SUPPORT AGREEMENT
Exhibit
10.2
SUPPORT
AGREEMENT
(the
“Agreement”)
made
as of the 14th
day of
November, 2008.
AMONG:
GRAN
TIERRA ENERGY INC.,
a
corporation existing under the laws of the State of Nevada (hereinafter referred
to as “Acquiror”),
-
and
-
GRAN
TIERRA CALLCO ULC,
a
corporation existing under the laws of the Province of Alberta (hereinafter
referred to as “Callco”),
-
and
-
GRAN
TIERRA EXCHANGECO INC.,
an
indirect wholly-owned subsidiary of Acquiror, existing under the laws of the
Province of Alberta (hereinafter referred to as “ExchangeCo”),
WHEREAS,
in
connection with an arrangement agreement (the “Arrangement
Agreement”)
made
as of July 28, 2008 among Acquiror, ExchangeCo and Solana Resources Limited,
a
corporation existing under the laws of Alberta (“Target”),
ExchangeCo is to issue exchangeable shares (the “Exchangeable
Shares”)
to
certain holders of common shares in the capital of Target (“Target
Common Shares”)
pursuant to the plan of arrangement (the “Arrangement”)
contemplated by the Arrangement Agreement;
AND
WHEREAS,
pursuant to the Arrangement Agreement, Acquiror and ExchangeCo have agreed
to
execute a support agreement substantially in the form of this Agreement on
the
Effective Date (as defined in the Arrangement Agreement);
NOW
THEREFORE,
in
consideration of the respective covenants and agreements provided in this
Agreement and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the parties hereto covenant
and
agree as follows:
ARTICLE
1
INTERPRETATION
1.1 Defined
Terms
Each
term
denoted herein by initial capital letters and not otherwise defined herein
shall
have the meaning ascribed thereto in the rights, privileges, restrictions and
conditions (collectively, the “Exchangeable
Share Provisions”)
attaching to the Exchangeable Shares which are attached as Schedule “A” to the
Plan of Arrangement which is attached as Exhibit A to the Arrangement Agreement
and as set out in the Articles of Arrangement of Target, unless the context
requires otherwise.
1.2 Interpretation
Not Affected by Headings
The
division of this agreement into articles, sections, subsections and other
portions and the insertion of headings are for convenience of reference only
and
shall not affect the construction or interpretation hereof. Unless otherwise
indicated, all references to an “Article”, “Section” or “Subsection” followed by
a number refer to the specified Article, Section or Subsection of this
Agreement. The terms “this Agreement,” “hereof,” “herein” and “hereunder” and
similar expressions refer to this Agreement and not to any particular Article,
Section, Subsection or other portion hereof.
1.3 Rules
of Construction
Unless
otherwise specifically indicated or the context otherwise requires: (a) all
references to “dollars” or “$” mean United States dollars; (b) words importing
the singular shall include the plural and vice versa and words importing any
gender shall include all genders; and (c) “include,” “includes” and “including”
shall be deemed to be followed by the words “without limitation.”
1.4 Date
for any Action
If
the
event that any date on which any action is required to be taken hereunder by
any
of the parties hereto is not a Business Day, such action shall be required
to be
taken on the next succeeding day that is a Business Day.
ARTICLE
2
COVENANTS
OF ACQUIROR AND EXCHANGECO
2.1 Covenants
Regarding Exchangeable Shares
So
long
as any Exchangeable Shares not owned by Acquiror or its Affiliates are
outstanding, Acquiror will:
|
(a)
|
not
declare or pay any dividend on common shares in the capital of Acquiror
(“Acquiror
Common Shares”)
unless: (i) ExchangeCo shall: (a) simultaneously declare or pay,
as the
case may be, an equivalent dividend or other distribution economically
equivalent thereto (as provided for in the Exchangeable Share Provisions)
on the Exchangeable Shares (an “Equivalent
Dividend”);
and (b) ExchangeCo shall have sufficient money or other assets or
authorized but unissued securities available to enable the due declaration
and the due and punctual payment, in accordance with applicable law,
of
any such Equivalent Dividend; or (ii) if the dividend or other
distribution is a stock dividend or distribution of stock, in lieu
of such
dividend ExchangeCo shall: (a) effect a corresponding, contemporaneous
and
economically equivalent subdivision of the Exchangeable Shares (as
provided for in the Exchangeable Share Provisions) (an “Equivalent
Stock Subdivision”);
and (b) have sufficient authorized but unissued securities available
to
enable the Equivalent Stock
Subdivision;
|
2.
|
(b)
|
advise
ExchangeCo sufficiently in advance of the declaration by Acquiror
of any
dividend on Acquiror Common Shares and take all such other actions
as are
reasonably necessary, in cooperation with ExchangeCo, to ensure that:
(i)
the respective declaration date, record date and payment date for
an
Equivalent Dividend on the Exchangeable Shares shall be the same
as the
declaration date, record date and payment date for the corresponding
dividend on the Acquiror Common Shares; or (ii) the record date and
effective date for an Equivalent Stock Subdivision shall be the same
as
the record date and payment date for the stock dividend on the Acquiror
Common Shares and that such dividend on the Exchangeable Shares will
correspond with any requirement of the principal stock exchange on
which
the Exchangeable Shares are listed;
|
|
(c)
|
ensure
that the record date for any dividend declared on Acquiror Common
Shares
is not less than 10 Business Days after the declaration date of such
dividend;
|
|
(d)
|
take
all such actions and do all such things as are reasonably necessary
or
desirable to enable and permit ExchangeCo, in accordance with applicable
law, to pay and otherwise perform its obligations with respect to
the
satisfaction of the Liquidation Amount, the Retraction Price or the
Redemption Price in respect of each issued and outstanding Exchangeable
Share (other than Exchangeable Shares owned by Acquiror or its Affiliates)
upon the liquidation, dissolution or winding-up of ExchangeCo or
any other
distribution of the assets of ExchangeCo among its shareholders for
the
purpose of winding-up its affairs, the delivery of a Retraction Request
by
a holder of Exchangeable Shares or a redemption of Exchangeable Shares
by
ExchangeCo, as the case may be, including all such actions and all
such
things as are necessary or desirable to enable and permit ExchangeCo
to
cause to be delivered Acquiror Common Shares to the holders of
Exchangeable Shares in accordance with the provisions of Articles
5, 6 and
7 of the Exchangeable Share Provisions, as the case may be, of the
Exchangeable Share Provisions and cash in respect of declared and
unpaid
dividends;
|
|
(e)
|
take
all such actions and do all such things as are reasonably necessary
or
desirable to enable and permit Callco, in accordance with applicable
law,
to perform its obligations arising upon the exercise by it of the
Liquidation Call Right, the Retraction Call Right or the Redemption
Call
Right, including all such actions and all such things as are necessary
or
desirable to enable and permit Callco to cause to be delivered Acquiror
Common Shares to the holders of Exchangeable Shares in accordance
with the
provisions of the Liquidation Call Right, the Retraction Call Right
or the
Redemption Call Right, as the case may be,
and cash in respect of declared and unpaid dividends;
and
|
3.
|
(f)
|
not
(and will ensure that Callco or any of its Affiliates does not) exercise
its vote as a shareholder to initiate the voluntary liquidation,
dissolution or winding-up of ExchangeCo or any other distribution
of the
assets of ExchangeCo among its shareholders for the purpose of winding
up
its affairs nor take any action or omit to take any action (and Acquiror
will not permit Callco or any of its Affiliates to take any action
or omit
to take any action) that is designed to result in the liquidation,
dissolution or winding up of ExchangeCo or any other distribution
of the
assets of ExchangeCo among its shareholders for the purpose of winding
up
its affairs.
|
2.2 Segregation
of Funds
Acquiror
will cause ExchangeCo to deposit a sufficient amount of funds in a separate
account of ExchangeCo and segregate a sufficient amount of such other assets
and
property as is necessary to enable ExchangeCo to pay dividends when due and
to
pay or otherwise satisfy its respective obligations under Articles 5, 6 and
7 of
the Exchangeable Share Provisions or, if required, to pay the purchase price
for
Acquiror Common Shares as contemplated by Section 2.5, as
applicable.
2.3 Reservation
of Acquiror Common Shares
Acquiror
hereby represents, warrants and covenants in favour of ExchangeCo and Callco
that Acquiror has reserved for issuance and will, at all times while any
Exchangeable Shares (other than Exchangeable Shares held by Acquiror or its
Affiliates) are outstanding, keep available, free from pre-emptive and other
rights, out of its authorized and unissued capital stock such number of Acquiror
Common Shares (or other shares or securities into which Acquiror Common Shares
may be reclassified or changed as contemplated by Section 2.7): (a) as is equal
to the sum of: (i) the number of Exchangeable Shares issued and outstanding
from
time to time; and (ii) the number of Exchangeable Shares issuable upon the
exercise of all rights to acquire Exchangeable Shares outstanding from time
to
time; and (b) as are now and may hereafter be required to enable and permit
Acquiror to meet its obligations under the Voting and Exchange Trust Agreement
and under any other security or commitment pursuant to the Arrangement with
respect to which Acquiror may now or hereafter be required to issue Acquiror
Common Shares, to enable and permit Callco to meet its obligations arising
upon
exercise by it of each of the Liquidation Call Right, the Retraction Call Right,
the Redemption Call Right and the Change of Law Call Right (if Acquiror causes
Callco to exercise such right) and to enable and permit ExchangeCo to meet
its
obligations hereunder and under the Exchangeable Share Provisions.
2.4 Notification
of Certain Events
In
order
to assist Acquiror in compliance with its obligations hereunder and to permit
Callco to exercise the Liquidation Call Right, the Retraction Call Right, the
Redemption Call Right and the Change of Law Call Right (if Acquiror causes
Callco to exercise such right), ExchangeCo will notify Acquiror and Callco
of
each of the following events at the times set forth below:
|
(a)
|
in
the event of any determination by the Board of Directors of ExchangeCo
to
institute voluntary liquidation, dissolution or winding-up proceedings
with respect to ExchangeCo or to effect any other distribution of
the
assets of ExchangeCo among its shareholders for the purpose of winding-up
its affairs, at least 60 days prior to the proposed effective date
of such
liquidation, dissolution, winding-up or other
distribution;
|
4.
|
(b)
|
promptly,
upon the earlier of receipt by ExchangeCo of notice of and ExchangeCo
otherwise becoming aware of any threatened or instituted claim, suit,
petition or other proceeding with respect to the involuntary liquidation,
dissolution or winding-up of ExchangeCo or to effect any other
distribution of the assets of ExchangeCo among its shareholders for
the
purpose of winding-up its affairs;
|
|
(c)
|
promptly,
upon receipt by ExchangeCo of a Retraction
Request;
|
|
(d)
|
promptly,
following the date on which notice of redemption is given to holders
of
Exchangeable Shares, upon the determination of a Redemption Date
in
accordance with the Exchangeable Share
Provisions;
|
|
(e)
|
promptly,
upon the issuance by ExchangeCo of any Exchangeable Shares or rights
to
acquire Exchangeable Shares (other than the issuance of Exchangeable
Shares and rights to acquire Exchangeable Shares in exchange for
outstanding Target Common Shares pursuant to the Arrangement);
and
|
|
(f)
|
promptly,
upon receiving notice of a Change of
Law.
|
2.5 Delivery
of Acquiror Common Shares to ExchangeCo and Callco
In
furtherance of its obligations under Subsections 2.1(d) and 2.1(e), upon notice
from ExchangeCo or Callco of any event that requires ExchangeCo or Callco to
cause to be delivered Acquiror Common Shares to any holder of Exchangeable
Shares, Acquiror shall forthwith issue and deliver the requisite number of
Acquiror Common Shares to be received by, and issued to or to the order of,
the
former holder of the surrendered Exchangeable Shares, as ExchangeCo or Callco
shall direct. All such Acquiror Common Shares shall be duly authorized, validly
issued and fully paid and non-assessable and shall be free and clear of any
lien, claim or encumbrance.
5.
2.6 Qualification
of Acquiror Common Shares
Acquiror
covenants that if any Acquiror Common Shares (or other shares or securities
into
which Acquiror Common Shares may be reclassified or changed as contemplated
by
Section 2.7) (other than Acquiror Common Shares held by the Trustee) to be
issued and delivered hereunder (including for greater certainty, pursuant to
the
Exchangeable Share Provisions, or pursuant to the Change of Law Call Right,
Exchange Right or the Automatic Exchange Rights (all as defined in the Voting
and Exchange Trust Agreement)) require registration or qualification with,
or
approval of, or the filing of any document, including any prospectus or similar
document, the taking of any proceeding with, or the obtaining of any order,
ruling or consent from, any governmental or regulatory authority under any
Canadian or United States federal, provincial, territorial or state securities
or other law or regulation or pursuant to the rules and regulations of any
securities or other regulatory authority, or the fulfillment of any other United
States or Canadian legal requirement (collectively, the “Applicable
Laws”)
before
such shares (or other shares or securities into which Acquiror Common Shares
may
be reclassified or changed as contemplated by Section 2.7) may be issued and
delivered by Acquiror at the direction of ExchangeCo or Callco, if applicable,
to the holder of surrendered Exchangeable Shares or in order that such shares
(or other shares or securities into which Acquiror Common Shares may be
reclassified or changed as contemplated by Section 2.7) may be freely traded
thereafter (other than any restrictions of general application on transfer
by
reason of a holder being a “control person” of Acquiror for purposes of Canadian
provincial securities law or an “affiliate” of Acquiror for purposes of United
States federal or state securities law), Acquiror will use its reasonable best
efforts and in good faith expeditiously take all such actions and do all such
things as are necessary or desirable and within its power to cause such Acquiror
Common Shares (or other shares or securities into which Acquiror Common Shares
may be reclassified or changed as contemplated by Section 2.7) to be and remain
duly registered, qualified or approved under United States and/or Canadian
law,
as the case may be, to the extent expressly provided in the Arrangement
Agreement. Acquiror will use its reasonable best efforts and in good faith
expeditiously take all such actions and do all such things as are reasonably
necessary or desirable to cause all Acquiror Common Shares (or other shares
or
securities into which Acquiror Common Shares may be reclassified or changed
as
contemplated by Section 2.7) (other than Acquiror Common Shares held by the
Trustee) to be delivered hereunder to be listed, quoted or posted for trading
on
all stock exchanges and quotation systems on which outstanding Acquiror Common
Shares (or other shares or securities into which Acquiror Common Shares may
be
reclassified or changed as contemplated by Section 2.7) are listed and are
quoted or posted for trading at such time.
2.7 Economic
Equivalence
So
long
as any Exchangeable Shares not owned by Acquiror or its Affiliates are
outstanding:
|
(a)
|
Acquiror
will not, without prior approval of ExchangeCo and the prior approval
of
the holders of the Exchangeable Shares given in accordance with Section
10.2 of the Exchangeable Share
Provisions:
|
|
(i)
|
issue
or distribute Acquiror Common Shares (or securities exchangeable
for or
convertible into or carrying rights to acquire Acquiror Common Shares)
to
the holders of all or substantially all of the then outstanding Acquiror
Common Shares by way of stock dividend or other distribution, other
than
an issue of Acquiror Common Shares (or securities exchangeable for
or
convertible into or carrying rights to acquire Acquiror Common Shares)
to
holders of Acquiror Common Shares who: (A) exercise an option to
receive
dividends in Acquiror Common Shares (or securities exchangeable for
or
convertible into or carrying rights to acquire Acquiror Common Shares)
in
lieu of receiving cash dividends; or (B) pursuant
to any dividend reinvestment plan or scrip dividend;
or
|
|
(ii)
|
issue
or distribute rights, options or warrants to the holders of all or
substantially all of the then outstanding Acquiror Common Shares
entitling
them to subscribe for or to purchase Acquiror Common Shares (or securities
exchangeable for or convertible into or carrying rights to acquire
Acquiror Common Shares); or
|
6.
|
(iii)
|
issue
or distribute to the holders of all or substantially all of the then
outstanding Acquiror Common Shares: (A) shares or securities of Acquiror
of any class other than Acquiror Common Shares (other than shares
convertible into or exchangeable for or carrying rights to acquire
Acquiror Common Shares); (B) rights, options or warrants other than
those
referred to in Subsection 2.7(a)(ii); (C) evidences
of indebtedness of Acquiror; or (D) assets
of Acquiror,
|
unless
the economic equivalent on a per share basis of such rights, options, warrants,
securities, shares, evidences of indebtedness or other assets is issued or
distributed simultaneously to holders of the Exchangeable Shares; provided
that,
for greater certainty, the above restrictions shall not apply to any securities
issued or distributed by Acquiror in order to give effect to and to consummate
the transactions contemplated by, and in accordance with, the Arrangement
Agreement.
|
(b)
|
Acquiror
will not without the prior approval of ExchangeCo and the prior approval
of the holders of the Exchangeable Shares given in accordance with
Section
10.2 of the Exchangeable Share
Provisions:
|
|
(i)
|
subdivide,
redivide or change the then outstanding Acquiror Common Shares into
a
greater number of Acquiror Common Shares;
or
|
|
(ii)
|
reduce,
combine, consolidate or change the then outstanding Acquiror Common
Shares
into a lesser number of Acquiror Common Shares;
or
|
|
(iii)
|
reclassify
or otherwise change Acquiror Common Shares or effect an amalgamation,
merger, reorganization or other transaction affecting the Acquiror
Common
Shares,
|
unless
the same or an economically equivalent change shall simultaneously be made
to,
or in the rights of the holders of, the Exchangeable Shares; provided that,
for
greater certainty, the above restrictions shall not apply to any securities
issued or distributed by Acquiror in order to give effect to and to consummate
the transactions contemplated by, and in accordance with, the Arrangement
Agreement.
|
(c)
|
Acquiror
will ensure that the record date for any event referred to in Subsections
2.7(a) or 2.7(b), or (if no record date is applicable for such event)
the
effective date for any such event, is not less than five Business
Days
after the date on which such event is declared or announced by Acquiror
(with contemporaneous notification thereof by Acquiror to
ExchangeCo).
|
|
(d)
|
The
Board of Directors of ExchangeCo shall determine, in good faith and
in its
sole discretion, economic equivalence for the purposes of any event
referred to in Subsections 2.7(a) or 2.7(b) and each such determination
shall be conclusive and binding on Acquiror and the holders of the
Exchangeable Shares. In making each such determination, the following
factors shall, without excluding other factors determined by the
Board of
Directors of ExchangeCo to be relevant, be considered by the Board
of
Directors of ExchangeCo:
|
7.
|
(i)
|
in
the case of any stock dividend or other distribution payable in Acquiror
Common Shares, the number of such shares issued in proportion to
the
number of Acquiror Common Shares previously
outstanding;
|
|
(ii)
|
in
the case of the issuance or distribution of any rights, options or
warrants to subscribe for or purchase Acquiror Common Shares (or
securities exchangeable for or convertible into or carrying rights
to
acquire Acquiror Common Shares), the relationship between the exercise
price of each such right, option or warrant and the Current Market
Price,
the volatility of the Acquiror Common Shares and the term of such
instrument;
|
|
(iii)
|
in
the case of the issuance or distribution of any other form of property
(including any shares or securities of Acquiror of any class other
than
Acquiror Common Shares, any rights, options or warrants other than
those
referred to in Subsection 2.7(d)(ii), any evidences of indebtedness
of
Acquiror or any assets of Acquiror), the relationship between the
fair
market value (as determined by the Board of Directors of ExchangeCo
in the
manner above contemplated) of such property to be issued or distributed
with respect to each outstanding Acquiror Common Share and the Current
Market Price;
|
|
(iv)
|
in
the case of any subdivision, redivision or change of the then outstanding
Acquiror Common Shares into a greater number of Acquiror Common Shares
or
the reduction, combination, consolidation or change of the then
outstanding Acquiror Common Shares into a lesser number of Acquiror
Common
Shares or any amalgamation, merger, reorganization or other transaction
affecting Acquiror Common Shares, the effect thereof upon the then
outstanding Acquiror Common Shares;
and
|
|
(v)
|
in
all such cases, the general taxation consequences of the relevant
event to
holders of Exchangeable Shares to the extent that such consequences
may
differ from the taxation consequences to holders of Acquiror Common
Shares
as a result of differences between taxation laws of Canada and the
United
States (except for any differing consequences arising as a result
of
differing marginal taxation rates and without regard to the individual
circumstances of holders of Exchangeable
Shares).
|
|
(e)
|
ExchangeCo
agrees that, to the extent required, upon due notice from Acquiror,
ExchangeCo will use its best efforts to take or cause to be taken
such
steps as may be necessary for the purposes of ensuring that appropriate
dividends are paid or other distributions are made by ExchangeCo,
or
subdivisions, redivisions or changes are made to the Exchangeable
Shares,
in order to implement the required economic equivalent with respect
to the
Acquiror Common Shares and Exchangeable Shares as provided for in
this
Section 2.7.
|
8.
2.8 Tender
Offers
For
so
long as Exchangeable Shares remain outstanding (not including Exchangeable
Shares held by Acquiror and its Affiliates), in the event that a tender offer,
share exchange offer, issuer bid, take-over bid or similar transaction with
respect to Acquiror Common Shares (an “Offer”)
is
proposed by Acquiror or is proposed to Acquiror or its shareholders and is
recommended by the Board of Directors of Acquiror, or is otherwise effected
or
to be effected with the consent or approval of the Board of Directors of
Acquiror, and the Exchangeable Shares are not redeemed by ExchangeCo or
purchased by Callco pursuant to the Redemption Call Right, Acquiror will use
its
reasonable best efforts expeditiously and in good faith to take all such actions
and do all such things as are necessary or desirable to enable and permit
holders of Exchangeable Shares (other than Acquiror and its Affiliates) to
participate in such offer to the same extent and on an economically equivalent
basis as the holders of Acquiror Common Shares, without discrimination. Without
limiting the generality of the foregoing, Acquiror will use its reasonable
best
efforts expeditiously and in good faith to ensure that holders of Exchangeable
Shares may participate in each such offer without being required to retract
Exchangeable Shares as against ExchangeCo (or, if so required, to ensure that
any such retraction, shall be effective only upon, and shall be conditional
upon, the closing of such Offer and only to the extent necessary to tender
or
deposit to the Offer). Nothing herein shall affect the rights of ExchangeCo
to
redeem (or Callco to purchase pursuant to the Redemption Call Right)
Exchangeable Shares, as applicable, in the event of an Acquiror Control
Transaction.
2.9 Ownership
of Outstanding Shares
Without
the prior approval of ExchangeCo and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section 10.2 of the Exchangeable
Share Provisions, Acquiror covenants and agrees in favour of ExchangeCo that,
as
long as any outstanding Exchangeable Shares are owned by any Person other than
Acquiror or any of its Affiliates, Acquiror will be and remain the direct or
indirect beneficial owner of all issued and outstanding voting shares in the
capital of ExchangeCo and Callco. Notwithstanding the foregoing, Acquiror shall
not be in violation of this Section 2.9 if any person or group of persons acting
jointly or in concert acquires all or substantially all of the assets of
Acquiror or the Acquiror Common Shares pursuant to any merger of Acquiror
pursuant to which Acquiror was not the surviving corporation.
2.10 Acquiror
and Affiliates Not to Vote Exchangeable Shares
Acquiror
and Callco each covenants and agrees that it will not, and will cause its
Affiliates not to, exercise any voting rights which may be exercisable by
holders of Exchangeable Shares from time to time pursuant to the Exchangeable
Share Provisions or pursuant to the provisions of the ABCA (or any successor
or
other corporate statute by which ExchangeCo may in the future be governed)
with
respect to any Exchangeable Shares held by it or by its Affiliates in respect
of
any matter considered at any meeting of holders of Exchangeable
Shares.
9.
2.11 Rule
10b-18 Purchases
For
greater certainty, nothing contained in this Agreement, including the
obligations of Acquiror contained in Section 2.8, shall limit the ability of
Acquiror or ExchangeCo to make a “Rule 10b-18 purchase” of Acquiror Common
Shares pursuant to Rule 10b-18 of the United States Securities
Exchange Act of 1934,
as
amended, or any successor rule.
2.12 Stock
Exchange Listing
Acquiror
covenants and agrees in favour of ExchangeCo that, as long as any outstanding
Exchangeable Shares are owned by any Person other than Acquiror or any of its
Affiliates, Acquiror will use its reasonable best efforts to maintain a listing
for such Exchangeable Shares on a Canadian stock exchange which is a designated
stock exchange within the meaning of the Income
Tax Act (Canada)
(the “Tax
Act”)
and to
ensure that ExchangeCo remains a “public corporation” within the meaning of the
Tax Act and maintains a “substantial Canadian presence” within the meaning of
the Tax Act as in effect on the date of this Agreement.
ARTICLE
3
ACQUIROR
SUCCESSORS
3.1 Certain
Requirements in Respect of Combination, etc.
Neither
Acquiror nor Callco shall consummate any transaction (whether by way of
reconstruction, reorganization, consolidation, merger, transfer, sale, lease
or
otherwise) whereby all or substantially all of its undertaking, property and
assets would become the property of any other Person or, in the case of a
merger, of the continuing corporation resulting therefrom unless, but may do
so
if:
|
(a)
|
such
other Person or continuing corporation (the “Acquiror
Successor”)
by operation of law, becomes, without more, bound by the terms and
provisions of this Agreement or, if not so bound, executes, prior
to or
contemporaneously with the consummation of such transaction, an agreement
supplemental hereto and such other instruments (if any) as are reasonably
necessary or advisable to evidence the assumption by the Acquiror
Successor of liability for all moneys payable and property deliverable
hereunder and the covenant of such Acquiror 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 Acquiror or Callco, as the case
may
be, under this Agreement;
|
|
(b)
|
in
the event that the Acquiror Common Shares are reclassified or otherwise
changed as part of such transaction, the same or an economically
equivalent change is simultaneously made to, or in the rights of
the
holders of, the Exchangeable Shares; and
|
|
(c)
|
such
transaction shall be upon such terms and conditions as substantially
to
preserve and not to impair in any material respect any of the rights,
duties, powers and authorities of the other parties hereunder or
the
holders of Exchangeable Shares.
|
10.
3.2 Vesting
of Powers in Successor
Whenever
the conditions of Section 3.1 have been duly observed and performed, the
parties, if required by Section 3.1, shall execute and deliver the supplemental
agreement provided for in Subsection 3.1(a) and thereupon the Acquiror Successor
shall possess and from time to time may exercise each and every right and power
of Acquiror or Callco, as the case may be, under this Agreement in the name
of
Acquiror 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 Acquiror
or any officers of Acquiror may be done and performed with like force and effect
by the directors or officers of such Acquiror Successor.
3.3 Wholly-Owned
Subsidiaries
Nothing
herein shall be construed as preventing the amalgamation or merger of any
wholly-owned direct or indirect subsidiary of Acquiror (other than ExchangeCo
or
Callco) with or into Acquiror or the winding-up, liquidation or dissolution
of
any wholly-owned subsidiary of Acquiror provided that all of the assets of
such
subsidiary are transferred to Acquiror or another wholly-owned direct or
indirect subsidiary of Acquiror and any such transactions are expressly
permitted by this Article 3.
3.4 Successorship
Transaction
Notwithstanding
the foregoing provisions of Article 3, in the event of an Acquiror Control
Transaction:
|
(a)
|
in
which Acquiror merges or amalgamates with, or in which all or
substantially all of the then outstanding Acquiror Common Shares
are
acquired by, one or more other corporations to which Acquiror is,
immediately before such merger, amalgamation or acquisition, “related’’
within the meaning of the Tax Act (otherwise than by virtue of a
right
referred to in paragraph 251(5)(b)
thereof);
|
|
(b)
|
which
does not result in an acceleration of the Redemption Date in accordance
with paragraph (b) of that definition; and
|
|
(c)
|
in
which all or substantially all of the then outstanding Acquiror Common
Shares are converted into or exchanged for shares or rights to receive
such shares (the “Other
Shares”)
or another corporation (the “Other
Corporation”)
that, immediately after such Acquiror Control Transaction, owns or
controls, directly or indirectly,
Acquiror,
|
then
all
references herein to “Acquiror’’ shall thereafter be and be deemed to be
references to “Other Corporation’’ and all references herein to “Acquiror Common
Shares” shall thereafter be and be deemed to be references to “Other Shares’’
(with appropriate adjustments, if any, as are required to result in a holder
of
Exchangeable Shares on the exchange, redemption or retraction of such shares
pursuant to the Exchangeable Share Provisions or Article 8 of the Plan of
Arrangement or exchange of such shares pursuant to the Voting and Exchange
Trust
Agreement immediately subsequent to the Acquiror Control Transaction being
entitled to receive that number of Other Shares equal to the number of Other
Shares such holder of Exchangeable Shares would have received if the exchange,
redemption or retraction of such shares pursuant to the Exchangeable Share
Provisions or Article 8 of the Plan of Arrangement, or exchange of such shares
pursuant to the Voting and Exchange Trust Agreement had occurred immediately
prior to the Acquiror Control Transaction and the Acquiror Control Transaction
was completed) without any need to amend the terms and conditions of the
Exchangeable Shares and without any further action required.
11.
ARTICLE
4
GENERAL
4.1 Term
This
Agreement shall come into force and be effective as of the date hereof and
shall
terminate and be of no further force and effect at such time as no Exchangeable
Shares (or securities or rights convertible into or exchangeable for or carrying
rights to acquire Exchangeable Shares) are held by any Person other than
Acquiror and any of its Affiliates.
4.2 Changes
in Capital of Acquiror and ExchangeCo
At
all
times after the occurrence of any event contemplated pursuant to Sections 2.7
and 2.8 hereof or otherwise, as a result of which either Acquiror Common Shares
or the Exchangeable Shares or both are in any way changed, this Agreement shall
forthwith be deemed amended and modified as necessary in order that it shall
apply with full force and effect, mutatis
mutandis,
to all
new securities into which Acquiror Common Shares or the Exchangeable Shares
or
both are so changed and the parties hereto shall execute and deliver an
agreement in writing giving effect to and evidencing such necessary amendments
and modifications.
4.3 Notices
to Parties
All
notices and other communications hereunder shall be in writing and shall be
deemed given when delivered personally, telecopied (which is confirmed) or
dispatched (postage prepaid) to a nationally recognized overnight courier
service with overnight delivery instructions, in each case addressed to the
particular party at:
|
(a)
|
If
to Acquiror, at:
|
Gran
Tierra Energy Inc.
#000,
000 – 00xx
Xxxxxx
X.X.
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention:
Xxxx
Xxxxxxxx, Ph. D., President & Chief Executive Officer
Facsimile
Number: (000)
000-0000
12.
|
(b)
|
If
to ExchangeCo, at:
|
Gran
Tierra Exchangeco Inc.
#000,
000 – 00xx
Xxxxxx
X.X.
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention:
Xxxx
Xxxxxxxx, Ph. D., President & Chief Executive Officer
Facsimile
Number: (000)
000-0000
|
(c)
|
If
to Callco, at:
|
Gran
Tierra Callco ULC
#000,
000 – 00xx
Xxxxxx
X.X.
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention:
Xxxx
Xxxxxxxx, Ph. D., President & Chief Executive Officer
Facsimile
Number: (000)
000-0000
or
at
such other address of which any party may, from time to time, advise the other
parties by notice in writing given in accordance with the
foregoing.
4.4 Assignment
No
party
hereto may assign this Agreement or any of its rights, interests or obligations
under this Agreement or the Arrangement (whether by operation of law or
otherwise) except that ExchangeCo may assign in its sole discretion, any or
all
of its rights, interests and obligations hereunder to any wholly-owned
subsidiary of Acquiror.
4.5 Binding
Effect
Subject
to Section 4.4, this Agreement and the Arrangement shall be binding upon, enure
to the benefit of and be enforceable by the parties hereto and their respective
successors and assigns.
4.6 Amendments,
Modifications
Subject
to Sections 4.2, 4.7 and 4.11, this Agreement may not be amended or modified
except by an agreement in writing executed by ExchangeCo, Callco and Acquiror
and approved by the holders of the Exchangeable Shares in accordance with
Section 10.2 of the Exchangeable Share Provisions.
4.7 Ministerial
Amendments
Notwithstanding
the provisions of Section 4.6, the parties to this Agreement may in writing
at
any time and from time to time, without the approval of the holders of the
Exchangeable Shares, amend or modify this Agreement for the purposes
of:
|
(a)
|
adding
to the covenants of any or all parties provided that the board of
directors of each of ExchangeCo, Callco and Acquiror shall be of
the good
faith opinion that such additions will not be prejudicial to the
rights or
interests of the holders of the Exchangeable
Shares;
|
13.
|
(b)
|
making
such amendments or modifications not inconsistent with this Agreement
as
may be necessary or desirable with respect to matters or questions
which,
in the good faith opinion of the board of directors of each of ExchangeCo,
Callco and Acquiror, it may be expedient to make, provided that each
such
board of directors shall be of the good faith opinion that such amendments
or modifications will not be prejudicial to the rights or interests
of the
holders of the Exchangeable Shares;
or
|
|
(c)
|
making
such changes or corrections which, on the advice of counsel to ExchangeCo,
Callco and Acquiror, 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 board of directors of
each of
ExchangeCo, Callco and Acquiror shall be of the good faith opinion
that
such changes or corrections will not be prejudicial to the rights
or
interests of the holders of the Exchangeable
Shares.
|
4.8 Meeting
to Consider Amendments
ExchangeCo,
at the request of Acquiror, shall call a meeting or meetings of the holders
of
the Exchangeable Shares for the purpose of considering any proposed amendment
or
modification requiring approval pursuant to Section 4.6. Any such meeting or
meetings shall be called and held in accordance with the bylaws of ExchangeCo,
the Exchangeable Share Provisions and all applicable laws.
4.9 Amendments
Only in Writing
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.
4.10 Governing
Laws; Consent to Jurisdiction
This
Agreement shall be governed by and construed in accordance with the laws of
the
Province of Alberta and the laws of Canada applicable therein and shall be
treated in all respects as an Alberta contract. Each party hereby irrevocably
attorns to the jurisdiction of the courts of the Province of Alberta in respect
of all matters arising under or in relation to this Agreement.
4.11 Severability
If
any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon
such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely
as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
4.12 Counterparts
This
Agreement may be executed in counterparts, each of which shall be deemed to
be
an original but all of which together shall constitute one and the same
instrument.
14.
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be duly executed as of the date
first above written.
|
GRAN
TIERRA ENERGY INC.
|
|
|
By:
|
/s/
Xxxx Xxxxxxxx
|
|
Name:
|
Xxxx
Xxxxxxxx, Ph. D.
|
|
Title:
|
President
and Chief Executive Officer
|
|
GRAN
TIERRA EXCHANGECO INC.
|
|
|
By:
|
/s/
Xxxx Xxxxxxxx
|
|
Name:
|
Xxxx
Xxxxxxxx, Ph. D.
|
|
Title:
|
President
and Chief Executive Officer
|
|
GRAN
TIERRA CALLCO ULC
|
|
|
By:
|
/s/
Xxxx Xxxxxxxx
|
|
Name:
|
Xxxx
Xxxxxxxx, Ph. D.
|
|
Title:
|
President
and Chief Executive Officer
|
15.
