VOTING EXCHANGE AND SUPPORT AGREEMENT
GOLDSTRIKE INC.
("Goldstrike")
and
1203647 ALBERTA INC.
("Callco")
and
GRAN TIERRA GOLDSTRIKE INC.
(the "Corporation")
and
Olympia Trust Company
(the "Trustee")
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Voting Exchange and Support Agreement
------------------------------------------------------------------------------
This 10th day of November, 2005
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS.....................................................2
SECTION 1.2 GENDER AND NUMBER...............................................5
SECTION 1.3 HEADINGS........................................................5
SECTION 1.4 DATE FOR ANY ACTION.............................................5
ARTICLE 2
PURPOSE OF AGREEMENT
SECTION 2.1 ESTABLISHMENT OF TRUST..........................................5
ARTICLE 3
SPECIAL VOTING SHARE
SECTION 3.1 ISSUE AND OWNERSHIP OF THE SPECIAL VOTING SHARE.................6
SECTION 3.2 LEGENDED SHARE CERTIFICATES.....................................6
SECTION 3.3 SAFE KEEPING OF CERTIFICATE.....................................6
ARTICLE 4
EXERCISE OF VOTING RIGHTS
SECTION 4.1 VOTING RIGHTS...................................................7
SECTION 4.2 NUMBER OF VOTES.................................................7
SECTION 4.3 MAILINGS TO SHAREHOLDERS........................................7
SECTION 4.4 COPIES OF SHAREHOLDER INFORMATION...............................9
SECTION 4.5 OTHER MATERIALS.................................................9
SECTION 4.6 LIST OF PERSONS ENTITLED TO VOTE...............................10
SECTION 4.7 ENTITLEMENT TO DIRECT VOTES....................................10
SECTION 4.8 VOTING BY TRUSTEE AND ATTENDANCE OF TRUSTEE
REPRESENTATIVE AT MEETING......................................10
SECTION 4.9 DISTRIBUTION OF WRITTEN MATERIALS..............................11
SECTION 4.10 TERMINATION OF VOTING RIGHTS...................................11
ARTICLE 5
INSOLVENCY AND AUTOMATIC EXCHANGE RIGHTS
SECTION 5.1 GRANT AND OWNERSHIP OF EXCHANGE RIGHTS.........................12
SECTION 5.2 LEGENDED SHARE CERTIFICATES....................................13
SECTION 5.3 INSOLVENCY EXCHANGE RIGHT......................................13
SECTION 5.4 EXERCISE OF INSOLVENCY EXCHANGE RIGHT SUBSEQUENT TO
RETRACTION.....................................................15
SECTION 5.5 NOTICE OF INSOLVENCY EVENT.....................................16
SECTION 5.6 AUTOMATIC EXCHANGE ON LIQUIDATION OF GOLDSTRIKE................16
(i)
ARTICLE 6
CERTAIN RIGHTS OF CALLCO TO ACQUIRE EXCHANGEABLE SHARES
SECTION 6.1 ACKNOWLEDGEMENT................................................18
SECTION 6.2 CALLCO LIQUIDATION CALL RIGHT..................................18
SECTION 6.3 CALLCO REDEMPTION CALL RIGHT...................................19
SECTION 6.4 CALLCO RETRACTION CALL RIGHT...................................20
SECTION 6.5 CHANGE OF LAW CALL RIGHT.......................................22
ARTICLE 7
WITHHOLDING RIGHTS AND STAMP TAXES
SECTION 7.1 WITHHOLDING RIGHTS.............................................23
SECTION 7.2 STAMP TAXES....................................................24
ARTICLE 8
RESTRICTIONS ON ISSUE OF GOLDSTRIKE SPECIAL VOTING SHARES
SECTION 8.1 ISSUE OF ADDITIONAL SHARES.....................................24
ARTICLE 9
CONCERNING THE TRUSTEE
SECTION 9.1 POWERS AND DUTIES OF THE TRUSTEE...............................24
SECTION 9.2 ACCEPTANCE OF TRUST............................................26
SECTION 9.3 NO CONFLICT OF INTEREST........................................26
SECTION 9.4 DEALINGS WITH TRANSFER AGENTS, REGISTRARS, ETC.................27
SECTION 9.5 BOOKS AND RECORDS..............................................27
SECTION 9.6 INCOME TAX RETURNS AND REPORTS.................................28
SECTION 9.7 ACTION OF BENEFICIARIES........................................28
SECTION 9.8 EXPERTS, ADVISERS AND AGENTS...................................29
SECTION 9.9 TRUSTEE NOT REQUIRED TO GIVE SECURITY..........................29
SECTION 9.10 AUTHORITY TO CARRY ON BUSINESS.................................29
SECTION 9.11 CONFLICTING CLAIMS.............................................30
SECTION 9.12 MERGER.........................................................30
SECTION 9.13 INDEMNIFICATION................................................31
SECTION 9.14 RESIGNATION....................................................32
SECTION 9.15 REMOVAL........................................................32
SECTION 9.16 SUCCESSOR TRUSTEE..............................................32
SECTION 9.17 NOTICE OF SUCCESSOR TRUSTEE....................................33
SECTION 9.18 INDEMNIFICATION PRIOR TO CERTAIN ACTIONS BY TRUSTEE............33
SECTION 9.19 RELIANCE UPON DECLARATIONS.....................................33
SECTION 9.20 EVIDENCE AND AUTHORITY TO TRUSTEE..............................34
SECTION 9.21 TRUSTEE NOT BOUND TO ACT ON REQUEST............................35
(ii)
ARTICLE 10
COMPENSATION
SECTION 10.1 FEES AND EXPENSES OF THE TRUSTEE...............................35
ARTICLE 11
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF GOLDSTRIKE AND THE CORPORATION
SECTION 11.1 COVENANTS OF GOLDSTRIKE REGARDING EXCHANGEABLE SHARES..........35
SECTION 11.2 NOTIFICATION OF CERTAIN EVENTS.................................37
SECTION 11.3 DELIVERY OF SHARES BY GOLDSTRIKE...............................38
SECTION 11.4 DELIVERY OF SHARES.............................................38
SECTION 11.5 QUALIFICATION OF GOLDSTRIKE SHARES.............................38
SECTION 11.6 ECONOMIC EQUIVALENCE...........................................38
SECTION 11.7 OWNERSHIP OF OUTSTANDING SHARES; VOTING........................41
SECTION 11.8 GOLDSTRIKE AND AFFILIATES NOT TO VOTE EXCHANGEABLE SHARES......41
SECTION 11.9 TENDER OFFERS, ETC.............................................41
SECTION 11.10 TENDER OFFERS..................................................42
SECTION 11.11 REPRESENTATIONS AND WARRANTIES OF GOLDSTRIKE...................42
SECTION 11.12 RESERVATION OF GOLDSTRIKE SHARES...............................43
SECTION 11.13 MERGER, AMALGAMATION OR BUSINESS COMBINATION...................43
ARTICLE 12
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
SECTION 12.1 AMENDMENTS, MODIFICATIONS, ETC.................................43
SECTION 12.2 CHANGES IN CAPITAL OF GOLDSTRIKE AND THE CORPORATION...........43
ARTICLE 13
TERMINATION
SECTION 13.1 TERM...........................................................44
ARTICLE 14
GENERAL
SECTION 14.1 SEVERABILITY...................................................44
SECTION 14.2 ENUREMENT......................................................44
SECTION 14.3 NOTICES TO PARTIES.............................................44
SECTION 14.4 RISK OF PAYMENTS BY POST.......................................47
SECTION 14.5 COUNTERPARTS...................................................47
SECTION 14.6 JURISDICTION...................................................47
ADDENDA
SCHEDULE "A"
SCHEDULE "B"
DETAILS OF THE GOLDSTRIKE SPECIAL VOTING SHARE
(iii)
VOTING EXCHANGE AND SUPPORT AGREEMENT
THIS AGREEMENT is entered into as of this 10th day of November, 2005, by
GOLDSTRIKE INC., a corporation incorporated under the laws of Nevada
("Goldstrike"), 1203647 ALBERTA INC., a corporation incorporated under the laws
of Alberta ("Callco"), GRAN TIERRA GOLDSTRIKE INC., a corporation incorporated
under the laws of Alberta (the "Corporation"), and Olympia Trust Company, a
corporation authorized under the laws of Alberta to carry on the business of a
trustee (the "Trustee").
WHEREAS, pursuant to a share purchase agreement dated effective November
10, 2005 (the "Acquisition Agreement"), by and among Goldstrike, Gran Tierra
Energy Inc. and the holders (the "Holders") of the issued and outstanding shares
in the capital of Gran Tierra Energy, Inc. specified therein, the parties
thereto agreed that on the closing of the transactions contemplated under the
Acquisition Agreement, the parties hereto would execute and deliver a Voting,
Exchange and Support Agreement containing the terms and conditions set forth as
an Exhibit to the Acquisition Agreement;
AND WHEREAS, pursuant to the Acquisition Agreement, the Corporation has
issued to certain of the Holders certain exchangeable shares of the Corporation
(the "Exchangeable Shares") having the rights, privileges, restrictions and
conditions set forth in Schedule "A" annexed hereto (the "Exchangeable Share
Provisions");
AND WHEREAS the parties hereto desire to make appropriate provision and to
establish a procedure whereby voting rights in Goldstrike shall be exercisable
by the Trustee in accordance with instructions given to him by the Beneficiaries
(as hereinafter defined), and in connection therewith, Goldstrike is to issue to
the Trustee, for the benefit of the Beneficiaries, pursuant to the Acquisition
Agreement, one preferred share in the capital of Goldstrike designated as a
"special voting share", $0.001 par value (the "Goldstrike Special Voting Share")
having attached thereto the rights, privileges, restrictions and conditions set
forth in Schedule "B" annexed hereto;
AND WHEREAS Callco is to grant to and in favour of the Trustee, for the
benefit of the Beneficiaries, the right, in the circumstances set forth herein,
to require Callco to purchase from the Beneficiaries all or any part of the
Exchangeable Shares held by the Beneficiaries;
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:
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ARTICLE 1
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions
Where used herein or in any amendments hereto or in any communications
required or permitted to be given hereunder, the following capitalized terms
shall have the following meanings, unless the context otherwise requires:
"Acquisition Agreement" has the meaning ascribed thereto in the recitals hereto.
"Act" means the Business Corporations Act (Alberta), as amended, consolidated or
re-enacted from time to time.
"Affiliate" shall have the meaning ascribed thereto in the Act.
"Automatic Exchange Rights" means the benefit of the obligation of Callco to
effect the automatic exchange of Exchangeable Shares for Goldstrike Shares
pursuant to Section 5.6 hereof upon the occurrence of a Liquidation Event.
"Automatic Redemption Date" has the meaning ascribed thereto in the Exchangeable
Share Provisions.
"Beneficiaries" means the registered holders from time to time of Exchangeable
Shares, other than Goldstrike, Callco and their Affiliates.
"Beneficiary Votes" has the meaning ascribed thereto in Section 4.2.
"Board of Directors" means the board of directors of the Corporation.
"Business Day" means any day, other than a Saturday, a Sunday or a day when
banks are not generally open for business in Calgary, Alberta.
"Call Rights" means the Liquidation Call Right, Redemption Call Right,
Retraction Call Right or the Change of Law Call Rights.
"Canadian Dollar Equivalent" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"Change of Law" means any amendment to the ITA and other applicable provincial
income tax laws that permits beneficial holders of Exchangeable Shares who are
resident in Canada to hold the Exchangeable Shares as capital property and deal
at arm's length with Goldstrike and the Corporation (all for the purposes of the
ITA and other applicable provincial income tax laws) to exchange their
Exchangeable Shares for Goldstrike Shares on a basis that will not require such
holders to recognize any gain or loss or any actual or deemed dividend in
respect of such exchange for the purposes of the ITA or applicable provincial
income tax laws.
3
"Change of Law Call Date" has the meaning ascribed thereto in Section 6.5.
"Change of Law Call Right" has the meaning ascribed thereto in Section 6.5.
"Change of Law Purchase Price" has the meaning ascribed thereto in Section 6.5.
"Current Market Price" has the meaning ascribed thereto in the Exchangeable
Share Provisions.
"Effective Date" means the date of issuance of the Exchangeable Shares.
"Exchangeable Share Consideration" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"Exchangeable Share Provisions" has the meaning ascribed thereto in the recitals
hereto.
"Exchangeable Shares" has the meaning ascribed thereto in the recitals hereto.
"Goldstrike Consent" means any written consent sought by Goldstrike from the
holders of Goldstrike Shares.
"Goldstrike Meeting" means any meeting of shareholders of Goldstrike at which
holders of Goldstrike Shares are entitled to vote.
"Goldstrike Shares" means the common shares of $.001 par value per share in the
capital of Goldstrike.
"Goldstrike Special Voting Share" has the meaning ascribed thereto in the
recitals hereto.
"Holder(s)" has the meaning ascribed thereto in the recitals hereto.
"Insolvency Event" means (i) the institution by the Corporation of any
proceeding to be adjudicated a bankrupt or insolvent or to be dissolved or
wound-up, or the consent of the Corporation to the institution of bankruptcy,
insolvency, dissolution or winding-up proceedings against it, or (ii) the filing
of a petition, answer or consent seeking dissolution or winding-up under any
bankruptcy, insolvency or analogous laws, including without limitation the
Companies Creditors' Arrangement Act (Canada) and the Bankruptcy and Insolvency
Act (Canada), and the failure by the Corporation to contest in good faith any
such proceedings commenced in respect of the Corporation within 15 days of
becoming aware thereof, or the consent by the Corporation to the filing of any
such petition or to the appointment of a receiver, or (iii) the making by the
Corporation of a general assignment for the benefit of creditors, or the
admission in writing by the Corporation of its inability to pay its debts
generally as they become due, or (iv) the Corporation not being permitted,
pursuant to liquidity or solvency requirements of applicable law, to redeem any
Retracted Shares pursuant to the Exchangeable Share Provisions.
4
"Insolvency Exchange Right" means the benefit of the obligation of Callco to
effect the exchange of Exchangeable Shares for Goldstrike Shares pursuant to
Section 5.3 hereof upon the occurrence of an Insolvency Event.
"ITA" means the Income Tax Act (Canada), as amended.
"Liquidation Call Purchase Price" has the meaning ascribed thereto in Section
6.2.
"Liquidation Call Right" has the meaning ascribed thereto in Section 6.2.
"Liquidation Event" has the meaning ascribed thereto in Section 5.6.
"Liquidation Event Effective Time" means the effective time of a Liquidation
Event.
"List" has the meaning ascribed thereto in Section 4.6.
"Officer's Certificate" means, with respect to Goldstrike or the Corporation, a
certificate signed on behalf of such entity by any one of the Chairman of the
Board, the Vice-Chairman of the Board, the Chief Executive Officer, the
President or the Chief Financial Officer of Goldstrike or the Corporation, as
the case may be.
"Person" includes an individual, body corporate, partnership, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative.
"Redemption Call Purchase Price" has the meaning ascribed thereto in Section
6.3.
"Redemption Call Right" has the meaning ascribed thereto in Section 6.3.
"Retracted Shares" has the meaning ascribed thereto in Section 5.4.
"Retraction Call Purchase Price" has the meaning ascribed thereto in Section
6.4.
"Retraction Call Right" has the meaning ascribed thereto in Section 6.4.
"Retraction Date" has the meaning ascribed thereto in the Exchangeable Share
Provisions.
"Retraction Request" has the meaning ascribed thereto in the Exchangeable Share
Provisions.
"Securities Act" has the meaning ascribed thereto in Section 11.5.
5
"Subsidiary", in relation to any person, means any body corporate, partnership,
joint venture, association or other entity of which more than 50% of the total
voting power of shares or units of ownership or beneficial interest entitled to
vote in the election of directors (or members of a comparable governing body) is
owned or controlled, directly or indirectly, by such person.
"Trust Estate" means the Goldstrike Special Voting Share, any other securities,
the Insolvency 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.
"Voting Rights" means the voting rights attached to the Goldstrike Special
Voting Share as set forth in Schedule "B" annexed hereto.
Section 1.2 Gender and Number
Any reference in this Agreement to gender includes all genders, and words
imparting the singular number only shall include the plural and vice versa.
Section 1.3 Headings
The provision of a table of contents, the division of this Agreement into
Articles and Sections and the insertion of headings are for convenience of
reference only and shall not affect the interpretation of this Agreement.
Section 1.4 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.
ARTICLE 2
PURPOSE OF AGREEMENT
Section 2.1 Establishment of Trust
The purpose of this Agreement is to create the Trust for the benefit of
the Beneficiaries, as herein provided. The Trustee will hold the Goldstrike
Special Voting Share in order to enable the Trustee to exercise the Voting
Rights and will hold the Automatic Exchange Rights and the Insolvency Exchange
Right in order to enable the Trustee to exercise such rights, in each case as
trustee for and on behalf of the Beneficiaries as provided in this Agreement.
6
ARTICLE 3
SPECIAL VOTING SHARE
Section 3.1 Issue and Ownership of the Special Voting Share
Immediately following execution of this Agreement, Goldstrike shall issue
to the Trustee the Goldstrike Special Voting Share (and shall deliver the
certificate representing such share to the Trustee) to be hereafter held of
record by the Trustee as trustee for and on behalf of, and for the use and
benefit of, the Beneficiaries and in accordance with the provisions of this
Agreement. Goldstrike hereby acknowledges receipt from the Trustee as trustee
for and on behalf of the Beneficiaries of good and valuable consideration (and
the adequacy thereof) for the issuance of the Goldstrike Special Voting Share by
Goldstrike 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 Goldstrike Special Voting Share and shall be
entitled to exercise all of the rights and powers of an owner with respect to
the Goldstrike Special Voting Share provided that the Trustee shall:
(a) hold the Goldstrike Special Voting Share and the legal title thereto
as trustee solely for the use and benefit of the Beneficiaries in
accordance with the provisions of this Agreement; and
(b) except as specifically authorized by this Agreement, have no power
or authority to sell, transfer, vote or otherwise deal in or with
the Goldstrike Special Voting Share and the Goldstrike Special
Voting Share shall not be used or disposed of by the Trustee for any
purpose other than the purposes for which this Trust is created
pursuant to this Agreement.
Section 3.2 Legended Share Certificates
The Corporation will cause each certificate representing Exchangeable
Shares to bear an appropriate legend notifying the Beneficiaries of their right
to instruct the Trustee with respect to the exercise of the Voting Rights in
respect of the Exchangeable Shares of the Beneficiaries.
Section 3.3 Safe Keeping of Certificate
The certificate representing the Goldstrike Special Voting Share shall at
all times be held in safe keeping by the Trustee or its duly authorized agent.
7
ARTICLE 4
EXERCISE OF VOTING RIGHTS
Section 4.1 Voting Rights
The Trustee, as the holder of record of the Goldstrike Special Voting
Share, shall be entitled to all of the Voting Rights, including the right to
vote in person or by proxy attaching to the Goldstrike Special Voting Share on
any matters, questions, proposals or propositions whatsoever that may properly
come before the shareholders of Goldstrike at any Goldstrike Meeting. The Voting
Rights shall be and remain vested in and exercised by the Trustee subject to the
terms of this Agreement. The Trustee shall exercise the Voting Rights only on
the basis of instructions received pursuant to this Article 4 from Beneficiaries
on the record date established by Goldstrike or by applicable law for such
Goldstrike Meeting who are entitled to instruct the Trustee as to the voting
thereof. To the extent that no instructions are received from a Beneficiary with
respect to the Voting Rights to which such Beneficiary is entitled, the Trustee
shall not exercise or permit the exercise of such Voting Rights.
Section 4.2 Number of Votes
With respect to all Goldstrike Meetings and Goldstrike Consents, each
Beneficiary shall be entitled to instruct the Trustee to cast and exercise the
votes comprised in the Voting Rights for each Exchangeable Share owned of record
by such Beneficiary on the record date established by Goldstrike or by
applicable law for such Goldstrike Meeting or Goldstrike Consent, as the case
may be (the "Beneficiary Votes"), in respect of each matter, question, proposal
or proposition to be voted on at such Goldstrike Meeting or by such Goldstrike
Consent.
Any Beneficiary who chooses to attend a Goldstrike Meeting in person will
be entitled to one vote on a show of hands.
Section 4.3 Mailings to Shareholders
(1) With respect to each Goldstrike Meeting and Goldstrike Consent, the
Trustee will use its reasonable efforts promptly to mail or cause to be
mailed (or otherwise communicate in the same manner as Goldstrike utilizes
in communications to holders of Goldstrike Shares subject to applicable
regulatory requirements and provided that such manner of communications is
reasonably available to the Trustee and upon the Trustee being advised in
writing of such method) to each of the Beneficiaries named in the List
(referred to in Section 4.6 below), such mailing or communication to
commence wherever practicable on the same day as the mailing or notice (or
other communication) with respect thereto is commenced by Goldstrike to
its shareholders:
8
(a) a copy of such notice, together with any related materials,
including, without limitation, any circular or information statement
or listing particulars, to be provided to shareholders of
Goldstrike;
(b) a statement that such Beneficiary is entitled to instruct the
Trustee as to the exercise of the Beneficiary Votes with respect to
such Goldstrike Meeting or Goldstrike Consent, as the case may be,
or, pursuant to Section 4.7 in the case of a Goldstrike Meeting, to
attend such Goldstrike Meeting and to exercise personally the
Beneficiary Votes thereat;
(c) 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:
(i) a proxy to such Beneficiary or his designee to exercise
personally the Beneficiary Votes; or
(ii) a proxy to a designated agent or other representative of the
management of Goldstrike to exercise such Beneficiary Votes;
(d) a statement that if no such instructions are received from the
Beneficiary, the Beneficiary Votes to which such Beneficiary is
entitled will not be exercised;
(e) a form of direction whereby the Beneficiary may so direct and
instruct the Trustee as contemplated herein; and
(f) a statement of the time and date by which such instructions must be
received by the Trustee in order to be binding upon it, which in the
case of any Goldstrike Meeting shall not be later than the close of
business on the third Business Day prior to such meeting, and of the
method for revoking or amending such instructions.
(2) The materials referred to in this Section 4.3 are to be provided to the
Trustee by Goldstrike, and the materials referred to in Section 4.3(1)(c),
Section 4.3(1)(e) and Section 4.3(1)(f) shall be subject to reasonable
comment by the Trustee in a timely manner. Goldstrike shall ensure that
the materials to be provided to the Trustee are provided in sufficient
time to permit the Trustee to comment as aforesaid and to send all
materials to each Beneficiary at the same time as such materials are first
sent to holders of Goldstrike Shares. Goldstrike agrees not to communicate
with holders of Goldstrike Shares with respect to the materials referred
to in this Section 4.3 otherwise than by mail unless such method of
communication is also reasonably available to the Trustee for
communication with the Beneficiaries.
9
(3) For the purpose of determining Beneficiary Votes to which a Beneficiary is
entitled in respect of any Goldstrike Meeting or Goldstrike Consent, the
number of Exchangeable Shares owned of record by the Beneficiaries shall
be determined at the close of business on the record date established by
Goldstrike or by applicable law for purposes of determining shareholders
entitled to vote at such Goldstrike Meeting or to approve such Goldstrike
Consent, as the case may be. Goldstrike will notify the Trustee in writing
of any decision of the Board of Directors of Goldstrike with respect to
the calling of any Goldstrike Meeting or requesting any Goldstrike Consent
and shall provide all necessary information and materials to the Trustee
in each case promptly and in any event in sufficient time to enable the
Trustee to perform its obligations contemplated by this Section 4.3.
Section 4.4 Copies of Shareholder Information
Goldstrike will deliver to the Trustee copies of all proxy materials
(including notices of Goldstrike Meetings but excluding proxies to vote
Goldstrike Shares), information statements, reports (including without
limitation, all interim and annual financial statements) and other written
communications that, in each case, are to be distributed by Goldstrike from time
to time to holders of Goldstrike Shares in sufficient quantities and in
sufficient time so as to enable the Trustee to send those materials to each
Beneficiary at the same time as such materials are first sent to holders of
Goldstrike Shares. The Trustee will mail or otherwise send to each Beneficiary,
at the expense of Goldstrike, copies of all such materials (and all materials
specifically directed to the Beneficiaries or to the Trustee for the benefit of
the Beneficiaries by Goldstrike) received by the Trustee from Goldstrike
contemporaneously with the sending of such materials to holders of Goldstrike
Shares.
Section 4.5 Other Materials
As soon as reasonably practicable after receipt by Goldstrike or
shareholders of Goldstrike (if such receipt is known by Goldstrike) of any
material sent or given by or on behalf of a third party to holders of Goldstrike
Shares generally, including without limitation, dissident proxy and information
circulars (and related information and material) and take-over bid and
securities exchange take-over bid circulars (and related information and
material), provided such material has not been sent to the Beneficiaries by or
on behalf of such third party, Goldstrike shall use its reasonable efforts to
obtain and deliver to the Trustee copies thereof in sufficient quantities so as
to enable the Trustee to forward such material (unless the same has been
provided directly to Beneficiaries by such third party) to each Beneficiary as
soon as possible thereafter. As soon as reasonably practicable after receipt
thereof, the Trustee will mail or otherwise send to each Beneficiary, at the
expense of Goldstrike, copies of all such materials received by the Trustee from
Goldstrike.
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Section 4.6 List of Persons Entitled to Vote
The Corporation shall, (a) prior to each annual, general and extraordinary
Goldstrike Meeting and (b) forthwith upon each request made at any time by the
Trustee in writing, prepare or cause to be prepared a list (a "List") of the
names and addresses of the Beneficiaries arranged in alphabetical order and
showing the number of Exchangeable Shares held of record by each such
Beneficiary, in each case at the close of business on the date specified by the
Trustee in such request or, in the case of a List prepared in connection with a
Goldstrike Meeting or Goldstrike Consent, at the close of business on the record
date established by Goldstrike or pursuant to applicable law for determining the
holders of Goldstrike Shares entitled to receive notice of and/or to vote at
such Goldstrike Meeting or to give such Goldstrike Consent. Each such List shall
be delivered to the Trustee promptly after receipt by the Corporation of such
request or the record date for such meeting or seeking of consent, as the case
may be, and in any event within sufficient time as to permit the Trustee to
perform its obligations under this Agreement. Goldstrike agrees to give the
Corporation notice (with a copy to the Trustee) of the calling of any Goldstrike
Meeting or seeking of any Goldstrike Consent, together with the record date
therefor, sufficiently prior to the date of the calling of such meeting or
seeking of such consent so as to enable the Corporation to perform its
obligations under this Section 4.6.
Section 4.7 Entitlement to Direct Votes
Subject to Section 4.8, any Beneficiary named in a List prepared in
connection with any Goldstrike Meeting or Goldstrike Consent will be entitled
(a) to instruct the Trustee in the manner described in Section 4.3 with respect
to the exercise of the Beneficiary Votes to which such Beneficiary is entitled
or (b), in the case of a Goldstrike Meeting, to attend such meeting and
personally exercise thereat, as the proxy of the Trustee, the Beneficiary Votes
to which such Beneficiary is entitled.
Section 4.8 Voting by Trustee and Attendance of Trustee Representative at
Meeting
(1) In connection with each Goldstrike Meeting and Goldstrike Consent, the
Trustee shall exercise, either in person or by proxy, in accordance with
the instructions received from a Beneficiary pursuant to Section 4.3, the
Beneficiary Votes as to which such Beneficiary is entitled to direct the
vote (or any lesser number thereof as may be set forth in the
instructions); provided, however, that such written instructions are
received by the Trustee from the Beneficiary prior to the time and date
fixed by the Trustee for receipt of such instruction in the notice given
by the Trustee to the Beneficiary pursuant to Section 4.3.
(2) Subject to the receipt of instructions from a Beneficiary pursuant to
Section 4.3 and any notice to the contrary, the Trustee shall cause a
representative who is empowered by it to sign and deliver, on behalf of
the Trustee, proxies for Voting Rights to attend each Goldstrike Meeting.
Upon submission by a Beneficiary (or its designee) of identification
satisfactory to the Trustee's representative, and at the Beneficiary's
request, such representative shall sign and deliver to such Beneficiary
(or its designee) a proxy to exercise personally the Beneficiary Votes as
to which such Beneficiary is otherwise entitled hereunder to direct the
vote, if such Beneficiary either (i) has not previously given the Trustee
instructions pursuant to Section 4.3 in respect of such meeting, or (ii)
submits to such representative written revocation of any such previous
instructions. At such meeting, the Beneficiary exercising such Beneficiary
Votes shall have the same rights as the Trustee to speak at the meeting in
respect of any matter, question, proposal or proposition, to vote by way
of ballot at the meeting in respect of any matter, question, proposal or
proposition, and to vote at such meeting by way of a show of hands in
respect of any matter, question or proposition.
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Section 4.9 Distribution of Written Materials
Any written materials distributed by the Trustee pursuant to this
Agreement shall be sent by mail (or otherwise communicated in the same manner as
Goldstrike utilizes in communications to holders of Goldstrike Shares subject to
applicable regulatory requirements and provided such manner of communications is
reasonably available to the Trustee and upon the Trustee being advised in
writing of such method) to each Beneficiary at its address as shown on the books
of the Corporation. Goldstrike agrees not to communicate with holders of
Goldstrike Shares with respect to such written materials otherwise than by mail
unless such method of communication is also reasonably available to the Trustee
for communication with the Beneficiaries. The Corporation shall provide or cause
to be provided to the Trustee for purposes of communication, on a timely basis
and without charge or other expense:
(a) a current List; and
(b) upon the request of the Trustee, mailing labels to enable the
Trustee to carry out its duties under this Agreement.
Section 4.10 Termination of Voting Rights
All of the rights of a Beneficiary with respect to the Beneficiary Votes
exercisable in respect of the Exchangeable Shares held by such Beneficiary,
including the right to instruct the Trustee as to the voting of or to vote
personally such Beneficiary Votes, shall be deemed to be surrendered by the
Beneficiary to Callco and such Beneficiary Votes and the Voting Rights
represented thereby shall cease immediately upon (i) the delivery by such holder
to the Trustee of the certificates representing such Exchangeable Shares in
connection with the occurrence of the automatic exchange of Exchangeable Shares
for Goldstrike Shares, as specified in Article 5 (unless Callco shall not have
delivered the requisite Goldstrike Shares issuable in exchange therefor to the
Trustee pending delivery to the Beneficiaries), or (ii) the retraction or
redemption of Exchangeable Shares pursuant to section 6 or 7 of the Exchangeable
Share Provisions respectively, or (iii) the effective date of the liquidation,
dissolution or winding-up of the Corporation pursuant to section 5 of the
Exchangeable Share Provisions, or (iv) the purchase of Exchangeable Shares from
the holder thereof by Callco pursuant to the exercise by Callco of any of the
Call Rights.
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ARTICLE 5
INSOLVENCY AND AUTOMATIC EXCHANGE RIGHTS
Section 5.1 Grant and Ownership of Exchange Rights
(1) Goldstrike and Callco hereby agree with the Trustee as trustee for and on
behalf of, and for the use and benefit of, the Beneficiaries that the
Trustee shall have (i) the Insolvency Exchange Right, and (ii) the
Automatic Exchange Rights, all in accordance with the provisions of this
Agreement. The Insolvency Exchange Right shall represent an agreement on
the terms set out herein between Callco and the Trustee (acting on behalf
of the Beneficiaries) that upon the occurrence of an Insolvency Event,
Callco will purchase from each and every Beneficiary all of the
Exchangeable Shares held by such Beneficiary. The Automatic Exchange
Rights shall represent an agreement on the terms set out herein between
Callco and the Trustee (acting on behalf of the Beneficiaries) that Callco
will purchase and be deemed to purchase the outstanding Exchangeable
Shares immediately prior to the Liquidation Event Effective Time. Callco
hereby acknowledges receipt from the Trustee as trustee for and on behalf
of the Beneficiaries of good and valuable consideration (and the adequacy
thereof) for agreeing with the Trustee to be bound by the Insolvency
Exchange Right and the Automatic Exchange Rights.
(2) 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 Insolvency 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 Insolvency Exchange Right and the Automatic
Exchange Rights, provided that the Trustee shall:
(a) hold the Insolvency Exchange Right and the Automatic Exchange Rights
and the legal title thereto as trustee solely for the use and
benefit of the Beneficiaries in accordance with the provisions of
this Agreement; and
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(b) except as specifically authorized by this Agreement, have no power
or authority to exercise or otherwise deal in or with the Insolvency
Exchange Right or the Automatic Exchange Rights, and the Trustee
shall not exercise any such rights for any purpose other than the
purposes for which the Trust is created pursuant to this Agreement.
(3) The obligations of Goldstrike to issue Goldstrike Shares to or as directed
by Callco so as to enable Callco to deliver such shares pursuant to the
Insolvency Exchange Right or the Automatic Exchange Rights are subject to
all applicable laws and regulatory requirements.
Section 5.2 Legended Share Certificates
The Corporation will cause each certificate representing Exchangeable
Shares to bear an appropriate legend notifying the Beneficiaries of the
Insolvency Exchange Right and the Automatic Exchange Rights.
Section 5.3 Insolvency Exchange Right
(1) Upon the occurrence and during the continuation of an Insolvency Event,
each Beneficiary shall be entitled to instruct the Trustee to exercise the
Insolvency Exchange Right in respect of all or any portion of the
Exchangeable Shares held by the Beneficiary and thereby require Callco to
purchase such Exchangeable Shares from the Beneficiary in accordance with
the provisions of this Agreement.
(2) The purchase price payable by Callco for each Exchangeable Share to be
purchased by Callco under the Insolvency Exchange Right shall be an amount
per share equal to (i) the Current Market Price of a Goldstrike Share on
the last Business Day prior to the day of closing of the purchase and sale
of such Exchangeable Share under the Insolvency Exchange Right, which
shall be satisfied in full by Callco delivering or causing to be delivered
to such holder one Goldstrike Share, plus (ii) to the extent not paid by
the Corporation on the designated payment date therefor, an additional
amount equal to and in full satisfaction of the full amount of all
declared and unpaid dividends on each such Exchangeable Share held by such
holder on any dividend record date which occurred prior to the closing of
the purchase and sale. In connection with each exercise of the Insolvency
Exchange Right, Callco shall provide to the Trustee an Officer's
Certificate setting forth the calculation of the purchase price for each
Exchangeable Share. The purchase price for each such Exchangeable Share so
purchased may be satisfied only by Callco delivering or causing to be
delivered to the Trustee, on behalf of the relevant Beneficiary, one
Goldstrike Share and on the applicable payment date a cheque for the
balance, if any, of the purchase price, less any amounts withheld pursuant
to Section 7.1. Upon payment by Callco of such purchase price the relevant
Beneficiary shall cease to have any right to be paid by the Corporation
any amount in respect of declared and unpaid dividends on each such
Exchangeable Share.
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(3) To exercise the Insolvency Exchange Right, the Trustee shall deliver to
Callco, in person or by certified or registered mail, at its head office
or at such other place as Callco may from time to time designate by
written notice to the Trustee, with a copy to the Corporation at its
principal executive offices or at such other place as the Corporation may
from time to time designate by written notice to the Trustee, the
certificates representing the Exchangeable Shares which the Beneficiary
desires Callco to purchase, duly endorsed for transfer to Callco, and
accompanied by such other documents and instruments as may be required to
effect a transfer of Exchangeable Shares under the Act and the constating
documents of the Corporation and such additional documents and instruments
as Callco may reasonably require, together with:
(a) a duly completed form of notice of exercise of the Insolvency
Exchange Right, contained on the reverse of or attached to the
Exchangeable Share certificates:
(i) stating that the Trustee is exercising the Insolvency Exchange
Right on behalf of the Beneficiary so as to require Callco to
purchase from the Beneficiary the number of Exchangeable
Shares specified therein;
(ii) containing confirmation from the Beneficiary that the
Beneficiary has good title to and owns all such Exchangeable
Shares to be acquired by Callco free and clear of all liens,
hypothecs, pledges, encumbrances, security interests, options,
restrictions, proxies and adverse claims, except as set forth
herein and in the Exchangeable Share Provisions; and
(iii) setting out the address of the Persons to whom the
Exchangeable Share Consideration should be delivered; and
(b) payment (or evidence satisfactory to the Corporation and Callco of
payment) of the taxes (if any) payable as contemplated by Section
7.2 hereof.
(4) If only part of the Exchangeable Shares represented by any certificate
delivered to Callco are to be purchased by Callco under the Insolvency
Exchange Right, a new certificate for the balance of such Exchangeable
Shares shall be issued to the Beneficiary at the expense of the
Corporation.
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(5) Promptly after receipt of the certificates representing the Exchangeable
Shares which the Beneficiary desires Callco to purchase under the
Insolvency Exchange Right (together with such documents and instruments of
transfer and a duly completed form of notice of exercise of the Insolvency
Exchange Right), duly endorsed for transfer to Callco, which notice to
Callco and the Corporation shall constitute exercise of the Insolvency
Exchange Right by the Trustee on behalf of the Beneficiary, Callco shall
promptly thereafter transfer to the Beneficiary the Exchangeable Share
Consideration deliverable in connection with the exercise of the
Insolvency Exchange Right; provided, however, that no such delivery shall
be made unless and until the Beneficiary shall have paid (or provided
evidence satisfactory to the Corporation and Callco of the payment of) the
taxes (if any) payable as contemplated by Section 7.2 hereof. Immediately
upon the giving of notice by the Trustee, on behalf of a Beneficiary, to
Callco and the Corporation of the exercise of the Insolvency Exchange
Right, as provided in this Section 5.3, the Beneficiary shall be deemed to
have transferred to Callco all of its right, title and interest in and to
such Exchangeable Shares, 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 the purchase price
therefor unless the Exchangeable Share Consideration is not delivered by
Callco to the Beneficiary by the date specified, in which case the rights
of the Beneficiary shall remain unaffected until such Exchangeable Share
Consideration is delivered by Callco and any cheque included therein is
paid. Notwithstanding the foregoing, until the Exchangeable Share
Consideration is delivered to the Beneficiary, the Beneficiary shall be
deemed to be a holder of the sold Exchangeable Shares for purposes of
voting rights with respect thereto under this Agreement.
Section 5.4 Exercise of Insolvency Exchange Right Subsequent to Retraction
In the event that a Beneficiary has exercised its right under Article 6 of
the Exchangeable Share Provisions to require the Corporation to redeem any or
all of the Exchangeable Shares held by the Beneficiary (such number of
Exchangeable Shares so required to be redeemed being hereinafter collectively
referred to as the "Retracted Shares") and is notified by the Corporation
pursuant to Section 6.5 of the Exchangeable Share Provisions that the
Corporation will not be permitted as a result of liquidity or solvency
requirements or other provisions of applicable law to redeem all such Retracted
Shares, subject to receipt by such Beneficiary of written notice to that effect
from the Corporation and provided that the Retraction Call Right with respect to
the Retracted Shares shall not have been exercised, the Retraction Request will
constitute, and will be deemed to constitute, notice from the Trustee on behalf
of such Beneficiary to Callco that the Trustee is exercising the Insolvency
Exchange Right on behalf of such Beneficiary with respect to those Retracted
Shares which the Corporation is not permitted by applicable law to redeem. In
any such event, the Corporation hereby agrees with such Beneficiary to notify
such Beneficiary immediately of such prohibition against the Corporation
redeeming all of the Retracted Shares and to forward or cause to be forwarded to
Callco immediately all relevant materials delivered by such Beneficiary to the
Corporation (including, without limitation, a copy of the Retraction Request
delivered pursuant to Section 6.1 of the Exchangeable Share Provisions) in
connection with such proposed redemption of the Retracted Shares, and Callco
will thereupon purchase such shares in accordance with the provisions of this
Article 5.
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Section 5.5 Notice of Insolvency Event
As soon as practicable following the occurrence of an Insolvency Event or
any event that with the giving of notice or the passage of time or both would be
an Insolvency Event, the Corporation and Callco shall give written notice
thereof to the Trustee. As soon as practicable following the receipt of notice
from the Corporation and Callco of the occurrence of an Insolvency Event, or
upon the Trustee becoming aware of an Insolvency Event, the Trustee will mail to
each Beneficiary a notice of such Insolvency Event in the form provided by
Callco, which notice shall contain a brief statement of the rights of the
Beneficiaries with respect to the Insolvency Exchange Right.
Section 5.6 Automatic Exchange on Liquidation of Goldstrike
(1) Goldstrike 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
Goldstrike to institute voluntary liquidation, dissolution or
winding-up proceedings with respect to Goldstrike or to effect any
other distribution of assets of Goldstrike among its shareholders
for the purpose of winding up its affairs, at least 60 days prior to
the proposed effective date of such liquidation, dissolution,
winding-up or other distribution; and
(b) immediately upon the earlier of (A) receipt by Goldstrike of notice
of, and (B) Goldstrike otherwise becoming aware of any instituted
claim, suit, petition or other proceedings with respect to the
involuntary liquidation, dissolution or winding-up of Goldstrike or
to effect any other distribution of assets of Goldstrike among its
shareholders for the purpose of winding up its affairs, in each case
where Goldstrike has failed to contest in good faith any such
proceeding commenced in respect of Goldstrike within 30 days of
becoming aware thereof.
(2) As soon as practicable following receipt by the Trustee from Goldstrike of
notice of any event (a "Liquidation Event") contemplated by Section
5.6(1)(a) or 5.6(1)(b), the Trustee will give notice thereof to the
Beneficiaries. Such notice shall be provided to the Trustee by Goldstrike
and shall include a brief description of the automatic exchange of
Exchangeable Shares for Goldstrike Shares provided for in Section 5.6(3).
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(3) In order that the Beneficiaries will be able to participate on a pro rata
basis with the holders of Goldstrike Shares in the distribution of assets
of Goldstrike in connection with a Liquidation Event, all of the then
outstanding Exchangeable Shares shall be automatically exchanged for
Goldstrike Shares. To effect such automatic exchange, Callco shall be
deemed to have purchased from the Beneficiaries immediately prior to the
Liquidation Event Effective Time each Exchangeable Share then outstanding
and held by Beneficiaries, and each Beneficiary shall be deemed to have
sold the Exchangeable Shares held by it at such time, free and clear of
any lien, claim or encumbrance, for a purchase price per share equal to
(i) the Current Market Price of a Goldstrike Share at the Liquidation
Event Effective Time, which shall be satisfied in full by Callco
delivering or causing to be delivered to the Beneficiary one Goldstrike
Share, plus (ii) to the extent not paid by the Corporation on the
designated payment date therefor, an additional amount equal to and in
full satisfaction of the full amount of all declared and unpaid dividends
on each such Exchangeable Share held by such holder on any dividend record
date which occurred prior to the date of the exchange. Callco shall
provide the Trustee with an Officer's Certificate in connection with each
automatic exchange setting forth the calculation of the purchase price for
each Exchangeable Share, which calculation the Trustee shall accept
without any obligation on its part to verify or confirm its accuracy or
completeness.
(4) Immediately prior to the Liquidation Event Effective Time, the closing of
the transaction of purchase and sale contemplated by the automatic
exchange of Exchangeable Shares for Goldstrike Shares shall be deemed to
have occurred, and each Beneficiary shall be deemed to have transferred to
Callco all of the Beneficiary's right, title and interest in and to such
Beneficiary's Exchangeable Shares free and clear of any lien, claim or
encumbrance and the related interest in the Trust Estate, any right of
each such Beneficiary to receive declared and unpaid dividends from the
Corporation shall be deemed to be satisfied and discharged, and each such
Beneficiary shall cease to be a holder of such Exchangeable Shares and
Callco shall deliver or cause to be delivered to the Beneficiary the
Goldstrike Shares deliverable upon the automatic exchange of Exchangeable
Shares for Goldstrike Shares and on the applicable payment date shall
deliver to the Trustee for delivery to the Beneficiary a cheque for the
balance, if any, of the total purchase price for such Exchangeable Shares,
without interest, in each case less any amounts withheld pursuant to
Section 7.1. Concurrently with such Beneficiary ceasing to be a holder of
Exchangeable Shares, the Beneficiary shall become the holder of the
Goldstrike Shares delivered pursuant to the automatic exchange of such
Beneficiary's Exchangeable Shares for Goldstrike Shares and the
certificates held by the Beneficiary previously representing the
Exchangeable Shares exchanged by the Beneficiary with Callco pursuant to
such automatic exchange shall thereafter be deemed to represent Goldstrike
Shares delivered to the Beneficiary by Callco pursuant to such automatic
exchange. Upon the request of a Beneficiary and the surrender by the
Beneficiary of Exchangeable Share certificates deemed to represent
Goldstrike Shares, duly endorsed in blank and accompanied by such
instruments of transfer as Goldstrike may reasonably require, Goldstrike
shall deliver or cause to be delivered to the Beneficiary certificates
representing the Goldstrike Shares of which the Beneficiary is the holder.
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ARTICLE 6
CERTAIN RIGHTS OF CALLCO TO ACQUIRE EXCHANGEABLE SHARES
Section 6.1 Acknowledgement
The Trustee and the Corporation hereby acknowledge the Call Rights in
favour of Callco and further agree that the Call Rights (i) are granted by the
Trustee, on behalf of Beneficiaries, in partial consideration of the obligations
of Goldstrike under the Acquisition Agreement; and (ii) may be assigned at any
time and from time to time by Callco in whole or in part upon written notice to
the Trustee provided that:
(a) such assignee acknowledges in writing the Exchangeable Share
Provisions and agrees to be bound by the terms of this Agreement;
and
(b) notwithstanding such assignment, Callco shall remain jointly and
severally liable with such assignee in respect of the obligations of
such assignee in connection with the exercise of any of the Call
Rights.
Section 6.2 Callco Liquidation Call Right
(1) Callco shall have the overriding right (the "Liquidation Call Right"), in
the event of and notwithstanding the proposed liquidation, dissolution or
winding-up of the Corporation pursuant to Article 5 of the Exchangeable
Share Provisions, to purchase from the Beneficiaries all but not less than
all of the Exchangeable Shares held by the Beneficiaries on payment by
Callco of an amount per share (the "Liquidation Call Purchase Price")
equal to the Exchangeable Share Consideration applicable on the last
Business Day prior to the Liquidation Date, which shall be satisfied in
full by Callco delivering or causing to be delivered to the Beneficiaries
the Exchangeable Share Consideration representing the Beneficiaries' total
Liquidation Call Purchase Price. In the event of the exercise of the
Liquidation Call Right by Callco as aforesaid, each Beneficiary shall be
obligated to sell all of the Exchangeable Shares held by the Beneficiary
to Callco on the Liquidation Date on payment by Callco to the Beneficiary
of the Liquidation Call Purchase Price for each such share, and, provided
Callco completes such purchase, the Corporation shall have no obligation
to pay the Liquidation Amount (as defined in the Exchangeable Share
Provisions) on such shares so purchased by Callco.
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(2) To exercise the Liquidation Call Right, Callco must notify the Corporation
and the Trustee in writing of Callco's intention to exercise such right at
least ten Business Days before the Liquidation Date in the case of a
voluntary liquidation, dissolution or winding-up of the Corporation, and
at least five Business Days before the Liquidation Date in the case of an
involuntary liquidation, dissolution or winding-up of the Corporation. The
Corporation will notify the Trustee in writing as to whether Callco has
exercised the Liquidation Call Right forthwith after the expiry of the
period during which the same may be exercised by Callco. If Callco
exercises the Liquidation Call Right, then on the Liquidation Date, Callco
will purchase, and each Beneficiary will sell, all of the Exchangeable
Shares then held by the Beneficiary for a price per share equal to the
Liquidation Call Purchase Price, which price shall be satisfied in the
manner set forth in Section 6.2(1) hereof.
(3) For the purposes of completing the purchase of the Exchangeable Shares
pursuant to the exercise of the Liquidation Call Right, Callco shall
deliver to each Beneficiary, on or before the Liquidation Date, the
Exchangeable Share Consideration in payment of the total Liquidation Call
Purchase Price upon presentation and surrender by the Beneficiary of
certificates representing the Exchangeable Shares held by the Beneficiary
duly endorsed for transfer, together with such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares
under the Act and the constating documents of the Corporation and such
additional documents and instruments as Callco may reasonably acquire. If
Callco does not exercise the Liquidation Call Right in the manner and with
the delay described above, then on the Liquidation Date the Beneficiaries
will be entitled to receive in exchange therefor the liquidation price
otherwise payable by the Corporation in connection with the liquidation,
dissolution or winding-up of the Corporation pursuant to Article 5 of the
Exchangeable Share Provisions.
Section 6.3 Callco Redemption Call Right
(1) Callco shall have the overriding right (the "Redemption Call Right"),
notwithstanding the proposed redemption of the Exchangeable Shares by the
Corporation pursuant to Article 7 of the Exchangeable Share Provisions, to
purchase from the Beneficiaries on the Automatic Redemption Date all but
not less than all of the Exchangeable Shares held by the Beneficiaries on
payment by Callco to the Holders of an amount per Exchangeable Share (the
"Redemption Call Purchase Price") equal to the Exchangeable Share
Consideration applicable on the last Business Day prior to the Automatic
Redemption Date, which shall be satisfied in full by Callco delivering or
causing to be delivered to the Beneficiaries, the Exchangeable Share
Consideration. In the event of the exercise of the Redemption Call Right
by Callco, each Beneficiary shall be obligated to sell all of the
Exchangeable Shares held by such Beneficiary to Callco on the Automatic
Redemption Date on payment by Callco to such Beneficiary of the Redemption
Call Purchase Price for each such share, and the Corporation shall have no
obligation to redeem such shares so purchased by Callco.
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(2) To exercise the Redemption Call Right, Callco must notify the Corporation
and the Trustee in writing of Callco's intention to exercise such right on
or before the Automatic Redemption Date. The Corporation will notify the
Trustee in writing as to whether Callco has exercised the Redemption Call
Right forthwith after the expiry of the period during which the same may
be exercised by Callco. If Callco exercises the Redemption Call Right,
then on the Automatic Redemption Date Callco will purchase, and each
Beneficiary will sell, all of the Exchangeable Shares then held by such
Beneficiary for a price per share equal to the Redemption Call Purchase
Price, which price shall be satisfied in the manner set forth in Section
6.3(1) hereof.
(3) For the purposes of completing the purchase of the Exchangeable Shares
pursuant to the exercise of the Redemption Call Right, Callco shall
deliver to each Beneficiary, on or before the Automatic Redemption Date,
the Exchangeable Share Consideration upon presentation and surrender by
such Beneficiary of certificates representing the Exchangeable Shares held
by such Beneficiary, duly endorsed for transfer, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Act and the constating documents of the
Corporation and such additional documents and instruments as Callco may
reasonably require. If Callco does not exercise the Redemption Call Right
in the manner and with the delay described above, then on the Automatic
Redemption Date the Beneficiaries will be entitled to receive in exchange
therefor the redemption price otherwise payable by the Corporation in
connection with the redemption of Exchangeable Shares pursuant to Article
7 of the Exchangeable Share Provisions.
Section 6.4 Callco Retraction Call Right
(1) Callco shall have the overriding right (the "Retraction Call Right"),
notwithstanding the proposed retraction of Retracted Shares by the
Corporation pursuant to Article 6 of the Exchangeable Share Provisions, to
purchase from the Beneficiaries on the Retraction Date all but not less
than all of the Retracted Shares held by the Beneficiaries on payment by
Callco to the Holders of an amount per Retracted Share (the "Retraction
Call Purchase Price") equal to the Exchangeable Share Consideration
applicable on the last Business Day prior to the Retraction Date, which
shall be satisfied in full by Callco delivering or causing to be delivered
to the Beneficiaries, the Exchangeable Share Consideration. In the event
of the exercise of the Retraction Call Right by Callco, each Beneficiary
shall be obligated to sell all of the Retracted Shares held by such
Beneficiary to Callco on the Retraction Date on payment by Callco to such
Beneficiary of the Retraction Call Purchase Price for each such share, and
the Corporation shall have no obligation to redeem such shares so
purchased by Callco.
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(2) Upon receipt by the Corporation of a Retraction Request, the Corporation
shall immediately notify Callco and the Trustee thereof. To exercise the
Retraction Call Right, Callco must notify the Corporation and the relevant
Beneficiary of Callco's intention to exercise such right with notice to
the Trustee within ten Business Days of such notification to Callco by the
Corporation of receipt of the Retraction Request. The Corporation will
notify such Beneficiary as to whether Callco has exercised the Retraction
Call Right forthwith after the expiry of the period during which the same
may be exercised by Callco. If Callco exercises the Retraction Call Right,
and provided that the Retraction Request is not revoked by the Beneficiary
in the manner specified in Section 6.6 of the Exchangeable Share
Provisions, the Retraction Request shall thereupon be considered only to
be an offer by the Beneficiary to sell such Retracted Shares to Callco in
accordance with the Retraction Call Right, and on the Retraction Date
Callco will purchase, and the Beneficiary will sell, all of the Retracted
Shares held by such Beneficiary for a price per share equal to the
Retraction Call Purchase Price, which price shall be satisfied in the
manner set forth in Section 6.4(1) hereof.
(3) For the purposes of completing the purchase of the Retracted Shares
pursuant to the exercise of the Retraction Call Right, Callco shall
deliver to each Beneficiary, on or before the Retraction Date, the
Exchangeable Share Consideration upon presentation and surrender by such
Beneficiary of certificates representing the Retracted Shares held by such
Beneficiary, duly endorsed for transfer, together with such other
documents and instruments as may be required to effect a transfer of
Retracted Shares under the Act and the constating documents of the
Corporation and such additional documents and instruments as Callco may
reasonably require. If Callco does not exercise the Retraction Call Right
in the manner and with the delay described above, then on the Retraction
Date the Beneficiaries will be entitled to receive in exchange therefor
the retraction price otherwise payable by the Corporation in connection
with the retraction of the Retracted Shares pursuant to Article 6 of the
Exchangeable Share Provisions.
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Section 6.5 Change of Law Call Right
(1) Goldstrike shall have the overriding right (the "Change of Law Call
Right"), in the event of a Change of Law, to purchase (or to cause Callco
to Purchase) from the Beneficiaries all but not less than all of the
Exchangeable Shares held by the Beneficiaries on payment by Goldstrike or
Callco, as the case may be, of an amount per share (the "Change of Law
Purchase Price") equal to the Exchangeable Share Consideration applicable
on the last Business Day prior to the Change of Law Call Date, which shall
be satisfied in full by Goldstrike or Callco, as the case may be,
delivering or causing to be delivered to the Beneficiaries the
Exchangeable Share Consideration representing the Beneficiaries' total
Change of Law Purchase Price. In the event of the exercise of the Change
of Law Call Right by Goldstrike or Callco as aforesaid, each Beneficiary
shall be obligated to sell all of the Exchangeable Shares held by the
Beneficiary to Goldstrike or Callco, as the case may be, on the Change of
Law Call Date on payment by Goldstrike or Callco to the Beneficiary of the
Change of Law Purchase Price for each such share.
(2) To exercise the Change of Law Call Right, Goldstrike or Callco must notify
the Corporation and the Trustee in writing of its intention to exercise
such right at least ten Business Days before the date on which Goldstrike
or Callco intends to acquire the Exchangeable Shares (the "Change of Law
Call Date"). If Goldstrike or Callco exercises the Change of Law Call
Right, then on the Change of Law Call Date, Goldstrike or Callco will
purchase, and each Beneficiary will sell, all of the Exchangeable Shares
then held by the Beneficiary for a price per share equal to the Change of
Law Call Purchase Price, which price shall be satisfied in the manner set
forth in Section 6.5(1) hereof.
(3) For the purposes of completing the purchase of the Exchangeable Shares
pursuant to the exercise of the Change of Law Call Right, Goldstrike or
Callco, as the case may be, shall deliver to each Beneficiary, on the
Change of Law Call Date, the Exchangeable Share Consideration in payment
of the total Change of Law Call Purchase Price upon presentation and
surrender by the Beneficiary of certificates representing the Exchangeable
Shares held by the Beneficiary, duly endorsed for transfer, together with
such other documents and instruments as may be required to effect a
transfer of the Exchangeable Shares under the Act and the constating
documents of the Corporation and such additional documents and instruments
as Goldstrike or Callco may reasonably require the Beneficiary, duly
endorsed for transfer, together with such other documents and instruments
as may be required to effect a transfer of the Exchangeable Shares under
the Act and the constating documents of the Corporation and such
additional documents and instruments as Goldstrike or Callco may
reasonably require.
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ARTICLE 7
WITHHOLDING RIGHTS AND STAMP TAXES
Section 7.1 Withholding Rights
Goldstrike, Callco, the Corporation and the Trustee shall be entitled to
deduct and withhold from any consideration otherwise payable under this
Agreement to any holder of Exchangeable Shares or Goldstrike Shares such amounts
as Goldstrike, Callco, the Corporation or the Trustee is required or permitted
to deduct and withhold with respect to such payment under the ITA or United
States tax laws or any provision of provincial, state, local or foreign tax law,
in each case as amended or succeeded. The Trustee may act on the advice of
counsel with respect to such matters. To the extent that amounts are so
withheld, such withheld amounts shall be treated for all purposes as having been
paid to the holder of the shares in respect of which such deduction and
withholding was made, provided that such withheld amounts are actually remitted
to the appropriate taxing authority. Notwithstanding the foregoing, to the
extent that the amount so required to be deducted or withheld from any payment
to a holder would exceed the cash portion of the consideration otherwise payable
to the holder, unless the holder has remitted funds in an amount not less than
such excess to Goldstrike, Callco or the Corporation, as the case may be, prior
to the time when Goldstrike, Callco or the Corporation, as the case may be,
would otherwise be required or permitted to redeem or purchase the Exchangeable
Shares from the holder or pay the consideration to the holder, then none of
Goldstrike, Callco or the Corporation shall be required to redeem or purchase
the Beneficiary's Exchangeable Shares or to deliver any part of the non-cash
consideration therefor to the Beneficiary; provided, however, that Goldstrike,
Callco or the Corporation may never the less, in its sole discretion, elect to
redeem or purchase (as the case may be) the Beneficiary's Exchangeable Shares,
and in that event Goldstrike, Callco and the Corporation are hereby authorized
to sell or otherwise dispose of such portion of the consideration as is
necessary to provide sufficient funds to Goldstrike, Callco or the Corporation,
as the case may be, to enable it to comply with such deduction or withholding
requirement and Goldstrike, Callco or the Corporation, as the case may be, shall
in that event notify the holder thereof and remit to such holder any unapplied
balance of the net proceeds of such sale. Goldstrike, Callco and the Corporation
represent and warrant that, based upon facts currently known to them, they have
no current intention, as at the date of this Agreement, to deduct or withhold
from any dividend or other consideration paid (i) to holders of Exchangeable
Shares any amounts under the United States tax laws; or (ii) to holders of
Exchangeable Shares who are resident in Canada for the purposes of the ITA any
amounts under the Canadian tax laws. Notwithstanding the foregoing: (i) the
Trustee shall have no responsibility whatsoever to determine if a Beneficiary is
a non-resident of Canada other than to take cognizance of the Beneficiary's
address; (ii) the Trustee shall be entitled to act on the advice of Goldstrike,
Callco or the Corporation as to any amounts to be withheld; (iii) the Trustee
may require a direction from Goldstrike, Callco, or the Corporation prior to
selling or otherwise disposing of any property; and (iv) the Trustee shall have
no responsibility with respect to the price obtained and the costs involved in
any such sale or disposition.
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Section 7.2 Stamp Taxes
Upon any sale of Exchangeable Shares to Callco pursuant to the Insolvency
Exchange Right or the Automatic Exchange Rights, the share certificate or
certificates representing Goldstrike Shares to be delivered in connection with
the payment of the total purchase price therefor shall be registered in the name
of the Beneficiary of the Exchangeable Shares so sold or in such names as such
Beneficiary may otherwise direct in writing provided such direction is received
by Callco prior to the time such shares are issued without charge to the holder
of the Exchangeable Shares so sold; provided, however, that such Beneficiary (a)
shall pay (and none of Goldstrike, Callco, the Corporation or the Trustee shall
be required to pay) any stamp taxes that may be payable in respect of any
transfer of such Exchangeable Shares to Callco or in respect of the issuance or
delivery of such Goldstrike Shares to such Beneficiary or any other person
including, without limitation, in the event that Goldstrike Shares are being
issued or transferred in the name of a clearing service or depositary or a
nominee thereof, or (b) shall have evidenced to the satisfaction of the Trustee,
Goldstrike, Callco and the Corporation that such Stamp Taxes, if any, have been
paid. Goldstrike, Callco and the Corporation represent and warrant that, based
upon facts currently known to them, there should not be any United States stamp
taxes payable in respect of an exchange of Exchangeable Shares for Goldstrike
Shares pursuant to the terms of this Agreement or the Exchangeable Share
Provisions.
ARTICLE 8
RESTRICTIONS ON ISSUE OF GOLDSTRIKE SPECIAL VOTING SHARES
Section 8.1 Issue of Additional Shares
During the term of this Agreement, Goldstrike will not, without the
consent of the holders at the relevant time of Exchangeable Shares, given in
accordance with section 9(2) of the Exchangeable Share Provisions, issue any
additional Goldstrike Special Voting Shares.
ARTICLE 9
CONCERNING THE TRUSTEE
Section 9.1 Powers and Duties of the Trustee
(1) The rights, powers, duties and authorities of the Trustee under this
Agreement, in its capacity as Trustee of the Trust, shall include:
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(a) receipt and deposit of the Goldstrike Special Voting Share from
Goldstrike as Trustee for and on behalf of the Beneficiaries in
accordance with the provisions of this Agreement;
(b) granting proxies and distributing materials to Beneficiaries as
provided in this Agreement;
(c) voting the Beneficiary Votes in accordance with the provisions of
this Agreement;
(d) receiving the grant of the Insolvency Exchange Right and the
Automatic Exchange Rights from Callco as Trustee for and on behalf
of the Beneficiaries in accordance with the provisions of this
Agreement;
(e) enforcing the benefit of the Insolvency Exchange Right and the
Automatic Exchange Rights, in each case in accordance with the
provisions of this Agreement, and in connection therewith receiving
from Beneficiaries Exchangeable Shares and other requisite documents
and distributing to such Beneficiaries Goldstrike Shares and
cheques, if any, to which such Beneficiaries are entitled pursuant
to the Insolvency Exchange Right or the Automatic Exchange Rights,
as the case may be;
(f) holding title to the Trust Estate;
(g) investing any moneys forming, from time to time, a part of the Trust
Estate as provided in this Agreement;
(h) taking action on its own initiative or at the direction of a
Beneficiary or Beneficiaries to enforce the obligations of
Goldstrike, Callco and the Corporation under this Agreement; and
(i) taking such other actions and doing such other things as are
specifically provided in this Agreement.
(2) In the exercise of such rights, powers, duties and authorities the Trustee
shall have (and is granted) such incidental and additional rights, powers,
duties and authority not in conflict with any of the provisions of this
Agreement as the Trustee, acting in good faith and in the reasonable
exercise of its discretion, may deem necessary, appropriate or desirable
to effect the purpose of the Trust. Any exercise of such discretionary
rights, powers, duties and authorities by the Trustee shall be final,
conclusive and binding upon all persons.
(3) The Trustee in exercising its rights, powers, duties and authorities
hereunder shall act honestly and in good faith and with a view to the best
interests of the Beneficiaries and shall exercise the care, diligence and
skill that a reasonably prudent trustee would exercise in comparable
circumstances.
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(4) The Trustee shall not be bound to give notice or do or take any act,
action or proceeding by virtue of the powers conferred on it hereby unless
and until it shall be specifically required to do so under the terms
hereof; nor shall the Trustee be required to take any notice of, or to do,
or to take any act, action or proceeding as a result of any default or
breach of any provision hereunder, unless and until notified in writing of
such default or breach, which notices shall distinctly specify the default
or breach desired to be brought to the attention of the Trustee, and in
the absence of such notice the Trustee may for all purposes of this
Agreement conclusively assume that no default or breach has been made in
the observance or performance of any of the representations, warranties,
covenants, agreements or conditions contained herein.
(5) The Trustee shall not be responsible or liable in any manner whatever for
the sufficiency, correctness, genuineness or validity of any security
deposited with it.
(6) The Trustee shall incur no liability with respect to the delivery or
non-delivery of any certificate or certificates whether delivered by hand,
mail or any other means.
(7) The duties and obligations of the Trustee shall be determined solely by
the provisions hereof and by the provisions of applicable law and,
accordingly, the Trustee shall only be responsible for the performance of
such duties and obligations as it has undertaken herein or as required by
applicable law. The Trustee shall retain and may employ the right not to
act and shall not be held liable for refusing to act unless it has
received clear and reasonable documentation which complies with the terms
of this Agreement. Such documentation must not require the exercise of
discretion or independent judgment on the part of the Trustee.
Section 9.2 Acceptance of Trust
The Trustee hereby accepts the Trust created and provided for by and in
this Agreement and agrees to perform the same upon the terms and conditions
herein set forth and to hold all rights, privileges and benefits conferred
hereby and by law in trust for the various persons who shall from time to time
be Beneficiaries, subject to all the terms and conditions herein set forth.
Section 9.3 No Conflict of Interest
The Trustee represents to Goldstrike, Callco and the Corporation that at
the date of execution and delivery of this Agreement there exists no material
conflict of interest in the role of the Trustee as a fiduciary hereunder and the
role of the Trustee in any other capacity. The Trustee shall, within 90 days
after it becomes aware that such material conflict of interest exists, either
eliminate such material conflict of interest or resign in the manner and with
the effect specified in Section 9.14. If, notwithstanding the foregoing
provisions of this Section 9.3, the Trustee has such a material conflict of
interest, the validity and enforceability of this Agreement shall not be
affected in any manner whatsoever by reason only of the existence of such
material conflict of interest. If the Trustee contravenes the foregoing
provisions of this Section 9.3, any interested party may apply to the Supreme
Court of Alberta for an order that the Trustee be replaced as Trustee hereunder.
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Section 9.4 Dealings with Transfer Agents, Registrars, etc.
(1) Goldstrike and the Corporation irrevocably authorize the Trustee, from
time to time, to:
(a) consult, communicate and otherwise deal with the respective
registrars and transfer agents, and with any such subsequent
registrar or transfer agent, of the Exchangeable Shares and
Goldstrike Shares; and
(b) requisition, from time to time, (i) from any such registrar or
transfer agent any information readily available from the records
maintained by it which the Trustee may reasonably require for the
discharge of its duties and responsibilities under this Agreement
and (ii) from the transfer agent of Goldstrike Shares, and any
subsequent transfer agent of such shares, the share certificates
issuable upon the exercise from time to time of the Insolvency
Exchange Right and pursuant to the Automatic Exchange Rights.
(2) Goldstrike and the Corporation irrevocably authorize their respective
registrars and transfer agents to comply with all such requests.
Goldstrike 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 Insolvency Exchange Right and the Automatic
Exchange Rights.
Section 9.5 Books and Records
The Trustee shall keep available for inspection (during the regular
business hours of the Trustee) by Goldstrike, Callco and the Corporation at the
Trustee's principal office in Calgary correct and complete books and records of
account relating to the Trust created by this Agreement, including without
limitation, all relevant data relating to mailings and instructions to and from
Beneficiaries and all transactions pursuant to the Insolvency Exchange Right and
the Automatic Exchange Rights. On or before January 15, 2006, and on or before
January 15th in every year thereafter, so long as the Goldstrike Special Voting
Share is registered in the name of the Trustee, the Trustee shall transmit to
Goldstrike and the Corporation a brief report, dated as of the preceding
December 31st, with respect to:
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(a) the property and funds comprising the Trust Estate as of that date;
(b) the number of exercises of the Insolvency Exchange Right, if any,
and the aggregate number of Exchangeable Shares received by the
Trustee on behalf of Beneficiaries in consideration of the issues by
Goldstrike of Goldstrike Shares in connection with the Insolvency
Exchange Right, during the calendar year ended on such December
31st; and
(c) any action taken by the Trustee in the performance of its duties
under this Agreement which it had not previously reported and which,
in the Trustee's opinion, materially affects the Trust Estate.
Section 9.6 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 or pursuant to the rules and regulations of any securities
exchange or other trading system through which the Exchangeable Shares are
traded. In connection therewith, the Trustee may obtain the advice and
assistance of such experts or advisors as the Trustee considers necessary or
advisable (who may be experts or advisors to Goldstrike or the Corporation). If
requested by the Trustee, Goldstrike or the Corporation shall retain qualified
experts or advisors for the purpose of providing such tax advice or assistance
and, to the extent the costs of such experts or advisors providing such tax
advice or assistance are incurred by the Trustee, the Trustee may add such
related costs to its fees and expenses as outlined in Section 10.1 hereof.
Section 9.7 Action of Beneficiaries
No Beneficiary shall have the right to institute any action, suit or
proceeding or to exercise any other remedy authorized by this Agreement for the
purpose of enforcing any of its rights or for the execution of any trust or
power hereunder unless the Beneficiary has requested the Trustee to take or
institute such action, suit or proceeding and the Trustee shall have failed to
act within a reasonable time thereafter. In such case, but not otherwise, the
Beneficiary shall be entitled to take proceedings in any court of competent
jurisdiction such as the Trustee might have taken; it being understood and
intended that no one or more Beneficiaries shall have any right in any manner
whatsoever to affect, disturb or prejudice the rights hereby created by any such
action, or to enforce any right hereunder or the Voting Rights, the Insolvency
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 Beneficiaries.
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Section 9.8 Experts, Advisers and Agents
The Trustee may:
(a) in relation to these presents act and rely on the opinion or advice
of or information obtained from any solicitor, attorney, auditor,
accountant, appraiser, valuer, engineer or other expert, whether
retained by the Trustee or by Goldstrike and/or the Corporation or
otherwise, and may retain or employ such assistants as may be
necessary to the proper discharge of its powers and duties and
determination of its rights hereunder and may pay proper and
reasonable compensation for all such legal and other advice or
assistance as aforesaid, such fees of experts to form part of the
Trustee's expenses hereunder;
(b) retain or employ such agents and other assistants as it may
reasonably require for the proper determination and discharge of its
powers and duties hereunder; and
(c) pay reasonable remuneration for all services performed for it (and
shall be entitled to receive reasonable remuneration for all
services performed by it) in the discharge of the trusts hereof and
compensation for all disbursements, costs and expenses made or
incurred by it in the discharge of its duties hereunder and in the
management of the Trust.
Section 9.9 Trustee Not Required to Give Security
The Trustee shall not be required to give any bond or security in respect
of the execution of the trusts, rights, duties, powers and authorities of this
Agreement or otherwise in respect of the premises.
Section 9.10 Authority to Carry on Business
The Trustee represents to Goldstrike and the Corporation that at the date
of execution and delivery by it of this Agreement it is authorized to carry on
the business of a trust company in the provinces of British Columbia and
Alberta, but if, notwithstanding the provisions of this Section 9.10, it ceases
to be so authorized to carry on business, the validity and enforceability of
this Agreement and the Voting Rights, the Insolvency Exchange Right and the
Automatic Exchange Rights shall not be affected in any manner whatsoever by
reason only of such event but the Trustee shall, within 90 days after ceasing to
be authorized to carry on the business of a trust company in any province of
Canada, either become so authorized or resign in the manner and with the effect
specified in Section 9.14.
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Section 9.11 Conflicting Claims
(1) If conflicting claims or demands are made or asserted with respect to any
interest of any Beneficiary in any Exchangeable Shares, including any
disagreement between the heirs, representatives, successors or assigns
succeeding to all or any part of the interest of any Beneficiary in any
Exchangeable Shares, resulting in conflicting claims or demands being made
in connection with such interest, then the Trustee shall be entitled, in
its sole discretion, to refuse to recognize or to comply with any such
claims or demands. In so refusing, the Trustee may elect not to exercise
any Voting Rights, Insolvency 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, Insolvency Exchange Right or Automatic Exchange Rights
subject to such conflicting claims or demands have been adjudicated
by a final judgment of a court of competent jurisdiction and all
rights of appeal have expired; or
(b) all differences with respect to the Voting Rights, Insolvency
Exchange Right or Automatic Exchange Rights subject to such
conflicting claims or demands have been conclusively settled by a
valid written agreement binding on all such adverse claimants, and
the Trustee shall have been furnished with an executed copy of such
agreement certified to be in full force and effect.
(2) If the Trustee elects to recognize any claim or comply with any demand
made by any such adverse claimant, it may in its discretion require such
claimant to furnish such surety bond or other security satisfactory to the
Trustee as it shall deem appropriate to fully indemnify it as between all
conflicting claims or demands.
Section 9.12 Merger
Any corporation into or with which the Trustee may be merged or
consolidated or amalgamated, or any corporation resulting therefrom, or any
corporation succeeding to the trust business of the Trustee by way of assignment
(which assignment shall require the consent of Goldstrike and the Corporation,
such consent not to be unreasonably withheld) shall be a successor to the
Trustee under this Agreement without any further act on its part or any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor trustee under the provisions of this Agreement.
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Section 9.13 Indemnification
(1) Goldstrike and the Corporation jointly and severally agree to indemnify
and save harmless the Trustee and its directors, officers, agents and
employees appointed and acting in accordance with this Agreement
(collectively, the "Indemnified Parties") from and against all claims,
demands, losses, actions, causes of action, costs, charges, expenses,
damages and liabilities whatsoever arising in connection with this
Agreement, including, without limitation, those arising out of or related
to actions taken or omitted to be taken by the Trustee contemplated
hereby, legal fees and disbursements on a solicitor and client basis, and
costs and expenses incurred in connection with the enforcement of this
indemnity, which the Trustee may suffer or incur, whether at law or in
equity, in any way caused by or arising, directly or indirectly, in
respect of any act, deed, matter or thing whatsoever made, done,
acquiesced in or omitted in or about or in relation to the execution of
its duties as Trustee and including any deed, matter or thing in relation
to the execution of its duties as Trustee and including any deed, matter
or thing in relation to the registration, perfection, release or discharge
of security. The foregoing provisions of this Section 9.13 do not apply to
the extent that the Trustee or its employees or agents have acted with
gross negligence or in wilful misconduct to the Trustee's obligations
hereunder. It is understood and agreed that this indemnification shall
survive the termination of this Agreement or the resignation of the
Trustee.
(2) The Trustee shall notify Goldstrike and the Corporation 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, provided that the omission to so notify Goldstrike
and the Corporation shall not relieve Goldstrike or the Corporation of any
liability they may have to the Indemnified Parties, except and only to the
extent that any such delay in or failure to give notice prejudices the
defence of such action or results in an increase in the liability which
Goldstrike and the Corporation have under this indemnity. Subject to (ii)
below, Goldstrike and the Corporation shall be entitled to participate at
their own expense in the defence and, if Goldstrike and the Corporation so
elect at any time after receipt of such notice, either of them may assume
the defence 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 defence 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 Goldstrike or the Corporation; or
(ii) the named parties to any such suit include both the Trustee and
Goldstrike or the Corporation and the Trustee shall have been advised by
counsel acceptable to Goldstrike or the Corporation that there may be one
or more legal defences available to the Trustee that are different from or
in addition to those available to Goldstrike or the Corporation and that,
in the judgment of such counsel, would present a conflict of interest were
a joint representation to be undertaken (in which case Goldstrike and the
Corporation shall not have the right to assume the defence of such suit on
behalf of the Trustee but shall be liable to pay the reasonable fees and
expenses of counsel for the Trustee).
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Section 9.14 Resignation
The Trustee, or any trustee hereafter appointed, may at any time resign by
giving written notice of such resignation to Goldstrike and the Corporation
specifying the date on which it desires to resign, provided that such notice
shall not be given less than thirty (30) days before such desired resignation
date unless Goldstrike and the Corporation otherwise agree and provided further
that such resignation shall not take effect until the date of the appointment of
a successor trustee and the acceptance of such appointment by the successor
trustee. Upon receiving such notice of resignation, Goldstrike and the
Corporation shall promptly appoint a successor trustee by written instrument in
duplicate, one copy of which shall be delivered to the resigning trustee and
once copy to the successor trustee. Failing the appointment and acceptance of a
successor trustee, a successor trustee may be appointed by order of a court of
competent jurisdiction upon application of one or more of the parties to this
Agreement. If the retiring trustee is the party initiating an application for
the appointment of a successor trustee by order of a court of competent
jurisdiction, Goldstrike and the Corporation shall be jointly and severally
liable to reimburse the retiring trustee for its legal costs and expenses in
connection with same.
Section 9.15 Removal
The Trustee, or any trustee hereafter appointed, may (provided a successor
trustee is appointed) be removed at any time on not less than 30 days' prior
notice by written instrument executed by Goldstrike and the Corporation, in
duplicate, one copy of which shall be delivered to the trustee so removed and
one copy to the successor trustee.
Section 9.16 Successor Trustee
Any successor trustee appointed as provided under this Agreement shall
execute, acknowledge and deliver to Goldstrike and the Corporation and to its
predecessor trustee an instrument accepting such appointment. Thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor under this Agreement, with the like effect as if originally named as
trustee in this Agreement. However, on the written request of Goldstrike and the
Corporation 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, Goldstrike, the Corporation 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.
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Section 9.17 Notice of Successor Trustee
Upon the acceptance of appointment by a successor trustee as provided
herein, Goldstrike and the Corporation shall cause to be mailed notice of the
succession of such trustee hereunder to each Beneficiary specified in a List. If
Goldstrike or the Corporation 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
Goldstrike and the Corporation.
Section 9.18 Indemnification Prior to Certain Actions by Trustee
The Trustee shall exercise any or all of the rights, duties, powers or
authorities vested in it by this Agreement at the request, order or direction of
any Beneficiary upon such Beneficiary furnishing to the Trustee reasonable
funding, security or indemnity against the costs, expenses and liabilities which
may be incurred by the Trustee therein or thereby, provided that no Beneficiary
shall be obligated to furnish to the Trustee any such security or indemnity in
connection with the exercise by the Trustee of any of its rights, duties, powers
and authorities with respect to the Voting Rights, the Insolvency Rights or the
Automatic Exchange Rights.
None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the exercise of any of its rights, powers, duties, or authorities unless
funded, given security and indemnified as aforesaid.
Section 9.19 Reliance Upon Declarations
The Trustee shall not be considered to be in contravention of any of its
rights, powers, duties and authorities hereunder if, when required, it acts and
relies in good faith upon statutory declarations, certificates, opinions or
reports furnished pursuant to the provisions hereof or required by the Trustee
to be furnished to it in the exercise of its rights, powers, duties and
authorities hereunder if such statutory declarations, certificates, opinions or
reports comply with the provisions of Section 9.20, if applicable, and with any
other applicable provisions of this Agreement.
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Section 9.20 Evidence and Authority to Trustee
Goldstrike and/or the Corporation 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 Goldstrike and/or the
Corporation 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, the Insolvency Rights 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 Goldstrike and/or the Corporation promptly if and when:
(a) such evidence is required by any other Section of this Agreement to be
furnished to the Trustee in accordance with the terms of this Section
9.20; or
(b) the Trustee, in the exercise of its rights, powers, duties and authorities
under this Agreement, gives Goldstrike and/or the Corporation written
notice requiring it to furnish such evidence in relation to any particular
action or obligation specified in such notice.
Such evidence shall consist of an Officer's Certificate of Goldstrike
and/or the Corporation 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,
the Insolvency Rights or the Automatic Exchange Rights or the taking of any
other action to be taken by the Trustee at the request or on the application of
Goldstrike and/or the Corporation, and except as otherwise specifically provided
herein, such evidence may consist of a report or opinion of any solicitor,
attorney, auditor, accountant, appraiser, valuer, engineer or other expert or
any other person whose qualifications give authority to a statement made by him,
provided that if such report or opinion is furnished by a director, officer or
employee of Goldstrike and/or the Corporation it shall be in the form of an
Officer's Certificate or a statutory declaration.
Each statutory declaration, Officer's Certificate, opinion or report
furnished to the Trustee as evidence of compliance with a condition provided for
in this Agreement shall include a statement by the person giving the evidence:
(c) declaring that he or she has read and understands the provisions of this
Agreement relating to the condition in question;
(d) describing the nature and scope of the examination or investigation upon
which he or she based the statutory declaration, certificate, statement or
opinion; and
35
(e) declaring that he or she has made such examination or investigation as he
or she believes is necessary to enable him or her to make the statements
or give the opinions contained or expressed therein.
Section 9.21 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
Goldstrike and/or the Corporation 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 upon any such copy purporting to be authenticated and believed
by the Trustee to be genuine.
ARTICLE 10
COMPENSATION
Section 10.1 Fees and Expenses of the Trustee
Goldstrike and the Corporation jointly and severally agree to pay the
Trustee reasonable compensation for all of the services rendered by it under
this Agreement and will reimburse the Trustee for all reasonable expenses
incurred by the Trustee in connection with its duties under this Agreement;
provided that Goldstrike and the Corporation 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 with fraud, gross negligence or wilful misconduct. The
obligations of Goldstrike and the Corporation under this Section 10.1 shall
survive the resignation or removal of the Trustee.
ARTICLE 11
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF GOLDSTRIKE AND THE CORPORATION
Section 11.1 Covenants of Goldstrike Regarding Exchangeable Shares
So long as any Exchangeable Shares are outstanding, Goldstrike will and,
in the case of Section 11.1(c), (d), (e), (f) and (g), will cause its
Subsidiaries to:
(a) not declare or pay any dividend on the Goldstrike Shares unless (i)
the Corporation shall simultaneously declare or pay, as the case may
be, an equivalent dividend (as provided for in the Exchangeable
Share Provisions) on the Exchangeable Shares and (ii) the
Corporation 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 dividend on the Exchangeable Shares;
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(b) advise the Corporation sufficiently in advance of the declaration by
Goldstrike of any dividend on Goldstrike Shares and take all such
other actions as are reasonably necessary, in co-operation with the
Corporation, to ensure that the respective declaration date, record
date and payment date for a dividend on the Exchangeable Shares
shall, subject to applicable law, be the same as the declaration
date, record date and payment date for the corresponding dividend on
the Goldstrike Shares;
(c) except for Exchangeable Shares issued to holders of common shares of
Gran Tierra Energy Inc. pursuant to a compulsory acquisition
pursuant to the Act as contemplated by the Acquisition Agreement,
not permit the Corporation to issue any further Exchangeable Shares,
or any other shares of the Corporation having an attribute which
permits the holders thereof to exchange or convert such shares into
shares of Goldstrike or any Affiliate of Goldstrike;
(d) enable, cause and permit the Corporation, in accordance with and
subject to applicable law, to pay and otherwise perform its
obligations with respect to the satisfaction of the Exchangeable
Share Consideration representing the Liquidation Amount in respect
of each issued and outstanding Exchangeable Share upon the
liquidation, dissolution or winding-up of the Corporation or any
other distribution of the assets of the Corporation for the purpose
of winding up its affairs, including, without limitation, all such
actions and all such things as are reasonably necessary to enable
and permit the Corporation to cause to be delivered Goldstrike
Shares to the holders of Exchangeable Shares in accordance with the
provisions of Article 5 of the Exchangeable Share Provisions;
(e) enable, cause and permit the Corporation, in accordance with and
subject to applicable law, to pay and otherwise perform its
obligations with respect to the satisfaction of the Exchangeable
Share Consideration representing the Retraction Price, as defined in
the Exchangeable Share Provisions, and the Redemption Price as
defined in the Exchangeable Share Provisions including, without
limitation, to enable and permit the Corporation to cause to be
delivered Goldstrike Shares to the holders of Exchangeable Shares
upon the retraction or redemption of the Exchangeable Shares in
accordance with the provisions of Article 6 or Article 7 of the
Exchangeable Share Provisions, as the case may be;
(f) enable and permit Callco and any assignee of Callco, in accordance
with applicable law, to perform its obligations arising upon the
exercise by it of any Call Right, including, without limitation, to
enable and permit Callco to cause to be delivered Goldstrike Shares
to the holders of Exchangeable Shares in accordance with the
provisions of any Call Right; and
37
(g) not consent to nor exercise its vote as a member of the Corporation
to initiate or permit the voluntary liquidation, dissolution or
winding-up of the Corporation nor take any action or omit to take
any action that is designed to result in the liquidation,
dissolution or winding-up of the Corporation.
Section 11.2 Notification of Certain Events
In order to assist Goldstrike and Callco to comply with their respective
rights and obligations hereunder, the Corporation will give Goldstrike, the
Trustee and Callco written notice of each of the following events at the time
set forth below:
(a) any determination by the Board of Directors to institute voluntary
liquidation, dissolution or winding-up proceedings with respect to
the Corporation or to effect any other distribution of the assets of
the Corporation among its shareholders for the purpose of winding-up
its affairs, at least 30 days prior to the proposed effective date
of such liquidation, dissolution, winding-up or other distribution;
it being understood that any merger, amalgamation, consolidation, or
similar transaction, and any sale of all or any or substantially all
of the assets of the Corporation shall not, in and of itself,
constitute a liquidation, dissolution or winding-up;
(b) promptly, upon the earlier of (i) receipt by the Corporation of
notice of, and (ii) the Corporation 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 the Corporation or to effect any other distribution of
the assets of the Corporation among its shareholders for the purpose
of winding-up its affairs or of the occurrence of any Insolvency
Event;
(c) promptly, upon receipt by the shareholders of a Retraction Request;
(d) on the same date on which notice of redemption is given to holders
of Exchangeable Shares in accordance with the Exchangeable Share
Provisions;
(e) at least 10 days prior to any accelerated Automatic Redemption Date
determined by the Board of Directors in accordance with the
Exchangeable Share Provisions; and
38
(f) promptly in the event of any determination by the Board of Directors
to take any action which would require a vote of the holders of
Exchangeable Shares.
Section 11.3 Delivery of Shares by Goldstrike
Upon notice from the Corporation or Callco of any event that requires the
Corporation or Callco to cause to be delivered Goldstrike Shares to any holder
of Exchangeable Shares, Goldstrike shall forthwith issue and deliver to the
Corporation or Callco, as the case may be, the requisite number of Goldstrike
Shares, as well as any other part of the Exchangeable Share Consideration, to be
received by the holder of Exchangeable Shares, as the Corporation or Callco
shall direct and as may be required under this agreement or the Exchangeable
Share Provisions.
Section 11.4 Delivery of Shares
All Goldstrike Shares issuable pursuant to this Agreement or the
Exchangeable Share Provisions shall be duly issued as fully paid and
non-assessable free and clear of any lien, hypothec, pledge, claim, encumbrance,
security interest or adverse claim or interest, other than those arising
hereunder, under the Exchangeable Share Provisions or under the Acquisition
Agreement. Any Exchangeable Shares delivered by the holders of Exchangeable
Shares to the Corporation, Callco, Goldstrike or their Affiliates pursuant to
this agreement or the Exchangeable Share Provisions shall be delivered free and
clear of any lien, hypothec, pledge, claim, encumbrance, security interest or
adverse claim or interest, other than those arising hereunder or under the
Exchangeable Share Provisions.
Section 11.5 Qualification of Goldstrike Shares
All Goldstrike Shares issued pursuant to the Acquisition Agreement, as
well as any Goldstrike Shares (or other shares or securities into which
Goldstrike Shares may be reclassified or changed as contemplated by Section
11.6) to be issued and delivered hereunder or pursuant to the Exchangeable Share
Provisions, have been or will be issued in transactions exempt from registration
under the Securities Act of 1933, as amended (the "Securities Act") by reason of
section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated
by the Securities and Exchange Commission thereunder. All of such shares are or
will be "restricted securities" under the Securities Act, subject to all
applicable resale restrictions specified by federal, provincial and state
securities laws.
Section 11.6 Economic Equivalence
So long as any Exchangeable Shares are outstanding:
(a) Goldstrike shall not, without the approval of the Corporation and
the holders of Exchangeable Shares:
39
(i) issue or distribute Goldstrike Shares (or securities
exchangeable for or convertible into or carrying rights to
acquire Goldstrike Shares) to the holders of all or
substantially all of the then outstanding Goldstrike Shares by
way of stock dividend or other distribution, other than an
issue of Goldstrike Shares (or securities exchangeable for or
convertible into or carrying rights to acquire Goldstrike
Shares) to holders of Goldstrike Shares who exercise an option
to receive dividends in Goldstrike Shares (or securities
exchangeable for or convertible into or carrying rights to
acquire Goldstrike Shares) in lieu of receiving cash
dividends; or
(ii) issue or distribute rights, options or warrants to the holders
of all or substantially all of the then outstanding Goldstrike
Shares entitling them to subscribe for or to purchase
Goldstrike Shares (or securities exchangeable for or
convertible into or carrying rights to acquire Goldstrike
Shares); or
(iii) issue or distribute to the holders of all or substantially all
of the then outstanding Goldstrike Shares, shares or
securities of Goldstrike of any class other than Goldstrike
Shares (and other than shares convertible into or exchangeable
for or carrying rights to acquire Goldstrike Shares), rights,
options or warrants other than those referred to in above,
evidences of indebtedness of Goldstrike or assets of
Goldstrike,
unless the economic equivalent on a per share basis of such rights,
options, securities, shares, evidence of indebtedness or other
assets are issued or distributed simultaneously to holders of the
Exchangeable Shares;
(b) Goldstrike shall not, without the approval of the Corporation and
the holders of Exchangeable Shares:
(i) subdivide, redivide or change the then outstanding Goldstrike
Shares into a greater number of Goldstrike Shares; or
(ii) reduce, combine, consolidate or change the then outstanding
Goldstrike Shares into a lesser number of Goldstrike Shares;
or
(iii) reclassify or otherwise change any of the terms and conditions
of the Goldstrike Shares, or effect an amalgamation, merger,
reorganization or other transaction affecting Goldstrike
Shares,
40
unless the same or an economically equivalent change shall
simultaneously be made to, or in the rights of the holders of, the
Exchangeable Shares;
(c) the Board of Directors shall determine, in good faith and in its sole
discretion, economic equivalence for the purposes of any event referred to
in Section 11.6(a) or Section 11.6(b) and each such determination shall be
conclusive and binding on Goldstrike. In making each such determination,
the following factors shall, without excluding other factors determined by
the Board of Directors to be relevant, be considered by the Board of
Directors:
(i) in the case of any stock dividend or other distribution
payable in Goldstrike Shares, the number of such shares issued
in proportion to the number of Goldstrike Shares previously
outstanding;
(ii) in the case of the issuance or distribution of any rights,
options or warrants to subscribe for or purchase Goldstrike
Shares (or securities exchangeable for or convertible into or
carrying rights to acquire Shares), the relationship between
the exercise price of each such right, option or warrant and
the Current Market Price of a Goldstrike Share;
(iii) in the case of the issuance or distribution of any other form
of property (including without limitation any shares or
securities of Goldstrike of any class other than Goldstrike
Shares, any rights, options or warrants other than those
referred to in Section 11.6(c)(ii), any evidences of
indebtedness of Goldstrike or any assets of Goldstrike), the
relationship between the fair market value (as determined by
the Board of Directors in the manner above contemplated) of
such property to be issued or distributed with respect to each
outstanding Goldstrike Share and the Current Market Price of a
Goldstrike Share; and
(iv) in the case of any subdivision, redivision or change of the
then outstanding Goldstrike Shares into a greater number of
Goldstrike Shares or the reduction, combination, consolidation
or change of the then outstanding Goldstrike Shares into a
lesser number of Goldstrike Shares or any amalgamation,
merger, reorganization or other transaction affecting
Goldstrike Shares, the effect thereof upon the then
outstanding Goldstrike Shares.
41
to the extent required, upon due notice from Goldstrike, the Corporation 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 the Corporation or subdivisions, redivisions or
changes are made to the Exchangeable Shares, in order to implement the required
economic equivalence with respect to the Goldstrike Shares and Exchangeable
Shares as provided for in this Section 11.6.
Section 11.7 Ownership of Outstanding Shares; Voting
So long as any Exchangeable Shares are outstanding, Goldstrike shall
remain the direct or indirect beneficial owner of issued and outstanding
securities of the Corporation to which are attached a majority of the voting
interests for the election of directors of the Corporation, unless it obtains
the prior approval of the holders of Exchangeable Shares given in accordance
with Section 11.2 of the Exchangeable Share Provisions. Goldstrike and its
Subsidiaries shall not vote any Exchangeable Shares in respect of any resolution
referred to in Section 11.2 of the Exchangeable Share Provisions.
Section 11.8 Goldstrike and Affiliates Not to Vote Exchangeable Shares
Each of Goldstrike and Callco will appoint and cause to be appointed
proxyholders with respect to all Exchangeable Shares held by it or them and its
or their respective Affiliates for the sole purpose of attending each meeting of
holders of Exchangeable Shares in order to be counted as part of the quorum for
each such meeting. Each of Goldstrike and Callco further covenants and agrees
that it and they will not and will cause its and their 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 Act (or any successor or other corporate
statute by which the Corporation may in the future be governed) with respect to
the Exchangeable Shares held by it or them or its or their Affiliates in respect
of any matter considered at any meeting of holders of Exchangeable Shares.
Section 11.9 Tender Offers, Etc.
Goldstrike shall provide timely notice to the holders of Exchangeable
Shares of any proposed share exchange offer, issuer bid, take-over bid or
similar transaction (including any Goldstrike Control Transaction as defined in
the Exchangeable Share Provisions) with respect to Goldstrike Shares proposed by
Goldstrike or proposed to Goldstrike or its shareholders and recommended by the
board of directors of Goldstrike, or otherwise effected or to be effected with
the consent or approval of the board of directors of Goldstrike.
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Section 11.10 Tender Offers
In the event that a tender offer, share exchange offer, issuer bid,
take-over bid or similar transaction with respect to Goldstrike Shares (an
"Offer") is proposed by Goldstrike or is proposed to Goldstrike or its
shareholders and is recommended by the Board of Directors of Goldstrike, or is
otherwise effected or to be effected with the consent or approval of the Board
of Directors of Goldstrike, and the Exchangeable Shares are not redeemed by the
Corporation or purchased by Callco pursuant to the Redemption Call Right,
Goldstrike will use its reasonable 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 Goldstrike and its
Affiliates) to participate in such Offer to the same extent and on an
economically equivalent basis as the holders of Goldstrike Shares, without
discrimination. Without limiting the generality of the foregoing, Goldstrike
will use its reasonable 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 the Corporation (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 the Corporation to redeem (or Callco to purchase pursuant to the
Redemption Call Right) Exchangeable Shares, as applicable, in the event of a
Goldstrike Control Transaction.
Section 11.11 Representations and Warranties of Goldstrike
Goldstrike hereby represents and warrants that:
(a) Goldstrike is a corporation incorporated and existing under the laws
of Nevada and has the corporate power and authority to enter into
and perform its obligations under this agreement;
(b) the execution, delivery and performance by Goldstrike of this
Agreement:
(i) have been duly authorized by all necessary corporate action on
the part of Goldstrike;
(ii) does not (or would not with the giving of notice, the lapse of
time or the happening of any other event or condition) result
in a breach or a violation of, or conflict with, any of the
terms or provisions of its constating documents or by-laws or
any material contracts or instruments to which it is a party
or pursuant to which any of its assets or property may be
affected; and
(iii) will not result in the violation of any law; and
43
(c) this Agreement has been duly executed and delivered by Goldstrike
and constitutes a legal, valid and binding obligation of Goldstrike,
enforceable against it in accordance with its terms.
Section 11.12 Reservation of Goldstrike Shares
Goldstrike hereby represents, warrants and covenants that it has and will
at all times keep available, free from pre-emptive and other rights, out of its
authorized and unissued share capital such number of Goldstrike Shares as are
now and may hereafter be required to enable and permit the Corporation to meet
its obligations hereunder and under the Exchangeable Share Provisions.
Section 11.13 Merger, Amalgamation or Business Combination
Goldstrike hereby covenants that it will not enter into any merger,
amalgamation or other form of business combination that results, in whole or in
part, in Exchangeable Shares remaining outstanding unless the successor entity
to Goldstrike ratifies and adopts the terms of this agreement as if it were an
original party hereto.
ARTICLE 12
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
Section 12.1 Amendments, Modifications, Etc.
This Agreement may not be amended, modified or waived except by an
agreement in writing executed by the parties hereto.
Section 12.2 Changes in Capital of Goldstrike and the Corporation
At all times after the occurrence of any event effected pursuant to the
Exchangeable Share Provisions or this Agreement, as a result of which either
Goldstrike Shares or the Exchangeable Shares or both are in any way changed,
this Agreement shall forthwith be amended and modified as necessary in order
that the holders of Exchangeable Shares maintain economically equivalent rights
and, in order that, where required, this Agreement will apply with full force
and effect, mutatis mutandis, to all new securities into which Goldstrike Shares
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. So long as there are any
Exchangeable Shares outstanding, the Corporation will not issue any additional
Exchangeable Shares to any Person (other than the holders of Exchangeable
Shares).
44
ARTICLE 13
TERMINATION
Section 13.1 Term
This Agreement shall continue until the earlier to occur of the following
events:
(a) no Exchangeable Shares are outstanding; or
(b) each of the parties hereto elects in writing to terminate this
Agreement.
ARTICLE 14
GENERAL
Section 14.1 Severability
The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any Person or entity or any
circumstance, is invalid or unenforceable:
(a) a suitable and equitable provision shall be substituted therefor in
order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision; and
(b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by
such invalidity or unenforceability nor shall such invalidity or
unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
Section 14.2 Enurement
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Section 14.3 Notices to Parties
Any notice, direction or other communication given under this agreement
shall be in writing and given by mail or delivering it or sending it by telecopy
or similar form or recorded communication addressed:
45
(a) if to Goldstrike, the Corporation or Callco, to:
Goldstrike Inc.
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx
X0X 0X0
Attention: Dr. Yenyou Zhang
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and
Gran Tierra Energy Inc.
00xx Xxxxx, 000 - 0xx Xxxxxx XX,
Xxxxxxx, Xxxxxxx
Xxxxxx
X0X 0X0
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to:
(b) Osler, Xxxxxx & Harcourt LLP
Suite 2500, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
46
and to:
Gottbetter & Partners, LLP
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX
00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Stikeman Elliott LLP
0000 Xxxxxxx Xxxx X.
000 -- 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(c) if to the Trustee, to:
Olympia Trust Company
2300, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Manager, Client Services
(d) if to any holder of Exchangeable Shares, to:
the address of the holder recorded in the securities register of the
Corporation or, in the event of the address of any such holder not
being so recorded, then at the last known address of such holder.
Any such communication shall be deemed to have been validly and
effectively given on the date such communication is received if such date is a
Business Day and if such communication is received prior to 4:00 p.m. (in the
jurisdiction of receipt) and otherwise on the next Business Day. Any party
hereto may change its address for service from time to time by notice given in
accordance with the foregoing and any subsequent notice shall be sent to such
party at its changed address.
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Section 14.4 Risk of Payments by Post
Whenever payments are to be made or documents are to be sent to the
Trustee or the holders of Exchangeable Shares by the Corporation, Goldstrike or
Callco, or by the Trustee or the holders of Exchangeable Shares to the
Corporation, Goldstrike or Callco, the making of such payment or sending of such
document sent through the post shall be at the risk of the Corporation,
Goldstrike or Callco, in the case of payments made or documents sent by the
Corporation, Goldstrike or Callco, and the Trustee or the holders of
Exchangeable Shares, in the case of payments made or documents sent by the
Trustee or the holders of Exchangeable Shares, as the case may be.
Section 14.5 Counterparts
This Agreement may be executed in counterparts (including counterparts by
facsimile), each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
Section 14.6 Jurisdiction
This Agreement shall be construed and enforced in accordance with the laws
of the Province of Alberta and the federal laws of Canada applicable therein.
IN WITNESS WHEREOF, the parties hereby have executed this agreement or
caused this agreement to be executed by their respective duly authorized
officers as of the date first above written.
[remainder of page left intentionally blank]
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GOLDSTRIKE INC. 1203647 ALBERTA INC.
Per: Per:
------------------------------ ------------------------------
Name: Xxxx Xxxxx Name:
Title: President Title:
GRAN TIERRA GOLDSTRIKE INC. OLYMPIA TRUST COMPANY
Per: Per:
------------------------------ ------------------------------
Name: Name:
Title: Title:
SCHEDULE "A"
Exchangeable Share Provisions
SCHEDULE "B"
DETAILS OF THE GOLDSTRIKE SPECIAL VOTING SHARE
