Exhibit 10.3
VOTING
AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF
AGREEMENT dated as of the 18th day of October, 2007.
AMONG :
MARATHON OIL
CORPORATION , a corporation existing under the laws of
Delaware (hereinafter referred to as “ Marathon
”)
-and-
1339971 ALBERTA
LTD. , a corporation existing under the laws of Alberta
(hereinafter referred to as “ AcquisitionCo
”)
- and -
MARATHON CANADIAN OIL SANDS
HOLDING LIMITED , a corporation existing under the laws
of Alberta (hereinafter referred to as “ CallCo
”)
- and -
VALIANT TRUST
COMPANY, a trust company incorporated under the laws of
Alberta (hereinafter referred to as the “ Trustee
”)
WHEREAS pursuant to
an arrangement agreement dated July 30, 2007 among Marathon,
AcquisitionCo, Western Oil Sands Inc. and WesternZagros Resources
Inc. (such agreement, as it may be amended or restated, is
hereafter referred to as the “ Arrangement Agreement
”), the parties agreed that on the Effective Date (as defined
in the Arrangement Agreement) the parties would execute and deliver
an agreement which would govern the relationship among the parties
as it related to the issuance and existence of exchangeable shares
in the capital of AcquisitionCo (the “ Exchangeable
Shares ”), which will be issued pursuant to the
Arrangement;
AND WHEREAS the
articles of AcquisitionCo set forth the rights, privileges,
restrictions and conditions (collectively, the “ Share
Provisions ”) attaching to the Exchangeable Shares;
AND WHEREAS the
parties hereto have agreed to enter into this Agreement in order to
give effect to those exchange rights and voting rights to be
created for the benefit of holders of Exchangeable Shares;
NOW THEREFORE in
consideration of the respective covenants and agreements provided
in this Agreement and for other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), the
parties hereto covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1
Definitions
In
this Agreement, each term denoted by initial capital letters and
not otherwise defined herein shall have the meaning attributed
thereto in the Share Provisions and the following terms shall have
the following meanings:
“ Aggregate Equivalent Vote Amount
” means, with respect to any matter, proposition or question
on which Marathon Shareholders are entitled to vote, consent or
otherwise act, the aggregate number of votes which all
Beneficiaries would have been entitled to exercise as Marathon
Shareholders if such Beneficiaries had exchanged their Exchangeable
Shares for Marathon Shares at the Exchange Ratio applicable on the
record date established by Marathon or by applicable law for
consideration of the matter to be voted on, consented to or
otherwise acted upon;
“ Automatic Exchange Rights
” means the benefit of the obligation of Marathon and CallCo
to effect the automatic exchange of Exchangeable Shares for
Marathon Shares as defined in Section 5.12(c);
“ Beneficiary Votes ” has
the meaning given to that term in Section 4.2;
“ Beneficiaries ” means the
registered holders from time to time of Exchangeable Shares, other
than Marathon and CallCo and their affiliates;
“ Consent ” has the meaning
given to that term in Section 4.2;
“ Exchange Rights ” has the
meaning given to that term in Section 5.1(a);
“ Indemnified Parties ” has
the meaning given to that term in Section 8.1;
“ Insolvency Event ” means
the institution by AcquisitionCo of any proceeding to be
adjudicated a bankrupt or insolvent or to be wound up, or the
consent of AcquisitionCo to the institution of bankruptcy,
insolvency, dissolution or winding-up proceedings against it, or
the filing of a petition, answer or consent seeking dissolution or
winding-up under any bankruptcy, insolvency or analogous laws,
including without limitation the Companies Creditors’
Arrangement Act (Canada) and the Bankruptcy and Insolvency
Act (Canada), and the failure by AcquisitionCo to contest in
good faith any such proceedings commenced in respect of
AcquisitionCo within 15 days of becoming aware thereof, or the
consent by AcquisitionCo to the filing of any such petition or to
the appointment of a receiver, or the making by AcquisitionCo of a
general assignment for the benefit of creditors, or the admission
in writing by AcquisitionCo of its inability to pay its debts
generally as they become due, or AcquisitionCo not being permitted,
pursuant to liquidity or solvency requirements or other applicable
law, to redeem any Retracted Shares pursuant to Section 4.6 of
the Share Provisions;
“ Liquidation Event ” has
the meaning given to that term in Section 5.12(b);
“ Liquidation Event Effective Time
” has the meaning given to that term in
Section 5.12(c);
“ List ” has the meaning
given to that term in Section 4.6;
“ Marathon Shareholder ”
means a holder of Marathon Shares;
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“ Meeting ” has the meaning
given to that term in Section 4.2;
“ Officer’s Certificate
” means, with respect to Marathon, AcquisitionCo and/or
CallCo, a certificate signed by any officer or director of
Marathon, AcquisitionCo or CallCo, as the case
may be;
“ Share Provisions ” means
the rights, privileges, restrictions and conditions attaching to
the Exchangeable Shares, all as set forth in the articles of
AcquisitionCo;
“ Special Voting Shares ”
means the special voting stock of Marathon, issued by Marathon to
and deposited with the Trustee, which entitles the Trustee, on
behalf of the holders of record of Exchangeable Shares who are
Beneficiaries, to a number of votes at meetings of Marathon
Shareholders equal to the Aggregate Equivalent Vote
Amount;
“ Successor ” has the
meaning given to that term in Section 10.1(a);
“ Trust ” means the trust
created by this Agreement;
“ Trust Estate ” means the
Special Voting Shares, the Voting Rights, the Exchange Rights, the
Automatic Exchange Rights and any money or other property which
may be held by the Trustee from time to time pursuant to this
Agreement;
“ Trustee ” means Valiant
Trust Company and, subject to the provisions of Article 9,
includes any successor trustee; and
“ Voting Rights ” means the
voting rights attached to the Special Voting Shares.
1.2
Interpretation Not Affected by Headings, etc.
The
division of this Agreement into Articles, Sections and other
portions and the insertion of headings are for convenience of
reference only and should not affect the construction or
interpretation of this Agreement. Unless otherwise indicated, all
references to an “Article” or “Section”
followed by a number and/or a letter refer to the specified
Article or Section of this Agreement. The terms
“this Agreement”, “hereof”,
“herein” and “hereunder” and similar
expressions refer to this Agreement and not to any particular
Article, Section or other portion hereof and include any
agreement or instrument supplementary or ancillary
hereto.
1.3
Number, Gender, etc.
Words importing the singular number only shall
include the plural and vice versa. Words importing any gender shall
include all genders.
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.
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ARTICLE 2
PURPOSE OF AGREEMENT
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
Special Voting Shares in order to enable the Trustee to exercise
the Voting Rights, and will hold the Exchange Rights and the
Automatic Exchange Rights and the right to enforce the Support
Agreement 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.
ARTICLE 3
SPECIAL VOTING SHARES
3.1
Issuance and Ownership of the Special Voting Shares
Marathon has issued to and has deposited with
the Trustee a number of Special Voting Shares equal to the number
of Exchangeable Shares issued by AcquisitionCo on the date hereof.
Marathon shall, on each Marathon Dividend Payment Date, issue and
deposit with the Trustee additional Special Voting Shares to
reflect adjustments to the Exchange Ratio so that, as of each
record date for determining the Marathon Shareholders entitled to
vote at a meeting of Marathon Shareholders, the number of Special
Voting Shares then held by the Trustee hereunder shall be equal to
the Aggregate Equivalent Vote Amount as of such date. Upon the
exchange, retraction or redemption of Exchangeable Shares pursuant
to and in accordance with the terms thereof, or the acquisition of
such shares by Marathon or CallCo, the Trustee shall, if so
directed in writing by Marathon, surrender to Marathon a number of
Special Voting Shares equal to the number of Beneficiary Votes then
allocable to the Exchangeable Shares so exchanged, retracted or
redeemed. Any such Special Voting Shares so surrendered may be
reissued by Marathon to the Trustee hereunder. Each Special Voting
Share issued to and deposited with the Trustee pursuant to the
foregoing provisions shall, until surrendered pursuant to the
foregoing provisions, be 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. Marathon 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 issuances of the
Special Voting Shares by Marathon to the Trustee pursuant to this
Section 3.1. 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 Special Voting
Shares and shall be entitled to exercise all of the rights and
powers of an owner with respect to the Special Voting Shares,
provided that the Trustee shall:
(a)
hold the Special Voting Shares and the legal title thereto as
trustee solely for the use and benefit of the Beneficiaries in
accordance with the provisions of this Agreement;
(b)
except as specifically authorized by this Agreement, have no power
or authority to sell, transfer, vote or otherwise deal in or with
the Special Voting Shares; and
(c)
not use or dispose of any of the Special Voting Shares for any
purpose other than the purposes for which this Trust is created
pursuant to this Agreement.
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3.2
Legended Share Certificates
AcquisitionCo 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 with respect to
the Exchangeable Shares held by a Beneficiary.
3.3
Safekeeping of Certificates
The
certificates representing the Special Voting Shares shall at all
times be held in safekeeping by the Trustee or its
agent.
ARTICLE 4
EXERCISE OF VOTING RIGHTS
4.1
Voting Rights
The
Trustee, as the holder of record of the Special Voting Shares,
shall be entitled to all of the Voting Rights, including the right
to consent to or to vote in person or by proxy the Special Voting
Shares, on any matter, question or proposition whatsoever that
may properly come before the Marathon Shareholders at a
Meeting or in connection with a Consent. The Voting Rights shall be
and remain vested in and exercised by the Trustee. Subject to
Section 6.15 hereof, the Trustee shall exercise the Voting
Rights only on the basis of instructions received pursuant to this
Article 4 from Beneficiaries entitled to instruct the Trustee
as to the voting thereof at the time at which a Consent is sought
or a Meeting is held. 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 Beneficiary’s Voting
Rights.
4.2
Number of Votes
With respect to all meetings of Marathon
Shareholders at which Beneficiaries are entitled to vote (a “
Meeting ”) and with respect to all written consents
sought by Marathon from Marathon Shareholders (a “
Consent ”), each Beneficiary shall be entitled to
instruct the Trustee to cast and exercise, in the manner
instructed, a number of votes equal to the number of votes such
Beneficiary would have been entitled to exercise as a Marathon
Shareholder if such Beneficiary had exchanged its Exchangeable
Shares for Marathon Shares at the Exchange Ratio applicable on the
record date established by Marathon or by applicable law for such
Meeting or Consent, as the case may be (the “
Beneficiary Votes ”), in respect of each matter,
question or proposition to be voted on at such Meeting or to be
consented to in connection with such Consent. The aggregate number
of voting rights in relation to Beneficiary Votes to which any
individual Beneficiary may be entitled in respect of any
fractional entitlements to Marathon Shares shall be rounded down to
the nearest whole number of Marathon Shares.
4.3
Mailings to Beneficiaries
With respect to each Meeting and Consent, the
Trustee will mail or cause to be mailed (or otherwise communicate
in the same manner as Marathon utilizes in communications to
Marathon Shareholders, subject to the Trustee’s ability to
provide this method of communication and upon being advised in
writing of such method) to each of the Beneficiaries named in the
List on the same day as the initial mailing or notice (or other
communication) with respect thereto is given by Marathon to
Marathon Shareholders:
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(a)
a copy of such notice, together with any proxy or information
statement and related materials (but excluding proxies to vote
Marathon Shares) to be provided to Marathon Shareholders;
(b)
a statement that such Beneficiary is entitled to instruct the
Trustee as to the exercise of the Beneficiary Votes with respect to
such Meeting or Consent, as the case may be, or, pursuant to
Section 4.7 hereof, to attend such Meeting and to exercise
personally the Beneficiary Votes thereat as proxy of the
Trustee;
(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 such Beneficiary’s designee to
exercise personally the Beneficiary Votes; or
(ii)
a proxy to a designated agent or other representative of the
management of Marathon 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 (i) the time and date by which such
instructions must be received by the Trustee in order to be binding
upon it, which in the case of a Meeting shall not be less than 24
hours prior to such meeting, and (ii) the method for revoking
or amending such instructions.
The
materials referred to above are to be provided by Marathon to the
Trustee, but shall be subject to review and comment by the
Trustee.
For
the purposes of determining Beneficiary Votes to which a
Beneficiary is entitled in respect of any such Meeting or Consent,
the number of Exchangeable Shares owned as of record by the
Beneficiary and the current Exchange Ratio shall be determined at
the close of business on the record date established by Marathon or
by applicable law for purposes of determining Marathon Shareholders
entitled to vote at such Meeting or to give written consent in
connection with such Consent. Marathon will notify the Trustee in
writing of any decision of the board of directors of Marathon with
respect to the calling of any such Meeting or the seeking of such
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.
4.4
Copies of Marathon Shareholder Information
Marathon will deliver to the Trustee copies of
all proxy materials (including notices of Meetings, but excluding
proxies to vote Marathon Shares), information statements, reports
(including, without limitation, all interim and annual financial
statements and management’s discussion and analysis thereon)
and other written communications that are to be distributed from
time to time to beneficiaries of Marathon Shares in sufficient
quantities and in sufficient time so as to enable the Trustee to
send those materials to each Beneficiary concurrently with the
transmittal of such materials to Marathon Shareholders. The Trustee
will mail or otherwise send to each Beneficiary, at the expense of
Marathon, copies of all such
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materials (and all materials specifically
directed to the Beneficiaries or to the Trustee for the benefit of
the Beneficiaries by Marathon) received by the Trustee from
Marathon concurrently with the transmittal of such materials to
Marathon Shareholders. The Trustee will make copies of all such
materials available for inspection by any Beneficiary at the
Trustee’s principal transfer office in the cities of Calgary
and Toronto.
4.5
Other Materials
As
soon as reasonably practicable after receipt by Marathon or any
Marathon Shareholder of any material sent or given generally to the
Marathon Shareholders by or on behalf of a third party, including
without limitation dissident proxy and information circulars (and
related information and material) and tender and exchange offer
circulars (and related information and material), Marathon 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 the Trustee or to Beneficiaries by such third party) to
each Beneficiary as soon as possible thereafter. As soon as
practicable after receipt thereof, the Trustee will mail or
otherwise send to each Beneficiary, at the expense of Marathon,
copies of all such materials received by the Trustee from Marathon.
The Trustee will also make copies of all such materials available
for inspection by any Beneficiary at the Trustee’s principal
transfer office in the cities of Calgary and Toronto.
4.6
List of Persons Entitled to Vote
AcquisitionCo shall: (i) prior to each
annual, general or special Meeting or the seeking of any Consent
and (ii) forthwith upon each request made at any time by the
Trustee in writing, prepare or cause to be prepared a list (a
“ List ”) of the names and addresses of the
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 Meeting or a Consent, at the close of business on
the record date established by Marathon or pursuant to applicable
law for determining the Marathon Shareholders entitled to receive
notice of and/or to vote at such Meeting or to give consent in
connection with such Consent. Each such List shall be delivered to
the Trustee promptly after receipt by AcquisitionCo of such request
on the record date for such meeting or seeking of consent, as the
case may be, and in any event within sufficient time as to
enable the Trustee to perform its obligations under this
agreement. Marathon agrees to give AcquisitionCo written notice
(with a copy to the Trustee) of the calling of any Meeting or the
seeking of any Consent, together with the record dates therefor,
sufficiently prior to the date of the calling of such meeting or
seeking of such consent so as to enable AcquisitionCo to
perform its obligations under this
Section 4.6.
4.7
Entitlement to Direct Votes
Any
Beneficiary named in a List prepared in connection with any Meeting
or any Consent will be entitled: (i) to instruct the Trustee
in the manner described in Section 4.3 hereof with respect to
the exercise of the Beneficiary Votes to which such Beneficiary is
entitled; or (ii) to attend such meeting and personally to
exercise thereat (or to exercise with respect to any written
consent), as the proxy of the Trustee, the Beneficiary Votes to
which such Beneficiary is entitled.
4.8
Voting by Trustee, and Attendance of Trustee Representative, at
Meeting
In
connection with each Meeting and 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 hereof, the Beneficiary Votes as to which such
Beneficiary is entitled to direct the vote (or any lesser number
thereof
7
as
may be set forth in the instructions); provided, however, that
such written instructions and any other required materials are
received by the Trustee from the Beneficiary prior to the time and
date fixed by it for receipt of such instructions and any other
required materials in the notice given by the Trustee to the
Beneficiary pursuant to section 4.3 hereof.
The
Trustee shall cause such representatives as are empowered by it to
sign and deliver, on behalf of the Trustee, proxies for Voting
Rights to attend each Meeting. Upon submission by a Beneficiary (or
its designee) of identification in a form satisfactory to the
Trustee’s representatives, and at the Beneficiary’s
request, such representatives 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 hereof in respect of such meeting; or
(ii) submits to the Trustee’s representatives 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 or proposition, to vote by way of ballot at the
meeting in respect of any matter, question or proposition and to
vote at such Meeting by way of a show of hands in respect of any
matter, question or proposition.
4.9
Distribution of Written Materials
Any
written materials to be distributed by the Trustee to the
Beneficiaries pursuant to this Agreement shall be delivered or sent
by mail (or otherwise communicated in the same manner as Marathon
utilizes in communications to Marathon Shareholders subject to the
Trustee’s ability to provide this method of communication and
upon being advised in writing of such method) to each Beneficiary
at its address as shown on the books of AcquisitionCo.
AcquisitionCo shall provide or cause to be provided to the Trustee
for this purpose, on a timely basis and without charge or other
expense:
(a)
current lists of the Beneficiaries; and
(b)
on the request of the Trustee, mailing labels to enable the Trustee
to carry out it duties under this Agreement.
The
materials referred to above are to be provided by AcquisitionCo to
the Trustee, but shall be subject to review and comment by the
Trustee.
4.10
Termination of Voting Rights
Except as otherwise provided herein or in the
Share Provisions, 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 Marathon, and such Beneficiary Votes and the Voting
Rights represented thereby shall cease immediately, upon the
delivery by such Beneficiary to the Trustee of the certificates
representing such Exchangeable Shares in connection with the
exercise by the Beneficiary of the Exchange Rights or the
occurrence of the Automatic Exchange Rights (unless in any case
Marathon or CallCo shall not have delivered the consideration
deliverable in exchange therefor to the Trustee for delivery to the
Beneficiaries), or upon the retraction or redemption of
Exchangeable Shares pursuant to Article 4 or Article 5 of
the Share Provisions, or upon the effective date of the
liquidation, dissolution or winding-up of AcquisitionCo or any
other distribution of the assets of AcquisitionCo among its
shareholders for the purpose of winding up its affairs pursuant to
Article 6 of the Share Provisions, or upon the purchase of
Exchangeable Shares
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from the Beneficiary thereof by Marathon or
CallCo pursuant to the exercise by Marathon or CallCo of the
Retraction Call Right, the Redemption Call Right or the Liquidation
Call Right.
ARTICLE 5
EXCHANGE RIGHTS AND AUTOMATIC EXCHANGE
5.1
Grant and Ownership of the Exchange Rights
Each of Marathon and CallCo hereby grants to
the Trustee as trustee for and on behalf of, and for the use and
benefit of, the Beneficiaries:
(a)
the right (the “ Exchange Rights ”), upon the
occurrence and during the continuance of an Insolvency Event, to
require Marathon or CallCo to purchase from each or any Beneficiary
all or any part of the Exchangeable Shares held by that
Beneficiary; and
(b)
the Automatic Exchange Rights,
all
in accordance with the provisions of this Agreement. Each of
Marathon and 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 the grant of the
Exchange Rights and the Automatic Exchange Rights by Marathon and
CallCo to the Trustee. During the term of the Trust and subject to
the terms and conditions of this Agreement, the Trustee shall
possess and be vested with full legal ownership of the Exchange
Rights and the Automatic Exchange Rights and shall be entitled to
exercise all of the rights and powers of an owner with respect to
the Exchange Rights and the Automatic Exchange Rights, provided
that the Trustee shall:
(c)
hold the Exchange Rights 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
(d)
except as specifically authorized by this Agreement, have no power
or authority to exercise or otherwise deal in or with the Exchange
Rights 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.
5.2
Legended Share Certificates
AcquisitionCo will cause each certificate
representing Exchangeable Shares to bear an appropriate legend
notifying the Beneficiaries of:
(a)
their right to instruct the Trustee with respect to the exercise of
the Exchange Rights in respect of the Exchangeable Shares held by a
Beneficiary; and
(b)
the Automatic Exchange Rights.
5.3
General Exercise of Exchange Rights
The
Exchange Rights shall be and remain vested in and exercisable by
the Trustee. Subject to Section 6.15, the Trustee shall
exercise the Exchange Rights only on the basis of instructions
received pursuant to this Article 5 from Beneficiaries
entitled to instruct the Trustee as to the exercise thereof.
To
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the
extent that no instructions are received from a Beneficiary with
respect to the Exchange Rights, the Trustee shall not exercise or
permit the exercise of the Exchange Rights.
5.4
Purchase Price
The
purchase price payable by Marathon or CallCo, as applicable, for
each Exchangeable Share to be purchased by Marathon or CallCo, as
applicable, under the Exchange Rights shall be an amount per share
equal to the amount determined by multiplying the Exchange Ratio on
the last Business Day prior to the date of closing of the purchase
and sale of such Exchangeable Shares under the Exchange Rights (as
provided for in Section 5.6) by the Current Market Price of a
Marathon Share on the last Business Day prior to such
date.
In
connection with each exercise of the Exchange Rights, Marathon or
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 Marathon or
CallCo, as applicable, delivering or causing to be delivered to the
Trustee, on behalf of the relevant Beneficiary, a certificate or
certificates representing that number of Marathon Shares (which
securities shall be duly issued as fully paid and non-assessable
and shall be free and clear of any lien, claim or encumbrance)
equal to the Exchange Ratio as at the last Business Day prior to
the date of closing of the purchase and sale of such Exchangeable
Shares under the Exchange Rights, such purchase price to be paid in
accordance with Section 5.6 (but less any amounts withheld
pursuant to Section 5.13). Upon payment by Marathon or CallCo,
as applicable, of such purchase price, the relevant Beneficiary
shall cease to have any right to be paid any amount in respect of
accrued and unpaid dividends (but not in respect of dividends which
have been declared and are unpaid) on each such Exchangeable Share
by AcquisitionCo.
5.5
Exercise Instructions
Subject to the terms and conditions herein set
forth, a Beneficiary shall be entitled, upon the occurrence and,
during the continuance of an Insolvency Event, to instruct the
Trustee to exercise the Exchange Rights with respect to all or any
part of the Exchangeable Shares registered in the name of such
Beneficiary on the books of AcquisitionCo. To cause the exercise of
the Exchange Rights by the Trustee, the Beneficiary shall deliver
to the Trustee, in person or by certified or registered mail, at
its principal office in Calgary or Toronto or at such other places
in Canada as the Trustee may from time to time designate by
written notice to the Beneficiaries, the certificates representing
the Exchangeable Shares which such Beneficiary desires Marathon or
CallCo to purchase, duly endorsed in blank for transfer, and
accompanied by such other documents and instruments as may be
required to effect a transfer of Exchangeable Shares under the Act
and the by-laws of AcquisitionCo and such additional documents and
instruments as the Trustee, Marathon, CallCo and AcquisitionCo
may reasonably require, together with:
(a)
a duly completed form of notice of exercise of the Exchange
Rights, contained on the reverse of or attached to the Exchangeable
Share certificates, stating: (i) that the Beneficiary thereby
instructs the Trustee to exercise the Exchange Rights so as to
require Marathon or CallCo to purchase from the Beneficiary the
number of Exchangeable Shares specified therein; (ii) that
such Beneficiary has good title to and owns all such Exchangeable
Shares to be acquired by Marathon or CallCo, as applicable, free
and clear of all liens, claims and encumbrances; (iii) the
names in which the certificates representing Marathon Shares
issuable in connection with the exercise of the Exchange Rights are
to be issued; and (iv) the names and addresses of the persons
to whom such new certificates should be delivered; and
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(b)
payment (or evidence satisfactory to the Trustee, Marathon, CallCo
and AcquisitionCo of payment) of the taxes (if any) payable as
contemplated by Section 5.8 of this Agreement.
If
only a part of the Exchangeable Shares represented by any
certificate or certificates delivered to the Trustee are to be
purchased by Marathon or CallCo under the Exchange Rights, a new
certificate for the balance of such Exchangeable Shares shall be
issued to the holder at the expense of AcquisitionCo.
5.6
Delivery of Marathon Shares; Effect of Exercise
Promptly after the receipt of the certificates
representing the Exchangeable Shares which the Beneficiary desires
Marathon or CallCo to purchase under the Exchange Rights, together
with such documents and instruments of transfer, and a duly
completed form of notice of exercise of the Exchange Rights
(and payment of taxes, if any, payable as contemplated by
Section 5.8 or evidence thereof), duly endorsed for transfer
to Marathon or CallCo, as applicable, the Trustee shall notify
Marathon, CallCo and AcquisitionCo of its receipt of the same,
which notice to Marathon, CallCo and AcquisitionCo shall constitute
exercise of the Exchange Rights by the Trustee on behalf of the
holder of such Exchangeable Shares, and Marathon or CallCo, as
applicable, shall promptly thereafter deliver or cause to be
delivered to the Trustee, for delivery to the holder of such
Exchangeable Shares (or to such other persons, if any, properly
designated by such holder) the number of Marathon Shares issuable
in connection with the exercise of the Exchange Rights, provided,
however, that no such delivery shall be made unless and until the
Beneficiary requesting the same shall have paid (or provided
evidence satisfactory to the Trustee, Marathon, CallCo and
AcquisitionCo of the payment of) the taxes (if any) payable as
contemplated by Section 5.8 of this Agreement. Immediately
upon the giving of notice by the Trustee to Marathon, CallCo and
AcquisitionCo of the exercise of the Exchange Rights as provided in
this Section 5.6, the closing of the transaction of purchase
and sale contemplated by the Exchange Rights shall be deemed to
have occurred and the holder of such Exchangeable Shares shall be
deemed to have transferred to Marathon or CallCo, as determined by
Marathon at the time, all of such holder’s right, title and
interest in and to such Exchangeable Shares and the related
interest in the Trust Estate and shall cease to be a holder of such
Exchangeable Shares and shall not be entitled to exercise any of
the rights of a holder in respect thereof, other than: (i) the
right to receive his proportionate share of the total purchase
price therefor, unless the requisite number of Marathon Shares is
not delivered by Marathon or CallCo, as applicable, to the Trustee
within five Business Days of the date of the giving of such notice
by the Trustee, in which case the rights of the Beneficiary shall
remain unaffected until such Marathon Shares are so delivered, by
Marathon or CallCo, as applicable; and (ii) the right to
receive declared but unpaid dividends in respect of such
Exchangeable Shares. Upon delivery to the Trustee of such Marathon
Shares, the Trustee shall deliver such Marathon Shares to such
Beneficiary (or to such other persons, if any, properly designated
by such Beneficiary). Concurrently with such Beneficiary ceasing to
be a holder of Exchangeable Shares, the Beneficiary shall be
considered and deemed for all purposes to be the holder of the
Marathon Shares delivered to it pursuant to the Exchange
Rights.
5.7
Exercise of Exchange Rights Subsequent to Retraction
In
the event that a Beneficiary has exercised its right under
Article 4 of the Share Provisions to require AcquisitionCo to
redeem any or all of the Exchangeable Shares held by the
Beneficiary (the “ Retracted Shares ”) and is
notified by AcquisitionCo pursuant to Section 4.6 of the Share
Provisions that AcquisitionCo will not be permitted as a result of
liquidity and solvency requirements of applicable law to redeem all
such Retracted Shares, and provided that neither Marathon nor
CallCo shall have exercised the Retraction Call Right with respect
to the Retracted Shares and that the Beneficiary has not revoked
the retraction request delivered by the Beneficiary to
AcquisitionCo pursuant to Section 4.1 of the Share Provisions,
and provided, further, that the Trustee has received written notice
of same from Marathon, CallCo or AcquisitionCo, the retraction
request will constitute and will be deemed to constitute
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notice from the Beneficiary to the Trustee
instructing the Trustee to exercise the Exchange Rights with
respect to those Retracted Shares that AcquisitionCo is unable to
redeem. In any such event, AcquisitionCo hereby agrees with the
Trustee and in favour of the Beneficiary promptly to forward or
cause to be forwarded to the Trustee all relevant materials
delivered by the Beneficiary to AcquisitionCo or to the transfer
agent of the Exchangeable Shares (including, without limitation, a
copy of the retraction request delivered pursuant to
Section 4.1 of the Share Provisions) in connection with such
proposed redemption of the Retracted Shares and the Trustee will
thereupon exercise the Exchange Rights with respect to
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