Document:

Fording Canadian Coal Trust Exchange Option Plan

 

EXHIBIT 4.5

FORDING CANADIAN COAL TRUST

EXCHANGE OPTION PLAN

1

 

TABLE OF CONTENTS

	 	 	 	 	 	 
					Page
					

	
    ARTICLE 1 — PURPOSE OF THE PLAN
    	 	
    3
    
	 	
    
    1.1
    

    	 	
    Purpose
    	 	
    3
    
	
    ARTICLE 2 — DEFINITIONS AND
    INTERPRETATION
    	 	
    3
    
	 	
    
    2.1
    

    	 	
    Definitions
    	 	
    3
    
	 	
    
    2.2
    

    	 	
    Interpretation
    	 	
    6
    
	 	
    
    6
    

    	 	
    Effectiveness
    	 	
    6
    
	
    ARTICLE 3 — GENERAL PROVISIONS OF THE
    PLAN
    	 	
    6
    
	 	
    
    3.1
    

    	 	
    Administration
    	 	
    6
    
	 	
    
    3.2
    

    	 	
    Units Reserved
    	 	
    6
    
	 	
    
    3.3
    

    	 	
    Limits with respect to Insiders
    	 	
    6
    
	 	
    
    3.4
    

    	 	
    Non-Exclusivity
    	 	
    7
    
	 	
    
    3.5
    

    	 	
    Amendment or Termination of Plan and Exchange
    Options
    	 	
    7
    
	 	
    
    3.6
    

    	 	
    Compliance with Laws and Stock Exchange Rules
    	 	
    7
    
	 	
    
    3.7
    

    	 	
    Participation in the Plan
    	 	
    7
    
	 	
    
    3.8
    

    	 	
    CP Optionholders
    	 	
    7
    
	
    ARTICLE 4 — EXCHANGE OF OPTIONS
    	 	
    8
    
	 	
    
    4.1
    

    	 	
    Exchange of Options
    	 	
    8
    
	 	
    
    4.2
    

    	 	
    Option Agreement
    	 	
    8
    
	 	
    
    4.3
    

    	 	
    Early Expiry
    	 	
    8
    
	 	
    
    4.4
    

    	 	
    Limited Assignment
    	 	
    9
    
	 	
    
    4.5
    

    	 	
    No Rights as Unitholder or to Remain an Eligible
    Person; Status of Consultants
    	 	
    10
    
	 	
    
    4.6
    

    	 	
    Adjustments
    	 	
    10
    
	
    ARTICLE 5 — EXERCISE OF OPTIONS
    	 	
    11
    
	 	
    
    5.1
    

    	 	
    Manner of Exercise
    	 	
    11
    
	 	
    
    5.2
    

    	 	
    Delivery of Unit Certificate
    	 	
    11
    
	 	
    
    5.3
    

    	 	
    Cashless Exercise
    	 	
    11
    
	 	
    
    5.4
    

    	 	
    Withholding
    	 	
    11
    
	 	
    
    5.5
    

    	 	
    Indemnification
    	 	
    12
    
	 	
    
    5.6
    

    	 	
    Effect on Trustees
    	 	
    12
    
	
    EXHIBIT A — NOTICE OF EXERCISE
    	 	
    13
    
	
    EXHIBIT B — FORM OF OPTION AGREEMENT
    	 	
    14
    
	
    EXHIBIT C — CASHLESS EXERCISE INSTRUCTION
    FORM
    	 	
    15
    

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ARTICLE 1

PURPOSE OF THE PLAN

1.1 Purpose

     
The purpose of the Fording Canadian Coal Trust
Exchange Option Plan (the “Plan”) is to record and
implement the exchange ultimately, as part of the Arrangement
(as herein defined), of all outstanding options and any
accompanying share appreciation rights (collectively,
“Options”) to purchase Common Shares (as herein
defined) issued under the Corporation’s Key Employee Stock
Option Plan (the “KESOP”) and the Directors’
Stock Option Plan (the “DSOP”), for options to acquire
Units in the Fund and accompanying unit appreciation rights (the
“Exchange Options”) issued under this Plan. Exchange
Options will have attached to them terms which are substantially
similar to the terms attaching to the Options for which they are
exchanged, adjusted in accordance with the terms of the
Arrangement.

ARTICLE 2

DEFINITIONS AND INTERPRETATION

2.1 Definitions

     
For the purposes of this Plan, the following
terms will have the following meanings:

			
	 	(a)	
    “Arrangement”
    means the arrangement under
    Section 192 of the CBCA involving the Corporation, its
    securityholders, Fording Coal Limited, 4123212 Canada Ltd., Teck
    Cominco Limited, Westshore Terminals Income Fund, the Fund, Teck
    Bullmoose Coal Inc., Quintette Coal Partnership, Luscar Coal
    Limited, CONSOL Energy Inc., Ontario Teachers’ Pension
    Plan, Sherritt International Corporation and Sherritt Coal
    Partnership II;
    
	 
	 	(b)	
    “Board”
    means the board of directors of the
    Corporation;
    
	 
	 	(c)	
    “CBCA”
    means the Canada Business
    Corporations Act, R.S.C. 1985, c. C-44, as amended,
    including the regulations promulgated thereunder;
    
	 
	 	(d)	
    “Cause”
    means:
    

			
	 	(i)	
    the continued failure by the Optionholder to
    substantially perform his duties in connection with his
    employment by, or service to, the Corporation or any Subsidiary
    (other than as a result of physical or mental illness) after the
    Corporation or the Subsidiary, as the case may be, has given the
    Optionholder reasonable written notice of such failure and a
    reasonable opportunity to correct it;
    
	 
	 	(ii)	
    the engaging by the Optionholder in any act which
    is injurious to the Corporation (including any Subsidiary)
    financially, reputationally or otherwise;
    
	 
	 	(iii)	
    the engaging by the Optionholder in any act
    resulting, or intended to result, whether directly or
    indirectly, in personal gain to the Optionholder at the expense
    of the Corporation (including any Subsidiary);
    
	 
	 	(iv)	
    the conviction of the Optionholder by a court of
    competent jurisdiction on any charge involving fraud, theft or
    moral turpitude in circumstances where such charge arises in
    connection with the business of the Corporation (including any
    Subsidiary); or
    
	 
	 	(v)	
    any other conduct that constitutes cause at
    common law;
    

			
	 	(e)	
    “Combination Agreement”
    means the combination agreement and
    schedules thereto dated January 12, 2003 among the
    Corporation, Teck Cominco Limited, Westshore Terminals Income
    Fund, Ontario Teachers’ Pension Plan and Sherritt
    International Corporation as the same may be amended in
    accordance with its terms;
    
	 
	 	(f)	
    “Common Shares”
    means common shares in the capital of
    the Corporation;
    

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	 	(g)	
    “Consultant”
    means a person engaged to provide
    ongoing management or consulting services to the Fund, the
    Corporation or any Subsidiary;
    
	 
	 	(h)	
    “Corporation”
    means Fording Inc., and any successor
    corporation thereto;
    
	 
	 	(i)	
    “CP Optionholders”
    means the former Canadian Pacific
    Limited optionholders who held options and accompanying share
    appreciation rights under the key employee stock option plan of
    Canadian Pacific Limited, which options and share appreciation
    rights were replaced by, in part, Options and accompanying share
    appreciation rights issued under the KESOP pursuant to a plan of
    arrangement under Section 192 of the CBCA completed in
    October 2001 that resulted in the Corporation becoming a
    publicly traded Corporation;
    
	 
	 	(j)	
    “Date of Termination”
    means, unless otherwise agreed to in
    writing by the Optionholder and the Corporation or, if
    applicable, a Subsidiary, the actual date of termination of
    employment of the Optionholder or termination of the
    Optionholder’s contract as a Consultant, excluding any
    period during which the Optionholder is in receipt of or is
    eligible to receive any statutory, contractual or common law
    notice or compensation in lieu thereof or severance or damage
    payments following the actual date of termination;
    
	 
	 	(k)	
    “DSOP” has
    the meaning ascribed to it in Section 1.1;
    
	 
	 	(l)	
    “Effective Date”
    has the meaning ascribed to it in the
    Plan of Arrangement;
    
	 
	 	(m)	
    “Eligible Person”
    means a holder of an Exchange Option
    who is:
    

			
	 	(i)	
    an officer, employee, Non-Employee Director of
    the Corporation or Consultant of the Corporation or any
    Subsidiary, and also includes a Family Trust, Personal Holding
    Corporation, Retirement Trust of any of the foregoing
    individuals; or
    
	 
	 	(ii)	
    a CP Optionholder;
    

			
	 	(n)	
    “Exchange Option”
    has the meaning ascribed to it in
    Section 1.1 hereof;
    
	 
	 	(o)	
    “Exercise Price”
    means the price per Unit at which
    Optioned Units may be subscribed for by an Optionholder pursuant
    to a particular Option Agreement;
    
	 
	 	(p)	
    “Expiry Date”
    means the date on which an Exchange
    Option expires pursuant to the Exchange Option Agreement
    relating to that Exchange Option;
    
	 
	 	(q)	
    “Family Trust”
    means a trust, of which at least one
    of the trustees is an Eligible Person and the beneficiaries of
    which are one or more of the Eligible Person and the spouse,
    minor children and minor grandchildren of the Eligible Person;
    
	 
	 	(r)	
    “Fund”
    means the Fording Canadian Coal Trust;
    
	 
	 	(s)	
    “Insider”
    means:
    

			
	 	(i)	
    an insider, as defined in the Securities
    Act (Alberta), other than a person who falls within that
    definition solely by virtue of being a director or senior
    officer of a Subsidiary; and
    
	 
	 	(ii)	
    an associate, as defined in the Securities
    Act (Alberta), of any person who is an insider by virtue of
    (i) above;
    

			
	 	(t)	
    “KESOP”
    has the meaning ascribed to it in
    Section 1.1 hereof;
    
	 
	 	(u)	
    “Non-Employee Director”
    means a person who, as of any
    applicable date, is a member of the Board and is not an officer
    or employee of the Corporation or any of its Subsidiaries;
    
	 
	 	(v)	
    “Notice of Exercise”
    means a notice, substantially in the
    form of the notice set out in Exhibit A to this Plan, from
    an Optionholder to the Fund giving notice of the exercise or
    partial exercise of an Exchange Option granted to the
    Optionholder;
    

4

 

			
	 	(w)	
    “Option Agreement”
    means an agreement, substantially in
    the form of the agreement set out in Exhibit B to this
    Plan, between the Fund and an Eligible Person setting out the
    terms of an Exchange Option granted to the Eligible Person;
    
	 
	 	(x)	
    “Optioned Units”
    means the Units that may be subscribed
    for by an Optionholder pursuant to a particular Option Agreement;
    
	 
	 	(y)	
    “Optionholder”
    means an Eligible Person who acquires
    an Exchange Option;
    
	 
	 	(z)	
    “Original Grant Date”
    means the date on which an Original
    Option was granted being the date that the Board resolved to
    grant such option, unless the Board resolved to ratify options
    to acquire Common Shares granted on an earlier date or to delay
    the grant of options to acquire Common Shares to a later date,
    in which case the Original Grant Date will be such earlier or
    later date;
    
	 
	 	(aa)	
    “Original Option”
    means an Option described in
    Section 1.1 (including for greater certainty, any related
    Share Appreciation Right) which, as an intermediate step in the
    exchange described in Section 4.1, is exchanged for an
    option to purchase a New Non-Voting Share (and, for greater
    certainty, any related share appreciation right) of Fording (as
    those terms are defined in the Plan of Arrangement);
    
	 
	 	(bb)	
    “Person”
    means any individual, sole
    proprietorship, partnership, firm, entity, unincorporated
    association, unincorporated syndicate, unincorporated
    organization, trust, body corporate, agency, and where the
    context requires, any of the foregoing when they are acting as
    trustee, executor, administrator or other legal representative;
    
	 
	 	(cc)	
    “Personal Holding
    Corporation” means a corporation
    that is controlled by an Eligible Person (who is a natural
    person) and the shares of which are beneficially owned by the
    Eligible Person and the spouse, minor children or minor
    grandchildren of the Eligible Person;
    
	 
	 	(dd)	
    “Plan” has
    the meaning ascribed to it in Section 1.1;
    
	 
	 	(ee)	
    “Plan of
    Arrangement” means the plan of
    arrangement to which this Plan is attached as
    Schedule “A”;
    
	 
	 	(ff)	
    “Retirement
    Trust” means a trust governed by
    a registered retirement savings plan or a registered retirement
    income fund established by and for the benefit of an Eligible
    Person (who is a natural person);
    
	 
	 	(gg)	
    “Share Appreciation
    Rights” are the rights granted to
    the CP Optionholders in connection with the options granted
    under the key employee stock option plan of Canadian Pacific
    Limited, which options and rights were replaced by options and
    share appreciation rights under the KESOP;
    
	 
	 	(hh)	
    “Subsidiary”
    means any corporation that is a subsidiary of the Corporation as
    defined in the Securities Act (Alberta);
    
	 
	 	(ii)	
    “Trustees”
    means the trustees of the Fund from time to time;
    
	 
	 	(jj)	
    “Unit Appreciation
    Rights” means the Unit
    appreciation rights issued under the Plan forming part of the
    Exchange Options issued to CP Optionholders pursuant to the Plan
    of Arrangement;
    
	 
	 	(kk)	
    “Unit Compensation
    Arrangement” means any unit
    option plan, employee unit purchase plan or any other
    compensation or incentive mechanism involving the issuance or
    potential issuance of Units from treasury to one or more
    Eligible Persons; and
    
	 
	 	(ll)	
    “Units”
    means trust units of the Fund.
    

5

 

2.2 Interpretation

			
	 	(a)	
    Time shall be the essence of this Plan.
    

			
	 	(b)	
    Words denoting the singular number include the
    plural and vice versa and words denoting any gender include all
    genders.
    

			
	 	(c)	
    This Plan and all matters to which reference is
    made herein will be governed by and interpreted in accordance
    with the laws of the Province of Alberta and the federal laws of
    Canada applicable therein.
    

2.3 Effectiveness

     
This Plan will become effective on the Effective
Date in the manner specified by the Plan of Arrangement.

ARTICLE 3

GENERAL PROVISIONS OF THE PLAN

3.1 Administration

     
The Plan will be administered by the Trustees and
the Trustees will interpret the Plan and determine all questions
arising out of the Plan and any Exchange Option issued pursuant
to the Plan, which interpretations and determinations will be
conclusive and binding on the Corporation, the Fund, Eligible
Persons, Optionholders and all other affected Persons.

3.2 Units Reserved

			
	 	(a)	
    The maximum number of Units that may be reserved
    for issuance under the Plan is 776,034. The maximum number of
    Units will be reduced as Exchange Options are exercised and the
    Units so reserved are issued.
    

			
	 	(b)	
    The maximum number of Units that may be reserved
    for issuance to any one Eligible Person under the Plan is 5% of
    the number of Units outstanding at the time of reservation.
    

3.3 Limits with respect to
Insiders

			
	 	(a)	
    The maximum number of Units that may be reserved
    for issuance to Insiders on the exercise of Exchange Options
    issued under the Plan and under or pursuant to any other Unit
    Compensation Arrangement of the Fund is 10% of the number of
    Units outstanding.
    

			
	 	(b)	
    The maximum number of Units that may be issued to
    Insiders under the Plan and any other Unit Compensation
    Arrangement of the Fund within a one-year period is 10% of the
    number of Units outstanding.
    

			
	 	(c)	
    The maximum number of Units that may be issued to
    any one Insider (and such Insider’s associates, as defined
    in the Securities Act (Alberta)), under the Plan and any
    other Unit Compensation Arrangement of the Fund within a
    one-year period is 5% of the number of Units outstanding.
    

			
	 	(d)	
    For the purposes of (a), (b) and
    (c) above, any entitlement to acquire Units issued pursuant
    to the Plan or any other Unit Compensation Arrangement of the
    Fund prior to the grantee becoming an Insider is to be excluded.
    For the purposes of (b) and (c) above, the number of
    Units outstanding is to be determined on the basis of the number
    of Units outstanding at the time of the reservation or issuance,
    as the case may be, excluding Units issued under the Plan or
    under any other Unit Compensation Arrangement of the Fund over
    the preceding one-year period.
    

6

 

3.4 Non-Exclusivity

     
Nothing in this Plan will prevent the Trustees
from adopting other or additional Unit Compensation
Arrangements, subject to obtaining any required regulatory or
shareholder approvals.

3.5 Amendment or Termination of Plan and
Exchange Options

			
	 	(a)	
    The Trustees may amend, suspend or terminate the
    Plan at any time, provided that no such amendment, suspension or
    termination may:
    

			
	 	(i)	
    be made without obtaining any required regulatory
    or securityholder approvals; or
    
	 
	 	(ii)	
    prejudice the rights of any Optionholder under
    any Exchange Option previously granted hereunder to the
    Optionholder, without the consent or deemed consent of the
    Optionholder.
    

			
	 	(b)	
    The Trustees may amend the terms of any
    outstanding Exchange Option (including, without limitation, to
    cancel any Exchange Option(s) previously issued), provided that:
    

			
	 	(i)	
    any required regulatory and securityholder
    approvals are obtained;
    
	 
	 	(ii)	
    the Trustees would have had the authority to
    initially grant the Exchange Option under terms as so amended;
    and
    
	 
	 	(iii)	
    the consent or deemed consent of the Optionholder
    is obtained if the amendment would prejudice the rights of the
    Optionholder under the Exchange Option.
    

3.6 Compliance with Laws and Stock
Exchange Rules

     
The Plan, the issuance of Exchange Options and
the exercise of Exchange Options under the Plan and the
Fund’s obligation to issue Units on exercise of Exchange
Options will be subject to all applicable federal, provincial
and foreign laws, rules and regulations and the rules of any
stock exchange on which the Units are listed for trading. Unless
otherwise agreed to by the Fund in writing, no Exchange Option
will be issued and no Optioned Units will be issued on the
exercise of Exchange Options under the Plan where such issue
would require registration of the Plan or such Optioned Units
under the securities laws of any foreign jurisdiction. Optioned
Units issued to Optionholders pursuant to the exercise of
Exchange Options may be subject to limitations on sale or resale
under applicable securities laws.

3.7 Participation in the Plan

     
The participation of any Eligible Person in the
Plan is entirely voluntary and not obligatory and shall not be
interpreted as conferring upon such Participant any rights or
privileges other than those rights and privileges expressly
provided in the Plan. The Plan does not provide any guarantee
against any loss which may result from fluctuations in the
market value of the Units. The Fund does not assume
responsibility for the income or other tax consequences for
Eligible Persons and they are advised to consult with their own
tax advisors.

3.8 CP Optionholders

     
Each Exchange Option, including any accompanying
Unit Appreciation Right, issued to a CP Optionholder pursuant to
the Plan of Arrangement will be subject to the provisions of
this Plan, with the necessary changes, provided that none of the
provisions of this Plan will operate so as to adversely affect
the rights of the CP Optionholders as set forth in the key
employee stock option plan of Canadian Pacific Limited.

7

 

ARTICLE 4

EXCHANGE OF OPTIONS

4.1 Exchange of Options

			
	 	(a)	
    Pursuant to the Plan of Arrangement, each
    Original Option will ultimately be exchanged for an Exchange
    Option, and thereafter the Original Options will be cancelled.
    
	 
	 	(b)	
    The Exercise Price of each Exchange Option issued
    pursuant to the Plan of Arrangement will be determined pursuant
    to the Plan of Arrangement.
    
	 
	 	(c)	
    The Expiry Date of an Exchange Option will be ten
    years after the Original Grant Date of the Original Option,
    subject to:
    

			
	 	(i)	
    any determination by the Trustees at the time of
    the Original Grant Date that a particular Original Option would
    have a shorter term; and
    
	 
	 	(ii)	
    the provisions of Section 4.3 relating to
    early expiry.
    

			
	 	(d)	
    In the event of any conflict between the Plan and
    the Combination Agreement, the terms of the Combination
    Agreement will prevail.
    
	 
	 	(e)	
    After the Effective Date, no further grants of
    Exchange Options will be made under this Plan.
    

4.2 Option Agreement

     
As soon as practicable following the Effective
Date, the Fund shall deliver to the Optionholder an Option
Agreement, confirming the terms of the Exchange Option and
executed by the Fund. The Optionholder will execute the Option
Agreement and return it to the Fund.

4.3 Early Expiry

     
An Exchange Option will continue in effect until
its Expiry Date or expire before its Expiry Date, as the case
may be, in the following events and manner:

			
	 	(a)	
    if an Optionholder resigns from his employment
    (other than in the circumstances described in (c)), or an
    Optionholder’s contract as a Consultant terminates at its
    normal termination date, then the Optionholder must exercise his
    Exchange Option during the period ending on the earlier of
    (i) 60 days after the date of resignation or
    termination and (ii) the Expiry Date, after which period
    the Exchange Option will expire;
    
	 
	 	(b)	
    if an Optionholder’s employment is
    terminated by the Corporation or a Subsidiary without Cause,
    including a constructive dismissal, or an Optionholder’s
    contract as a Consultant is terminated by the Corporation or a
    Subsidiary before its normal termination date without Cause,
    then the Optionholder must exercise his Exchange Option during
    the period ending on the earlier of (i) 60 days after
    the Date of Termination and (ii) the Expiry Date, after
    which period the Exchange Option will expire;
    
	 
	 	(c)	
    if an Optionholder’s employment is
    terminated by the Corporation or a Subsidiary for Cause, or an
    Optionholder’s contract as a Consultant is terminated by
    the Corporation or a Subsidiary before its normal termination
    date for Cause, including where an Optionholder resigns from his
    employment or terminates his contract as a Consultant after
    being requested to do so by the Corporation or Subsidiary as an
    alternative to being terminated for Cause, then the Exchange
    Option will expire on the Date of Termination;
    
	 
	 	(d)	
    if an Optionholder’s contract as a
    Consultant is frustrated before its normal termination date due
    to permanent disability, then the Optionholder must exercise his
    Exchange Option during the period ending on the earlier of
    (i) six months after the date of frustration and
    (ii) the Expiry Date, after which period the Exchange
    Option will expire;
    

8

 

			
	 	(e)	
    if an Optionholder’s employment ceases due
    to permanent disability, then the Exchange Option may be
    exercised prior to the Expiry Date;
    
	 
	 	(f)	
    if an Optionholder retires upon attaining the
    mandatory or early retirement age established by the Corporation
    or a Subsidiary from time to time (other than a Non-Employee
    Director as described in (g)), then the Exchange Option may be
    exercised prior to the Expiry Date;
    
	 
	 	(g)	
    subject to paragraph (h) below, if an
    Optionholder who is a Non-Employee Director ceases to be a
    member of the Board (whether as a result of the resignation of
    the Non-Employee Director from the Board or the Non-Employee
    Director not standing for re-election or not being re-elected as
    a member of the Board by the shareholders of the Corporation at
    a meeting, or for any other reason other than as a result of
    death), then the Non-Employee Director must exercise his
    Exchange Option during the period ending on the earlier of
    (i) 36 months after the date of cessation and (ii) the
    Expiry Date, after which the Exchange Option will expire;
    
	 
	 	(h)	
    if an Optionholder who is a Non-Employee Director
    ceases to be a member of the Board in the circumstances
    described in (g) above, but immediately thereafter becomes a
    Trustee of the Fund, then the Exchange Option held by such
    Optionholder must be exercised on the earlier of
    (i) 36 months after the date the Optionholder ceases
    to be a Trustee of the Fund, and (ii) the Expiry Date,
    after which the Exchange Option will expire;
    

			
	 	(i)	
    if an Optionholder dies, then any exercise must
    be effected by a legal representative of the Optionholder’s
    estate or by a person who acquires the Optionholder’s
    rights under the Exchange Option by bequest or inheritance and
    any such exercise must be effected during the period ending on
    the earlier of (i) 12 months after the death of the
    Optionholder and (ii) the Expiry Date, after which period
    the Exchange Option will expire;
    

subject to the right of the Trustees to, after
the Original Grant Date, set shorter (with the consent of the
Optionholder) or longer periods for exercise (not later than the
Expiry Date) with respect to a particular Optionholder or group
of Optionholders. Notwithstanding the foregoing, the early
expiry provisions set out in this Section 4.3 shall not
apply to the CP Optionholders whose Exchange Options and Unit
Appreciation Rights shall continue to be governed by the terms
of the resolution of the board of directors of Canadian Pacific
Limited dated July 30, 2001, providing for the extension of
the CP Optionholders’ exercise period until the end of the
original grant period, notwithstanding any earlier termination
of employment.

4.4 Limited Assignment

			
	 	(a)	
    Unit Appreciation Rights may not be assigned
    separately from the related right to acquire Units which is the
    subject of the Option.
    
	 
	 	(b)	
    Exchange Options, including any accompanying Unit
    Appreciation Rights, may not be assigned, except to:
    

			
	 	(i)	
    an Optionholder’s Family Trust, Personal
    Holding Corporation or Retirement Trust (or between such
    entities or from either of such entities to the Optionholder); or
    
	 
	 	(ii)	
    a legal representative of the Optionholder’s
    estate or a person who acquires the Optionholder’s rights
    under the Exchange Option by bequest or inheritance on death of
    the Optionholder.
    

			
	 	(c)	
    If a Personal Holding Corporation to which an
    Exchange Option, including any accompanying Unit Appreciation
    Right, has been granted or assigned is no longer controlled by
    the related Eligible Person, or the shares of the Personal
    Holding Corporation are no longer beneficially owned by the
    Eligible Person and persons who were the spouse, minor children
    or minor grandchildren of the Eligible Person at the time of
    grant or assignment, then the Exchange Option, including any
    accompanying Unit Appreciation Right, cannot be exercised until
    it is assigned by the Personal Holding Corporation to that
    Eligible Person or another assignee permitted by
    paragraph 4.4(a).
    

9

 

 

		
	4.5	
    No Rights as Unitholder or to Remain an
    Eligible Person; Status of Consultants

			
	 	(a)	
    An Optionholder will only have rights as a
    unitholder of the Fund with respect to those of the Optioned
    Units that the Optionholder has acquired through exercise of an
    Exchange Option in accordance with its terms.
    
	 
	 	(b)	
    Nothing in this Plan or in any Option Agreement
    will confer on any Optionholder any right to remain as an
    officer, employee, Consultant, director or trustee of the Fund,
    the Corporation or any Subsidiary.
    
	 
	 	(c)	
    Nothing in this Plan or in any Option Agreement
    entered into with a Consultant will constitute the Consultant as
    an employee of the Fund, the Corporation or any Subsidiary.
    

4.6 Adjustments

     
Adjustments will be made to (i) the Exercise
Price of an Exchange Option, and (ii) the number of
Optioned Units delivered to an Optionholder upon exercise of an
Exchange Option in the following events and manner, subject to
any required regulatory approvals and the right of the Trustees
to make such other or additional adjustments, or to make no
adjustments at all, as the Trustees consider to be appropriate
in the circumstances:

			
	 	(a)	
    upon (i) a subdivision of the Units into a
    greater number of Units, (ii) a consolidation of the Units
    into a lesser number of Units, or (iii) the distribution of
    Units to the holders of Units (excluding a Unit distribution
    made in lieu of a cash distribution in the ordinary course and
    in accordance with the Fund’s distribution policy, and
    excluding a distribution of Units under another Unit
    Compensation Arrangement), the Exercise Price will be adjusted
    accordingly and the Fund will deliver upon exercise of an
    Exchange Option, in addition to or in lieu of the number of
    Optioned Units in respect of which the right to purchase is
    being exercised, such greater or lesser number of Units as
    result from the subdivision, consolidation or Unit distribution;
    
	 
	 	(b)	
    upon (i) a capital reorganization,
    reclassification or change of the Units, (ii) a
    consolidation, amalgamation, arrangement or other form of
    business combination of the Fund with another Person or
    (iii) a sale, lease or exchange of all or substantially all
    of the property of the Fund, the Exercise Price will be adjusted
    accordingly and the Fund will deliver upon exercise of an
    Exchange Option, in lieu of the Optioned Units in respect of
    which the right to purchase is being exercised, the kind and
    amount of units or other securities or property as results from
    such event;
    
	 
	 	(c)	
    upon the distribution by the Fund to holders of
    the Units of (i) units of any class (whether of the Fund or
    another fund) other than Units, (ii) rights, options or
    warrants, (iii) evidences of indebtedness or (iv) cash
    (excluding a cash distribution paid in the ordinary course and
    in accordance with the Fund’s distribution policy),
    securities or other property or assets, the Exercise Price will
    be adjusted accordingly but no adjustment will be made to the
    number of Optioned Units to be delivered upon exercise of an
    Exchange Option;
    
	 
	 	(d)	
    adjustments to the Exercise Price of an Exchange
    Option will be rounded up to the nearest one cent and
    adjustments to the number of Optioned Units delivered to an
    Optionholder upon exercise of an Exchange Option will be rounded
    down to the nearest whole Unit; and
    
	 
	 	(e)	
    an adjustment will take effect at the time of the
    event giving rise to the adjustment, and the adjustments
    provided for in this Section are cumulative.
    

     
In the event that any adjustment is made to the
Exercise Price of an Exchange Option or the number of Optioned
Units issuable on exercise of an Exchange Option, similar
changes will be made to the exercise price of a Unit
Appreciation Right so as to preserve its value.

10

 

ARTICLE 5

EXERCISE OF OPTIONS

5.1 Manner of Exercise

     
An Optionholder who wishes to exercise an
Exchange Option may do so by delivering, on or before the Expiry
Date of the Exchange Option:

			
	 	(a)	
    a completed Notice of Exercise; and
    
	 
	 	(b)	
    subject to Section 5.3, a certified cheque,
    money order or bank draft payable to the Fund for the aggregate
    Exercise Price of the Optioned Units being acquired (and any tax
    payable in accordance with Section 5.4).
    

     
If the Optionholder is deceased or mentally
disabled, the Exchange Option may be exercised by a legal
representative of the Optionholder or the Optionholder’s
estate or by a person who acquires the Optionholder’s
rights under the Exchange Option by bequest or inheritance and
who, in addition to delivering the Notice of Exercise and
(if applicable) certified cheque, money order or bank draft
described above and must also deliver evidence of their status.

5.2 Delivery of Unit
Certificate

     
Not later than five business days after receipt
pursuant to Section 5.1 of the Notice of Exercise and
payment in full for the Optioned Units being acquired, the Fund
will direct its registrar and transfer agent to issue a
certificate in the name of the Optionholder or an intermediary
on behalf of the Optionholder, (or, if deceased, his legal
representative or beneficiary) for the number of Optioned Units
purchased by the Optionholder or the intermediary (or his
legal representative or beneficiary), which will be issued as
fully paid and non-assessable Units.

5.3 Cashless Exercise

     
To the extent permitted by applicable laws as
determined in the sole discretion of the Trustees, an
Optionholder may elect to effect a “cashless” exercise
of its Exchange Options. In such case, the Optionholder will not
be required to deliver to the Fund the certified cheque, money
order or bank draft referred to in Section 5.1. Instead,
the Optionholder will complete a Cashless Exercise Instruction
Form in the form attached as Exhibit C to the Plan,
pursuant to which:

			
	 	(a)	
    the Optionholder will instruct a broker selected
    by the Optionholder to sell through the Toronto Stock Exchange
    the Optioned Units issuable on exercise of an Exchange Option,
    as soon as possible and at the then applicable bid price for the
    Units of the Fund;
    
	 
	 	(b)	
    on the settlement date for the trade, the Fund
    will direct its registrar and transfer agent to issue a
    certificate in the name of the broker (or as the broker may
    otherwise direct) for the number of Optioned Units issued on
    exercise of the Exchange Option, against payment by the broker
    to the Fund of the Exercise Price for such Optioned Units; and
    
	 
	 	(c)	
    the broker will deliver to the Optionholder the
    remaining proceeds of sale, net of brokerage commission (and any
    tax payable in accordance with Section 5.4).
    

5.4 Withholding

     
If the Fund determines that the satisfaction of
taxes, including withholding tax, or other withholding
liabilities is necessary or desirable in respect of the exercise
of any Exchange Option, including any accompanying Unit
Appreciation Right, the exercise of the Exchange Option is not
effective unless such taxes have been paid or withholdings made
to the satisfaction of the Trustees. The Fund may require an
Optionholder to pay to the Fund, in addition to the Exercise
Price for the Optioned Units, any amount that the Fund or the
Corporation is obliged to remit to the relevant taxing authority
in respect of the exercise of the

11

 

Exchange Option. Any such additional payment is
due no later than the date on which any amount with respect to
the Exchange Option exercised is required to be remitted by the
Fund or the Corporation.

5.5 Indemnification

     
Every Trustee will at all times be indemnified
and saved harmless by the Fund and from its assets from and
against all costs, charges and expenses whatsoever including any
income tax liability arising from any such indemnification, that
such Trustee may sustain or incur by reason of any action, suit
or proceeding, taken or threatened against the Trustee,
otherwise than by the Fund, for or in respect of any act done or
omitted by the Trustee in respect of this Plan, such costs,
charges and expenses to include any amount paid to settle such
action, suit or proceeding or in satisfaction of any judgement
rendered therein.

5.6 Effect on Trustees

     
The Trustees have established this Plan solely in
their capacity as Trustees on behalf of the Fund and the
obligations of the Fund hereunder shall not be personally
binding upon the Trustees or any of the Unitholders of the Fund
or any annuitant under a plan of which a Unitholder is a trustee
or carrier (“annuitant”). Any recourse against the
Fund, the Trustees or any Unitholder or annuitant in any manner
in respect of any indebtedness, obligation or liability of the
Fund arising hereunder or arising in connection herewith or from
the matters to which this Plan relates, if any, including,
without limitation, claims based on negligence or otherwise
tortious behaviour, shall be limited to, and satisfied only out
of the Fund’s assets, without recourse to the personal
assets of any of the foregoing persons.

12

 

EXHIBIT A TO THE EXCHANGE OPTION
PLAN

NOTICE OF EXERCISE

FORDING CANADIAN COAL TRUST

EXCHANGE OPTION PLAN

	 	 	 	 	 	 	 
	
    TO:
    	 	
    Solium Capital Inc.
    	 	
    FROM:
    	 	
    

	 	 	
    Geri Langley
    	 	
    (Title)
    	 	
    

	 	 	
    710, 805 8(th) Avenue SW
    	 	
    (Work
    	 	
    

	 	 	
    Calgary,
    AB,     T2P 1H7
    	 	
    Address)
    	 	
    

	 
	
    
    Phone:
    

    	 	
    (403) 515-3909
    	 	
    Phone:
    	 	
    

	
    
    Fax:
    

    	 	
    (403) 515-3919
    	 	
    Fax:
    	 	
    

I hereby elect to exercise
                                    Exchange
Options of Fording Canadian Coal Trust (the “Fund”)
granted to me under the provisions of the Exchange Option Plan
(the “Plan”) dated
                                             .
The grant ID was
                                              and
the Exercise Price of these Exchange Options was set as
$                                             
per Optioned Unit.

I have enclosed a certified cheque, bank draft or
money order in the amount of
$                                             
(number of options being exercised multiplied by the Exercise
Price) representing the cost to purchase
                                              Units
of the Fund and any tax payable in accordance with
Section 5.4 of the Plan.

I request that the certificate be registered and
delivered as follows:

Name: 

Address: 

City/Province: 

Postal
Code: 

I hereby elect to exercise
                                              Unit
Appreciation Rights (UARs) of the Fund granted to me under the
provisions of the Exchange Option Plan dated
                                             .
The grant ID
was                and
the price of these UARs are set at
$                                              per
unit.

Current Canada Customs and Revenue Agency/ Quebec
administrative practice provides that 50% of the appreciation
realized by the UAR exercise is exempt from income tax. The
remaining 50% of the appreciation will be taxed at the top
marginal rate.

	 	 	 	 	 
	
    
    Signed:
    

    	 	
    
	 	
    

	 	 	 	 	
    (Address I would like my cheque mailed to)
    
	 
	
    
    Dated:
    

    	 	
    
	 	
    

	 	 	 	 	
    (City/Province/Postal Code)
    

To be completed by Solium Capital Inc. and
faxed to the Fund:

Solium Capital Inc. confirms that
                                             
is eligible to exercise the entitlement indicated herein.

	 	 	 
	
	 	

	
    
    Solium Capital Inc.
    

    	 	
    Date
    

13

 

EXHIBIT B TO THE EXCHANGE OPTION
PLAN

FORM OF OPTION AGREEMENT

FORDING CANADIAN COAL TRUST

EXCHANGE OPTION PLAN

OPTION AGREEMENT

     
This Option Agreement is entered into between
Fording Canadian Coal Trust (the “Fund”) and the
optionholder named below (the “Optionholder”) who is a
participant in the Fording Canadian Coal Trust Exchange Option
Plan (the “Plan”), a copy of which is attached hereto.
The Optionholder hereby confirms that he or she has been granted
the options (the “Exchange Options”) set forth on the
attached Schedule “A”, that the information set
forth in such schedule is true and correct and that all such
Exchange Options are subject to the terms and conditions of the
Plan and this Agreement. The undersigned further acknowledges
that the Exchange Options have been granted in replacement for
an equal number of Original Options granted under the
Corporation’s KESOP or DSOP as the case may be.

     
By signing this agreement, the Optionholder
acknowledges that he or she has read and understands the terms
of the Plan and accepts the Exchange Option in exchange for his
or her Original Options in accordance with the terms of the Plan.

     
IN WITNESS WHEREOF the Fund and the Optionholder
have executed this Option Agreement as of
                               ,
2003.

		
	 	
    FORDING CANADIAN COAL TRUST

			
	 	By: 	

		
	 	
    

	 	
    Trustee
    
	 
	 	
    

	 	
    Name of Optionholder
    
	 
	 	
    

	 	
    Signature of Optionholder
    

14

 

EXHIBIT C TO THE EXCHANGE OPTION
PLAN

CASHLESS EXERCISE INSTRUCTION FORM

FORDING CANADIAN COAL TRUST

EXCHANGE OPTION PLAN

	 	 	 	 	 	 	 	 	 
	 	 	 	 	
	 	 
	
    TO
    	 	
    :
    	 	
      Brokerage
    Firm: 

    	 	
    FROM:
    	 	
    

	 	 	 	 	
      Broker
    Name: 

    	 	
    (Title)
    	 	
    

	 	 	 	 	
      Phone: (403)
    515-3909 

    	 	
    (Work
    	 	
    

	 	 	 	 	
      Fax: (403)
    515-3919 

    	 	
    Address)
    	 	
    

	 	 	 	 	
      A/C Number: 

    	 	 	 	 
	 	 	 	 	
	 	 

		
	 	
    FAX A COPY TO:
    
	 	
    Client Services
    
	 	
    Solium Capital Inc.
    
	 	
    710, 805 – 8th Avenue SW
    
	 	
    Calgary, AB
    
	 	
    T2P 1H7
    
	 	
    Fax: (403) 515-3919
    

I hereby authorize
                              
to sell
                    
Units of the Fund at a price of
$                    .
Concurrent with the sale of Units, I hereby elect to exercise
Grant number
                    
made to me under the provisions of the Exchange Option Plan as
of
                              
at an Exercise Price of
$                     per
Optioned Unit.

Upon the sale of
                    
Units of the Fund, I direct
                              
to deliver payment to the Fund. The aggregate amount that will
be paid to the Fund will be
$                    
(number of Optioned Units to be exercised
          
multiplied by the Exercise Price
$                    ).

Upon receipt by the Fund of
$                    ,
I hereby direct that a certificate for the Optioned Units
referred to above be issued in the name of
                              
for the account of
                              
and delivered to
          .

Upon receipt of the units, I direct
                              
Units exercised under my Option Agreement, less brokerage
commission fees as follows:

	 	 	 	 	 	 	 	 	 
	
    o
    	 	
    Mail to my address
    	 	 	 	
    o  Pick
    up from Broker
    
	
    o
    	 	
    Deposit to my bank account:
    	 	
    

	 	 	 	 	
    Bank ID #
    	 	
    Transit #
    	 	
    A/C #
    
	 

	 	 	 
	
    

    Bank Address: 

    
	 
	
    Signed: 

    	 	
    Home Address: 

    
	 
	
    Date: 

    	 	
                    

    

To be completed by Solium Capital Inc. and
faxed to Broker:

Solium Capital Inc. hereby confirms that
                    
is eligible to exercise the Exchange Option referred to herein:

	 	 	 
	
    
	 	
    

	
    Solium Capital Inc.
    	 	
    Date
    

To be completed by the Broker and faxed to
Fording Canadian Coal Trust within 3 days of
transaction:

This hereby confirms that the options referred to
above were sold at a price of
$                    
per Unit.

	 	 	 
	
    
	 	
    

	
    Broker’s Signature
    	 	
    Date
    

15Exhibit 10.6 Agreement with Amerisource Funding, Inc.

Exhibit 10.6 Agreement with Amerisource Funding, Inc.

Amerisource Funding, Inc.
5300 Hollister, Ste 360
Houston, TX 77040
(713) 863-8300 / (800) US MONEY
(713) 863-1434 FAX                                                  Amerisource
                                                                Freedom to Grow

                                   TERM SHEET
                             Better Solutions, Inc.

Richard McDonald:

Based on the information provided and representations made, Amerisource is
interested in establishing a factoring account for Better Solutions, Inc. under
the following terms:

1.   Maximum Account Limits: $250,000 initially. Floating thereafter based on
creditworthiness of account debtors.

2.   Advance: 90% advance on acceptable accounts.

3.   Fee for Services: Fees for accounts purchased by Amerisource shall
include a flat rate of 3.50% for the first 35 days an account is outstanding. An
additional fee of 0.120 percent (0.120%) per day will begin on the 36th day an
account is outstanding.

4.   Term of Contract: None.

5.   Reserves: Cleared weekly.

6.   Recourse: 90 days.

7.   Collateral: Better Solutions, Inc. will grant a first priority interest
in accounts receivable as defined in the security agreement. Better Solutions,
Inc. will grant a blanket lien on all other assets. Better Solutions, Inc.
principals will execute a continuing guaranty.

All other terms and conditions are expressed in the factoring documents.
Amerisource approval is subject to final management review. Upon your acceptance
of the above and submission of invoices for factoring (If no invoices are
submitted, a $500 deposit is required). Amerisource is prepared to move forward
immediately.

Amerisource                                           Agreed and Accepted
/s/ Tina Adams                                        /s/ Richard McDonald, CFO
Tina Adams                                            Richard McDonald
Business Development                                  Better Solutions, Inc.
Date: 2-2-2001                                        Date: 1-31-2001

                           PURCHASE AND SALE AGREEMENT

THIS AGREEMENT, made and entered into this 8th day of February, 2001 is by and
between AMERISOURCE FUNDING, INC. a Texas corporation, whose address is 5300
Hollister, Suite 360, Houston, Texas 77040, (hereinafter referred to as "ASF"),
and Better Solutions, Inc. whose address is 300 Penn Center Blvd., Ste. 201,
Pittsburgh, PA 15235 (hereinafter referred to as "CLIENT").

PURPOSE: Whereas, CLIENT desires, from time to time, to sell accounts receivable
and other rights to ASF; and, Whereas, ASF is, from time to time, desirous of
acquiring these accounts receivable and other rights from CLIENT. Now,
therefore, in consideration of the mutual promises set forth herein, the parties
agree as follows:

DEFINITIONS:

1.  "ACCOUNT" means any right to payment for goods sold or leased, and
delivered, or services rendered which may or may not be evidenced by an
instrument or chattel paper.

2.  "CLIENT" means the seller and assignor of the accounts.

3.  "CUSTOMER" means CLIENT's customer or the account debtor or obligor of an
account.

4.  "COLLATERAL" means the intangible or tangible property given as security
to ASF by CLIENT for the obligations of CLIENT under this Agreement.

5.  "WARRANT" means to guarantee, as a material element of this Agreement. Each
separate warranty herein is also an independent condition to ASF's duties under
this Agreement.

6.  "CUSTOMER DISPUTE" means a claim, by customer against CLIENT, any kind
whatsoever, that reduces the amount collectible from customer by ASF. A
"customer dispute" may arise from any kind of disagreement between customer and
CLIENT whatsoever, valid or invalid; and may arise at anytime, both before
and/or after the signing of this Agreement or the purchase of the account.

WARRANTIES: With respect to each of the accounts, CLIENT hereby represents and
warrants unto ASF as follows:

1.  ASF, upon acquisition of the accounts from CLIENT, will be the lawful owner
thereof, free and clear of all claims, liens, or encumbrances whatsoever.

2.  Said accounts are valid and existing as of the date of purchase by ASF, free
from all defenses, and that all persons and/or entities executing such accounts
had full authority and capacity to do so.

3.  All legal requirements of federal, state, and local governments or agencies
thereof, have been fully satisfied.

4.  All accounts offered for sale to ASF represent an accurate and undisputed
statement of present indebtedness by customer to CLIENT due and payable within
thirty days, unless otherwise agreed between CLIENT and ASF in writing, and not
subject to any set-off by customer or contingent upon any further assurances,
conditions, or fulfillment of any contracts by CLIENT.

5.  CLIENT does not have ownership or control of the business of any customer,
nor does any customer have indebtedness to CLIENT, other than as specified on
certain invoices from CLIENT for goods and services delivered by CLIENT;
constituting accounts offered for sale to ASF.

6.  All financial records, invoices, statements, purchase orders, books, or
other documents of CLIENT or its customers presented to ASF, before or after the
signing of this agreement are complete, true, and accurate.

7.  Neither CLIENT nor any of the customers on any of the accounts are the
subject of any current proceeding in bankruptcy or reorganization under the
federal bankruptcy laws or any other debtor relief laws. CLIENT further warrants
that there are no open, unsettled, or pending liens or judgments against the
CLIENT, nor, to the best of the CLIENT's knowledge, against his customers.

The representations and warranties contained in this Agreement shall survive the
purchase of all accounts and shall expire only upon retirement and full payment
of all accounts.

COVENANTS: As inducement to ASF to purchase, from time to time, accounts from
CLIEENT, CLIENT further agrees as follows:

1.  CLIENT will not sell, discount, or factor accounts to anyone other than ASF
for the duration of this Agreement without the prior written consent of ASF.
CLIENT further agrees not to transfer, assign, pledge, or give a security
interest in any of its accounts to any other parties, without the prior written
consent of ASF.

2.  CLIENT will not attempt to modify the terms of, in any ways, or extend the
credit beyond thirty days of any accounts.

3.  CLIENT may not assign any of its rights or obligations under this Agreement
without the prior written consent of ASF and any attempt to assign without such
consent will be void.

4.  CLIENT will immediately notify ASF in writing of any customer dispute.

5.  CLIENT will hold in trust, as the property of ASF, and immediately turn over
to ASF the original check or other form of payment received by CLIENT, whenever
any payments on any accounts purchased by ASF come into CLIENT's possession.
Should CLIENT come into possession of a check comprising payment owing to both
CLIENT and ASF, CLIENT shall immediately turn over said check to ASF and ASF
will refund CLIENT's portion to CLIENT upon collection of said check.

6.  CLIENT will promptly notify ASF of any attachment, lien, judgment, suit, or
any other legal process levied against CLIENT or any of CLIENT's customers.

7.  CLIENT will notify ASF in writing prior to any change in the location of
CLIENT's place or places of business or any change in the principal officers of
CLIENT or any change in CLIENT's name, identity, legal entity, corporate
structure or use of additional or other trade names by CLIENT.

8.  ASF may at anytime notify the customers of CLIENT to validate their
indebtedness to CLIENT and direct them to make payments directly to ASF.

9.  CLIENT hereby grants to ASF, as further inducement for ASF to enter into
this Agreement, as collateral for the repayment of any and all of its
obligations hereunder, a Security Interest, under the Uniform Commercial Code,
in all of CLIENT's "presently existing or hereafter arising, now owned or
hereafter acquired accounts, accounts receivable, contract rights, chattel
paper, documents, instruments, money deposit accounts, reserves, reserve
accounts, rebates, insurance policies, inventory, equipment, vehicles and
general intangibles, and all books and records pertaining to accounts and all
proceeds of the foregoing property". CLIENT shall not sell, transfer, or
otherwise convey, or dispose of any of the property in which ASF has a security
interest as long as this Agreement is in effect without the prior written
consent of ASF.

POWER OF ATTORNEY: For the purpose of carrying out this Agreement, CLIENT hereby
appoints ASF as its agent and attorney-in-fact, and gives ASF its Power of
Attorney to sign any necessary documents and take any necessary action in
CLIENT's name or on CLIENT's behalf, including but not limited to the following:

1. Sign and file UCC-1 Financial Statements for the purpose of protecting ASF's
security interest under this Agreement and under any other transactions related
to this Agreement.

2. Replace CLIENT's address with ASF's address on all invoices, statements, or
other related documents to be sent to customers of CLIENT.

3. Receive and process any and all mail addressed to CLIENT and delivered to
ASF.

4. Endorse the name of CLIENT on any checks, invoices, or any other documents
relating to the payment of an account.

5. Collect, prosecute, compromise, defend any action, or make use of any legal
process available to settle any unpaid account.

6. Do any and all things necessary and proper to carry out the purpose intended
by this Agreement.

ASSIGNMENT: CLIENT shall from time to time at CLIENT's option sell, transfer and
assign accounts to ASF and said accounts shall be identified by separate and
subsequent written assignments on a form to be provided to CLIENT by ASF known
as the INVOICE TRANSMITTAL.

APPROVAL: ASF will not purchase an account unless such account is first
submitted to ASF by CLIENT for approval. ASF is not obligated to approve or
purchase any account from CLIENT.

DISCOUNT: ASF agrees to buy acceptable accounts from CLIENT at a discount (fee)
of 3.5 percent (3.5%) for the first 35 days an account is outstanding plus 0.12
percent (0.12%) per day thereafter an account is outstanding, unless otherwise
specified on the Invoice Transmittal, from the face value of each account.

RESERVE: ASF may reserve and withhold an amount in a non-interest bearing
reserve account equal to 6.5 percent (6.5%), unless otherwise specified on the
Invoice Transmittal, of the gross face amount of all accounts purchased. Said
reserve account may be held by ASF and applied by ASF against charge-back or any
obligations of CLIENT to ASF, known or anticipated, and said reserve account is
not due and payable to CLIENT until any and all such obligations are fully paid
and/or satisfied. CLIENT gives to ASF a security interest reserve account which
secures all obligations and indebtedness arising hereunder.

RESERVE ACCOUNT REFUND: ASF will return to CLIENT any reserve held on account
once said account has been paid in full and there are no other obligations known
or anticipated of CLIENT to ASF.

REQUIRED DOCUMENTS: When CLIENT offers an Invoice Transmittal to ASF for the
sale of accounts, ASF shall also receive an original invoice together with a
copy of a purchase order or contract, if applicable, and satisfactory proof of
delivery or service performed.

REPURCHASE: CLIENT will promptly repurchase from ASF any accounts which fall
subject to any one or more of the following circumstances:

1. If CLIENT has breached any warranties or covenants in this Agreement with
regard to an unpaid account.

2. If a customer on an account asserts a claim of loss or offset of any kind
against CLIENT or ASF.

3. If CLIENT and customer are involved in a dispute, of any kind and for any
reason whatsoever, that reduces the amount collectible from customer by ASF,
regardless of whether or not CLIENT's at fault.

4. If an account purchased from CLIENT by ASF is not paid in full to ASF within
ninety (90) days from the original invoice date.

DELINQUENCY: As inducement to CLIENT to repurchase accounts promptly when
required to do so and to sell only the accounts from which prompt payments can
be expected, CLIENT agrees to a penalty of 0.2 percent (0.2%) for every day
beyond ninety five (95) days that an invoice remains outstanding and unpaid at
ASF.

NOTICE OF DISPUTE: CLIENT shall immediately notify ASF in writing of any
customer dispute.

PAYMENT OF DISPUTEDACCOUNT: Upon customer dispute, CLIENT shall immediately pay
to ASF the face amount of the applicable invoice/account less any payments made
thereon to AS, plus any applicable discount fees. ASF may, at its sole
discretion, charge the reserve account for such amount or subtract such amount
from any refund, rebate or other obligation owed by ASF to CLIENT. Upon payment
to ASF of such amount, ownership of the account shall revest in CLIENT, subject
to ASF's security interest described herein.

DEFULT: The following are events of default by CLIENT under this Agreement:

1. Any of CLIENT's obligations to ASF under any agreement with ASF is not paid
promptly when due.

2. CLIENT breaches any warranty, covenant, representation or provision hereof,
or under any other agreement now or hereof executed by CLIENT with or benefiting
ASF.

3. CLIENT becomes insolvent, dies or ceases to do business as a going concern.

4. CLIENT has given ASK misleading information regarding its financial or the
financial condition of any of its customers or obligors on the account.

5. A petition in bankruptcy, or for arrangement of debts, or reorganization, or
under any other debtor relief laws be filed by or against CLIENT or CLIENT
admits its inability to pay its debts as they mature.

6. Any liens or attachments shall be applied against the property of CLIENT in
which a security interest is granted to ASF in this Agreement.

7. Any guarantor, surety or endorser for CLIENT defaults in any obligation or
liability to ASF or any guaranty obtained in connection with this Agreement is
terminated or breached.

REMEDIES: ASF may elect, in the event of the occurrence of an event of default
by CLIENT, to pursue one or more of the following remedies:

1. Require that CLIENT immediately repurchases all accounts old to ASF which
have not been fully paid by the customer/obligor thereon.

2. Enforce the rights and remedies given ASF under this Purchase and Sale
Agreement pursuant to the Uniform Commercial Code, including the right to any
deficiency remaining after disposition of the collateral for which CLIENT hereby
agrees to remain fully liable.

3. Enter upon the premises of CLIENT and take possession of the collateral and
any documents or records pertaining to the collateral.

4. Without notice to CLIENT, renegotiate, extend, compromise or settle at less
than face value, any accounts included in the collateral.

5. Recover from CLIENT all cost and expenses, including attorney's fees,
involved in exercising ASF's rights under this Purchase and Sale Agreement.

6. Pursue any such other remedy available under State or Federal law.

CLIENT expressly waives all rights to possession of the collateral after default
and all claims and causes of action resulting from or in connection with ASF
exercising its rights and remedies under this Agreement.

MISCELLANEOUS:

Termination: This Agreement shall continue in full force and effect until
terminated by written notice of either party. After termination, CLIENT is still
fully liable to ASF for any accounts purchased by ASF before such termination
and ASF will continue to have a security interest in the collateral of CLIENT
until all existing indebtedness of CLIENT is paid in full.

Nature of Charges: It is agreed that any discounts, fees and commissions payable
hereunder constitute consideration for ASF's services provided hereunder,
including but not limited to, providing all transactional documents applicable
to the Agreement contemplated herein, making credit investigations, supervising
the ledgering of accounts purchased, supervising the collection of the accounts
purchased, notifying customers and verifying accounts purchased, including
long-distance telephone, telefax and postage charges, assuming certain risks and
other services provided by ASF hereunder. Nothing contained herein shall be
construed to require the payment of interest; however, should a court of
competent jurisdiction rule that any part of ASF's discounts, fees, and
commissions or any other charges hereunder are in fact or in law to be treated
as interest on funds advanced, in no event shall CLIENT be obligated to pay that
interest at a rate in excess of the maximum amount permitted by law, and all
agreements, conditions, or stipulations contained herein, if any, which may in
any event or contingency whatsoever operate to bind, obligate, or compel CLIENT
to pay a rate of interest exceeding the maximum rate of interest permitted by
law shall be without binding force or effect at law or equity to the extent only
of the excess of interest of such maximum rate of interest permitted by law.
Also, in such event, ASF may "spread" all charges characterized as interest over
the entire term of all transactions with CLIENT and may refund to CLIENT the
excess of any payments made over the highest lawful rate. It is the intention of
the parties hereto that in the construction and interpretation of this
Agreement, this paragraph shall be given precedence over any other agreement,
condition, or stipulation herein contained which is in conflict with same.

Modification; Assignment: This Agreement may not be modified, altered or
amended, except in writing signed by both CLIENT and ASF. CLIENT hereby consents
to ASF's sale, assignment, or transfer of this Agreement, in part or in whole,
and/or any if its rights under this Agreement.

Waiver by ASF: ASF's failure, at any time or times hereafter, to require strict
performance by CLIENT of any provision of this Agreement shall not waive, affect
or diminish any right of ASF thereafter to demand strict performance and
compliance of this Agreement or any part thereof.

Severability: If any provision of this Agreement shall be prohibited by or be
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity without invalidating the remainder of this
Agreement.

Parties: This Agreement shall be binding upon and inure to the benefit of CLIENT
and ASF and their respective successors and assigns.

Governing Law: This Agreement shall be deemed to have been delivered, and
performance shall be, in Harris County, Texas, and shall be interpreted, and the
rights and liabilities of the parties hereto determined in accordance with the
laws of the State of Texas.

Notice: Any notice required hereunder shall be in writing, and shall be deemed
to have been validly served if given or delivered in person, by certified mail
or by private receipted carrier and addressed to the party to be notified at the
address of such party set forth below or to such other address as each party may
designate by like notice.

Complete Agreement: This Agreement is the complete and entire Agreement between
the parties and any amendment or addition hereto must be in writing and signed
by the parties or the respective obligating party thereon.

IN WITNESS WHEREOF, this PURCHASE AND SALE AGREEMENT has been duly executed as
of the day and year specified at the beginning.

CLIENT:                                     ASF:

Better Solutions, Inc.                      AMERISOURCE FUNDING, INC.

/s/ MR  Marc D. Roup                        /s/ Jason Floyd
--------------------                        ----------------
By: Marc D. Roup                            By: Jason Floyd
----------------                            ---------------
Title: CEO                                  Title: President
----------                                  ----------------

/s/ Richard E. McDonald
-----------------------
By: Richard E. McDonald
-----------------------
Title: CFO
----------

300 Penn Center Blvd., Ste. 201             5300 Hollister, Ste. 360
Pittsburgh, PA 15235                        Houston, TX 77040

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