Document:

Share Exchange Agreement - Mass Financial Corp.

 

 

EXHIBIT
4.39

SHARE EXCHANGE AGREEMENT

THIS AGREEMENT made December 29, 2005

BETWEEN:

MASS FINANCIAL CORP., a company incorporated under the laws
of Barbados

(the “Company”)

AND:

KHD HUMBOLDT WEDAG INTERNATIONAL LTD, a corporation
continued under the laws of British Columbia

(the “Shareholder”)

WHEREAS:

	A.	 	The authorized capital of the Company consists of an unlimited number of shares of one class
designated as common shares (the “Common Shares”);
	 
	B.	 	There are eleven (11) Common Shares in the capital of the Company issued to the Shareholder;
and
	 
	C.	 	The Company and the Shareholder wish to reorganize the capital of the Company under the
provisions of the Companies Act (Barbados) and the Income Tax Act (Canada);

NOW THEREFORE THIS AGREEMENT WITNESSES that for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree as follows:

	1.	 	Amendment to Articles

The parties agree to take all necessary steps to:

	 	(a)	 	increase the authorized capital of the Company by creating a series of a new
class of preferred shares without par value (the “Series A Preferred Shares”) with
special rights and restrictions substantially similar to the special rights and
restrictions set out in Schedule A of this Agreement and by creating a new class of
common shares without par value (the “New Common Shares”); and
	 
	 	(b)	 	exchange the eleven (11) Common Shares held by the Shareholder for one (1)
Series A Preferred Share and one (1) New Common Share (the “Exchange”).

 

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	2.	 	Estimated Value of Shares
	 
	2.1	 	The Company will:

	 	(a)	 	determine the best estimate of the fair market value of the issued Common
Shares immediately prior to the Exchange (the “Estimated Value of the Common Shares”),
such determination to be made in consultation with an independent valuator, having
regard to the principles of business valuation as endorsed by the Association of
Business Valuators, within 90 days of the Exchange; and
	 
	 	(b)	 	set the initial redemption amount of the Series A Preferred Shares equal to the
Estimated Value of the Common Shares less $100.

	2.2	 	The Company may from time to time amend the Estimated Value of the Common Shares based on the
results of appraisals and other information subsequently made available provided, however,
that subject to paragraph 3, any determination of value by such independent valuator will be
final and binding on the Company and the Shareholder.
	 
	2.3	 	The New Common Shares issued by the Company to KHD on the Exchange will have a nominal fair
market value of $100.

	3.	 	Adjustment

If:

	 	(a)	 	the Minister of National Revenue or any other competent authority at any time
questions or proposes to issue or issues any assessment or assessments that would
impose or imposes any liability for tax of any nature or kind on any of the parties or
on any other person on the basis that the fair market value of the issued Common Shares
immediately prior to the Exchange is greater or less than the Estimated Value of the
Common Shares; and
	 
	 	(b)	 	the Company and the Shareholder agree or a competent tribunal finally adjudges
that the fair market value of the issued Common Shares immediately prior to the
Exchange is a greater or lesser amount (the “Adjusted Value of the Common Shares”) than
the Estimated Value of the Common Shares;

then

	 	(c)	 	the initial redemption amount in respect of each Series A Preferred Share in
the capital of the Company, as that term is defined by reference to the articles of the
Company and this Agreement, will be determined by reference to the Adjusted Value of
the Common Shares to the exclusion of the Estimated Value of the Common Shares; and
	 
	 	(d)	 	the Company and the Shareholder will do all such things and perform all such
acts as may be necessary to revise the initial redemption amount accordingly.

 

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	4.	 	Agreement to Vote
	 
	 	 	The Shareholder agrees that it will vote its shares so as to enable the Company to alter its
articles in the manner set out in this Agreement.
	 
	5.	 	Subsequent Shareholders
	 
	 	 	The Company agrees that in the event any person subscribes for Series A Preferred Shares in
the capital of the Company at any time in the future, the Company will cause such person to
agree in writing to be bound by the terms and conditions of paragraph 3 of this Agreement
and to consent to and do any and all acts or things which may be necessary to give effect to
the terms thereof.
	 
	6.	 	Notices
	 
	 	 	All notices and other communications hereunder shall be in writing and shall be delivered by
hand to the parties at the following addresses or sent by telecopy at the following
telecopier numbers or at such other addresses or telecopier numbers as shall be specified by
the parties by like notice:

	 	(a)	 	if to the Shareholder:

	 	 	 
	 

	 	Unit 803, 8/F, Dina House, Ruttonjee Centre
	 

	 	11 Duddell Street, Central
	 

	 	Hong Kong
	 
	 	 
	 

	 	Attention: Michael J. Smith
	 

	 	Fax: 852.2537.3689

	 	(b)	 	if to the Company:

	 	 	 
	 

	 	Palm Court
	 

	 	28 Pine Road
	 

	 	Belleville, St. Michael
	 

	 	Barbados
	 
	 	 
	 

	 	Attention: Michael J. Smith
	 

	 	Fax: 246.429.5143

The date of receipt of any such notice shall be deemed to be the date of delivery thereof
or, in the case of notice sent by telecopy, the date of successful transmission thereof
(unless transmission is received after normal business hours, in which case the date of
receipt shall be deemed to be the next business day).

 

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	7.	 	Applicable Law
	 
	 	 	This Agreement shall be governed by, and construed in accordance with, the laws of the
Province of British Columbia and the federal laws of Canada applicable therein and shall be
treated in all respects as a British Columbia contract.
	 
	8.	 	Currency
	 
	 	 	All sums of money which are referred to in this Agreement are expressed in lawful money of
the United States of America unless otherwise stated.
	 
	9.	 	Binding Effect and Assignment
	 
	 	 	This Agreement and all the provisions hereof shall be binding upon and enure to the benefit
of the parties hereto and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights hereunder shall be assigned by any of the parties hereto
without the prior written consent of the other party hereto.
	 
	10.	 	Time of Essence
	 
	 	 	Time shall be of the essence of this Agreement.
	 
	11.	 	Counterparts
	 
	 	 	This Agreement may be executed in counterparts, each of which shall be deemed an original,
and each signed copy sent by electronic facsimile transmission shall be deemed to be an
original, but all of which together shall constitute one and the same instrument.
	 
	12.	 	Further Assurances
	 
	 	 	Each party shall make, do and execute, or cause to be made, done and executed all such
further acts, deeds, agreements, transfers, assurances, instruments or documents as may be
reasonably required in order to implement this Agreement.

IN WITNESS THEREOF the parties have entered into this Agreement as of the date and year first above
written.

MASS FINANCIAL CORP.

	 	 	 
	Per:

	 	/s/ Michael J. Smith
	 

	 	Authorized Signatory

KHD HUMBOLDT WEDAG INTERNATIONAL LTD

	 	 	 
	Per:

	 	/s/ Michael J. Smith
	 

	 	Authorized Signatory

 

 

SCHEDULE A

SPECIAL RIGHTS AND RESTRICTIONS

ATTACHED TO SERIES A PREFERRED SHARES

The Series A Preferred Shares shall have attached to them the following special rights and
restrictions:

	1.	 	DEFINITIONS

For the purposes of this Schedule, the following terms shall have the following meanings:

	1.1	 	“Common Shareholders” means the registered holders of the Old Common Shares or the New Common
Shares, as applicable;
	 
	1.2	 	“Company” means Mass Financial Corp.;
	 
	1.3	 	“Constating Documents” means the Articles of Continuance, as amended;
	 
	1.4	 	“Cumulative Redemption Amount” in respect of a Preferred Share means the aggregate of the
Redemption Amount plus the amount of any dividends payable on the Preferred Share under
section 6.8 of this Schedule;
	 
	1.5	 	“Initial Redemption Amount” in respect of a Preferred Share means the amount equal to the
quotient contained by dividing (i) the fair market value of the Old Common Shares, at the time
the Old Common Shares were exchanged for the Preferred Shares and the New Common Shares, less
$100, by (ii) the number of Preferred Shares issued at the time the Old Common Shares were
exchanged for the Preferred Shares and the New Common Shares;
	 
	1.6	 	“New Common Shares” means the class of common shares authorized by the Constating Documents,
which, together with the Preferred Shares, were issued in exchange for the Old Common Shares;
	 
	1.7	 	“Old Common Shares” means the class of common shares authorized by the Constating Documents,
which were issued by the Company and outstanding as of December 1, 2005 and which were
exchanged for the Preferred Shares and the New Common Shares;
	 
	1.8	 	“Preferred Shareholders” means the registered holders of the Preferred Shares;
	 
	1.9	 	“Preferred Shares” means the class of Series A preferred shares issued by the Company,
together with the New Common Shares, in exchange for the Old Common Shares;
	 
	1.10	 	“Redemption Amount” means the redemption amount of each Preferred Share as calculated in
accordance with section 5.4 of this Schedule;

 

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	1.11	 	“Redemption” means the repurchase by the Company, at the direction of the Company, of all or
any of the then outstanding and issued Preferred Shares from time to time as provided for by
section 5 of this Schedule;
	 
	1.12	 	“Redemption Notice” has the meaning set out in section 5.1 of this Schedule;
	 
	1.13	 	“Redemption Priority Special Dividend” has the meaning set out in section 5.5(a) of this
Schedule;
	 
	1.14	 	“Retraction” means the repurchase by the Company, at the direction of a Preferred
Shareholder, of all or any of the then outstanding and issued Preferred Shares held by such
Preferred Shareholder from time to time as provided for by section 6 of this Schedule;
	 
	1.15	 	“Retraction Notice” has the meaning set out in section 6.1 of this Schedule;
	 
	1.16	 	“Retraction Priority Special Dividend” has the meaning set out in section 6.4(a) of this
Schedule;
	 
	1.17	 	“Sale Priority Special Dividend” has the meaning set out in section 7.1(a) of this Schedule;
and
	 
	1.18	 	“Surplus Entitlement” has the meaning set out in the Regulation 5905(10) to the Income Tax
Act, 1985 R.S.C. c. 1 (5th Supplement) (as amended).
	 
	2.	 	RANKING OF PREFERRED SHARES
	 
	2.1	 	In the event of the liquidation, dissolution or winding up of the Company, whether voluntary
or involuntary, or any other distribution of the assets of the Company among its shareholders
for the purpose of winding up its affairs, the Preferred Shareholders shall be entitled to
receive in respect of each Preferred Share, in preference and priority over the New Common
Shares, an amount equal to the Cumulative Redemption Amount and no more.
	 
	2.2	 	No class of shares may be created or issued ranking as to capital or dividends prior to or on
parity with the Preferred Shares without the prior approval of all of the Preferred
Shareholders given in accordance with applicable law by resolution passed by not less than a
majority of the votes cast on such resolution by the Preferred Shareholders represented in
person or proxy at a meeting of the Preferred Shareholders duly called and held at which at
least 10% of the outstanding and issued Preferred Shares at that time are present or
represented by proxy.
	 
	3.	 	NO VOTING
	 
	3.1	 	The Preferred Shareholders are not entitled to receive notice of, to attend or to vote at any
meeting of the Common Shareholders of the Company.

 

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	4.	 	DIVIDENDS
	 
	4.1	 	Subject to the Constating Documents, as amended, the Company’s by-laws and any applicable
restrictions imposed by law, the Preferred Shares shall be entitled to dividends as provided
for in this Schedule.
	 
	4.2	 	No dividends shall at any time be declared or paid or set apart for payment on the New
Commons Shares if:

	 	(a)	 	the payment of such dividend would reduce the value of the net assets of the
Company to less than the aggregate Cumulative Redemption Amount of all of the issued
and outstanding Preferred Shares from time to time;
	 
	 	(b)	 	the Company is in arrears on any outstanding Cumulative Redemption Amount for
any Redemption or Retraction of any of its issued Preferred Shares;
	 
	 	(c)	 	the Company is in arrears on any outstanding Redemption Priority Special
Dividend, Retraction Priority Special Dividend, or Sale Priority Special Dividend; or
	 
	 	(d)	 	the Company is in default of the obligations imposed under section 6 of this
Schedule.

	5.	 	REDEMPTION
	 
	5.1	 	Subject to the Constating Documents, as amended, the Company’s by-laws and any applicable
restrictions imposed by law, the Company may, at its option and at any time, redeem all or any
number of the outstanding and issued Preferred Shares on payment of the Redemption Amount for
each Preferred Share to be redeemed; provided, however, that not less than 21 days’ notice in
writing (the “Redemption Notice”) of such Redemption is given to the Preferred Shareholders
specifying a date and place or places of Redemption unless the Preferred Shareholders waive
the notice required to be given under this section, whether given before or after the
Redemption, which waiver will be deemed to cure any default in giving such notice. If notice
of any Redemption is given by the Company and an amount sufficient to redeem the Preferred
Shares subject to the Redemption Notice is deposited with any trust company or chartered bank
as specified in any notice given, on or before the date fixed for Redemption, such Preferred
Shareholders will thereafter have no rights against the Company in respect of such Preferred
Shares except upon the surrender of certificates for such redeemed Preferred Shares to receive
payment for them out of the monies so deposited.
	 
	5.2	 	If the Company does not redeem all of the outstanding and issued Preferred Shares, the
Preferred Shares to be redeemed may be selected in such manner as the directors of the Company
determine and need not be selected either in proportion to the number of Preferred Shares
registered in the name of each Preferred Shareholder or from every or any particular Preferred
Shareholder.

 

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	5.3	 	If the Company redeems only part of the Preferred Shares represented by any one Preferred
Share certificate, then a new certificate representing the Preferred Shares that are not
redeemed shall be issued at the expense of the Company.
	 
	5.4	 	The Redemption Amount shall be initially fixed as the Initial Redemption Amount. The
Redemption Amount will be adjusted over time by reference to the following formula:

Redemption Amount =

     Initial Redemption Amount X (1.04)(number of months Preferred Shares have been
outstanding/12)

	5.5	 	Upon receiving a Redemption Notice from the Company:

	 	(a)	 	each Preferred Shareholder has the right to give notice, and shall be deemed to
have given notice, to the Company requiring each Preferred Share, whether or not
subject to the Redemption Notice, held by that Preferred Shareholder to become entitled
to a priority special dividend in an amount equal to the Cumulative Redemption Amount
(the “Redemption Priority Special Dividend”); and
	 
	 	(b)	 	the Company shall not declare or pay a dividend on any other class of shares in
its capital stock until such time as the Company has paid the Redemption Priority
Special Dividend to the Preferred Shareholder.

	5.6	 	The notice deemed to have been given by each Preferred Shareholder in accordance with section
5.5(a) of this Schedule shall be deemed to be withdrawn after the Redemption set out in the
Redemption Notice is completed.
	 
	5.7	 	For greater certainty, payment of the Priority Special Dividend by the Company will reduce
the Cumulative Redemption Amount payable by the Company on each Preferred Share.
	 
	5.8	 	For greater certainty, the deemed notice and Redemption Priority Special Dividend referred to
in section 5.5(a) of this Schedule are intended to ensure that the Surplus Entitlement of a
Preferred Share held immediately prior to a Redemption in accordance with section 5 of this
Schedule reflects the Surplus Entitlement of the Old Common Share for which the Preferred
Share was, together with any New Common Share(s), exchanged.
	 
	6.	 	RETRACTION
	 
	6.1	 	Beginning in the fourth year after the date of issuance of the Preferred Shares, each
Preferred Shareholder shall be able to cause a redemption of the Preferred Shares at the rate
of up to 1/15 per year of the initial number of Preferred Shares issued to such Preferred
Shareholder.
	 
	6.2	 	Subject to section 6.1 of this Schedule, the Company shall, upon receiving notice from a
Preferred Shareholder (the “Retraction Notice”), redeem the number of Preferred Shares
registered in the name of the Preferred Shareholder as stated in the Retraction Notice by
paying to such Preferred Shareholder, for each Preferred Share to be redeemed, the

 

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 Redemption Amount; provided, however, that not less than 21 days’ notice in writing of
such Retraction must be given to the Company by

 the Preferred Shareholder seeking to have
its Preferred Shares redeemed, such notice to be delivered by mailing to the registered
office of 

 the Company a notice specifying the number of Preferred Shares to be redeemed and
surrendering the relevant share certificates for

 cancellation unless the Company waives the
notice required to be given under this section, whether given before or after the
Retraction,

 which waiver will be deemed to cure any default in giving such notice.

	6.3	 	Notwithstanding anything in this Schedule to the contrary, any Retraction of Preferred Shares
by the Company upon receipt of a Retraction Notice from any Preferred Shareholder need not be
made on a pro rata basis among every or any particular Preferred Shareholder.

	6.4	 	Upon the Company receiving a Retraction Notice from a Preferred Shareholder:

	 	 (a)	 	each such Preferred Shareholder has the right to give notice, and shall be
deemed to have given notice, to the Company requiring each Preferred Share, whether or
not subject to the Retraction Notice, held by that Preferred Shareholder to become
entitled to a priority special dividend in an amount equal to the Cumulative Redemption
Amount (the “Retraction Priority Special Dividend”); and
	 
	 	 (b)	 	the Company shall not declare or pay a dividend on any other class of shares in
its capital stock until such time as the Company has paid the Retraction Priority
Special Dividend to the Preferred Shareholder.

	6.5	 	The notice deemed to have been given by each Preferred Shareholder in accordance with section
6.4(a) of this Schedule shall be deemed to be withdrawn after the Retraction set out in the
Retraction Notice is completed.

	6.6	 	For greater certainty, payment of the Retraction Priority Special Dividend by the Company
will reduce the Cumulative Redemption Amount payable by the Company on each Preferred Share.

	6.7	 	For greater certainty, the deemed notice and Retraction Priority Special Dividend referred to
in section 6.4(a) of this Schedule are intended to ensure that the Surplus Entitlement of a
Preferred Share held immediately prior to a Retraction in accordance with section 6 of this
Schedule reflects the Surplus Entitlement of the Old Common Share for which the Preferred
Share was, together with any New Common Share(s), exchanged.

	6.8	 	If a Preferred Shareholder exercises the right of Retraction with respect to its Preferred
Shares under section 6.1 of this Schedule and the Company does not redeem such Preferred
Shares within 21 days after receiving the Retraction Notice, the Company shall pay to the
Preferred Shareholder a dividend of 4% of the Redemption Amount for the Preferred Shares,
subject to the Retraction Notice, for each 30 day period (on a pro-rata basis) during which
such Preferred Shares are not redeemed.

 

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7.
    SALE OR TRANSFER OF PREFERRED SHARES

	7.1	 	Upon the Company receiving notice of a proposed transfer or sale (the “Notice of Sale”) by a
Preferred Shareholder:

	 	 (a)	 	each such Preferred Shareholder has the right to give notice, and shall be
deemed to have given notice, to the Company requiring each Preferred Share, whether or
not subject to such transfer or sale, held by that Preferred Shareholder to become
entitled to a priority special dividend in an amount equal to the Cumulative Redemption
Amount (the “Sale Priority Special Dividend”); and
	 
	 	 (b)	 	the Company shall not declare or pay a dividend on any other class of shares in
its capital stock until such time as the Company has paid the Sale Priority Special
Dividend to the Preferred Shareholder.

	7.2	 	The notice deemed to have been given by each Preferred Shareholder in accordance with section
7.1(a) of this Schedule shall be deemed to be withdrawn after the transfer or sale set out in
the Notice of Sale is completed.

	7.3	 	For greater certainty, payment of the Sale Priority Special Dividend by the Company will
reduce the Cumulative Redemption Amount payable by the Company on each Preferred Share.

	7.4	 	For greater certainty, the deemed notice and Sale Priority Special Dividend referred to in
section 7.1(a) of this Schedule are intended to ensure that the Surplus Entitlement of a
Preferred Share held immediately prior to a Sale in accordance with section 7 of this Schedule
reflects the Surplus Entitlement of the Old Common Share for which the Preferred Share was,
together with any New Common Share(s), exchanged.Services Agreement - Mass Financial Corp.

 

EXHIBIT 4.40

MANAGEMENT SERVICES AGREEMENT

THIS AGREEMENT is dated for reference the 1st day of February, 2006

BETWEEN:

KHD HUMBOLDT WEDAG INTERNATIONAL LTD., a corporation continued under
the laws of British Columbia

(“KHD”)

AND:

MASS FINANCIAL CORP., a company continued under the laws of Barbados

(“Mass”)

WHEREAS:

A. Pursuant to a Restructuring Agreement, dated December 29, 2005 (the “Restructuring Agreement”),
between KHD and Mass, KHD agreed to distribute certain assets of its financial services business
segment (the “Financial Services Business”) to its shareholders;

B. Pursuant to the Restructuring Agreement, KHD agreed to transfer to Mass its interests in certain
subsidiaries, which are involved or related to the Financial Services Business and not
complimentary to industrial and engineering services business segment (the “Industrial and
Engineering Services Business”), except for MFC Merchant Bank S.A. (and its Swiss affiliates) and
its passive royalty interest in an iron ore mine (the “Excluded Assets”);

C. Mass, by and through its officers, employees, agents, representatives and affiliates, has
expertise in the areas of corporate management, finance, investment, acquisitions and other matters
related to the operation of the Excluded Assets;

D. KHD wishes Mass to perform certain management services for KHD in connection with the Excluded
Assets and KHD wishes to compensate Mass for the performance of such management services; and

E. KHD and Mass wish to enter into this Agreement setting out the terms and conditions on which the
management services will be carried out;

NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the premises and the respective
covenants and agreements herein contained, the parties hereto covenant and agree as follows:

 

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ARTICLE 1

INTERPRETATION

1.1  Definitions

In this Agreement, unless the subject matter or context is inconsistent therewith:

	 	  (a)	 	“Bank Assets” has the meaning ascribed thereto in Section 6.1 of this
Agreement;
	 
	 	  (b)	 	“Bank Services” means the management services to be provided by Mass to KHD in
connection with the operation of MFC Merchant Bank, as detailed in Schedule A attached
hereto;
	 
	 	  (c)	 	“Bank Shares” has the meaning ascribed thereto in Section 6.1 of this
Agreement;
	 
	 	  (d)	 	“Business Day” means a day other than a Saturday, Sunday or a civic or
statutory holiday in Vancouver, British Columbia;
	 
	 	  (e)	 	“Cade” means Cade Struktur Corporation, a corporation existing under the laws
of Yukon;
	 
	 	  (f)	 	“Confidential Information” includes without limitation any business, technical
or other information disclosed by a party and relating to such party’s operations,
plans, strategy, finances, development, know-how, trade secrets or employees, and
which, at the time of disclosure, is designated as confidential, is disclosed in
circumstances of confidence, or would be understood by the receiving party, exercising
reasonable business judgment, to be confidential;
	 
	 	  (g)	 	“Financial Services Business” has the meaning ascribed thereto in Recital A of
this Agreement;
	 
	 	  (h)	 	“Industrial and Engineering Services Business” has the meaning ascribed thereto
in Recital B of this Agreement;
	 
	 	  (i)	 	“MFC Merchant Bank” means MFC Merchant Bank SA, an entity existing under the
laws of Switzerland;
	 
	 	  (j)	 	“Notice” has the meaning ascribed thereto in Section 6.1 of this Agreement;
	 
	 	  (k)	 	“Offer Terms” has the meaning ascribed thereto in Section 6.1 of this
Agreement;
	 
	 	  (l)	 	“Offered Price” has the meaning ascribed thereto in Section 6.1 of this
Agreement;
	 
	 	  (m)	 	“Offeror” has the meaning ascribed thereto in Section 6.1 of this Agreement;
	 
	 	  (n)	 	“Restructuring Agreement” has the meaning ascribed thereto in Recital A of this
Agreement;

 

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	 	 (o)	 	“Right of First Refusal” has the meaning ascribed thereto in Section 6.1 of
this Agreement;
	 
	 	 (p)	 	“Royalty Services” means the management services to be provided by Mass to KHD
in connection with the review, supervision and monitoring of the royalty provided to
Cade in connection with the Wabush Mine;
	 
	 	 (q)	 	“Services” includes the Bank Services and the Royalty Services;
	 
	 	 (r)	 	“Standard” means the higher of:

	 	(i)	 	the standard implied or imposed by law or in equity,
	 
	 	(ii)	 	the standard in the applicable industry or discipline,
	 
	 	(iii)	 	the standard prescribed by the provisions of or incorporated
in this Agreement, and
	 
	 	(iv)	 	the standard that may be agreed to by KHD and Mass from time to
time.

	 	 (s)	 	“Term” has the meaning ascribed thereto in Section 7.1 of this Agreement; and
	 
	 	 (t)	 	“Wabush Mine” means the mine that is operated by Cliffs Mining Company Inc. (or
its assignee or successor) on the lands governed by the Amendment and Consolidation of
Mining Leases, dated September 2, 1959, and the Knoll Lake Mining Lease, dated May 17,
1962, as each has been or may be amended from time to time (and all related
agreements), between Cade (the assignee or successor to Canadian Javelin Limited) and
Wabush Iron Co. Limited, Dofasco Inc. and Stelco Inc. (the assignee or successor to
Wabush Iron Co. Limited).

	1.2	 	Currency
	 
	 	 	All sums of money which are referred to in this Agreement are expressed in lawful money of
Canada unless otherwise stated.
	 
	1.3	 	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 shall not affect the construction or
interpretation of this Agreement.
	 
	1.4	 	Number, etc.
	 
	 	 	Unless the subject matter or context requires the contrary, words importing the singular
number only shall include the plural and vice versa; words importing the use of any gender
shall include all genders; and words importing persons shall include natural persons, firms,
trusts, partnerships and corporations.

 

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	1.5	 	Date for Any Action
	 
	 	 	In the event that any date on which any action is required to be taken hereunder by any of
the parties hereto is not a Business Day, such action shall be required to be taken on the
next succeeding day which is a Business Day.
	 
	1.6	 	Entire Agreement
	 
	 	 	This Agreement constitutes the entire agreement between the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements, understandings, negotiations, and
discussions, whether oral or written, between the parties hereto with respect to the subject
matter hereof. There are no representations, warranties, covenants or conditions with
respect to the subject matter hereof except as contained herein.

ARTICLE 2

THE SERVICES

	2.1	 	Engagement
	 
	 	 	Effective as of February 1, 2006, KHD hereby engages Mass to perform the Services for KHD
and Mass hereby accepts such engagement and agrees to perform the Services for KHD, upon and
subject to the terms and conditions set forth in this Agreement.
	 
	2.2	 	Services

	 	(a)	 	Mass shall provide the Bank Services and the Royalty Services to KHD in
accordance with the provisions and stipulations of this Agreement.
	 
	 	(b)	 	Mass shall have the right to engage the services of third party contractors to
perform some or all of the Services without the prior consent of KHD, provided that
Mass causes such contractors to perform the Services in accordance with the terms and
conditions of this Agreement. No subcontracting shall release Mass from its
responsibility for its obligations under this Agreement. Mass shall be responsible for
all payments to all such third party contractors.
	 
	 	(c)	 	Mass shall, for the benefit of KHD, provide the Services to the Standard and
shall at all times comply with and perform to the Standard.
	 
	 	(d)	 	Except as otherwise specifically provided for herein, KHD shall provide all
equipment, supplies and materials necessary in connection with providing and carrying
out the Services.
	 
	 	(e)	 	Mass, while on KHD’s premises, shall (i) comply, and cause its respective
representatives to comply with, the reasonable requests, standard rules and regulations
of KHD regarding security, safety and health and personal and professional conduct
generally applicable to such premises (and of which Mass

 

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	 	 	 	has received prior notice) and (ii) otherwise conduct themselves in a businesslike
manner.
	 
	 	(f)	 	Mass shall appoint individuals to perform the Services with suitable training
and skills to perform the Services.
	 
	 	(g)	 	In the event KHD determines that a particular individual appointed by Mass to
perform the Services is not conducting himself or herself in accordance with this
Agreement, KHD may notify Mass of such conduct. Upon receipt of such notice, Mass
shall promptly investigate the matter and take appropriate action which may include (i)
removing the applicable person from the performance of the Services and providing KHD
with prompt notice of such removal, and replacing the applicable person with a
similarly qualified individual, or (ii) taking other appropriate disciplinary action to
prevent a recurrence. In the event there are repeat violations of these provisions by
a particular member of Mass, Mass shall promptly remove the individual from the
performance of the Services.

	2.3	 	Reporting and Contract Administration

	 	(a)	 	Mass shall provide KHD with reports regarding the performance of the Services
at such intervals as KHD may reasonably request and such reports shall be in a form
acceptable to KHD and shall contain such information and details as KHD may require
from time to time.
	 
	 	(b)	 	The parties will participate in regularly scheduled review meetings, at
mutually agreed to locations, or through teleconferences, as determined by the parties,
to review the performance of the Services.
	 
	 	(c)	 	Each party shall designate one individual as a contract manager, who shall be
that party’s primary point of contact for all questions and issues relating to this
Agreement. Each such contract manager shall have overall responsibility for managing
and coordinating performance of that party’s obligations under this Agreement and shall
be authorized to act for and on behalf of that party with respect to all matters
relating to this Agreement. Each party recognizes the benefits inherent in maintaining
the continuity of contract management personnel under this Agreement and agrees to use
reasonable commercial efforts to maintain its contract management personnel under this
Agreement throughout the Term.

	2.4	 	Audit and Regulatory Requirements
	 
	 	 	Mass shall assist KHD in meeting its audit and regulatory requirements, as they relate to
the Services, to enable KHD, government authorities and KHD’s auditors to comply with and
satisfy any applicable regulatory requirements and to conduct appropriate audits.
	 
	2.5	 	Compensation

	 	(a)	 	In consideration of the provision of the Services, KHD shall pay Mass the
compensation set out in Schedule B attached hereto.

 

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	 	 (b)	 	Except where approved by Mass, KHD shall be responsible for reimbursement for
Mass’s reasonable disbursements, expenses, costs and overhead in connection with the
provision of the Services. Mass shall keep proper accounts and records of all
disbursements, expenses, costs, overhead and other expenditures made in connection with
the Services and all invoices, receipts and vouchers relating thereto. All expenses in
excess of $25,000 shall be pre-approved by KHD.

	2.6	 	Books and Records
	 
	 	 	Mass shall keep proper accounts and records of all expenditures made by it in connection
with the performance of the Services and all invoices, receipts and vouchers relating
thereto.
	 
	2.7	 	Devotion to Agreement
	 
	 	 	During the term of this Agreement, Mass shall devote sufficient time, attention, and ability
as is reasonably necessary for the proper performance of the Services. Nothing contained
herein shall be deemed to require Mass to devote its exclusive time, attention and ability
to the performance of the Services. During the term of this Agreement, Mass shall cause
each of its agents assigned to performance of the Services to:

	 	 (a)	 	at all times perform the services faithfully, diligently and to the best of
their abilities; and
	 
	 	 (b)	 	devote such of its time, labour and attention as is necessary for the proper
performance of the Services.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

	3.1	 	Mutual Representations and Warranties
	 
	 	 	Each party represents and warrants to the other party as follows and acknowledges that the
other party is relying upon such representations and warranties in connection with the
matters contemplated by this Agreement:

	 	 (a)	 	it is duly incorporated and validly existing under the laws of its jurisdiction
of incorporation and has the corporate power and authority to own or lease its property
and assets and to carry on its business as now conducted by it;
	 
	 	 (b)	 	the execution and delivery of this Agreement by it, including all matters
contemplated hereby, have been authorized by all necessary corporate action and it has
the corporate power and authority to enter into and perform its obligations under this
Agreement;
	 
	 	 (c)	 	it has duly executed and delivered this Agreement and this Agreement is a valid
and binding agreement enforceable against it in accordance with its terms, subject

 

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	 	 	 	to bankruptcy, insolvency and other laws affecting the enforcement of creditors’
rights generally and to general principles of equity; and
	 	(d)	 	the execution and delivery of this Agreement and the completion of the
transactions contemplated hereby do not now and will not:

	 	(i)	 	conflict with, or result in a breach of, or create a state of
facts which after notice or lapse of time or both results or may result in a
breach of, any of the terms, conditions or provisions of its constating
documents or the constating documents of any of its subsidiaries or any
material agreement, instrument, licence, permit, undertaking, commitment or
understanding to which it or any of its subsidiaries is a party or by which it
is bound; or
	 
	 	(ii)	 	violate any provision of law or administrative regulation or
any judicial or administrative award, judgment or decree applicable and known
to it (after due inquiry), the breach of which would have a material adverse
effect on it.

	3.2	 	Representations and Warranties of Mass
	 
	 	 	Mass hereby represents and warrants that it has the executive staff and expertise to provide
the Services, and in consideration of the compensation payable to it pursuant to this
Agreement, Mass shall carry out the Services with due diligence and care.

ARTICLE 4

OTHER AGREEMENTS AND COVENANTS

	4.1	 	Co-operation, Consents and Approvals
	 
	 	 	Each party shall, and shall cause its subsidiaries to, co-operate and use their respective
reasonable commercial efforts to obtain all authorizations, waivers, exemptions, consents,
orders and other approvals from domestic or foreign courts, governmental or regulatory
agencies, boards, commissions or other authorities, shareholders and third parties as are
necessary for the consummation of the transactions contemplated by this Agreement.
	 
	4.2	 	Compliance With and Changes in Law

	 	 (a)	 	Each party will comply with all applicable laws, regulations and statutory
requirements, and advise the other of changes in laws that concern the conduct of its
business and affect performance of the Services.
	 
	 	 (b)	 	KHD shall be responsible for promptly identifying and notifying Mass of any
changes in law relating to any banking regulatory requirements applicable to MFC
Merchant Bank that may relate to Mass’s delivery or KHD’s receipt of or use of the
Services. The parties shall work together to identify the impact of such changes on
how KHD receives and uses, and Mass delivers, the Services. KHD shall be responsible
for any fines and penalties arising from any noncompliance

 

- 8 -

	 	 	 	by KHD or Mass with any such changes in law relating to the Services; provided,
however, that Mass shall be responsible for any fines and penalties arising from any
noncompliance by Mass to the extent KHD has notified Mass of a change in law and
Mass failed to comply with such change in law even though it had a reasonable period
of time after notification from KHD in which to comply with such change in law.

	4.3	 	Cooperation with Third Parties
	 
	 	 	Mass shall cooperate with any independent third party service providers of KHD; provided,
however, that (i) such cooperation does not impact the Services or Mass’s ability to meet
the Standard and (ii) Mass shall not be required to disclose any of its Confidential
Information to such third party service provider unless such third party executes a
confidentiality agreement and such thirty party’s use of such Confidential Information is
solely for the benefit of KHD.

	4.4	 	Public Announcements
	 
	 	 	No news release or other public announcement concerning this Agreement shall be made by any
party hereto without the prior consent of the other, such consent not to be unreasonably
withheld; provided, however, that any party may without such consent make such disclosure as
may be required by any stock exchange on which its securities are listed or by any
securities legislation or any regulatory authority having jurisdiction over such party and,
if such disclosure is required, the party making the disclosure shall use reasonable efforts
to give prior oral or written notice to the other party and an opportunity to allow the
other party to comment on the disclosure.
	 
	4.5	 	Confidential Information

	 	 (a)	 	Mass and KHD each agree not to use any Confidential Information disclosed to it
by the other party for its own use or for any purpose other than to fulfil their
respective obligations related to this Agreement. Neither party will disclose or
permit disclosure of any Confidential Information of the other party to third parties.
Each party will ensure that the Confidential Information of the other party is
disclosed only to the extent required to fulfil their respective obligations hereunder
and only to: (i) those of its directors, officers, employees consultants or agents who
need to have the information in order to fulfil their obligations in relation to this
Agreement and (ii) who have executed written agreements obligating them to protect the
Confidential Information of the disclosing party in a manner materially similar to the
terms of this Section. Each party will exercise a standard of care to protect the
secrecy of, and avoid the disclosure or unauthorized use of, the Confidential
Information of the disclosing party that is not less than a reasonable standard of
care. Each party will notify the other party in writing as soon as possible of any
actual or suspected misuse, misappropriation or unauthorized disclosure of Confidential
Information and the notifying party will take all reasonable steps to reduce or prevent
such disclosure.

 

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	 	(b)	 	Each party shall return all Confidential Information of the other party in its
possession or under its control immediately upon demand, except where retention of that
Confidential Information is required by applicable law.

	4.6	 	Unauthorized Acts
	 
	 	 	Each party shall: (i) promptly notify the other party of any unauthorized possession, use or
knowledge, or attempt thereof, of the other party’s Confidential Information by any person
or entity that may become known to such party, including any incidents involving a breach of
security and any incidents that might indicate or lead to a threat to, or weakness in,
security; (ii) promptly furnish to the other party full details of the unauthorized
possession, use or knowledge, or attempt thereof, and assist the other party in
investigating or preventing the recurrence of any unauthorized possession, use or knowledge,
or attempt thereof, of Confidential Information; (iii) cooperate with the other party in any
litigation and investigation against third parties deemed necessary by the other party to
protect its proprietary rights; and (iv) promptly use commercially reasonable efforts to
prevent a recurrence of any such unauthorized possession, use or knowledge, or attempt
thereof, of Confidential Information.
	 
	4.7	 	Injunction
	 
	 	 	Each party recognizes that its disclosure or inappropriate use of Confidential Information
of the other party may give rise to irreparable injury to such party and acknowledges that
remedies other than injunctive relief may not be adequate. Accordingly, each party has the
right to equitable and injunctive relief to prevent the unauthorized possession, use,
disclosure or knowledge of any Confidential Information, as well as to such damages or other
relief as is occasioned by such unauthorized possession, use, disclosure or knowledge.
	 
	4.8	 	Personal Information
	 
	 	 	In the event the Services require the access to or use of personal data, each party shall be
responsible for taking all necessary steps required by applicable law to ensure the
protection of the privacy of such personal data to be accessed or used. In the event that
applicable law requires registration with or consents of a governmental authority, KHD shall
register, or cause such registration, with such governmental authority, or obtain such
consents, unless applicable law otherwise requires.

ARTICLE 5

INDEMNITY

	5.1	 	Indemnity by Mass
	 
	 	 	Mass hereby agrees to indemnify, defend and hold harmless KHD from and against any and all
claims, demands, losses, liabilities, actions, lawsuits and other proceedings, judgments and
awards, and costs and expenses (including reasonable legal fees on a solicitor and his own
client full indemnity basis), arising directly or indirectly, in whole

 

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or in part, out of the gross negligence or any wilful act or omission of Mass, or of any of
its officers, directors, agents or employees, in connection with this Agreement or the
Services.

	5.2	 	Indemnity by KHD
	 
	 	 	KHD hereby agrees to indemnify, defend and hold harmless Mass and its officers, directors
and employees, from and against any and all claims, demands, losses, liabilities, actions,
lawsuits and other proceedings, judgments and awards, and costs and expenses (including
reasonable legal fees on a solicitor and his own client full indemnity basis), arising
directly or indirectly, in whole or in part, out of obligations or liabilities incurred by
Mass as agent for KHD or out of the gross negligence or any wilful act or omission of KHD in
connection with this Agreement.
	 
	5.3	 	Indemnification Procedures
	 
	 	 	If any third party claim is commenced against a party who is entitled to indemnification
under this Agreement (an “Indemnified Party”), notice thereof shall be given to the other
party (the “Indemnifying Party”) as promptly as practicable. If, after such notice, the
Indemnifying Party shall acknowledge that this Section 5.3 applies with respect to such
claim, then the Indemnifying Party shall be entitled, if it so elects, in a notice promptly
delivered to the Indemnified Party, but in no event less than ten (10) days prior to the
date on which a response to such claim is due, to immediately take control of the defense
and investigation of such claim and to employ and engage attorneys reasonably acceptable to
the Indemnified Party to handle and defend the same, at the Indemnifying Party’s sole cost
and expense. Where conflicting interests so require, the Indemnified Party shall have
separate counsel, at the Indemnifying Party’s expense. The Indemnified Party shall
cooperate, at the cost of the Indemnifying Party, in all reasonable respects with the
Indemnifying Party and its attorneys in the investigation, trial and defense of such claim
and any appeal arising therefrom; provided, however, that the Indemnified Party may, at its
own cost and expense, participate, through its attorneys or otherwise, in such
investigation, trial and defense of such claim and any appeal arising therefrom. No
settlement of a claim pursuant to this Section 5.3 that involves a remedy other than the
payment of money by the Indemnifying Party shall be entered into without the consent of the
Indemnified Party, which consent shall not be unreasonably withheld. After notice by the
Indemnifying Party to the Indemnified Party of its election to assume full control of the
defense of any such claim, the Indemnifying Party shall not be liable to the Indemnified
Party for any legal expenses incurred thereafter by such Indemnified Party in connection
with the defense of that claim. If the Indemnifying Party does not assume full control over
the defense of a claim subject to such defense as provided in this Section 5.3, the
Indemnifying Party may participate in such defense, at its sole cost and expense, and the
Indemnified Party shall have the right to defend the claim in such manner as it may deem
appropriate, at the cost and expense of the Indemnifying Party.

 

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ARTICLE 6

RIGHT OF FIRST REFUSAL

	6.1	 	If KHD receives a bona fide offer from a third party (the “Offeror”) to purchase all or
substantially all of the assets (the “Bank Assets”) of MFC Merchant Bank or to purchase 50% or
more of the outstanding shares (the “Bank Shares”) of MFC Merchant Bank, KHD shall grant to
Mass a right of first refusal with respect to the Bank Assets or the Bank Shares, as the case
may be, on the terms and conditions as follows (the “Right of First Refusal”):

	 	 (a)	 	KHD shall:

	 	  (i)	 	deliver to Mass a written notice (the “Notice”) stating its
intention to sell or otherwise transfer the Bank Assets or the Bank Shares (as
the case may be), the name of the Offeror, a list of the assets to be
transferred to the Offeror or the class and number of shares to be transferred
to the Offeror, the cash price or other consideration for which KHD proposes to
transfer the Bank Assets or the Bank Shares (the “Offered Price”) and the
material terms and conditions of the proposed transfer (the “Offer Terms”); and
	 
	 	  (ii)	 	offer the Bank Assets or Bank Shares at the Offered Price and
on the Offer Terms to Mass or its assignee or grant to Mass the right to assist
in the sale or transfer of the Bank Assets or Bank Shares, as the case may be.

	 	 (b)	 	At any time within ten (10) Business Days after receipt of the Notice, Mass
and/or its assignee(s) may:

	 	  (i)	 	by giving written notice to KHD, elect to purchase all, but not
less than all, of the Bank Assets or Bank Shares proposed to be transferred to
the Offeror at the purchase price and on the terms determined in accordance
with this Section; or
	 
	 	  (ii)	 	by giving written notice to KHD, elect to assist with the sale
of the Bank Assets or the Bank Shares, and as consideration for such assistance
earn five per cent (5%) of the Offered Price as commission.

	 	 (c)	 	The purchase price (the “Purchase Price”) for the Bank Assets or the Bank
Shares purchased by Mass or its assignee under this Section shall be the Offered Price,
and the terms and conditions of the transfer shall be identical in all material
respects to the Offer Terms. If the Offered Price includes consideration other than
cash, the cash equivalent value of the non-cash consideration shall be determined by
the Board of Directors of Mass in good faith.
	 
	 	 (d)	 	Payment of the Purchase Price shall be made, at the option of Mass or its
assignee, in cash, by cancellation of all or a portion of any outstanding indebtedness,
or by any combination thereof, in any case in accordance with the Offer Terms, within
twenty (20) Business Days after delivery of the written notice by KHD as set forth in
this Section, provided that such period shall be extended as

 

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	 	 	 	necessary to seek and obtain all necessary approvals of any governmental or
regulatory authorities.

	 	(e)	 	If all of the Bank Assets or the Bank Shares proposed in the Notice to be
transferred to the Offeror are not purchased by Mass and/or its assignee as provided in
this Section, then subject to Subsection 6.1(b)(ii), KHD may sell or otherwise transfer
such Bank Assets or Bank Shares to the Offeror at the Offered Price or at a higher
price and on the Offer Terms, provided that such sale or other transfer is consummated
within thirty (30) Business Days after the date of the Notice, or such longer period as
is required to seek and obtain all necessary approvals of any governmental or
regulatory authorities and provided further that any such sale or other transfer is
affected in accordance with all applicable laws. If the Bank Assets or the Bank Shares
are not transferred to the Offeror within such period, a new Notice shall be given to
Mass, and Mass and/or its assignee shall again be offered the Right of First Refusal
before any Bank Assets or Bank Shares may be sold or otherwise transferred by KHD.
	 
	 	(f)	 	Completion of any transfer of the Bank Assets and Bank Shares pursuant to
Section 6.1(d) or 6.1(e) shall be subject to receipt of the necessary approvals from
the applicable banking regulatory authorities.

ARTICLE 7

TERM, RENEWAL, TERMINATION AND AMENDMENT

7.1  Term, Renewal and Termination

	 	(a)	 	The initial term of this Agreement shall commence on the date of this Agreement
and, subject to earlier termination or renewal as provided in this Agreement, shall
terminate on the third anniversary of the date of this Agreement (the “Initial Term”).
	 
	 	(b)	 	Upon expiration of the Initial Term, this Agreement shall automatically renew
for a one (1) year renewal period (each, a “Renewal Term”).
	 
	 	(c)	 	Unless this Agreement is earlier terminated, KHD shall notify Mass at least
three (3) months prior to the expiry of the Initial Term or, if in a Renewal Term,
three (3) months prior to the expiry of any such Renewal Term of KHD’s desire not to
renew this Agreement, otherwise this Agreement shall be automatically renewed on and
subject to the same conditions set forth herein.
	 
	 	(d)	 	This Agreement may be terminated at any time by agreement in writing executed
by KHD and Mass.
	 
	 	(e)	 	In the event of any material breach or default by Mass in regard to the
Services, KHD may terminate this Agreement, provided that KHD shall give notice to Mass
specifying the material breach or default, and a reasonable period to cure and remedy
the default.

 

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	 	(f)	 	In the event of any material breach or default of this Agreement by KHD, Mass
may terminate this Agreement, provided that Mass shall give notice to KHD specifying
the material breach or default, and a reasonable period to cure and remedy the default.
	 
	 	(g)	 	In the event of the termination of this Agreement prior to the expiry of the
Initial Term or a Renewal Term, as applicable, the compensation payable to Mass shall
be pro-rated to the end of the month of the notice period, and no compensation will be
payable from and after the end of the notice period.
	 
	 	(h)	 	In the event that either KHD or Mass: (i) shall admit in writing its inability
to, or be generally unable to, pay its debts as such debts become due; or (ii) shall
(1) apply for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator of itself or of all or a
substantial part of its property or assets, (2) make a general assignment for the
benefit of its creditors, (3) file a petition seeking to take advantage of any other
law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of debts, (4) fail to
controvert in a timely and appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under any bankruptcy or insolvency legislation,
or (5) take any corporate action for the purpose of effecting any of the foregoing;
then the other party may, by giving notice thereof to such party, terminate this
Agreement effective as of the date specified in such termination notice.
	 
	 	(i)	 	Upon termination of this Agreement, Mass shall upon receipt of all sums due and
owing, promptly deliver the following in accordance with the directions of KHD:

	 	  (i)	 	a final accounting, reflecting the balance of expenses incurred
on behalf of KHD as of the date of termination; and
	 
	 	  (ii)	 	all documents pertaining to KHD or this Agreement, including
but not limited to, all books of account, correspondence and contracts,
provided that Mass shall be entitled thereafter to inspect, examine and copy
all of the documents which it delivers in accordance with this provision at all
reasonable times upon three (3) days’ notice to KHD.

	7.2	 	Effect of Termination
	 
	 	 	In the event of any termination of this Agreement, the provisions hereof will become void
and no party will have any liability to any other party in respect of this Agreement, except
in respect of any breach of this Agreement, which occurred on or before the termination of
this Agreement.
	 
	7.3	 	Force Majeure
	 
	 	 	Mass shall not be responsible or liable in any way for any delays in or suspension of
performance of its obligations under this Agreement caused by: (i) acts of God; (ii)

 

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	 	 	 restrictions, regulations or orders of any governmental authority or agency or subdivision
thereof or delays caused by such authorities or

 agencies; (iii) strikes or labour disputes;
(iv) fires or other loss of facilities; (v) utility, communication or transportation delays
or failures

 that materially affects Mass’s ability to deliver the Services; (vi) acts of war
(whether declared or undeclared), terrorism, sabotage or the

 like; or (vii) any other causes
beyond the reasonable control, and not the result of the fault or neglect, of Mass that
materially affects

 Mass’s ability to deliver the Services.

	7.4	 	Amendment
	 
	 	 	Subject as hereinafter provided, this Agreement may, at any time and from time to time, be
amended by written agreement of KHD and Mass (or, in the case of a waiver, by written
instrument of the party giving the waiver) without, subject to applicable law, notice to or
authorization on the part of the shareholders of KHD or Mass. Without limiting the
generality of the foregoing, any such amendment may:

	 	   (a)	 	change the time for performance of any of the obligations or acts of the
parties hereto;
	 
	 	   (b)	 	waive any inaccuracies or modify any representation or warranty contained
herein or in any document to be delivered pursuant hereto; or
	 
	 	   (c)	 	waive compliance with or modify any of the covenants herein contained or waive
or modify performance of any of the obligations of the parties hereto.

	 	 	 Notwithstanding the foregoing, the terms of this Agreement shall not be amended in a manner
prejudicial to KHD or Mass without the

 approval of KHD or Mass, as the case may be.

ARTICLE 8

GENERAL PROVISIONS

	8.1	 	Assignment
	 
	 	 	Mass shall not assign this Agreement or any portion of this Agreement either voluntarily,
involuntarily or by operation of law, without KHD’s prior written approval.
	 
	8.2	 	Notices
	 
	 	 	All notices and other communications hereunder shall be in writing and shall be delivered by
hand to the parties at the following addresses or sent by telecopy at the following
telecopier numbers or at such other addresses or telecopier numbers as shall be specified by
the parties by like notice:

 

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	 	(a)	 	if to KHD:

Unit 803

8/F Dina House

Ruttonjee Centre

11 Duddell Street, Central

Hong Kong SAR

China

Attention: Jim Busche

Telecopy: 852-2537-3689

	 	(b)	 	if to Mass:

Unit 803

8/F Dina House

Ruttonjee Centre

11 Duddell Street, Central

Hong Kong SAR

China

Attention: Michael J. Smith

Telecopy: 852-2537-3689

	 	 	The date of receipt of any such notice shall be deemed to be the date of delivery thereof
or, in the case of notice sent by telecopy, the date of successful transmission thereof
(unless transmission is received after normal business hours, in which case the date of
receipt shall be deemed to be the next Business Day).
	 
	8.3	 	Survival of Representations, Warranties and Covenants
	 
	 	 	The respective representations, warranties and covenants of KHD and Mass contained herein
shall expire with, and be terminated and extinguished upon, the completion or termination of
this Agreement, except for the provisions of Section 4.5, 4.6, 4.7, 4.8, Article 5 and
Section 8.3 which shall survive as continuing covenants following the completion or
termination of this Agreement.
	 
	8.4	 	Solicitation
	 
	 	 	During the Initial Term and any Renewal Term, neither party shall directly solicit any
employees of the other party without such party’s consent.
	 
	8.5	 	Applicable Law
	 
	 	 	This Agreement shall be governed by, and construed in accordance with, the laws of the
Province of British Columbia and the federal laws of Canada applicable therein and shall be
treated in all respects as a British Columbia contract.

 

- 16 -

	8.6	 	Binding Effect and Assignment
	 
	 	 	This Agreement and all the provisions hereof shall be binding upon and enure to the benefit
of the parties hereto and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights hereunder or under the Restructuring Agreement shall be
assigned by any of the parties hereto without the prior written consent of the other party
hereto.
	 
	8.7	 	Time of Essence
	 
	 	 	Time shall be of the essence of this Agreement.
	 
	8.8	 	Counterparts
	 
	 	 	This Agreement may be executed in counterparts, each of which shall be deemed an original,
and each signed copy sent by electronic facsimile transmission shall be deemed to be an
original, but all of which together shall constitute one and the same instrument.
	 
	8.9	 	Further Assurances
	 
	 	 	Each party shall make, do and execute, or cause to be made, done and executed all such
further acts, deeds, agreements, transfers, assurances, instruments or documents as may be
reasonably required in order to implement this Agreement.

IN WITNESS WHEREOF each of the parties hereto has executed this Agreement as of the date first
written above.

KHD HUMBOLDT WEDAG INTERNATIONAL LTD.

	 	 	 
	Per:

	 	/s/ Michael J. Smith
	 

	 	Authorized Signatory

MASS FINANCIAL CORP.

	 	 	 
	Per:

	 	/s/ Michael J. Smith
	 

	 	Authorized Signatory

 

 

SCHEDULE A

BANK SERVICES

KHD’s and Mass’s respective functions and responsibilities include those (i) described in this
Schedule, (ii) identified by charts or responsibility matrices, and (iii) not specifically
described in this Schedule but required for proper performance and inherent in or necessary
sub-tasks for the functions described (unless specifically excluded).

The Bank Services shall include the following:

	(a)	 	advising KHD on investment strategies;
	 
	(b)	 	identification of potential business opportunities for merchant bank activities;
	 
	(c)	 	advising KHD on the financing structure for MFC Merchant Bank;
	 
	(d)	 	providing support to MFC Merchant Bank, upon request of KHD, with the implementation of
merchant bank transactions;
	 
	(e)	 	analyzing business propositions submitted to KHD by MFC Merchant Bank;
	 
	(f)	 	identification of co-financing partners for KHD and, upon request, for MFC Merchant Bank;
	 
	(g)	 	offering to KHD and, upon request, to MFC Merchant Bank, general advisory capacities related
to financial services; and
	 
	(h)	 	such other services as may be agreed to by the parties from time to time.

 

 

SCHEDULE B

COMPENSATION

	1.	 	As compensation for providing the Bank Services, KHD shall pay to Mass, on the terms and
conditions set out in the Agreement and amended by KHD and Mass from time to time, fifteen
percent (15%) of the after tax profits (calculated accordingly to applicable banking laws of
Switzerland).
	 
	2.	 	As compensation for providing the Royalty Services, KHD shall pay to Mass, on the terms and
conditions set out in the Agreement and amended by KHD and Mass from time to time, eight
percent (8%) of the royalty income (net of all mining and related taxes) that Cade receives in
connection with the Wabush Mine.
	 
	3.	 	All compensation and reimbursements payable by KHD to Mass under this Agreement shall be paid
by KHD to Mass within sixty (60) days of Mass rendering to KHD an invoice for such amounts.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}]]