EXHIBIT 10.14
MEMORANDUM OF AGREEMENT made effective as of the 30th day of September,
2003.
AMONG:
XXXXXXX INTERNATIONAL RESOURCES INC., a corporation incorporated under the
laws of the State of Nevada (hereinafter referred to as "Xxxxxxx")
- and -
XXXXXXX INVESTMENTS LTD., a corporation incorporated under the laws of the
Province of Alberta (hereinafter referred to as "SIL")
- and -
XXX X. XXXXXXXXX C.A., LLB, with his principal office at Calgary, Alberta
(hereinafter referred to as the Trustee")
VOTING AND EXCHANGE TRUST AGREEMENT
-----------------------------------
WHEREAS pursuant to the provisions of a Share Purchase Agreement dated the
30th day of September, 2003, among Xxxxxxx, SIL and all of the Holders
(hereinafter referred to as the Share Purchase Agreement"), the Exchangeable
Shares Provisions and the Support Agreement between Xxxxxxx and SIL; and
WHEREAS pursuant to the provisions of the Share Purchase Agreement the
parties agreed that the Articles of Incorporation of SIL would create an
unlimited number of Exchangeable Shares having the attributes as set out in the
Articles of Incorporation of SIL (the "Exchangeable Shares"); and
WHEREAS the Articles of Incorporation of SIL set forth the rights,
privileges, restrictions and conditions (collectively, the "Exchangeable Share
Provisions") attaching to the Exchangeable Shares;
WHEREAS Xxxxxxx agreed to provide voting rights in Xxxxxxx to each holder
(other than Xxxxxxx 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 Xxxxxxx Common Stock (the "Xxxxxxx Common Stock"); and
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WHEREAS Xxxxxxx is to grant to and in favor of the holders (other than
Xxxxxxx and its Subsidiaries) from time to time of Exchangeable Shares the
right, in the circumstances set forth herein, to require Xxxxxxx 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 Xxxxxxx shall be exercisable by holders
(other than Xxxxxxx 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 Xxxxxxx Special Preferred Voting Stock (the "Xxxxxxx Special Voting Stock")
to which voting rights attach for the benefit of such holders and whereby the
rights to require Xxxxxxx to purchase Exchangeable Shares from the holders
thereof (other than Xxxxxxx 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 Xxxxxxx and SIL 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 Xxxxxxx 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.
"Automatic Exchange Rights" means the benefit of the obligation of
Xxxxxxx to effect the automatic exchange of shares of Xxxxxxx Common
Stock for Exchangeable Shares pursuant to Section 5 (k) hereof.
"Board of Directors" means the Board of Directors of SIL.
"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 Xxxxxxx Common Stock are
entitled to vote, consent or otherwise act, the number of votes to
which a holder of one share of Xxxxxxx Common Stock is entitled with
respect to such matter, proposition or question.
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"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. "Xxxxxxx Common Stock" has the meaning attributed
thereto in the recitals hereto. "Xxxxxxx Consent" has the meaning
attributed thereto in Section 4(b) hereof. "Xxxxxxx Meeting" has the
meaning attributed thereto in Section 4(b) hereof. "Xxxxxxx Special
Voting Stock" has the meaning attributed thereto in the recitals
hereto. "Xxxxxxx Successor" has the meaning attributed thereto in
subsection 11 (a) hereof. "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 Xxxxxxx and its Subsidiaries.
"Insolvency Event" means the institution by SIL of any proceeding to
be adjudicated a bankrupt or insolvent or to be dissolved or wound-up,
or the consent of SIL 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 SIL to
contest in good faith any such proceedings commenced in respect of SIL
within 15 days of becoming aware thereof, or the consent by SIL to the
filing of any such petition or to the appointment of a receiver, or
the making by SIL of a general assignment for the benefit of
creditors, or the admission in writing by SIL of its inability to pay
its debts generally as they become due, or SIL 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(k)(ii) hereof. "Liquidation Event Effective Date" has the meaning
attributed thereto in subsection 5 (k) (iii) hereof.
"List" has the meaning attributed thereto in Section 4(f) hereof.
"Officers' Certificate" means, with respect to Xxxxxxx or SIL, 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 Xxxxxxx or SIL, as the
case may be.
"Person" includes an individual, partnership, corporation, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative.
"Redemption Call 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.
"Share Purchase Agreement" has the meaning attributed thereto in the
recitals hereof.
"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 SIL and Xxxxxxx.
"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 Xxx X. Xxxxxxxxx C.A., LLB and, subject to the
provisions of Article 10 hereof, includes any successor trustee or
permitted assigns.
"Voting Rights" means the voting rights attached to the Voting Share.
"Voting Share" means the one (1) share of Xxxxxxx Special Voting
Stock, U.S. $1.00 par value, issued by Xxxxxxx to and deposited with
the Trustee, which entitles the holder of record to a number of votes
at meetings of holders of Xxxxxxx Common Stock equal to the Aggregate
Equivalent Vote Amount.
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(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.
1. 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. The Trust
is hereby constituted on the 30th day of September, 2003 by the
granting of the Exchange Rights and Automatic Exchange Rights to the
Trustee notwithstanding that the Voting Share entitling the Trustee to
Voting Rights is delivered after the date hereof.
2. Voting Share
(a) Issuance and Ownership of the Voting Share. Immediately following
approval by the directors of Xxxxxxx of the creation and issuance
of the Voting Share, Xxxxxxx shall issue to and deposit 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 in consideration for the payment by the Trustee of
$1.00 (the receipt and sufficiency of which is hereby
acknowledged) for and on behalf of the Holders. 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. SIL 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.
3. 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 Xxxxxxx or in
connection with a Xxxxxxx 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(m) 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 Xxxxxxx Consent is sought or a Xxxxxxx 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
Xxxxxxx at which holders of shares of Xxxxxxx Common Stock are
entitled to vote (a "Xxxxxxx Meeting") and with respect to all
written consents sought by Xxxxxxx from its stockholders
including the holders of shares of Xxxxxxx Common Stock (a
"Xxxxxxx 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 Xxxxxxx or by applicable law for such Xxxxxxx
Meeting or Xxxxxxx Consent, as the case may be (the "Holder
Votes") in respect of each matter, question or proposition to be
voted on at such Xxxxxxx Meeting or to be consented to in
connection with such Xxxxxxx Consent.
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(c) Mailings to Shareholders. With respect to each Xxxxxxx Meeting
and Xxxxxxx Consent, the Trustee will mail or cause to be mailed
(or otherwise communicate in the same manner as Xxxxxxx utilizes
in communications to holders of Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx;
(ii) a statement that such Holder is entitled to instruct the
Trustee as to the exercise of the Holder Votes with respect
to such Xxxxxxx Meeting or Xxxxxxx Consent, as the case may
be, or, pursuant to Section 4(g) hereof, to attend such
Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx 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.
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The materials referred to above are to be provided by Xxxxxxx 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 Xxxxxxx Meeting or Xxxxxxx 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
Xxxxxxx or by applicable law for purposes of determining stockholders
entitled to vote at such Xxxxxxx Meeting or to give written consent in
connection with such Xxxxxxx Consent. Xxxxxxx will notify the Trustee
in writing of any decision of the board of directors of Xxxxxxx with
respect to the calling of any such Xxxxxxx Meeting or the seeking of
any such Xxxxxxx 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).
(a) Copies of Stockholder Information. Xxxxxxx will deliver to the
Trustee copies of all proxy materials (including notices of
Xxxxxxx Meetings but excluding proxies to vote shares of Xxxxxxx
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 Xxxxxxx 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 Xxxxxxx Common Stock. The Trustee will
mail or otherwise send to each Holder, at the expense of Xxxxxxx,
copies of all such materials (and all materials specifically
directed to the Holders or to the Trustee for the benefit of the
Holders by Xxxxxxx) received by the Trustee from Xxxxxxx at the
same time as such materials are first sent to holders of Xxxxxxx
Common Stock. The Trustee will make copies of all such materials
available for inspection by any Holder at the office of the
Trustee in the city of Calgary.
(b) Other Materials. Immediately after receipt by Xxxxxxx or any
stockholder of Xxxxxxx of any material sent or given generally to
the holders of Xxxxxxx 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), Xxxxxxx 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 Xxxxxxx, copies
of all such materials received by the Trustee from Xxxxxxx. The
Trustee will also make copies of all such materials available for
inspection by any Holder at the office of the Trustee in the City
of Calgary.
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(c) List of Persons Entitled to Vote. SIL shall, (i) prior to each
annual, general and special Xxxxxxx Meeting or the seeking of any
Xxxxxxx 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
Xxxxxxx Meeting or a Xxxxxxx Consent, at the close of business on
the record date established by Xxxxxxx or pursuant to applicable
law for determining the holders of Xxxxxxx Common Stock entitled
to receive notice of and/or to vote at such Xxxxxxx Meeting or to
give consent in connection with such Xxxxxxx Consent. Each such
List shall be delivered to the Trustee promptly after receipt by
SIL of such request or the record date for such meeting or
seeking of consent, as the case may be, and in any event within
sufficient time as to enable the Trustee to perform its
obligations under this Agreement. Xxxxxxx agrees to give SIL
written notice (with a copy to the Trustee) of the calling of any
Xxxxxxx Meeting or the seeking of any Xxxxxxx 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 SIL to perform its obligations under this Section 4(f).
(d) Entitlement to Direct Votes. Any Holder named in a List prepared
in connection with any Xxxxxxx Meeting or any Xxxxxxx 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.
(e) Stockholder Proposals. The Trustee shall forthwith submit to
Xxxxxxx 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 Xxxxxxx at which the holders of
Xxxxxxx Common Stock are entitled to submit stockholder
proposals. Xxxxxxx agrees to accept all stockholder proposals
submitted by the Trustee that are received by Xxxxxxx 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.
(f) Voting by Trustee, and Attendance of Trustee Representative, at
Meeting.
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(i) In connection with each Xxxxxxx Meeting and Xxxxxxx 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 Xxxxxxx
Meeting at the expense of Xxxxxxx. 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 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.
(g) 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 Xxxxxxx utilizes in
communications to holders of Xxxxxxx Common Stock) to each Holder
at its address as shown on the books of SIL. SIL shall provide or
cause to be provided to the Trustee for this purpose, on a timely
basis and without charge or other expense:
(i) current lists of the Holders; and
(ii) 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 Xxxxxxx to the
Trustee, but shall be subject to review and comment by the Trustee.
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(h) 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 Xxxxxxx 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 Xxxxxxx Common Stock, as specified in
Article 5 hereof (unless in either case Xxxxxxx 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
SIL pursuant to Article 5 of the Exchangeable Share Provisions,
or upon the purchase of Exchangeable Shares from the holder
thereof by Xxxxxxx pursuant to the exercise by Xxxxxxx 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. Xxxxxxx 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 Xxxxxxx to purchase from each or any Holder all
or any part of the Exchangeable Shares held by such Holders, and
(ii) the Automatic Exchange Rights, all in accordance with the
provisions of this Agreement.
Xxxxxxx 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 Xxxxxxx 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:
(a) 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
(b) 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
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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. SIL will cause each certificate
representing Exchangeable Shares to bear an appropriate legend
notifying the Holders of:
(a) their right to instruct the Trustee with respect to the
exercise of the Exchange Right in respect of the
Exchangeable Shares held by a Holder; and
(b) 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(m) 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 Xxxxxxx for each
Exchangeable Share to be purchased by Xxxxxxx 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, Xxxxxxx 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 Xxxxxxx issuing and
delivering or causing to be delivered to the Trustee, on behalf
of the relevant Holder, 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. 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 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 Xxxxxxx 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
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applicable law and the bylaws of SIL 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 Xxxxxxx 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 Xxxxxxx free and clear of all liens, claims and
encumbrances, (C) the names in which the certificates
representing Xxxxxxx 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, SIL and Xxxxxxx 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 Xxxxxxx under the Exchange Right, a new
certificate for the balance of such Exchangeable Shares shall be
issued to the Holder at the expense of SIL.
(f) Delivery of Exchangeable Share Consideration; Effect of Exercise.
Promptly after receipt of the certificates representing the
Exchangeable Shares which the Holder desires Xxxxxxx 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
Xxxxxxx the Trustee shall notify Xxxxxxx and SIL of its receipt
of the same, which notice to Xxxxxxx and SIL shall constitute
exercise of the Exchange Right by the Trustee on behalf of the
Holder of such Exchangeable Shares, and Xxxxxxx 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, SIL and Xxxxxxx of the payment of)
the taxes (if any) payable as contemplated by Section 5(h) of
this Agreement. Immediately upon the giving of notice by the
Trustee to Xxxxxxx and SIL 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 Xxxxxxx 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 Xxxxxxx to the Trustee, for
delivery to such Holder (or to such other persons, if any,
14
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 Xxxxxxx 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 purpose to be the holder of the
shares of Xxxxxxx 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 SIL to redeem any or all
of the Exchangeable Shares held by the Holder (the Retracted
Shares") and is notified by SIL pursuant to Section 6.6 of the
Exchangeable Share Provisions that SIL 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 SIL and provided
that Xxxxxxx 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 SIL
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 SIL is unable to redeem. In any such
event, SIL hereby agrees with the Trustee and in favor of the
Holder immediately to notify the Trustee of such prohibition
against SIL 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 SIL (including without
limitation a copy of the retraction request delivered pursuant to
Section 6. I 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 SIL is not permitted to redeem and
will require Xxxxxxx 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 Xxxxxxx pursuant to the Exchange Right or the Automatic
Exchange Rights, the share certificate or certificates
representing Xxxxxxx Common Stock to be delivered in connection
with the payment of the total purchase price therefor shall be
issued in the name of the Holder of the Exchangeable Shares so
sold or in such names as such Holder may otherwise direct in
writing without charge to the holder of the Exchangeable Shares
so sold, provided, however, that such Holder (i) shall pay (and
neither Xxxxxxx, SIL 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,
Xxxxxxx and SIL that such taxes, if any, have been paid.
15
(i) Notice of Insolvency Event. SIL and Xxxxxxx shall give written notice
thereof to the Trustee 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. As soon as
practicable after receiving notice from SIL and Xxxxxxx or from any
other Person of the occurrence of an Insolvency Event, the Trustee
will mail to each Holder, at the expense of Xxxxxxx, a notice of such
Insolvency Event in the form provided by Xxxxxxx, which notice shall
contain a brief statement of the right of the Holders with respect to
the Exchange Right.
(j) Reservation of Shares of Xxxxxxx Common Stock. Xxxxxxx 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 Xxxxxxx 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 SIL and Xxxxxxx 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 Share Purchase Agreement with
respect to which Xxxxxxx xxx now or hereafter be required to issue
shares of Xxxxxxx Common Stock.
(k) Automatic Exchange on Liquidation of Xxxxxxx
(i) Xxxxxxx 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 Xxxxxxx to institute voluntary liquidation, dissolution
or winding-up proceedings with respect to Xxxxxxx or to
effect any other distribution of assets of Xxxxxxx 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
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(B) immediately, upon the earlier of (I) receipt by Xxxxxxx of
notice of and (II) Xxxxxxx 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 Xxxxxxx or to effect any other
distribution of assets of Xxxxxxx among its stockholders for
the purpose of winding-up its affairs.
(ii) Immediately following receipt by the Trustee from Xxxxxxx of
notice of any event (a "Liquidation Event") contemplated by
Section 5 (k) (i) above, the Trustee will give notice thereof to
the Holders. Such notice will be provided by Xxxxxxx to the
Trustee and shall include a brief description of the automatic
exchange of Exchangeable Shares for shares of Xxxxxxx Common
Stock provided for in Section 5(k) (iii) below.
(iii) In order that the Holders will be able to participate on a PRO
RATA basis with the holders of Xxxxxxx Common Stock in the
distribution of assets of Xxxxxxx 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 Xxxxxxx Common Stock. To effect such
automatic exchange, Xxxxxxx 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, Xxxxxxx shall 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(k)(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 Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx Common Stock issued to it pursuant to
the automatic exchange of Exchangeable Shares for Xxxxxxx Common
Stock and the certificates held by the Holder previously
representing the Exchangeable Shares exchanged by the Holder with
Xxxxxxx pursuant to such automatic exchange shall thereafter be
deemed to represent the shares of Xxxxxxx Common Stock issued to
the Holder by Xxxxxxx pursuant to such automatic exchange. Upon
the request of a Holder and the surrender by the Holder of
17
Exchangeable Share certificates deemed to represent shares of
Xxxxxxx Common Stock, duly endorsed in blank and accompanied by
such instruments of transfer as Xxxxxxx xxx reasonably require,
Xxxxxxx shall deliver or cause to be delivered to the Holder
certificates representing the shares of Xxxxxxx Common Stock of
which the Holder is the holder.
6. Restrictions on Issuance of Xxxxxxx Special Voting Stock
During the term of this Agreement, Xxxxxxx will not issue any shares of
Xxxxxxx 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 Xxxxxxx 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;
(iii) 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 Xxxxxxx 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 Xxxxxxx
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;
18
(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 Xxxxxxx 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 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 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) 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; such
costs and expenses shall be paid for by Xxxxxxx. The Trustee shall not
be required to take any action until it has received reasonable
funding, security and indemnity against the costs, expenses and
liabilities which may be incurred by the Trustee.
(c) Dealings with Transfer Agents, Registrars, etc. Xxxxxxx irrevocably
authorize the Trustee, from time to time, to:
(a) consult, communicate and otherwise deal with the respective
registrars and transfer agents, and with any such subsequent
registrar or transfer agent, of the Xxxxxxx Common Stock; and
19
(b) 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 Xxxxxxx 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.
Xxxxxxx irrevocably authorizes and agrees to direct its registrars and
transfer agents to comply with all such requests. Xxxxxxx 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
Xxxxxxx and SIL, 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 August 31, 2004, and on or before August
31 in every year thereafter, so long as the Voting Share is on deposit
with the Trustee, the Trustee shall transmit to Xxxxxxx and SIL a
brief report with respect to:
(a) the property and funds comprising the Trust Estate as of that
date;
(b) the number of exercises of the Exchange Right, if any, and the
aggregate number of Exchangeable Shares received by the Trustee
on behalf of Holders in consideration of the issue and delivery
by Xxxxxxx of shares of Xxxxxxx Common Stock in connection with
the Exchange Right, during the calendar year ended on such date;
and
(c) all other actions taken by the Trustee in the performance of its
duties at the expense of Xxxxxxx 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 or cause to be prepared and filed 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, may obtain the advice and assistance of such experts
as the Trustee may consider necessary or advisable. If requested by
the Trustee, Xxxxxxx shall retain such experts for purposes of
providing such advice and assistance.
20
(f) 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 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.
(g) 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.
(h) Evidence and Authority to Trustee. SIL and/or Xxxxxxx 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 SIL and/or Xxxxxxx 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 SIL and/or Xxxxxxx forthwith if and when:
(a) such evidence is required by any other section of this Agreement
to be furnished to the Trustee in accordance with the terms of
this Section 7(h); or
21
(b) the Trustee, in the exercise of its rights, powers, duties and
authorities under this Agreement, gives SIL and/or Xxxxxxx
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 SIL and/or
Xxxxxxx 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 if such report or
opinion is furnished by a director, officer or employee of SIL and/or
Xxxxxxx 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:
(i) declaring that he has read and understands the provisions of this
Agreement relating to the condition in question;
(ii) describing the nature and scope of the examination or
investigation upon which he based the statutory declaration,
certificate, statement or opinion; and
(iii) 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.
(i) 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 SIL and/or
Xxxxxxx 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
22
(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.
(j) Investment of Monies Held by Trustee. Unless otherwise provided in
this Agreement, any monies held by or on behalf of the Trustee which
under the terms of this Agreement may or ought to be invested or which
may be on deposit with the Trustee or which may be in the hands of the
Trustee may be invested and reinvested in the name or under the
control of the Trustee in 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 SIL. Pending the
investment of any monies as hereinbefore provided, such monies may be
deposited in the name of the Trustee in any chartered bank in Canada
or, with the consent of SIL, 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.
(k) 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.
(l) 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 SIL and/or Xxxxxxx 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.
(m) 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,
23
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:
(a) the rights of all adverse claimants with respect to the Voting
Rights, Exchange Right or Automatic Exchange Rights subject to
such conflicting claims or demands have been adjudicated by a
final judgment of a court of competent jurisdiction; or
(b) 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.
(n) 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
Xxxxxxx and SIL 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
Xxxxxxx and SIL 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.
24
9. Indemnification and Limitation of Liability
(a) Indemnification of the Trustee. Xxxxxxx and SIL jointly and severally
agree to indemnify and hold harmless the Trustee, its partners,
employees, agents, successors and assigns (collectively, the
"Indemnified Parties") against all claims, losses, damages, costs,
penalties, fines and reasonable expenses (including reasonable
expenses of the 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 Xxxxxxx or SIL pursuant
hereto. In no case shall Xxxxxxx or SIL be liable under this indemnity
for any claim against any of the Indemnified Parties unless Xxxxxxx
and SIL shall be notified by the Trustee of the written assertion of a
claim or of any action commenced against the Indemnified Parties,
promptly after any of the Indemnified Parties shall have received any
such written assertion of a claim or shall have been served with a
summons or other first legal process giving information as to the
nature and basis of the claim. Subject to (ii), below, Xxxxxxx and SIL
shall be entitled to participate at their own expense in the defense
and, if Xxxxxxx or SIL 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 Xxxxxxx or SIL, such authorization not to be
unreasonably withheld; or (ii) the named parties to any such suit
include both the Trustee and Xxxxxxx or SIL and the Trustee shall have
been advised by counsel acceptable to Xxxxxxx or SIL that there may be
one or more legal defenses available to the Trustee that are different
from or in addition to those available to Xxxxxxx or SIL and that an
actual or potential conflict exists (in which case Xxxxxxx and SIL
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, willful misconduct or bad faith on the
part of the Trustee.
25
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
Xxxxxxx and SIL specifying the date on which it desires to resign,
provided that such notice shall not be given less than 30 days before
such desired resignation date unless Xxxxxxx and SIL otherwise agree.
Upon receiving such notice of resignation, Xxxxxxx and SIL 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 30 days prior notice by
written instrument executed by Xxxxxxx and SIL, 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).
(c) Successor Trustee. Any successor trustee appointed as provided under
this Agreement shall execute, acknowledge and deliver to Xxxxxxx and
SIL 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 Xxxxxxx and SIL 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, Xxxxxxx, SIL
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, Xxxxxxx and SIL shall cause to be
mailed notice of the succession of such trustee hereunder to each
Holder specified in a List. If Xxxxxxx or SIL 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 Xxxxxxx and SIL.
26
11. Xxxxxxx Successors
(a) Certain Requirements in Respect of Combination, etc. Xxxxxxx 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 "Xxxxxxx
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 Xxxxxxx
Successor of liability for all monies payable and property
deliverable hereunder and the covenant of such Xxxxxxx 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 Xxxxxxx 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.
(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 Xxxxxxx Successor and SIL
shall execute and deliver the supplemental agreement provided for in
Article 12 hereof and thereupon the Xxxxxxx Successor shall possess
and from time to time may exercise each and every right and power of
Xxxxxxx under this Agreement in the name of Xxxxxxx 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 Xxxxxxx or any
officers of Xxxxxxx xxx be done and performed with like force and
effect by the directors or officers of such Xxxxxxx Successor.
(c) Wholly-Owned Subsidiaries. Nothing herein shall be construed as
preventing the amalgamation or merger of any wholly-owned subsidiary
of Xxxxxxx with or into Xxxxxxx or the winding-up, liquidation or
dissolution of any wholly-owned subsidiary of Xxxxxxx provided that
all of the assets of such subsidiary are transferred to Xxxxxxx or
another wholly-owned subsidiary of Xxxxxxx, and any such transactions
are expressly permitted by this Article 11.
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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 SIL, Xxxxxxx
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 Xxxxxxx and SIL 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 SIL, Xxxxxxx and the Trustee, are required for the
purpose of curing or correcting any ambiguity or defect or
inconsistent provision or clerical omission or mistake or
manifest error, provided that the Trustee and its counsel and the
board of directors of each of SIL and Xxxxxxx shall be 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. SIL, at the request of Xxxxxxx, 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 bylaws of SIL, the Exchangeable Share
Provisions and all applicable laws.
(d) Changes in Capital of Xxxxxxx and SIL. At all times after the
occurrence of any event effected pursuant to Section 2(e) or Section
2(f) of the Support Agreement, as a result of which either Xxxxxxx
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,
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mutatis mutandis, to all new securities into which Xxxxxxx 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 SIL (when
authorized by a resolution of its Board of Directors), Xxxxxxx (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 Xxxxxxx Successors to Xxxxxxx
and the covenants of and obligations assumed by each such Xxxxxxx
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 Xxxxxxx, SIL, 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.
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;
29
(ii) each of SIL and Xxxxxxx 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 Xx 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 Xxxxxxx at: Xxxxxxx International Resources Inc.
0000 - 000 0 Xxxxxx XX
Xxxxxxx Xxxxxxx X0X 0X0
Attention: Xxxxx Xxxxx - President
(ii) if to SIL at: Xxxxxxx Investments Ltd.
0000 - 000 0 Xxxxxx XX
Xxxxxxx Xxxxxxx X0X 0X0
Attention: Xxxxx Xxxxx - President
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(iii) if to the Trustee at: Xxx X. Xxxxxxxxx 2 - 0000 00
Xxxxxx XX Xxxxxxx Xxxxxxx X0X 0X0
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 SIL or
by Xxxxxxx or by such Holder to the Trustee or to Xxxxxxx or SIL,
the making of such payment or sending of such document sent
through the post shall be at the risk of SIL or Xxxxxxx, in the
case of payments made or documents sent by the Trustee or SIL or
Xxxxxxx, 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.
(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. Xxxxxxx 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 SIL at its registered
office in the Province of Alberta as Shannon's attorney for
service of process.
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IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
duly executed as of the date first above written.
Xxxxxxx International Resources Inc.
Per: /s/ Xxxxx Xxxxx
---------------------------------
Per:
---------------------------------
Xxxxxxx Investments Ltd.
Per: /s/ Xxxxx Xxxxx
---------------------------------
Per:
---------------------------------
Witness Xxx X. Xxxxxxxxx
/s/ Xxx X. Xxxxxxxxx
---------------------------- ----------------------------------
Name:
Address:
