EXHIBIT 10.22
MAAX HOLDINGS, INC.
AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
THIS AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "AGREEMENT") is
entered into as of December 10, 2004 by and among MAAX Holdings, Inc., a
Delaware corporation (the "COMPANY"), the JWC Holders (as defined below), the
Borealis Holders (as defined below), the OMERS Holders (as defined below), the
Management Holders (as defined below) and the Additional Holders (as defined
below).
RECITALS
A. The parties hereto entered into a Stockholders Agreement as of June 4,
2004 (the "ORIGINAL AGREEMENT").
B. The Stockholders (as defined below) own (and may hereafter acquire)
certain shares of Common Stock (as defined below), Preferred Stock (as defined
below) and certain options, warrants, securities and other rights to acquire
from the Company, by exercise, conversion, exchange or otherwise, shares of
Common Stock or Preferred Stock or securities convertible into Common Stock or
Preferred Stock.
C. On or about the date hereof, the Company is proposing to issue
$170,689,000 aggregate principal amount at maturity of 11.25% senior discount
notes due 2012 (the "OFFERING"), and the Company intends to use the net proceeds
of the Offering to repurchase or cancel certain shares of its Common Stock and
options exercisable into shares of its Common Stock from the holders thereof
(the "EQUITY REPURCHASE"), and to make a payment to certain members of its
management in connection with the transactions contemplated in connection with
the Offering.
D. The parties hereto desire to amend and restate the Original Agreement by
entering into this Agreement in order to preserve the intent of the Original
Agreement after giving effect to the Equity Repurchase and the Offering, and to
regulate certain aspects of the Stockholders' relationships with one another and
with the Company.
AGREEMENT
In consideration of the premises and the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement, the receipt
and sufficiency of which are acknowledged by all parties to this Agreement, the
parties to this Agreement mutually agree as follows:
ARTICLE I
Definitions
For the purposes of this Agreement, the following terms shall be defined as
follows:
"ACTIVE TRADING MARKET" shall mean the New York or American Stock Exchange
or the National Association of Securities Dealers, Inc.'s National Market System
or Small Capitalization System or the Toronto Stock Exchange.
"ADDITIONAL HOLDERS" shall mean those Persons listed as Additional Holders
on the signature pages hereof and all Persons that became Stockholders as of the
date hereof and are designated as Additional Holders pursuant to Section 2.16
hereof.
An "AFFILIATE" of a specified Person shall mean a Person who, directly or
indirectly, through one or more intermediaries, controls or is controlled by or
is under common control with the specified Person and, when used with respect to
the Company or any Subsidiary of the Company, shall include any holder of
capital stock holding greater than 5% of the total number of outstanding shares
of Common Stock on a fully-diluted basis or any officer or director of the
Company or any Subsidiary of the Company.
"BOARD OF DIRECTORS" shall mean the Board of Directors of the Company.
"BOREALIS" shall mean, collectively, Borealis Private Equity Limited
Partnership and Borealis (QLP) Private Equity Limited Partnership.
"BOREALIS DIRECTOR" shall have the meaning set forth in Section 4.1(c).
"BOREALIS HOLDER" shall mean each of those Persons listed as Borealis
Holders on the signature pages hereof and, after the date hereof, shall mean all
such Persons and Permitted Transferees of the Borealis Holders, other than those
transferees who qualify as JWC Holders, OMERS Holders or Management Holders
immediately prior to or upon such Transfer.
"BOREALIS REPRESENTATIVE" shall have the meaning set forth in Section 6.9.
"BOREALIS OBSERVER" shall have the meaning set forth in Section 4.2(a).
"BUSINESS DAY" shall mean any day, other than a Saturday, Sunday or legal
holiday, on which banks in New York, New York, Boston, Massachusetts, Toronto,
Ontario and Montreal, Quebec are permitted to be open for business.
"CALL DESIGNATED EMPLOYEE" shall have the meaning set forth in Section
2.5(c).
"CALL EVENT" shall have the meaning set forth in Section 2.5(a).
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"CALL GROUP" shall have the meaning set forth in Section 2.5(a).
"CALL OPTION" shall have the meaning set forth in Section 2.5(a).
"CALL PRICE" shall mean, as of any date, with respect to any Subject
Securities, a per share price equal to (a) the quotient of (i) the excess of (A)
the product of 7.0 times EBITDA, over (B) the Consolidated Indebtedness as of
the end of the period for which EBITDA is calculated, plus (C) the amount of
cash and cash equivalents of the Company and its Subsidiaries as of the end of
the period for which EBITDA is calculated which is not required to fund the
day-to-day operations of the Company and its Subsidiaries, as reasonably
determined by the Board of Directors in good faith, divided by (ii) the
aggregate number of Stock Equivalents at the time of the relevant Call Event or
Put Event, as applicable, outstanding, minus, (b) in the case of Vested Options,
the per share exercise price payable in connection with such Vested Options.
Notwithstanding the foregoing, in no event shall the Call Price with respect to
any share of Preferred Stock exceed the Maximum Share Price.
"CALL SECURITIES" shall have the meaning set forth in Section 2.5(a).
"CANADIAN SECURITIES LAWS" shall mean the Securities Act (Quebec) and the
equivalent legislation in the other provinces of Canada all as now enacted or
the same may from time to time be amended, re-enacted or replaced, and the
applicable rules, regulations, rulings, orders and forms made or promulgated
under such statutes and the published policies as applied by the regulatory
authorities administering such statutes, as well as the rules, regulations,
by-laws and policies of the Toronto Stock Exchange.
"CAUSE" with respect to a Management Holder, shall have the meaning set
forth in the executed written employment agreement, offer letter or term sheet
between the Management Holder and the Company (or a Subsidiary thereof) or, in
the absence of such employment agreement, offer letter or term sheet (or if not
defined therein), the occurrence of any of the following during the term of the
Management Holder's employment or consultancy with the Company (or a Subsidiary
thereof):
(a) dishonesty, theft or fraud in connection with the performance of
the Management Holder's duties;
(b) the Management Holder's continued failure to perform substantially
his duties (other than as a result of a disability), which failure is not cured
within 30 days of receipt of written notice thereof from the Company or any of
its Subsidiaries;
(c) the Management Holder's conviction of, or entering a plea of
guilty or nolo contendere to, a crime that constitutes a felony, an indictable
offence, a misdemeanor involving moral turpitude or a summary offence involving
moral turpitude;
(d) any wilful act or omission on the Management Holder's part which
is materially injurious to the financial condition or business reputation of the
Company or any of its Subsidiaries;
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(e) a breach by the Management Holder of any material covenant or
provision contained in (i) the Management Holder's employment agreement, if any,
or (ii) this Agreement, which breach is not cured within 30 days of receipt of
written notice thereof from the Company or any of its Subsidiaries;
(f) the Company, after reasonable investigation, finds that the
Management Holder has violated material written policies and procedures of the
Company, including, but not limited to, policies and procedures pertaining to
harassment or discrimination;
(g) a failure or refusal by the Management Holder to comply with a
written directive from the Board of Directors (unless such directive represents
an illegal act);
(h) a confirmed positive illegal drug test result for the Management
Holder; or
(i) the discovery of outstanding indebtedness for borrowed money
incurred by the Company or any of its Subsidiaries in favor of the Management
Holder which was not approved by the Board of Directors prior to such
incurrence.
"COMMON STOCK" shall mean shares of common stock, par value US$0.01 per
share, of the Company, shares of common stock, class A, par value US$0.01 per
share, of the Company and any other class of common stock of the Company.
"COMMON STOCK EQUIVALENTS" shall mean, as of any date, (a) all shares of
Common Stock outstanding as of such date and (b) all Vested Options exerciseable
for Common Stock and all convertible securities, warrants and other securities
convertible, exchangeable into or redeemable for Common Stock, which securities
are vested and/or exercisable within 60 days of the date of measurement. Solely
for the purposes of Section 2.4 and 2.7, Common Stock Equivalents shall mean all
shares of Common Stock and all options, convertible securities, warrants and
other securities convertible, exchangeable into or redeemable for Common Stock,
whether or not vested and/or exercisable.
"COMPANY CALL PERIOD" shall mean the earlier of (i) 395 days after the date
of the applicable Call Event and (ii) 60 days following (a) the exercise by the
Management Holder of all exercisable stock options held by such Management
Holder or (b) waiver by the Management Holder of the right to exercise all stock
options held by such Management Holder.
"COMPANY EXCLUSIVE FIRST REFUSAL PERIOD" shall have the meaning set forth
in Section 2.2(a).
"COMPETITOR" shall mean any Person that competes with the Company or any of
its Subsidiaries in any activity in which the Company or any of its Subsidiaries
is engaged from time to time, or to the Transferor's knowledge, has definitive
plans to be engaged in the future, including but not limited to, the production,
distribution, marketing and sale (including, without limitation, sales through
wholesalers, showrooms, specialty retailers, dealers and home centers)
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of bathroom products, kitchen cabinetry, spas and related items in the United
States or Canada or which competes with any product line of or service offered
by the Company (including any Subsidiary or affiliate of the Company).
"CONSOLIDATED INDEBTEDNESS" shall mean, as of any date, the aggregate
amount, without duplication, of (i) indebtedness on a consolidated basis
(excluding accrued expenses and trade payables), whether or not contingent, of
the Company and its Subsidiaries (a) in respect of borrowed money; (b) evidenced
by bonds (excluding performance bonds and bid bonds), notes, debentures or
similar instruments or letters of credit (or reimbursement agreements in respect
thereof); (c) in respect of bankers' acceptances; (d) representing capital lease
obligations; and (e) representing the balance deferred and unpaid of the
purchase price of any property or services due more than six months after such
property is acquired or such services are completed, except any such balance
that represents an accrued expense or trade payable, if and to the extent any of
the preceding items (other than letters of credit) would appear as a liability
upon a balance sheet of the Company and its Subsidiaries prepared in accordance
with U.S. generally accepted accounting principles, and (ii) all indebtedness of
others secured by a lien on any asset of the Company or its Subsidiaries
(whether or not such indebtedness is assumed by the Company or its
Subsidiaries), but only to the extent that the aggregate amount of such
indebtedness does not exceed the fair market value of the asset, and, to the
extent not otherwise included, the guarantee by the Company or any of its
Subsidiaries of any indebtedness of any other Person; provided, however, that in
no event will obligations or liabilities in respect of any capital stock
constitute indebtedness hereunder.
"COST PRICE" shall mean, with respect to any Subject Securities, the
purchase price (which in the case of stock options of MAAX Inc. being converted
into stock options of the Company shall be equal to the value of such MAAX Inc.
stock options on the date of consummation of the amalgamation contemplated by
the Merger Agreement), if any, per share of Stock or per Vested Option, as the
case may be, paid to the Company for such Subject Securities by the original
holder thereof or, if no shares were so purchased at the Closing (as defined in
the Merger Agreement), then the lesser of (i) the price per share paid to the
Company by the original holder thereof and (ii) the price per share paid by the
Institutional Holders at the Closing. If at any time the number of shares of
Stock outstanding is (a) increased by a stock dividend payable in shares of
Stock or by a subdivision or split-up of shares of Stock or (b) decreased by a
combination of shares of such Stock, the Cost Price per share of Stock shall be
adjusted upward or downward, as appropriate, to reflect the decrease or increase
in shares of Stock outstanding. Notwithstanding the foregoing, in no event shall
the Cost Price with respect to any share of Preferred Stock exceed the Maximum
Share Price.
"DESIGNATED PERCENTAGE" shall mean, as to each Institutional Holder, the
fraction, expressed as a percentage, the numerator of which is the total number
of shares of Common Stock Equivalents held by such Institutional Holder, and the
denominator of which is the total number of shares of Common Stock Equivalents
held by all of the Institutional Holders.
"DISABLED," with respect to a Management Holder, shall have the meaning set
forth in the executed written employment agreement, offer letter or term sheet
between the Management
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Holder and the Company (or a Subsidiary thereof) or, in the absence of such
employment agreement, offer letter or term sheet (or if not defined therein),
such Management Holder shall be deemed to have become "DISABLED" if, during the
term of such Management Holder's employment with the Company (or a Subsidiary
thereof), such Management Holder shall become physically or mentally disabled,
whether totally or partially, either permanently or so that such Management
Holder, in the good faith judgment of the Board of Directors, is unable
substantially and competently to perform his duties on behalf of the Company or
a Subsidiary thereof for a period of 180 consecutive days or for 180 days during
any one-year period during the term of employment. In order to assist the Board
of Directors in making that determination, such Management Holder shall, as
reasonably requested by the Board of Directors, (i) make himself available for
medical examinations by one or more physicians chosen by the Board of Directors
and (ii) grant any such physicians access to all relevant medical information
concerning him or arrange to furnish copies of all relevant medical records to
such physicians chosen by the Board of Directors.
"DRAGALONG GROUP" shall have the meaning set forth in Section 2.4(a).
"EBITDA" shall mean, for any consecutive twelve-month period ended
immediately prior to the date of calculation, an amount determined for the
Company and its Subsidiaries on a consolidated basis, equal to (i) consolidated
net income as determined in accordance with GAAP for such period, plus (ii) the
sum, without duplication, of the amounts for such period (in each case to the
extent reducing such consolidated net income) of (a) consolidated interest
expense; (b) provisions for taxes based on income; (c) total depreciation
expense; (d) total amortization expense; (e) other non-cash items reducing such
consolidated net income (excluding any such non-cash item to the extent that it
represents an accrual or reserve for potential cash items in any future period
or amortization of a prepaid cash item that was paid in a prior period); (f) any
after-tax losses attributable to asset sales (other than inventory in the
ordinary course of business) or returned surplus assets of any pension plan and
any extraordinary losses; (g) relocation costs and expenses incurred to move the
headquarters of the Company and its Subsidiaries from Sainte-Xxxxx, Canada to
Montreal, Canada; (h) costs and expenses incurred during the fiscal year ending
February 28, 2005 in connection with, and on or prior to the consummation of,
the transactions contemplated by the Merger Agreement; (i) restructuring
expenses associated with plant closures and rationalizations that are authorized
by the Board of Directors; (j) cash gains realized under currency agreements;
(k) minority interest (if negative) with respect to any Subsidiary of the
Company; and (l) Consulting Fees as defined in the Management Agreement, dated
as of June 4, 2004, among the Company, MAAX Corporation, X.X. Childs Associates,
L.P., Borealis Capital Corporation and the Ontario Municipal Employees
Retirement Board; minus (iii) the sum, without duplication, of the amounts for
such period (in each case to the extent increasing such consolidated net income)
of (a) non-cash items increasing such consolidated net income (excluding any
such non-cash item to the extent it represents the reversal of an accrual or
reserve for potential cash item in any prior period); (b) any after-tax gains
attributable to asset sales (other than inventory in the ordinary course of
business) or returned surplus assets of any pension plan and any extraordinary
gains, (c) cash losses realized under currency agreements; and (d) minority
interest (if positive) with respect to any Subsidiary of the Company.
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"EQUITY REPURCHASE" shall have the meaning set forth in the recitals
hereto.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended,
or any successor federal statute thereto, and the rules and regulations of the
SEC promulgated thereunder, all as the same shall be in effect from time to
time.
"EXCLUDED SECURITIES" shall have the meaning set forth in Section 5.1(e).
"GAAP" shall mean the generally accepted accounting principles in the
United States of America, as such principles are changed from time to time,
consistent with those applied in the preparation of the financial statements of
such Person.
"GOOD REASON," with respect to a Management Holder, shall have the meaning
set forth in the executed written employment agreement, offer letter or term
sheet between the Management Holder and the Company (or a Subsidiary thereof)
or, in the absence of such employment agreement, offer letter or term sheet (or
if not defined therein), "Good Reason" shall be deemed to have occurred if,
other than for Cause, during the term of the Management Holder's employment or
consultancy with the Company (or a Subsidiary thereof) the Management Holder's
base salary has been reduced, other than in connection with an across the board
reduction of executive compensation imposed by the Board of Directors or
committee thereof on management employees in response to negative financial
results or other adverse circumstances affecting the Company or its
Subsidiaries.
"HOLDER" shall have the meaning set forth in Section 3.1.
"INITIATING STOCKHOLDER" shall have the meaning set forth in Section
2.3(b).
"INSTITUTIONAL HOLDERS" shall mean, collectively, the JWC Holders, the
Borealis Holders and the OMERS Holders.
"INVOLUNTARY TRANSFER" shall have the meaning set forth in Section 2.10.
"INVOLUNTARY TRANSFER NOTICE" shall have the meaning set forth in Section
2.11.
"INVOLUNTARY TRANSFEREE" shall have the meaning set forth in Section 2.10.
"JOINDER AGREEMENT" shall mean a joinder agreement substantially in the
form of Exhibit B attached hereto which is entered into pursuant to Section 2.16
hereof.
"JWC CO-INVEST III" shall mean JWC Fund III Co-Invest, LLC, a Delaware
limited liability company.
"JWC EQUITY PARTNERS III" shall mean X.X. Childs Equity Partners III, L.P.,
a Delaware limited partnership.
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"JWC HOLDERS" shall mean each of those Persons listed as JWC Holders on the
signature pages hereof and, after the date hereof, shall mean all such Persons
and Permitted Transferees of the
JWC Holders, other than those transferees who qualify as Borealis Holders,
OMERS Holders or Management Holders immediately prior to or upon such Transfer.
"JWC INC." shall mean X.X. Childs Associates, Inc., a Delaware corporation.
"JWC REPRESENTATIVE" shall have the meaning set forth in Section 6.8.
"LIEN" shall mean any lien, mortgage, pledge, security interest, adverse
claim (as defined in the New York Uniform Commercial Code), claim or other type
of charge or encumbrance of any kind, or any other type of preferential
arrangement, including, without limitation, the lien or retained security title
of a conditional vendor and any easement, right of way or other encumbrance on
title to real property and any financing statement filed in respect of any of
the foregoing.
"MANAGEMENT HOLDERS" shall mean any Person listed as a Management Holder on
the signature pages hereof and shall also include (a) any director, officer,
employee, consultant or independent contractor engaged in a role reasonably
similar to that of an employee of the Company or any of its Subsidiaries who
hereafter becomes a Stockholder, (b) Permitted Transferees of the Management
Holders, unless immediately prior to such Transfer such transferee was an
Institutional Holder and (c) any Person designated as a Management Holder by the
Company on the Joinder Agreement executed by such Person.
"MARKETABLE SECURITIES" shall mean securities which are as of the date of
the ROFO Transfer Notice (i) traded on a recognized stock exchange or trading
facility (including, without limitation, the New York Stock Exchange, the
American Stock Exchange, the National Association of Securities Dealers, Inc.'s
National Market System or Small Capitalization System or the Toronto Stock
Exchange) and (ii) of a class having a market capitalization of at least
$500,000,000.
"MATERIAL TRANSACTION" shall mean any material transaction in which the
Company or any of its Subsidiaries proposes to engage or is engaged, including a
purchase or sale of assets or securities, financing, merger, consolidation,
reorganization, tender offer or any other transaction that would require
disclosure pursuant to applicable securities laws, and with respect to which the
Board of Directors reasonably has determined in good faith that compliance with
this Agreement may reasonably be expected to either materially interfere with
the Company's or such Subsidiary's ability to consummate such transaction in a
timely fashion or require the Company to disclose material, non-public
information prior to such time as it would otherwise be required to be
disclosed.
"MAXIMUM SHARE PRICE" shall mean US$16.56.
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"MERGER AGREEMENT" shall mean the Merger Agreement, dated as of March 10,
2004 among 3087052 Nova Scotia Company, 3087053 Nova Scotia Company, 0000-0000
Xxxxxx Inc., 9139- 7158 Quebec Inc. and MAAX Inc.
"OFFERED SECURITIES" shall have the meaning set forth in Section 5.1(a).
"OFFEREE PERCENTAGE" shall mean, as to each offeree, the fraction,
expressed as a percentage, the numerator of which is the total number of shares
of Common Stock Equivalents held by such offeree, and the denominator of which
is the total number of shares of Common Stock Equivalents held by all of the
offerees.
"OFFERING" shall have the meaning set forth in the recitals hereto.
"OMERS" shall mean the Ontario Municipal Employees Retirement Board.
"OMERS DIRECTOR" shall have the meaning set forth in Section 4.1(d).
"OMERS HOLDERS" shall mean each of those Persons listed as OMERS Holders on
the signature pages hereof and, after the date hereof, shall mean all such
Persons and Permitted Transferees of the OMERS Holders, other than those
transferees who qualify as JWC Holders, Borealis Holders or Management Holders
immediately prior to or upon such Transfer.
"OMERS OBSERVER" shall have the meaning set forth in Section 4.2(b).
"OMERS REPRESENTATIVE" shall have the meaning set forth in Section 6.10.
"ORIGINAL AGREEMENT" shall have the meaning set forth in the recitals
hereto.
"ORIGINAL BOREALIS HOLDERS" shall mean the Borealis Holders as of the date
of this Agreement.
"ORIGINAL JWC HOLDERS" shall mean the JWC Holders as of the date of this
Agreement.
"ORIGINAL OMERS HOLDERS" shall mean the OMERS Holders as of the date of
this Agreement.
"PARTICIPATING OFFEREES" shall have the meaning set forth in Section
2.3(b).
"PARTICIPATION NOTICE" shall have the meaning set forth in Section 2.3(b).
"PARTICIPATION SECURITIES" shall have the meaning set forth in Section
2.3(b).
"PERMITTED TRANSFER" shall mean a Transfer that is not a Prohibited
Transfer and is one of the following:
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(a) a Transfer of any Subject Securities between any Management
Holder, any Holder who is an Additional Holder as of the date hereof, any
Institutional Holder (to the extent an individual) and such Stockholder's
spouse, children (whether natural, step or by adoption), grandchildren (whether
natural, step or by adoption) or parents or to a trust, partnership, corporation
or limited liability company, all the trustees, beneficiaries, partners and
stockholders of which are (and continue to be), as applicable, one or more of
any of such Persons;
(b) a Transfer of Subject Securities by a JWC Holder to a JWC Holder
or JWC Inc. or JWC Equity Partners III or JWC Co-Invest III or to a corporation
or corporations or to a partnership or partnerships, limited liability company
or companies (or other entity for collective investment, such as a fund) which
is (and continues to be) wholly-owned, directly or indirectly, by one or more of
JWC Inc. or JWC Equity Partners III or JWC Co-Invest III or, upon the
dissolution or liquidation of any JWC Holder, to the beneficial holders of
interests in such JWC Holder;
(c) a Transfer of Subject Securities by a Borealis Holder to a
Borealis Holder or to a corporation or corporations or to a partnership or
partnerships, limited liability company or companies (or other entity for
collective investment, such as a fund) which is (and continues to be)
wholly-owned, directly or indirectly, by Borealis or, upon the dissolution of
any Borealis Holder, to the beneficial holders of interest in such Borealis
Holder;
(d) a Transfer of Subject Securities by an OMERS Holder to an OMERS
Holder or to a corporation or corporations or to a partnership or partnerships,
limited liability company or companies (or other entity for collective
investment, such as a fund) which is (and continues to be) wholly-owned,
directly or indirectly, by OMERS or, upon the dissolution of any OMERS Holder,
to the beneficial holders of interest in such OMERS Holder;
(e) a Transfer of Subject Securities between or among the JWC Holders,
the Borealis Holders or the OMERS Holders;
(f) a Transfer of Subject Securities to the Company in accordance with
the terms of this Agreement;
(g) a Transfer of Subject Securities between any Stockholder who is a
natural person and such Stockholder's guardian or conservator; and
(h) a bona fide pledge of Subject Securities by an Institutional
Holder to a bank or financial institution.
No Permitted Transfer shall be effective unless and until the transferee of the
Subject Securities so transferred executes and delivers to the Company an
executed Joinder Agreement in accordance with Section 2.16 hereof; provided,
however, that the Permitted Transfer to a bank or a financial institution
pursuant to clause (h) above shall be effective upon delivery of the Subject
Securities and such entity shall execute and deliver an executed Joinder
Agreement in accordance
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with Section 2.16 hereof modified appropriately so that it shall be effective
only upon any foreclosure or similar action by any such pledgee.
"PERMITTED TRANSFEREE" shall mean, with respect to any Stockholder, any
Person who shall have directly or indirectly acquired and who shall hold any
Subject Securities pursuant to a Permitted Transfer from that Stockholder.
Notwithstanding the foregoing, a Permitted Transferee shall not include any
Person that is in receivership, bankruptcy, insolvency, dissolution, liquidation
or any similar proceeding or any Person whose incompetence has been established
pursuant to a judicial determination.
"PERSON" shall mean an individual, corporation, partnership, limited
liability company, trust, unincorporated association, government or any agency
or political subdivision thereof, or any other entity.
"PRE-PUBLIC OFFERING TRANSACTION" shall have the meaning set forth in
Section 2.7(a).
"PRE-PUBLIC OFFERING TRANSACTION REQUEST" shall have the meaning set forth
in Section 2.7(a).
"PREEMPTIVE OFFER" shall have the meaning set forth in Section 5.1(a).
"PREEMPTIVE OFFER ACCEPTANCE NOTICE" shall have the meaning set forth in
Section 5.1(b).
"PREEMPTIVE OFFER PERIOD" shall have the meaning set forth in Section
5.1(a).
"PREEMPTIVE RIGHTS HOLDERS" shall have the meaning set forth in Section
5.1(a).
"PREFERRED STOCK" shall mean shares of Series A Preferred Stock, par value
US$0.01 per share, of the Company.
"PREFERRED STOCK EQUIVALENTS" shall mean, as of any date, (a) all shares of
Preferred Stock outstanding as of such date and (b) all Vested Options
exercisable for Preferred Stock and all convertible securities, warrants and
other securities convertible, exchangeable into or redeemable for Preferred
Stock, which securities are vested and/or exercisable within 60 days of the date
of measurement. Solely for the purposes of Section 2.4 and 2.7, Preferred Stock
Equivalents shall mean all shares of Preferred Stock and all options,
convertible securities, warrants and other securities convertible, exchangeable
into or redeemable for Preferred Stock, whether or not vested and/or
exercisable.
"PRIMARY SHARES" shall mean at any time the authorized but unissued shares
of Common Stock or shares of Common Stock held by the Company in its treasury.
"PROHIBITED TRANSFER" shall mean any Transfer of any Subject Security to a
Person which (a) may not be effected without registering the securities involved
under the Securities
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Act, (b) would result in the assets of the Company constituting "Plan Assets" as
such term is defined in the Department of Labor regulations promulgated under
the Employee Retirement Income Security Act of 1974, as amended, (c) would cause
the Company to be controlled by or be under common control with an "investment
company" for purposes of the Investment Company Act of 1940, as amended, (d)
would require any securities of the Company to be registered under the Exchange
Act, (e) is a Competitor of the Company (other than Transfers in accordance with
Section 2.4) or (f) is in violation of this Agreement.
A "PUBLIC OFFERING" shall mean the completion of a sale of shares of Common
Stock or Successor Security Equivalents (including by way of Income Deposit
Securities, Canadian Income Trust or similar offering of securities) pursuant to
a registration statement which has become effective under the Securities Act or
a prospectus filed in accordance with Canadian Securities Laws, excluding a
registration form or prospectus relating solely to employee benefit plans or a
registration form which does not permit secondary sales or does not include
substantially the same information as would be required in a Form S-1 or Form
S-3 Registration Statement (or any successor forms) covering the sale of
Registrable Securities.
"PUT DESIGNATED EMPLOYEE" shall have the meaning set forth in Section
2.6(c).
"PUT NOTICE" shall have the meaning set forth in Section 2.6(a).
"PUT OPTION" shall have the meaning set forth in Section 2.6(a).
"PUT PERIOD" shall have the meaning set forth in Section 2.6(a).
"PUT PRICE" shall mean, with respect to any Subject Securities, a per share
price equal to the lower of the Cost Price and the Call Price.
"PUT SECURITIES" shall have the meaning set forth in Section 2.6(a).
"REDEMPTION PERCENTAGE" shall mean, as to each Management Holder or
Additional Holder, the fraction, expressed as a percentage, the numerator of
which is the total number of Common Stock Equivalents held by such Management
Holder or Additional Holder, and the denominator of which is the total number of
Common Stock Equivalents held by all Stockholders.
"REFUSED SECURITIES" shall have the meaning set forth in Section 5.1(c).
"REGISTRABLE SECURITIES" shall mean, as of any date, with respect to any
Stockholder, (a) all shares of Common Stock held by such Stockholder as of such
date and (b) all shares of Common Stock that may be acquired as of such date by
such Stockholder upon exercise of Vested Options; provided that, as to any
particular Registrable Security, such security shall cease
12
to be a Registrable Security when (i) a registration statement (other than a
registration statement on Form S-8) with respect to the sale or exchange of such
security shall have become effective under the Securities Act or a receipt for a
prospectus is obtained under Canadian Securities Laws and such security shall
have been disposed of in accordance with such registration statement or
prospectus, (ii) a registration statement on Form S-8 with respect to such
security shall have become effective under the Securities Act, (iii) such
security shall have been sold or acquired in a Rule 144 Transaction, or (iv)
such security (once issued) has ceased to be outstanding.
"REQUIRED SHARE OWNERSHIP" shall mean, as of any given date, an amount of
shares held by the JWC Holders constituting (i) at least 75% of the shares of
Common Stock held by the JWC Holders immediately after giving effect to the
Offering and the Equity Repurchase and (ii) at least 30% of the Common Stock
Equivalents outstanding on the applicable date.
"ROFO OFFER PERIOD" shall have the meaning set forth in Section 2.2(b).
"ROFO OFFERING HOLDER" shall have the meaning set forth in Section 2.2(b).
"ROFO OFFEROR" shall have the meaning set forth in Section 2.2(b).
"ROFO TRANSFER NOTICE" shall have the meaning set forth in Section 2.2(b).
"ROFO TRANSFER OFFER" shall have the meaning set forth in Section 2.2(b).
"ROFO TRANSFER SECURITIES" shall have the meaning set forth in Section
2.2(b).
"ROFR OFFER PERIOD" shall have the meaning set forth in Section 2.2(a).
"ROFR OFFERING HOLDER" shall have the meaning set forth in Section 2.2(a).
"ROFR OFFEROR" shall have the meaning set forth in Section 2.2(a).
"ROFR TRANSFER NOTICE" shall have the meaning set forth in Section 2.2(a).
"ROFR TRANSFER OFFER" shall have the meaning set forth in Section 2.2(a).
"ROFR TRANSFER SECURITIES" shall have the meaning set forth in Section
2.2(a).
"RULE 144 TRANSACTION" means a transfer of Common Stock complying with Rule
144 under the Securities Act as such rule or a successor thereto is in effect on
the date of such transfer.
"SALE REQUEST" shall have the meaning set forth in Section 2.4(a).
"SCHEDULE OF STOCKHOLDERS" shall refer to the Schedule of Stockholders
attached hereto as EXHIBIT A.
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"SEC" shall mean the Securities and Exchange Commission or successor agency
or commission of the United States federal government.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or any
successor federal statute thereto, and the rules and regulations of the SEC
promulgated thereunder, all as the same shall be in effect from time to time.
"STOCK" shall mean, together, the Common Stock and the Preferred Stock.
"STOCK EQUIVALENTS" shall mean, together, the Common Stock Equivalents and
the Preferred Stock Equivalents.
"STOCK ISSUANCE" shall have the meaning set forth in Section 5.2.
"STOCKHOLDER" shall mean any party hereto other than the Company, including
any Person who hereafter becomes a party to this Agreement pursuant to Section
2.16 hereof.
"STOCKHOLDER GROUP" shall mean any of (a) the JWC Holders, taken as a
group, (b) the Borealis Holders, taken as a group, (c) the OMERS Holders, taken
as a group, (d) the Management Holders, taken as a group and/or (e) the
Additional Holders, taken as a group. The Company shall not in any case be
deemed to be a member of any Stockholder Group (whether or not the Company holds
or repurchases any Stock Equivalents).
"STOCK OPTION AGREEMENT" shall mean any stock option agreement between the
Company and an employee thereof.
"SUBJECT SECURITIES" shall mean any Stock or Stock Equivalents now or
hereafter held by any Stockholder.
"SUBSIDIARY" with respect to any Person (the "PARENT") shall mean any
Person of which such parent, at the time in respect of which such term is used,
(a) owns directly or indirectly more than 50% of the equity or beneficial
interest, on a consolidated basis, or (b) owns directly or controls with power
to vote, indirectly through one or more Subsidiaries, shares of capital stock or
beneficial interest having the power to cast at least a majority of the votes
entitled to be cast for the election of directors, trustees, managers or other
officials having powers analogous to those of directors of a corporation. Unless
otherwise specifically indicated, when used herein, the term Subsidiary shall
refer to a direct or indirect Subsidiary of the Company.
"SUBSIDIARY COMMON STOCK EQUIVALENTS" shall mean, as of any date, (a) all
shares of common stock of any Subsidiary of the Company outstanding as of such
date and (b) all Vested Options, convertible securities, warrants and other
securities convertible, exchangeable into or redeemable for common stock of any
Subsidiary of the Company, which securities are vested and/or exercisable within
60 days of the date of measurement.
"SUCCESSOR SECURITY EQUIVALENTS" shall have the meaning set forth in
Section 2.7(a).
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"SUCCESSOR CORPORATION" shall mean a corporation, partnership, limited
liability company or trust which is the Company's successor in interest in
connection with a Pre-Public Offering Transaction or otherwise by way of
exchange or substitution of securities of the Company for Successor Security
Equivalents or any conversion, merger, consolidation, recapitalization or other
business combination or any similar transaction.
"THIRD PARTY" shall mean any Person other than the Company and its
Subsidiaries.
"TRANSFER" shall mean to transfer, sell, assign, pledge, hypothecate, give,
grant or create a security interest in or Lien on, place in trust (voting or
otherwise), assign an interest in or in any other way encumber or dispose of,
directly or indirectly and whether or not by operation of law or for value, any
of the Subject Securities.
"TRANSFERRED SECURITIES" shall have the meaning set forth in Section 2.10.
"VESTED OPTIONS" shall mean, as of any date, options, securities and other
rights to acquire from the Company, by exercise, conversion, exchange or
otherwise, shares of Stock or securities convertible into Stock, which are
vested and exercisable within 60 days of such date of measurement.
"VOTING STOCK" shall mean the Common Stock (other than the Common Stock,
class A, of the Company), Common Stock Equivalents and any other securities of
the Company entitled to vote at a meeting of the Stockholders, including, but
not limited to, with respect to the election of the Board of Directors.
ARTICLE II
Rights With Respect To The Subject Securities
2.1 Limited Rights of Transfer.
(a) Transfers. No Stockholder shall Transfer all or any part of the
Subject Securities at the time held by such Stockholder, except in accordance
with the terms of this Agreement. Subject to Section 2.1(b), no Transfer of or
attempt to Transfer any Subject Securities in violation of the preceding
sentence shall be effective or valid for any purpose. Notwithstanding any other
provision of this Agreement, no Transfer of any Subject Securities shall be
effective or valid under this Section 2.1(a) if such Transfer constitutes a
Prohibited Transfer or, if permitted under Section 2.1(b), unless and until the
transferee executes and delivers to the Company a Joinder Agreement in
accordance with Section 2.16 hereof.
(b) Exceptions. Notwithstanding Section 2.1(a), a Transfer may be
effectively and validly made hereunder if such Transfer is not a Prohibited
Transfer and is either (i) a Permitted Transfer, (ii) made pursuant to the
registration rights granted under Article III hereof, (iii) made pursuant to
and/or following a Public Offering, (iv) made pursuant to Section 2.2 by
15
any Stockholder (other than a Management Holder), (v) made by a Management
Holder pursuant to Section 2.2 after the third anniversary of the date hereof,
(vi) made pursuant to Sections 2.3 (as a Participating Offeree), 2.4, 2.5, 2.6
or 2.7 or (vii) subject to Section 2.3, made with the written consent of the
holders of a majority of the Common Stock Equivalents at the time held by the
JWC Holders (or the JWC Representative) and the holders of a majority of the
Common Stock Equivalents at the time held by the Borealis Holders (or the
Borealis Representative) and the holders of a majority of the Common Stock
Equivalents at the time held by the OMERS Holders (or the OMERS Representative).
No Transfer of any Subject Securities shall be effective or valid under this
Section 2.1(b) if such Transfer constitutes a Prohibited Transfer. In addition,
no Transfer shall be effective or valid under this Section 2.l(b) unless and
until the transferee executes and delivers to the Company a Joinder Agreement in
accordance with Section 2.16 hereof.
2.2 Right of First Offer/Right of First Refusal.
(a) Right of First Refusal.
(i) Subject to Sections 2.2(c) and 2.2(d), if (A) at any time any
Stockholder (other than a Management Stockholder or a JWC Holder), (B) after the
third anniversary of the date hereof, a Management Holder or (C) a JWC Holder
which (I) is not entitled to exercise its rights under Section 2.4 because (a)
the number of Subject Securities proposed to be Transferred is less than 50% of
the Subject Securities at the time held by the JWC Holders, (b) the JWC Holders
do not then hold the Required Share Ownership or (c) the Stockholder Approval
required pursuant to Section 2.4(d) is not obtained or (II) is entitled to
exercise its rights under Section 2.4, but determines not to do so (the "ROFR
OFFERING HOLDER"), receives a bona fide offer to purchase any or all of such
ROFR Offering Holder's Subject Securities, other than unexercised stock options
(such Subject Securities, the "ROFR TRANSFER SECURITIES"), from any Third Party,
other than to a Permitted Transferee (such Third Party, the "ROFR OFFEROR"), and
(B) such ROFR Offering Holder wishes to accept such offer (a "ROFR TRANSFER
OFFER"), and if such sale would otherwise be permitted under this Agreement,
then the ROFR Offering Holder shall cause the ROFR Transfer Offer to be reduced
to writing and shall provide a notice containing the offer to purchase specified
below (the "ROFR TRANSFER NOTICE") to the Company and each of the Institutional
Holders. The ROFR Transfer Notice shall be accompanied by a true and correct
copy of the ROFR Transfer Offer (which shall identify in reasonable detail all
material terms, including, but not limited to, the ROFR Offeror, the ROFR
Transfer Securities, the price contained in the ROFR Transfer Offer and all of
the other material terms and conditions of the ROFR Transfer Offer). The ROFR
Transfer Notice shall constitute an irrevocable offer to sell any or all of the
ROFR Transfer Securities to the Company and to the Institutional Holders within
30 days of receipt by the Company of the ROFR Transfer Notice (the "ROFR OFFER
PERIOD"). During the ROFR Offer Period, subject to the limitation in the next
sentence, any combination of the Company and/or the Institutional Holders will
have the right and option to purchase all of the ROFR Transfer Securities at a
price equal to the price contained in the ROFR Transfer Offer and upon the same
terms as contained in the ROFR Transfer Offer. During the first 15 days of the
ROFR Offer Period (the "COMPANY EXCLUSIVE FIRST REFUSAL PERIOD"), the Company
shall have the exclusive right and option to
16
purchase all of the ROFR Transfer Securities. If the ROFR Offering Holder is an
Institutional Holder, then such Institutional Holder's nominee(s) on the Board
of Directors shall not participate in the vote with respect to whether the
Company will exercise its rights under this Section 2.2(a). Following the
expiration of the Company Exclusive First Refusal Period, if the Company has not
opted to purchase all of the ROFR Transfer Securities, the Company and any
combination of the Institutional Holders (pro rata in accordance with the
respective Common Stock Equivalents at the time held by the Institutional
Holders so exercising their rights under this Section 2.2(a)) may elect to
purchase all of the ROFR Transfer Securities; provided that if any such
Institutional Holder fails to purchase all or a portion of the shares of ROFR
Transfer Securities which such Institutional Holder may purchase pursuant to
this Section 2.2(a), then the other Institutional Holders so exercising their
rights under this Section 2.2(a) shall be entitled to purchase such shares of
ROFR Transfer Securities (pro rata in accordance with the respective Common
Stock Equivalents at the time held, or as otherwise agreed, by such
Institutional Holders). For the avoidance of doubt, unless the ROFR Offering
Holder shall have consented to the purchase of less than all of the ROFR
Transfer Securities by the Company and/or the Institutional Holders, neither the
Company nor any Institutional Holders, nor any combination of the Company and
any Institutional Holders may purchase any ROFR Transfer Securities pursuant to
the foregoing provisions unless all of the ROFR Transfer Securities are to be so
purchased (whether by the Company, the Institutional Holders, or any combination
thereof).
(ii) Closing of ROFR Transfer Securities. If, during the ROFR
Offer Period, the Company, or any combination of the Company and the
Institutional Holders, has accepted the offer contained in the ROFR Transfer
Notice, then, the closing of the purchase of such ROFR Transfer Securities shall
take place at the principal offices of the Company within 15 days of such
acceptance. At such closing, the Company and/or the Institutional Holders, as
applicable, and/or its or their designees, as the case may be, shall deliver a
certified check or checks calculated at the price set forth in the ROFR Transfer
Notice to the ROFR Offering Holder against delivery of certificates and/or other
instruments representing the ROFR Transfer Securities, together with stock or
other appropriate powers duly endorsed with respect to the ROFR Transfer
Securities, free and clear of all Liens (other than pursuant to securities laws,
this Agreement or a Stock Option Agreement). All of the foregoing deliveries
will be deemed to be made simultaneously and none shall be deemed completed
until all have been completed.
(iii) Completion of Sale to Third Party. If, during the ROFR
Offer Period, neither the Company nor any combination of the Company and/or the
Institutional Stockholders has accepted the offer contained in the ROFR Transfer
Notice in writing as to all of the ROFR Transfer Securities covered thereby, or
within 15 days of acceptance by any combination of the Company and/or any
Institutional Stockholder the closing has not occurred, then during the next 60
days, the ROFR Offering Holder may sell the ROFR Transfer Securities to the ROFR
Offeror at the price and on the other terms contained in the ROFR Transfer
Notice. No sale may be made by the ROFR Offering Holder to any ROFR Offeror if
such sale would constitute a Prohibited Transfer or unless and until such ROFR
Offeror executes and delivers to the Company a Joinder Agreement in accordance
with Section 2.15 hereof. Promptly after any sale pursuant to this Section
2.2(a), the ROFR Offering Holder shall furnish such evidence of the completion
(including time of completion) of such sale and of the terms thereof as the
Company
17
may reasonably request. If the ROFR Offering Holder has not completed the sale
of the ROFR Transfer Securities during the applicable period referred to above,
such ROFR Offering Holder shall no longer be permitted to sell such shares
pursuant to this Section 2.2(a) without again fully complying with the
provisions of this Section 2.2(a) and all of the restrictions on sale, transfer
or assignment contained in this Agreement shall again be in effect with respect
to the ROFR Transfer Securities.
(b) Right of First Offer.
(i) Notice of Offer. Subject to Sections 2.2(c) and 2.2(d), if at
any time that the JWC Holders are entitled to, and determine to, exercise their
rights under Section 2.4 hereof and a JWC Holder (the "ROFO OFFERING HOLDER")
(A) proposes to sell any or all of its Subject Securities, other than
unexercised stock options (such Subject Securities, the "ROFO TRANSFER
SECURITIES") to a Third Party (other than a Permitted Transferee(s)) or (B)
receives a bona fide offer to purchase any or all of such ROFO Transfer
Securities, from any Third Party, other than from a Permitted Transferee (such
Third Party, the "ROFO OFFEROR"), and such ROFO Offering Holder wishes to accept
such offer (the "ROFO TRANSFER OFFER"), and if such sale would otherwise be
permitted under this Agreement, then the ROFO Offering Holder shall give notice
(a "ROFO TRANSFER NOTICE"), and shall in the case of clause (B) cause the ROFO
Transfer Offer to be reduced to writing and provide it along with the ROFO
Transfer Notice, to the Company and each of the Institutional Holders. The ROFO
Transfer Notice shall, in the case of clause (A) identify in reasonable detail
all material terms, including, but not limited to, the minimum price at which
the Subject Securities will be sold and in the case of clause (B), be
accompanied by a true and correct copy of the ROFO Transfer Offer (which shall
identify in reasonable detail all material terms, including, but not limited to,
the ROFO Offeror, the ROFO Transfer Securities, the price contained in the ROFO
Transfer Offer and all of the other material terms and conditions of the ROFO
Transfer Offer). The ROFO Transfer Notice shall constitute an irrevocable offer
to sell any or all of the ROFO Transfer Securities to the Institutional Holders
within fifteen (15) Business Days of receipt by the Institutional Holders of the
ROFO Transfer Notice (the "ROFO OFFER PERIOD"). During the ROFO Offer Period,
the Institutional Holders will have the right and option to purchase all of the
ROFO Transfer Securities at a price equal to the price contained in the ROFO
Transfer Notice and upon the same terms as contained in the ROFO Transfer Notice
(pro rata in accordance with the respective Common Stock Equivalents at the time
held by the Institutional Holders so exercising their rights under this Section
2.2(b)); provided that if any Institutional Holder fails to purchase all or a
portion of the shares of ROFO Transfer Securities which such Institutional
Holder may purchase pursuant to this Section 2.2(b), then the other
Institutional Holders so exercising their rights under this Section 2.2(b) shall
be entitled to purchase such shares of ROFO Transfer Securities (pro rata in
accordance with the respective Common Stock Equivalents at the time held, or as
otherwise agreed, by such Institutional Holders). For the avoidance of doubt,
unless the ROFO Offering Holder shall have consented to the purchase of less
than all of the ROFO Transfer Securities by the Institutional Holders, the
Institutional may not purchase any ROFO Transfer Securities pursuant to the
foregoing provisions unless all of the ROFO Transfer Securities are to be so
purchased.
18
(ii) Closing of ROFO Transfer Securities. If, during the ROFO
Offer Period, the Company, or any combination of the Company and the
Institutional Holders, has accepted the offer contained in the ROFO Transfer
Notice, then, the closing of the purchase of such ROFO Transfer Securities shall
take place at the principal offices of the Company within 15 days of such
acceptance (subject to extension for up to an additional 45 days if regulatory
approvals for such transaction remain outstanding). At such closing, the Company
and/or the Institutional Holders, as applicable, and/or its or their designees,
as the case may be, shall deliver a certified check or checks calculated at the
price set forth in the ROFO Transfer Notice to the ROFO Offering Holder against
delivery of certificates and/or other instruments representing the ROFO Transfer
Securities, together with stock or other appropriate powers duly endorsed with
respect to the ROFO Transfer Securities, free and clear of all Liens (other than
pursuant to securities laws, this Agreement or a Stock Option Agreement). All of
the foregoing deliveries will be deemed to be made simultaneously and none shall
be deemed completed until all have been completed.
(iii) Completion of Sale to Third Party. If, during the ROFO
Offer Period, neither the Company nor any combination of the Company and/or the
Institutional Stockholders has accepted the offer contained in the ROFO Transfer
Notice in writing as to all of the ROFO Transfer Securities covered thereby, or
within 15 days of acceptance by any combination of the Company and/or any
Institutional Stockholder the closing has not occurred, then during the next 60
days, the ROFO Offering Holder may sell the ROFO Transfer Securities to the ROFO
Offeror at a price not less than the price set forth in the ROFO Transfer Notice
and otherwise on terms and conditions no more favorable than as set forth in the
ROFO Transfer Notice or, in the case of a sale pursuant to Section 2.2(b), shall
have the right to enter into an agreement to sell all of the Subject Securities
to any Person or Persons (other than an existing Stockholder) during such 60-day
period and to close the transaction within 30 Business Days thereafter (subject
to extension for up to an additional 45 days if regulatory approvals for such
transaction remain outstanding) for a price not less than the price set forth in
the ROFO Transfer Notice and otherwise on terms and conditions no more favorable
than as set forth in the ROFO Transfer Notice. No sale may be made by the ROFO
Offering Holder to any ROFO Offeror if such sale would constitute a Prohibited
Transfer or unless and until such ROFO Offeror executes and delivers to the
Company a Joinder Agreement in accordance with Section 2.16 hereof. Promptly
after any sale pursuant to this Section 2.2(b), the ROFO Offering Holder shall
furnish such evidence of the completion (including time of completion) of such
sale and of the terms thereof as the Company may reasonably request. If the ROFO
Offering Holder has not completed the sale of the ROFO Transfer Securities
during the applicable period referred to above, such ROFO Offering Holder shall
no longer be permitted to sell such shares pursuant to this Section 2.2(b)
without again fully complying with the provisions of this Section 2.2(b) and all
of the restrictions on sale, transfer or assignment contained in this Agreement
shall again be in effect with respect to the ROFO Transfer Securities.
(c) No Additional Consideration. No ROFR Offering Holder or ROFO
Offering Holder shall, directly or indirectly, enter into any agreement,
commitment or understanding which would have the effect of, directly or
indirectly, providing to such ROFR Offering Holder or ROFO Offering Holder, as
applicable additional consideration in the nature
19
of an actual economic collateral benefit for the interests being sold, directly
or indirectly, by such ROFR Offering Holder or ROFO Offering Holder, as
applicable pursuant to this Article II, which is not available to the
Institutional Holders generally. For greater certainty, and without limitation,
bona fide employment or consulting arrangements which are not entered into for
the purpose (in whole or in part) of providing a collateral benefit, shall not
be prohibited by this Section.
(d) Non-Applicability of Right of First Refusal and Right of First
Offer. Notwithstanding the foregoing, the provisions of this Section 2.2 shall
not apply to any Transfer of Subject Securities by the JWC Holders with respect
to which the JWC Holders are entitled to, and determine to, exercise their
rights under Section 2.4 and in which the consideration being paid is in the
form of cash and/or Marketable Securities.
(e) Transfers other than for Cash. Other than pursuant to Section 2.4,
unless otherwise agreed to by at least 50% of the Subject Securities held by the
JWC Holders and at least 50% of the Subject Securities held by the Borealis
Holders and at least 50% of the Subject Securities held by the OMERS Holders, no
Stockholder may Transfer their Subject Securities in exchange for consideration
other than cash.
2.3 Tagalong.
(a) Trigger of Tag-Along Right. No JWC Holder shall Transfer any
Subject Securities to a Third Party (other than a Permitted Transferee) in one
or a series of transactions without complying with the terms and conditions set
forth in Sections 2.1, 2.2 (if applicable) and this Section 2.3.
(b) Notice of Tag-Along Sale. Any JWC Holder (the "INITIATING
STOCKHOLDER") intending to Transfer Subject Securities subject to the
restriction in Section 2.3(a) shall give not less than ten days prior written
notice of such intended Transfer to each other Stockholder ("PARTICIPATING
OFFEREES") and to the Company. Such notice (the "PARTICIPATION NOTICE") shall
set forth general terms and conditions of such proposed Transfer, including the
name of the prospective transferee, the number of Subject Securities proposed to
be transferred (the "PARTICIPATION SECURITIES") by the Initiating Stockholder,
the purchase price per share proposed to be paid therefor and the payment terms
and type of Transfer to be effectuated. Within ten days following the delivery
of the Participation Notice by the Initiating Stockholder to each Participating
Offeree and to the Company, each Participating Offeree shall, by notice in
writing to the Initiating Stockholder and to the Company, have the opportunity
and right to sell to the purchasers in such proposed Transfer (upon the same
terms and conditions as the Initiating Stockholder (other than with respect to
Preferred Stock, for which the price per share shall not exceed the Maximum
Share Price and any amount allocated to a share of Preferred Stock in excess of
the Maximum Share Price shall be shared pro rata among the Participating
Offerees in accordance with the respective Common Stock Equivalents at the time
held)) up to that number of Subject Securities representing Subject Securities
at the time held by such Participating Offeree as shall equal the product of (i)
a fraction, the numerator of which is the number of Subject Securities owned by
such Participating Offeree as of the date of the Participation Notice
20
and the denominator of which is the aggregate number of Subject Securities owned
as of the date of such Participation Notice by each Initiating Stockholder and
by all Participating Offerees so electing to sell Subject Securities pursuant to
this Section 2.3(b), multiplied by (ii) the number of Subject Securities
proposed to be transferred in the Participation Notice.
(c) Closing of Tag-Along Sale. At the closing of any proposed Transfer
in respect of which a Participation Notice has been delivered, the Initiating
Stockholder, together with all Participating Offerees that have timely and
properly elected to sell Subject Securities pursuant to Section 2.3(b), shall
execute and deliver such documents or instruments reasonably requested by the
proposed transferee and deliver to the proposed transferee certificates and/or
other instruments representing the Subject Securities to be sold, free and clear
of all Liens, together with stock or other appropriate powers duly endorsed
therefor, and shall receive in exchange therefor the consideration to be paid or
delivered by the proposed transferee in respect of such Subject Securities as
described in the Participation Notice. Any Subject Securities acquired by a
Third Party pursuant to this Section 2.3 from the JWC Holders and/or the
Participating Offerees shall be held by such acquiring Third Party subject to
the terms and conditions of this Agreement.
(d) Exclusion for Compliance with Other Provisions. The provisions of
this Section 2.3 shall not apply to (i) any Transfer pursuant to a Public
Offering or (ii) any Transfers pursuant to Section 2.4 hereof.
2.4 Dragalong.
(a) Grant of Dragalong Right. Subject to Sections 2.1, 2.2(b) and
2.4(d), and provided that the JWC Holders hold the Required Share Ownership, if
the JWC Holders (the "DRAGALONG GROUP") determine to sell or exchange (in a sale
or exchange of securities of the Company or in a merger, consolidation,
recapitalization, reorganization or other business combination or any similar
transaction) in one or a series of related bona fide arm's-length transactions
to an unaffiliated Third Party and not pursuant to a Permitted Transfer, at
least 50% of the Subject Securities (which defined term shall, for purposes of
this Section 2.4 only, include all Subject Securities regardless of vesting or
exercisability) at the time held by the JWC Holders, then upon ten days' prior
written notice from the Dragalong Group to the other Stockholders, which notice
shall include reasonable details and all material terms of the proposed sale or
exchange, including the proposed time and place of closing and the form and
amount of consideration to be received by the Stockholders (such notice being
referred to as the "SALE REQUEST"), each other Stockholder shall be obligated
to, and shall, (i) sell, transfer and deliver, or cause to be sold, transferred
and delivered, to such Third Party such Stockholder's pro rata portion (as
defined below) of Subject Securities as is being sold by the JWC Holders in the
same transaction at the closing thereof (and shall (A) execute and deliver such
agreements for the purchase of such Subject Securities and other agreements,
instruments and certificates as the members of the Dragalong Group shall execute
and deliver in connection with such proposed transaction, with appropriate
modifications thereto as may be required by regulations or laws applicable to
such Stockholder and (B) deliver certificates and/or other instruments
representing the proportion of such Stockholder's Subject Securities being sold,
together with stock or other
21
appropriate powers therefore duly executed, at the closing, free and clear of
all Liens), and, subject to the last sentence of this Section 2.4(a), each
Stockholder shall receive upon the closing of such transaction the pro rata
portion (as defined below) of the consideration to be paid or delivered by the
proposed transferee in respect of such Stockholder's Subject Securities as shall
be payable to the members of the Dragalong Group in respect of their Subject
Securities (in the case of options, warrants or other Stock Equivalents, subject
to subtraction of the exercise price), (ii) waive any dissenter's or appraisal
rights in connection therewith and (iii) if stockholder approval of the
transaction is required, vote such Stockholder's Common Stock in favor thereof.
The "PRO RATA PORTION" of each Stockholder shall be the number of Subject
Securities issued to and owned by such Stockholder multiplied by a fraction, the
numerator of which shall be the number of Subject Securities the JWC Holders
wish to sell or exchange, and the denominator of which shall be the aggregate
number of Subject Securities issued to or beneficially owned by the JWC Holders
participating in the sale. Notwithstanding the foregoing, in no event shall any
Stockholder receive in respect of any share of Preferred Stock an amount
exceeding the Maximum Share Price; and any amount allocated to a share of
Preferred Stock in excess of the Maximum Share Price shall be shared pro rata
among the Stockholders in accordance with the respective Common Stock
Equivalents at the time held.
(b) Required Indemnification. Each Stockholder shall be severally
obligated to join on a pro rata basis (based on such Stockholder's pro rata
share of the net proceeds paid by such Third Party) in an indemnification that
is to be provided in connection with such Sale; provided that no Stockholder
shall be obligated in connection with such Sale to agree to indemnify or hold
harmless the Third Party with respect to an amount in excess of the net cash
proceeds paid to such Stockholder in connection with such Sale. All Stockholders
will bear their pro rata share of the costs and expenses incurred in connection
with such Sale to the extent such costs are incurred for the benefit of all
Stockholders and are not otherwise paid by the Company or the Third Party.
(c) Further Assurances in the Event of a Dragalong. Each Stockholder
agrees that, in such Stockholder's capacity as a stockholder of the Company,
such Stockholder shall, including pursuant to Section 2.4(a) hereof, vote, or
grant proxies relating to the Common Stock at the time held by such Stockholder
to vote, all of such Stockholder's Common Stock in favor of any sale or exchange
of securities of the Company or any merger, consolidation, recapitalization,
reorganization or other business combination or any similar transaction,
including pursuant to Section 2.4(a) hereof, if, and to the extent that,
approval of the Company's stockholders is required in order to effect such
transaction.
(d) Stockholder Approval of Drag Along. Notwithstanding the foregoing,
the JWC Holders shall not be permitted to exercise the rights set forth in this
Section 2.4, (i) from the date hereof until the second anniversary of the date
hereof, unless approved by Stockholders (including JWC Holders) holding in the
aggregate at least 65% of the outstanding shares of Common Stock and (ii) from
the second anniversary of the date hereof until the third anniversary of the
date hereof, unless approved by Stockholders (including JWC Holders) holding in
the aggregate at least 47% of the outstanding shares of Common Stock. If the JWC
Holders are not permitted to exercise the rights set forth in this Section 2.4
between the second anniversary and
22
the third anniversary of the date hereof because the approval required under
clause (ii) of the immediately preceding sentence is not obtained, then the JWC
Holders shall have the right to require the Company to purchase, by delivery of
a written notice to the Company during the 30-day period after the date of the
vote, and the Company shall be required to purchase, the number of Common Stock
Equivalents proposed to be sold or exchanged by the JWC Holders in the
transaction for which the required approval was not obtained under clause (ii)
above, at fair market value, to be agreed in good faith by the JWC Holders and
the Company (it being agreed that any nominees of the JWC Holders to the Board
of Directors shall be excluded from all such deliberations) in consultation with
at least two, but not more than three, nationally recognized investment banks.
The closing of any purchase by the Company from the JWC Holders pursuant to this
Section 2.4(d) shall take place at the principal office of the Company on such
date as the Company shall specify to the JWC Holders in writing, but not more
than 60 days after delivery by the JWC Holders to the Company of the notice to
sell their Common Stock Equivalents to the Company pursuant to this Section
2.4(d). At such closing, the JWC Holders shall deliver to the Company, against
payment by the Company of the purchase price for the JWC Holders' Common Stock
Equivalents in cash (by wire transfer of immediately available funds to the JWC
Holders), certificates and/or other instruments representing, together with
stock or other appropriate powers duly endorsed with respect to, the JWC
Holders' Common Stock Equivalents, free and clear of all Liens (other than
pursuant to securities laws, this Agreement or a Stock Option Agreement). All of
the foregoing deliveries will be deemed to be made simultaneously and none shall
be deemed completed until all have been completed. Notwithstanding anything set
forth in this Section 2.4(d) to the contrary, the OMERS Holders and/or the
Borealis Holders may agree with the Company to acquire, in lieu of the Company,
some (if the Company is acquiring the remaining Common Stock Equivalents that
the JWC Holders have determined to sell) or all (if the Company is not acquiring
any of the Common Stock Equivalents that the JWC Holders have determined to
sell) of the Common Stock Equivalents that the Company is required to purchase
from the JWC Holders under this Section 2.4(d) on the same terms and conditions
as set forth in this Section 2.4(d) which apply to the repurchase of Common
Stock Equivalents by the Company from the JWC Holders.
2.5 Call by the Company.
(a) (i) If the employment of a Management Holder with the Company or
any of its Subsidiaries shall terminate (a "CALL EVENT") for any reason, then,
subject to Section 2.5(a)(ii) hereof, the Company shall have the right to
purchase (the "CALL OPTION"), by delivery of a written notice (the "CALL
NOTICE") to such terminated Management Holder (with a copy thereof to each of
the JWC Representative, the Borealis Representative and the OMERS
Representative) at any time during the Company Call Period, and such Management
Holder and such Management Holder's direct and indirect Permitted Transferees (a
"CALL GROUP") shall be required to sell, any and all of the Subject Securities
(other than unvested stock options, which shall terminate immediately upon the
occurrence of a Call Event, and any other unexercised options which, pursuant to
the Stock Option Plan or the applicable Stock Option Agreement, terminate upon
the occurrence of a Call Event) that are owned by such Call Group on the date of
the Call Event (such Subject Securities to be purchased hereunder being referred
to collectively
23
as the "CALL SECURITIES") at, except as otherwise provided in Section 2.5(a)(ii)
hereof, a price per share equal to the Call Price of such Call Securities as of
the date of the Call Event.
(ii) Notwithstanding anything set forth in this Section 2.5 to
the contrary, in the event a Management Holder's employment is terminated for
Cause by the Company or its Subsidiaries or without Good Reason by the
Management Holder, then the purchase price per share payable for the Call
Securities shall be an amount equal to the lesser of (i) the Cost Price of such
Call Securities and (ii) the Call Price of such Call Securities as of the date
of the Call Event.
(b) The closing of any purchase of Call Securities by the Company from
a Call Group pursuant to this Section 2.5 shall take place at the principal
office of the Company on such date within 15 days after the expiration of the
Company Call Period with respect to such Call Group as the Company shall specify
to the members of such Call Group in writing. At such closing, the members of
the Call Group shall deliver to the Company, against payment by the Company of
the purchase price for the Call Securities in cash (by delivery of a certified
check or checks payable to the respective members of the Call Group, as the case
may be), certificates and/or other instruments representing, together with stock
or other appropriate powers duly endorsed with respect to the Call Securities,
free and clear of all Liens (other than pursuant to securities laws, this
Agreement or a Stock Option Agreement). All of the foregoing deliveries will be
deemed to be made simultaneously and none shall be deemed completed until all
have been completed.
(c) Notwithstanding anything set forth in this Section 2.5 to the
contrary, prior to the exercise by the Company of its Call Option to purchase
Call Securities pursuant to this Section 2.5, one or more prospective or
existing employees or another Person may be designated by the Board of Directors
(individually, a "CALL DESIGNATED EMPLOYEE" and, collectively, "CALL DESIGNATED
EMPLOYEES") who shall have the right, but not the obligation, to exercise the
Call Option and to acquire, in lieu of the Company, some or all (as determined
by the Company) of the Call Securities that the Company is entitled to purchase
from the Call Group hereunder, for cash and otherwise on the same terms and
conditions as set forth in Section 2.5(b) which apply to the repurchase of Call
Securities by the Company. Concurrently with any such purchase of Call
Securities by any such Call Designated Employee, such Call Designated Employee
shall execute a counterpart of this Agreement whereupon such Call Designated
Employee shall be deemed a "Management Holder" and shall have the same rights
and be bound by the same obligations as the other Management Holders hereunder.
Payment under this Section 2.5(c) shall be made by a certified check or checks
payable to the respective members of the Call Group, in an amount equal to the
purchase price for such Call Securities under Section 2.5(a) hereof against
delivery of certificates and/or other instruments representing, together with
stock or other appropriate powers duly endorsed with respect to such Call
Securities, free and clear of all Liens (other than pursuant to securities laws,
this Agreement or a Stock Option Agreement). All of the foregoing deliveries
will be deemed to be made simultaneously and none shall be deemed completed
until all have been completed.
24
(d) If and to the extent neither the Company nor any Call Designated
Employee elects to exercise the Call Option and deliver a Call Notice prior to
the expiration of the Company Call Period with respect to such Management
Holder, then the Institutional Holders, pro rata in accordance with the
respective Common Stock Equivalents at the time held by the Institutional
Holders so exercising their rights under this Section 2.5(d), may exercise the
Call Option for cash and otherwise on the same terms and conditions set forth in
Section 2.5(b) which apply to the repurchase of Call Securities by the Company,
in lieu of the Company and such Call Designated Employee by delivery of a Call
Notice to such terminated Management Holder within the Company Call Period. The
closing of any purchase of Call Securities by such Institutional Holders shall
take place at the principal offices of the Company on such date within 15 days
after the expiration of the Company Call Period with respect to such Management
Holder as the holders of a majority of the Common Stock Equivalents at the time
held by the Institutional Holders so exercising their rights under this Section
2.5(d) shall specify to the members of such Call Group in writing; provided that
if any such Institutional Holder fails to purchase all or a portion of the
number of Call Securities which such Institutional Holder may purchase pursuant
to this Section 2.5(d), then the other Institutional Holders so exercising their
rights under this Section 2.5(d) shall be entitled to purchase such Call
Securities (pro rata based upon their respective Common Stock Equivalents at the
time held, without giving effect to any Call Securities purchased under this
Section 2.5(d) with respect to such Call Event, or as otherwise agreed, by the
Institutional Holders). Payment under this Section 2.5(d) shall be made by a
certified check or checks payable to the respective members of the Call Group,
in an amount equal to the purchase price for such Call Securities under Section
2.5(a) hereof against delivery of certificates and/or other instruments
representing, together with stock or other appropriate powers duly endorsed with
respect to such Call Securities, free and clear of all Liens (other than
pursuant to securities laws, this Agreement or a Stock Option Agreement). All of
the foregoing deliveries will be deemed to be made simultaneously and none shall
be deemed completed until all have been completed.
(e) If and to the extent none of the Company, any Call Designated
Employees or any Institutional Holder elects to exercise the Call Option and
delivers a Call Notice within the Company Call Period or if the closing of the
purchase of all Call Securities does not occur within 15 days after the
expiration of the Company Call Period, then the Call Option provided for in this
Section 2.5 shall terminate with respect to such Subject Securities not so
purchased under this Section, but the parties hereto shall continue to be bound
by the remaining provisions of this Agreement.
2.6 Put by the Management Holders.
(a) If a Call Event occurs by reason of a Management Holder
terminating his employment with the Company and any of its Subsidiaries for Good
Reason or his employment being terminated without Cause by the Company and any
of its Subsidiaries or upon termination of a Management Holder's employment with
the Company by reason of death or Disability, then such Management Holder shall
have the right to require the Company to purchase (the "PUT OPTION"), by
delivery of a written notice (the "PUT NOTICE") to the Company during the 60-day
period after the expiration of the Company Call Period pertaining to such
Management Holder
25
(the "PUT PERIOD"), and the Company shall be required to purchase all of the
Subject Securities described in the Put Notice (other than Subject Securities
purchased under Section 2.5) (such Subject Securities to be purchased hereunder
being referred to collectively as the "PUT SECURITIES") at a price per share
equal to the Put Price.
(b) The closing of any purchase of Put Securities by the Company from
a Management Holder pursuant to this Section 2.6 shall take place at the
principal office of the Company on such date within 15 days after the expiration
of the Put Period with respect to such Management Holder as the Company shall
specify to such Management Holder in writing. At such closing, the Management
Holder shall deliver to the Company, against payment by the Company of the
purchase price for the Put Securities in the manner set forth in the following
sentence, certificates and/or other instruments representing, together with
stock or other appropriate powers duly endorsed with respect to, the Put
Securities, free and clear of all Liens (other than pursuant to securities laws,
this Agreement or a Stock Option Agreement). The purchase price for the Put
Securities may be paid in cash (by delivery of a certified check payable to the
Management Holder) or, at the option of the Company, by promissory note which is
subordinated to all public, bank, financial institution and similar debt of the
Company and its Subsidiaries, payable 20% on issuance and 20% on each of the
following four anniversaries of the issuance date with interest paid at the
prime rate announced from time to time by the Company's or its Subsidiaries'
senior lenders (such interest payable in kind); provided that any cash payments
required to be made under the terms of the promissory note may, if required by
the Company or its Subsidiaries' senior lenders or noteholders, be made in the
form of a note, provided, further, that at such time as payments under the
promissory note are no longer prohibited by the Company's or its Subsidiaries'
senior lenders or noteholders, the Company shall pay such amounts in cash (by
delivery of a certified check payable to the Management Holder). All of the
foregoing deliveries will be deemed to be made simultaneously and none shall be
deemed completed until all have been completed.
(c) Notwithstanding anything set forth in this Section 2.6 to the
contrary, one or more prospective or existing employees or other Persons may
agree with the Board of Directors (individually, a "PUT DESIGNATED EMPLOYEE"
and, collectively, "PUT DESIGNATED EMPLOYEES") that such employees or other
Persons will acquire, in lieu of the Company, some (if the Company is acquiring
the remaining Put Securities) or all (if the Company is not acquiring any Put
Securities) of the Put Securities that the Company is required to purchase from
the Management Holder under this Section 2.6, for cash and otherwise on the same
terms and conditions as set forth in Section 2.6(b) which apply to the
repurchase of Put Securities by the Company. Concurrently with any such purchase
of Put Securities by any such Put Designated Employee, such Put Designated
Employee shall execute a counterpart of this Agreement whereupon such Put
Designated Employee shall be deemed a "Management Holder" and shall have the
same rights and be bound by the same obligations as the other Management Holders
hereunder. Payment under this Section 2.6(c) shall be made by a certified check
or checks payable to the Management Holder, in an amount equal to the purchase
price for such Put Securities under Section 2.6(a) hereof against delivery of
certificates and/or other instruments representing, together with stock or other
appropriate powers duly endorsed with respect to such Put Securities, free and
clear of all Liens (other than pursuant to securities laws, this Agreement
26
or a Stock Option Agreement). All of the foregoing deliveries will be deemed to
be made simultaneously and none shall be deemed completed until all have been
completed.
(d) If and to the extent a Management Holder elects not to exercise
the Put Option and deliver a Put Notice within the Put Period or if the closing
of the purchase of all Put Securities does not occur within 15 days after the
expiration of the Put Period through the fault of such Management Holder, then
the Put Option provided for in this Section 2.6 shall terminate with respect to
such Subject Securities not so purchased under this Section, but the parties
hereto shall continue to be bound by the remaining provisions of this Agreement.
2.7 Pre-Public Offering Transaction.
(a) Cooperation with Public Offering. If the Board of Directors
recommends that the Company engage in a Public Offering, and that in order to
facilitate such Public Offering it is in the best interests of the Company to
undertake a transaction (the "PRE-PUBLIC OFFERING TRANSACTION") pursuant to
which all shares of Common Stock and/or Preferred Stock shall be exchanged into
or substituted by shares of Successor Security Equivalents and all other Subject
Securities shall be substituted by securities of a Successor Corporation which
are substantially equivalent to such Subject Securities (such securities of the
Successor Corporation, the "SUCCESSOR SECURITY EQUIVALENTS"), by way of
contribution of all Subject Securities to the Successor Corporation in exchange
for Successor Security Equivalents, or by conversion, merger, consolidation,
recapitalization, reorganization or other business combination or any similar
transaction or otherwise, then upon ten days' prior written notice from a
representative of the Board of Directors to the holders of the Subject
Securities, which notice shall include reasonable details and all material terms
of the proposed Public Offering and the Pre-Public Offering Transaction,
including the proposed time and place of closing of the Pre-Public Offering
Transaction and the form and amount of the Successor Security Equivalents to be
received by the Stockholders (such notice being referred to as the "PRE-PUBLIC
OFFERING TRANSACTION REQUEST"), each Stockholder shall be obligated to, and
shall, (provided such Pre-Public Offering Transaction, or any part thereof,
would not have an adverse effect from a business, tax or regulatory perspective
to such Stockholder in a manner different from any other Stockholder and was
contemplated by the tax structure prepared by KPMG LLP and
PricewaterhouseCoopers LLP in connection with the consummation of the
transactions contemplated by the Merger Agreement) (i) execute and deliver such
agreements for the exchange, contribution or substitution of such Subject
Securities and other agreements, instruments and certificates as the JWC Holders
shall execute and deliver in connection with the Pre-Public Offering
Transaction, with appropriate modifications thereto as may be required by
regulations or laws applicable to such Stockholder, and (ii) deliver
certificates and/or other instruments, if any, representing such Stockholder's
Subject Securities being exchanged, contributed or substituted, together with
appropriate transfer powers therefore duly executed, or legally binding written
assignments thereof, at the closing, free and clear of all Liens, and each
Stockholder shall receive upon the closing of the Pre-Public Offering
Transaction the Successor Security Equivalents deliverable by the Successor
Corporation in respect of such Stockholder's Subject Securities. Following the
Pre-Public Offering Transaction, this Agreement shall continue with the same
force and effect, to the extent practicable, with respect to the Stockholders
and the Successor Security Equivalents
27
then owned by them, as determined in good faith by the Board of Directors,
without any further action or approval by the Stockholders. The Pre-Public
Offering Transaction shall not be considered a Transfer subject to the terms of
this Article II.
(b) Further Assurances in the Event of a Pre-Public Offering
Transaction. Each Stockholder agrees that, in such Stockholder's capacity as a
Stockholder of the Company, such Stockholder shall, including pursuant to
Section 2.7(a), vote, or grant proxies relating to the shares of Common Stock at
the time held by such Stockholder to vote, all of such Stockholder's shares of
Common Stock in favor of any Pre-Public Offering Transaction or proposed Public
Offering, including pursuant to Section 2.7(a), if, and to the extent that,
approval of the Company's Stockholders is required in order to effect the
Pre-Public Offering Transaction or the proposed Public Offering.
2.8 Closed Company Provisions. To the extent that any action is permitted
under the terms of this Agreement, but cannot be taken because of the inclusion
of the "closed company" provisions in Articles V, VI and VII of the Amended and
Restated Certificate of Incorporation of the Company, filed with the Secretary
of State of the State of Delaware on June 3, 2004 (as amended, the "CERTIFICATE
OF INCORPORATION"), the Stockholders shall take all such action and do all such
things that are necessary or useful in order to permit the Company to amend the
Certificate of Incorporation to remove all of such "closed company" provisions.
2.9 No Other Proxies, Voting or Other Stockholder Other Agreements. No
Stockholder shall grant any proxy or enter into or agree to be bound by any
voting trust with respect to any Subject Securities other than as set forth in
this Agreement nor shall any Stockholder enter into any stockholders agreements
or arrangements of any kind with any Person with respect to any of the Subject
Securities on terms which conflict with the provisions of this Agreement
(whether or not such agreements and arrangements are with other Stockholders or
holders of Stock Equivalents that are not parties to this Agreement), including
but not limited to, agreements or arrangements with respect to the acquisition,
disposition or voting of Subject Securities inconsistent herewith.
2.10 Involuntary Transfers are Subject to this Agreement. Except as
otherwise provided in this Agreement, in the event of an Involuntary Transfer
(as defined in the following sentence) of any Subject Securities (the
"TRANSFERRED SECURITIES") of any Institutional Holder, Management Holder or
Additional Holder to any Person, the transferee, including, without limitation,
any and all transferees and subsequent transferees of the initial transferee
(the "INVOLUNTARY TRANSFEREE"), shall take and hold the Transferred Securities
subject to this Agreement and to all of the obligations of, and restrictions
imposed hereby upon, the transferor holder and shall comply with this Agreement.
As used in this Agreement, the term "INVOLUNTARY TRANSFER" shall mean any
transaction, proceeding or action by or in which the Institutional Holder,
Management Holder or Additional Holder is involuntarily deprived or divested of
any right, title or interest in or to any of such holder's Subject Securities
(including, without limitation, a seizure under levy of attachment or execution,
a foreclosure under a pledge of Subject Securities, a transfer to a trustee in
bankruptcy or receiver or other officer or agency,
28
or a transfer to a state or to a public officer or agency pursuant to a statute
pertaining to escheat or abandoned property but specifically excluding death,
incapacity, divorce and similar events).
2.11 Required Notice in the Event of Involuntary Transfer. In the event of
an Involuntary Transfer, the Stockholders and the Company shall not take any
action to approve any such involuntary transfer not in accordance with this
Section, and the transferor Stockholder (or, if it fails to do so, the
Involuntary Transferee) shall forthwith give notice (the "INVOLUNTARY TRANSFER
NOTICE") to the Company stating (i) when the involuntary transfer occurred or is
to occur, (ii) the circumstances alleged to require such involuntary transfer,
(iii) the number and type of securities involved and (iv) the name, address and
capacity of the Involuntary Transferee.
2.12 Option Granted in the Event of Involuntary Transfer. If an Involuntary
Transfer of the Subject Securities of any Stockholder occurs, the Company and
its designees shall have the same rights of first refusal with respect to the
Transferred Shares as if the involuntary transfer had been a proposed voluntary
transfer by the transferor Stockholder governed by Section 2.2 except that: (i)
the periods within which such right must be exercised shall run from the date
the Involuntary Transfer Notice is given in accordance with this Agreement; and
(ii) such rights shall be exercised by notice to the Involuntary Transferee
rather than to the transferor Stockholder. The closing of any purchase of
Transferred Shares pursuant to this Section shall be in accordance with the
procedures set forth in Section 2.2.
2.13 Right of First Refusal in the Event of Involuntary Transfers . If the
provisions of this Section are held to be unenforceable for any reason with
respect to any particular involuntary transfer of Transferred Shares, or if the
right of first refusal is not exercised with respect to such involuntary
transfer, the Company shall have a right of first refusal in accordance with
Section 2.2 if the Involuntary Transferee subsequently obtains a bona fide offer
for and desires to transfer such Transferred Shares, in which event the
Involuntary Transferee shall be bound by the provisions of Section 2.2 and the
related provisions of this Agreement. For the purposes of this Section, all
references to the "Offeror" in Section 2.2 and related Sections shall be deemed
to include and refer to the Involuntary Transferee.
2.14 (a) Purchase for Investment; Legend on Certificate. Each Stockholder
acknowledges that all of the securities of the Company held by such Stockholder
are being (or have been) acquired for investment and not with a view to the
distribution thereof and that no Transfer, hypothecation or assignment of any
such securities (including the Stock for which such securities may be
exercisable or exchangeable or into which such securities may be convertible)
may be made except in compliance with applicable federal and state securities
laws. All of the certificates or other instruments representing any of such
securities (including the Stock for which such securities may be exercisable or
exchangeable or into which such securities may be convertible) which are now or
hereafter held by any Stockholder shall be subject to the terms of this
Agreement and shall have endorsed in writing, stamped or printed, thereon the
following legends:
29
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A STOCKHOLDERS AGREEMENT DATED AS OF JUNE 4, 2004, AS
AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE WITH AND AVAILABLE
FROM THE SECRETARY OF THE COMPANY."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE OR JURISDICTION, AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE REQUIREMENTS OF SUCH
ACT."
"THE COMPANY HAS MULTIPLE CLASSES OF STOCK. THE COMPANY WILL FURNISH
WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS IN WRITING THE POWERS,
DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL, OR OTHER
SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF AND THE
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR
RIGHTS."
(b) The certificates evidencing the securities of the Company acquired
by any Stockholder shall also bear any legend required under any applicable
state securities laws. Absent an effective registration statement under the
Securities Act covering the Transfer of the securities of the Company held by a
Stockholder, no Stockholder shall Transfer any securities of the Company unless
such Transfer is exempt from the registration and prospectus delivery
requirements of the Securities Act and has been registered or qualified under
(or is exempt from the registration and qualification requirements of) any
applicable state securities laws. Each Stockholder consents to the Company
making a notation on its records or giving instructions to any transfer agent
for the securities of the Company held by them in order to implement the
restrictions on Transfer set forth in this Section 2.14.
(c) Removal of Legends, Etc. Notwithstanding the provisions of Section
2.14(a) upon the transferability of any Subject Securities, the restrictions
thereunder shall cease and terminate when (i) such Subject Securities are sold
or otherwise disposed of in accordance with the intended method of disposition
by the seller or sellers thereof set forth in a registration statement or (ii)
the holder of such Subject Securities has met the requirement of transfer of
such Subject Securities pursuant to subparagraph (k) of Rule 144. Whenever the
restrictions imposed by Section 2.14(a) shall terminate, as herein provided, the
holder of any Subject Securities shall be entitled to receive from the Company,
without expense, a new certificate not bearing the restrictive legend set forth
in Section 2.14(a) and not containing any other reference to the restrictions
imposed by Section 2.14(a).
30
2.15 Effectiveness of Transfers. Any Subject Securities transferred by a
Stockholder shall be held by the transferee thereof pursuant to this Agreement.
Such transferee shall, except as otherwise expressly stated herein, have all the
rights and be subject to all of the obligations of a Stockholder under this
Agreement automatically and without requiring any further act by such transferee
or by any parties to this Agreement. Without affecting the preceding sentence,
if such transferee is not a Stockholder on the dates of such transfer, then such
transferee, as a condition to such transfer, shall confirm such transferee's
obligations hereunder in accordance with Section 2.16 hereof. No Subject
Securities shall be transferred on the Company's books and records, and no
transfer thereof shall be otherwise effective, unless any such transfer is made
in accordance with the terms and conditions of this Agreement, and the Company
is hereby authorized by all of the Stockholders to enter appropriate stop
transfer notations on its transfer records to give effect to this Agreement.
2.16 Additional Stockholders; Joinder Agreement. Any Person that is not
already a party to this Agreement in the same Stockholder capacity as such
Person would be following the Transfer and who is acquiring any Subject
Securities shall on or before the transfer or issuance to it of such Subject
Securities, sign and deliver to the Company a Joinder Agreement and shall
thereby become a party to this Agreement. If such Person meets the definition of
a JWC Holder, then such Person shall be treated as a JWC Holder hereunder, if
such Person meets the definition of a Borealis Holder, such Person shall be
treated as a Borealis Holder, if such Person meets the definition of an OMERS
Holder, such Person shall be treated as an OMERS Holder, if such Person meets
the definition of a Management Holder, such Person shall be treated as a
Management Holder hereunder, and if such Person meets none of the foregoing
definitions, such Person shall be treated as an Additional Holder hereunder. The
Company shall require each Person acquiring an option, warrant or other right to
purchase shares of Stock under any option or other equity participation plan to
execute a Joinder Agreement.
2.17 Prior Notice of Transfer Required. Each Institutional Holder,
Management Holder and Additional Holder agrees, prior to any Transfer of any
Subject Securities (except pursuant to an effective registration statement), to
give written notice to the Company of such holder's intent to effect such
Transfer and agrees to comply in all other respects with the provisions of this
Agreement. Each such notice shall describe the manner and circumstances of the
proposed Transfer and, unless the proposed Transfer is a Permitted Transfer or
unless waived by the Company, shall be accompanied by the written opinion,
addressed to the Company, of counsel for the holder of such Subject Securities
(which counsel shall be reasonably satisfactory to the Company), stating that in
the opinion of such counsel (which opinion shall be reasonably satisfactory to
the Company) such proposed Transfer does not involve a transaction requiring
registration or qualification of such Subject Securities under the Securities
Act or the securities laws of any state of the United States or of any foreign
jurisdiction.
31
ARTICLE III
Registration Rights
3.1 General. For purposes of this Article III, (a) the terms "REGISTER,"
"REGISTERED" and "REGISTRATION" refer to a registration effected by preparing
and filing a registration statement on Form X-0, X-0 or S-3 in compliance with
the Securities Act and the declaration or ordering of effectiveness of such
registration statement and (b) the term "HOLDER" means any Stockholder electing
to register any Registrable Securities pursuant to Section 3.2 or 3.3. The
provisions of this Article III shall apply to a Public Offering made in
compliance with Canadian Securities Laws, making appropriate adjustments to
reflect the requirements thereunder. The registration rights granted pursuant to
Sections 3.2 and 3.3 shall terminate and expire on the tenth anniversary of the
occurrence of a Public Offering.
3.2 Required Registration. Subject to Section 3.2(e), if the Company shall
be requested, in writing, (a) at any time, by the holders of a majority of the
Common Stock Equivalents then held by the JWC Holders (or the JWC
Representative), (b) after an initial Public Offering, by the holders of a
majority of the Common Stock Equivalents then held by the Borealis Holders (or
the Borealis Representative) or (c) after an initial Public Offering, by the
holders of a majority of the Common Stock Equivalents then held by the OMERS
Holders (or the OMERS Representative) to effect a registration statement under
the Securities Act of Registrable Securities, the Company shall promptly (i)
give written notice of the proposed registration to all other Stockholders and
(ii) use its best efforts to effect the registration under the Securities Act of
the Registrable Securities which the Company has been so requested to register
by the JWC Holders, the Borealis Holders or the OMERS Holders, as applicable,
and by other Stockholders in a written request received by the Company within
ten Business Days after the giving of the written notice specified in clause (i)
above; provided, however, that the Company shall not be obligated to effect any
registration under the Securities Act except in accordance with the following
provisions:
(a) The Company shall not be obligated to use its best efforts to file
and cause to become effective any registration statement during any period in
which any other registration statement (other than on Forms S-4, F-4 or S-8
promulgated under the Securities Act or any successor forms thereto) pursuant to
which Primary Shares are to be or were sold has been filed and not withdrawn or
has been declared effective within the prior 90 days.
(b) The Company may delay the filing or effectiveness of any
registration statement for a period of up to 90 days after the date of a request
for registration pursuant to this Section 3.2 if at the time of such request (i)
the Company is engaged, or has fixed plans to engage within 90 days after the
date of such request, in a firm commitment underwritten public offering of
Primary Shares in which the holders of Registrable Securities may include
Registrable Securities pursuant to Section 3.3 or (ii) a Material Transaction
exists, provided that the Company may only so delay the filing or effectiveness
of its registration statements (if any) once pursuant to this Section 3.2(b).
32
(c) With respect to any registration pursuant to this Section 3.2, the
Company may include in such registration any Primary Shares; provided, however,
that, if the managing underwriter advises the Company that the inclusion of all
Registrable Securities and Primary Shares proposed to be included in such
registration would interfere with the successful marketing (including pricing)
of the Registrable Securities proposed to be included in such registration, then
the number of Registrable Securities and Primary Shares proposed to be included
in such registration shall be included in the following order:
(i) first, the Registrable Securities requested to be included in
such registration by the Institutional Holders, the Management Holders and the
Additional Holders (or, if necessary, such Registrable Securities pro rata among
the Holders of such Registrable Securities based upon the number of Registrable
Securities requested to be included in such registration); and
(ii) second, the Primary Shares.
(d) If the method of disposition requested by the holders pursuant to
this Section 3.2 is an underwritten public offering, the Board of Directors
shall have the right to designate the managing underwriter of such offering.
(e) Notwithstanding the foregoing, the Company shall not be obligated
to use its best efforts to file and cause to become effective more than two
registration statements (i) at the request of the JWC Holders, if at such times
the JWC Holders do not own the Required Share Ownership, (ii) at the request of
the Borealis Holders or (iii) the request of the OMERS Holders.
(f) At any time before the registration statement covering Registrable
Securities becomes effective, the Stockholders holding a majority of the
Registrable Securities requested to be registered may request the Company to
withdraw or not to file the registration statement.
3.3 Piggyback Registration.
(a) If, at any time, the Company is required by Section 3.2 of this
Agreement (a "Demand Registration") or the Company otherwise determines to
register any Common Stock under the Securities Act in connection with a Public
Offering of such securities, the Company shall, at each such time, promptly give
each Stockholder written notice of such determination no later than 30 days
before its intended filing with the SEC. Upon the written request of any
Stockholder received by the Company within ten Business Days after the giving of
any such notice by the Company, the Company shall use its best efforts to cause
to be registered under the Securities Act all of the Registrable Securities of
such Stockholder that such Holder has requested be registered for disposition in
accordance with the intended method of disposition as stated in such notice and
with the underwriter selected by the Board of Directors.
(b) If the managing underwriter advises the Company that the inclusion
of all Registrable Securities and Primary Shares proposed to be included in such
registration would
33
interfere with the successful marketing (including pricing) of the Registrable
Securities proposed to be included in such registration and
(i) such registration is being made in respect of a Demand
Registration, then the number of Registrable Securities and Primary Shares
proposed to be included in such registration shall be included in the
following order:
first, the Registrable Securities requested to be included
in such registration by the Institutional Holders, the
Management Holders and the Additional Holders (or, if
necessary, such Registrable Securities pro rata among the
Holders of such Registrable Securities based upon the number
of Registrable Securities requested to be included in such
registration); and;
second, the Primary Shares;
or
(ii) such registration is being made in respect of a registration
other than in respect of a Demand Registration, then the number of
Registrable Securities and Primary Shares proposed to be included in such
registration shall be included in the following order:
first, all Primary Shares offered for the account of the
Company; and
second, the Registrable Securities requested to be included
in such registration by the Institutional Holders, the
Management Holders and the Additional Holders (or, if
necessary, such Registrable Securities pro rata among the
Holders of such Registrable Securities based upon the number
of Registrable Securities requested to be included in such
registration); and.
If any of the Holders disapproves of the terms of any such underwriting, it may
elect to withdraw therefrom by written notice to the Company and the underwriter
prior to the date of pricing such offer. Any Registrable Securities or other
securities excluded or withdrawn from such underwriting shall be withdrawn from
such registration.
3.4 Obligations of the Company.
(a) Whenever required under Section 3.2 or 3.3 to use its best efforts
to effect the registration of any Registrable Securities, the Company shall
(provided, that if such registration is being effected pursuant to Section 3.3,
the Company may at any time delay or abandon the underlying registration without
any liability to the Holders):
34
(i) prepare and file with the SEC a registration statement (or an
amendment to a registration statement) with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become and remain effective, including, without limitation, filing of
post-effective amendments and supplements to any registration statement or
prospectus necessary to keep the registration statement current;
(ii) as expeditiously as reasonably possible, prepare and file
with the SEC such amendments and supplements to such registration statement
and the prospectus used in connection with such registration statement as
may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement and to keep each registration and qualification under this
Agreement effective (and in compliance with the Securities Act) by such
actions as may be necessary or appropriate for a period of 120 days after
the effective date of such registration statement (unless all securities
covered by such registration statement are sooner disposed of), all as
requested by such Holder or Holders;
(iii) as expeditiously as reasonably possible furnish to the
Holders such numbers of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and
such other documents as they may reasonably request in order to facilitate
the disposition of Registrable Securities owned by them in accordance with
the plan of distribution provided for in such registration statement;
(iv) as expeditiously as reasonably possible use its best efforts
to register and qualify the securities covered by such registration
statement under such securities or "blue sky" laws of such jurisdictions as
shall be reasonably appropriate for the distribution of the securities
covered by the registration statement, provided that the Company shall not
be required in connection therewith or as a condition thereto to qualify to
do business in any jurisdiction it would not otherwise be required to
qualify but for this subsection (iv), to file a general consent to service
of process in any such jurisdiction or subject itself to taxation in any
such jurisdiction, and further provided that (anything in this Agreement to
the contrary notwithstanding with respect to the bearing of expenses) if
any jurisdiction in which the securities shall be qualified shall require
by law or regulation that expenses incurred in connection with the
qualification of the securities in that jurisdiction be borne by selling
stockholders, then such expenses shall be payable by selling stockholders
pro rata, to the extent required by such jurisdiction;
(v) notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or
upon the happening of any event as a result of which, the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made
(provided that upon such notification, each Holder agrees not to sell or
otherwise transfer or dispose of any
35
Common Stock (or other securities) of the Company at the time held by such
Holder or any interest or future interest therein until such statement or
omission has been corrected, and there shall be added to the period during
which the Company is obligated to keep such registration effective the
number of days for which such sales or other transfers or dispositions were
suspended), and at the request of any such Holder promptly prepare and
furnish, without charge, to such seller or Holder a reasonable number of
copies of a supplement to such prospectus or an amendment of such
registration statement as may be necessary so that, as thereafter delivered
to the purchasers of such securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were
made;
(vi) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering
the period of at least 12 months but not more than 18 months, beginning
with the first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act or Rule 158 thereunder;
and
(vii) use its best efforts to list all Registrable Securities
covered by such registration statement on (A) any securities exchange on
which any class of similar Securities is then listed or (B) in the event of
an initial Public Offering, any national securities exchange designated by
the JWC Representative or the holders of a majority of the Common Stock
Equivalents at the time held by the JWC Holders.
(b) If the Company at any time proposes to register any of its
securities under the Securities Act subject to the registration rights of the
Holders under Section 3.2 or 3.3, and such securities are to be distributed by
or through one or more underwriters selected by the Board of Directors, then the
Company will make reasonable efforts, if requested by any Holder of Registrable
Securities who requests such registration, to arrange for such underwriters to
include such Registrable Securities among the securities to be distributed by or
through such underwriters.
(c) In connection with the preparation and filing of each registration
statement registering Registrable Securities under this Agreement, the Company
will give the Holders of Registrable Securities on whose behalf such Registrable
Securities are to be so registered and their underwriters, if any, and their
respective counsel and accountants the opportunity to participate in the
preparation of such registration statement, each prospectus included therein or
filed with the SEC, and each amendment thereof or supplement thereto, and will
give each of them such access to its books and records and such opportunities to
discuss the business of the Company with its officers, its counsel and the
independent public accountants who have certified its financial statements, as
shall be reasonably necessary, in the opinion of such Holders or such
underwriters or their respective counsel, in order to conduct a reasonable and
diligent investigation within the meaning of the Securities Act.
36
3.5 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Article III that
each Holder shall furnish to the Company such information regarding such Holder,
the Registrable Securities held by such Holder, and the intended method of
disposition of such securities as the Company shall reasonably request and as
shall be required in connection with the action to be taken by the Company.
3.6 Expenses of Registration. Registration, filing and qualification fees,
printers' and accounting fees, fees and expenses of compliance with securities
or blue sky laws, fees and expenses relating to filings with the National
Association of Securities Dealers, Inc. or any applicable securities exchange,
fees of underwriters (excluding discounts, commissions or fees of underwriters,
selling brokers, dealer managers or similar securities industry professionals
attributable to the Registrable Securities being registered), and fees and
disbursements of counsel for the Company, and of one counsel selected by
Stockholders holding a majority of the Registrable Securities requested to be
registered in the event of registration pursuant to Section 3.2, incurred in
connection with a registration pursuant to Section 3.2 or 3.3 shall be borne by
the Company. Each Holder whose shares are being sold will bear, pro rata,
underwriters' discounts and brokerage and other commissions, fees and
disbursements of its own counsel and all of its other expenses of such
registration, offering and sale.
3.7 Underwriting Requirements. In connection with any registration of
Registrable Securities under this Agreement, the Holders whose shares are being
sold shall, if requested by the Company or the underwriters, enter into an
underwriting agreement with such underwriters for such offering, such agreement
to contain such terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, provisions relating to indemnification and contribution. The
Holders on whose behalf Registrable Securities are to be distributed shall also
complete and execute all questionnaires, powers of attorney and/or other
documents required under the terms of such underwriting agreement.
3.8 Indemnification. In the event any Registrable Securities are included
in a registration statement pursuant to this Article III:
(a) To the fullest extent permitted by law, the Company will indemnify
and hold harmless each Holder joining in a registration and its directors and
officers, any underwriter (as defined in the Securities Act) for it, and each
Person, if any, who controls such Holder or such underwriter within the meaning
of the Securities Act, from and against any losses, claims, damages, expenses
(including reasonable attorneys' fees and expenses and reasonable costs of
investigation) or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages, expenses or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
on any untrue or alleged untrue statement of any material fact contained in such
registration statement including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to
37
make the statements made therein not misleading in light of the circumstances
under which they were made, provided that the indemnity agreement contained in
this Section 3.8(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable for any such loss, claim, damage, liability or
action to the extent that it arises out of or is based upon (i) an untrue
statement or omission made in connection with such registration statement,
preliminary prospectus, final prospectus or amendments or supplements thereto in
reliance upon and in conformity with written information furnished by such
Holder, underwriter or control person to the Company specifically for inclusion
in the Registration Statement in connection with such registration, or (ii) such
Holder's failure to deliver a copy of the registration statement or prospectus
or any amendments or supplements thereto after the Company has furnished such
Holder with a sufficient number of copies of the same. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Holder, underwriter or control person and shall survive the
transfer of such securities by such Holder.
(b) To the fullest extent permitted by law, each Holder joining in a
registration shall indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement, each
Person, if any, who controls the Company within the meaning of the Securities
Act, and each agent and any underwriter for the Company and any Person who
controls any such agent or underwriter and each other Holder and any Person who
controls such Holder (within the meaning of the Securities Act) against any
losses, claims, damages, expenses (including reasonable attorney's fees and
expenses and reasonable costs of investigation) or liabilities to which the
Company or any such director, officer, control person, agent, underwriter or
other Holder may become subject, under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon an untrue statement of any material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, or arise out of or are based
upon the omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent that such untrue statement or omission was made in such registration
statement, preliminary or final prospectus, or amendments or supplements
thereto, in reliance upon and in conformity with written information furnished
by such Holder in connection with such registration, provided that the indemnity
agreement contained in this Sec tion 3.8(b) shall not apply to amounts paid in
settlements effected without the consent of such Holder (which consent shall not
be unreasonably withheld). Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or any such
director, officer, Holder, underwriter or control person and shall survive the
transfer of such securities by such Holder.
(c) Any Person seeking indemnification under this Section 3.8 will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification, but the failure to give such notice will not
affect the right to indemnification hereunder, except to the extent the
indemnifying party is actually prejudiced by such failure and (ii) unless in
such indemnified party's reasonable judgment a conflict of interest may exist
38
between such indemnified and indemnifying parties with respect to such claim,
permit such indemnifying party, and other indemnifying parties similarly
situated, jointly to assume the defense of such claim with counsel reasonably
satisfactory to the parties. In the event that the indemnifying parties cannot
mutually agree as to the selection of counsel, each indemnifying party may
retain separate counsel to act on its behalf and at its expense. The indemnified
party shall in all events be entitled to participate in such defense at its
expense through its own counsel. If such defense is not assumed by the
indemnifying party, the indemnifying party will not be subject to any liability
for any settlement made without its consent (but such consent will not be
unreasonably withheld). No indemnifying party will consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation. An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim.
(d) If for any reason the foregoing indemnification is unavailable to
any party or insufficient to hold it harmless as and to the extent contemplated
by the preceding paragraphs of this Section 3.8, then each indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such loss, claim, damage expense or liability in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party,
on the one hand, and the applicable indemnified party, as the case may be, on
the other hand, and also the relative fault of the indemnifying party and any
applicable indemnified party, as the case may be, as well as any other relevant
equitable considerations. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person or entity who was not guilty of such fraudulent
misrepresentation.
3.9 Market Stand-Off Agreement. If requested by the managing underwriter of
the initial Public Offering on behalf of the Company of its Common Stock, or by
the managing underwriter of a Public Offering for which Registrable Securities
of any Holders have been registered, all Holders (in the case of such initial
Public Offering) or such participating Holders (in the case of such other Public
Offering) shall not sell or otherwise transfer or dispose of any Registrable
Securities held by such Holders (other than pursuant to Permitted Transfers,
those Registrable Securities included in the registration, pursuant to Section
2.5 or 2.6, and, if permitted by the managing underwriter, pursuant to Section
2.3 or 2.4) during such period following the effective date of such registration
as is usual and customary at such time in similar public offerings of similar
securities.
39
ARTICLE IV
Corporate Governance
4.1 Board of Directors.
(a) The Company and each of the Stockholders shall take all action,
including, but not limited to, such Stockholder's voting, or executing and
delivering proxies or written consents in lieu of a meeting with respect to, the
Voting Stock at the time held by such Stockholder so that the number of
directors is seven (7) or such other authorized number of directors as may be
agreed at any time by a majority of the JWC Holders, a majority of the OMERS
Holders and a majority of the Borealis Holders. The initial Board of Directors
shall consist of seven (7) directors.
(b) The Company and each of the Stockholders shall take all actions,
including, but not limited to, such Stockholder's voting, or executing and
delivering proxies or written consents in lieu of a meeting with respect to, the
Voting Stock at the time held by such Stockholder as may be from time to time
requested by holders of a majority of the Common Stock Equivalents at the time
held by the JWC Holders (or the JWC Representative) so that the Board of
Directors shall include four (4) directors (the "CHILDS DIRECTORS") designated
by the holders of a majority of the Common Stock Equivalents at the time held by
the JWC Holders (or the JWC Representative) (or such lesser number of directors
designated by the holders of a majority of the Common Stock Equivalents at the
time held by the JWC Holders (or the JWC Representative)), one of whom will be
the non-executive chairman of the Board of Directors; provided, that the
Original JWC Holders and their Permitted Transferees (other than the Borealis
Holders, the OMERS Holders and the Management Holders) shall not be entitled to
designate a director pursuant to this Section 4.1(b) from and after such time as
the Original JWC Holders and their Permitted Transferees (other than the
Borealis Holders, the OMERS Holders and the Management Holders) hold less than
5% of the outstanding Common Stock Equivalents. The Childs Directors shall
initially be Xxxxxx X. Xxxxx, the non-executive chairman of the Board of
Directors, Xxxxxx X. Xxxxx and Xxxxx X. Xxxx, and there shall be one vacancy.
The holders of a majority of the Common Stock Equivalents at the time held by
the JWC Holders (or the JWC Representative) shall also be entitled to require
that any member of the Board of Directors so designated pursuant to this Section
4.1(b) be removed or replaced by another designee of the holders of a majority
of the Common Stock Equivalents at the time held by the JWC Holders (or the JWC
Representative), in which event the Company and each Stockholder shall take all
actions, including, but not limited to, such Stockholder's voting, or executing
and delivering proxies or written consents in lieu of a meeting with respect to,
the Voting Stock at the time held by such Stockholder as may be necessary to
effect such removal or replacement. The JWC Representative shall have the right
to appoint at least one Childs Director to each committee, if any, established
by the Board of Directors.
(c) The Company and each Stockholder shall take all action, including,
but not limited to, such Stockholder's voting, or executing proxies or written
consents with respect to, the Voting Stock at the time held by such Stockholder
as may be from time to time requested by the holders of a majority of the Common
Stock Equivalents at the time held by the Original Borealis Holders and their
Permitted Transferees (other than the JWC Holders, the OMERS Holders and the
Management Holders) or on their behalf by the Borealis Representative, so that
the Board of Directors shall include one (1) director designated by the holders
of a majority of
40
the Common Stock Equivalents held by the Original Borealis Holders and their
Permitted Transferees (other than the JWC Holders, the OMERS Holders and the
Management Holders) or on their behalf by the Borealis Representative which
director (the "BOREALIS DIRECTOR") shall initially be Andre La Forge; provided
that the Original Borealis Holders and their Permitted Transferees (other than
the JWC Holders, the OMERS Holders and the Management Holders) shall not be
entitled to designate a director pursuant to this Section 4.1(c) from and after
such time as the Original Borealis Holders and their Permitted Transferees
(other than the JWC Holders, the OMERS Holders and the Management Holders) hold
less than 5% of the outstanding Common Stock Equivalents. The holders of a
majority of the Common Stock Equivalents at the time held by the Original
Borealis Holders and their Permitted Transferees (other than the JWC Holders,
the OMERS Holders and the Management Holders) or on their behalf by the Borealis
Representative shall also be entitled to require that any director so designated
pursuant to this Section 4.1(c) be removed or replaced by another designee of
the holders of the majority of the Common Stock Equivalents at the time held by
the Original Borealis Holders and their Permitted Transferees (other than the
JWC Holders, the OMERS Holders and the Management Holders) or on their behalf by
the Borealis Representative, in which event the Company and each Stockholder
shall take all action, including, but not limited to, such Stockholder's voting,
or executing proxies or written consents with respect to, the Voting Stock at
the time held by such Stockholder as may be necessary to effect such removal or
replacement. As long as the Borealis Director is a member of the Board of
Directors pursuant to this Section 4.1(c), such Borealis Director shall be on
each committee, if any, established by the Board of Directors.
(d) The Company and each Stockholder shall take all action, including,
but not limited to, such Stockholder's voting, or executing proxies or written
consents with respect to, the Voting Stock at the time held by such Stockholder
as may be from time to time requested by the holders of a majority of the Common
Stock Equivalents at the time held by the Original OMERS Holders and their
Permitted Transferees (other than the JWC Holders, the Borealis Holders and the
Management Holders) or on their behalf by the OMERS Representative, so that the
Board of Directors shall include one (1) director designated by the holders of a
majority of the Common Stock Equivalents held by the Original OMERS Holders and
their Permitted Transferees (other than the JWC Holders, the Borealis Holders
and the Management Holders) or on their behalf by the OMERS Representative which
director (the "OMERS DIRECTOR") shall initially be Xxxxxxx Xxxxxx; provided that
the Original OMERS Holders and their Permitted Transferees (other than the JWC
Holders, the Borealis Holders and the Management Holders) shall not be entitled
to designate a director pursuant to this Section 4.1(c) from and after such time
as the Original OMERS Holders and their Permitted Transferees (other than the
JWC Holders, the Borealis Holders and the Management Holders) hold less than 5%
of the outstanding Common Stock Equivalents. The holders of a majority of the
Common Stock Equivalents at the time held by the Original OMERS Holders and
their Permitted Transferees (other than the JWC Holders, the Borealis Holders
and the Management Holders) or on their behalf by the OMERS Representative shall
also be entitled to require that any director so designated pursuant to this
Section 4.1(c) be removed or replaced by another designee of the holders of the
majority of the Common Stock Equivalents at the time held by the Original OMERS
Holders and their Permitted Transferees (other than the JWC Holders, the
Borealis Holders and the Management Holders) or
41
on their behalf by the OMERS Representative, in which event the Company and each
Stockholder shall take all action, including, but not limited to, such
Stockholder's voting, or executing proxies or written consents with respect to,
the Voting Stock at the time held by such Stockholder as may be necessary to
effect such removal or replacement. As long as the OMERS Director is a member of
the Board of Directors pursuant to this Section 4.1(c), such OMERS Director
shall be on each committee, if any, established by the Board of Directors.
(e) The Company and each of the Stockholders shall take all actions,
including, but not limited to, such Stockholder's voting, or executing and
delivering proxies or written consents in lieu of a meeting with respect to, the
Voting Stock at the time held by such Stockholder so that the Chief Executive
Officer of the MAAX Corporation will be a member of the Board of Directors.
(f) From and after such time as the Original JWC Holders and their
Permitted Transferees (other than the Borealis Holders, the OMERS Holders and
the Management Holders) no longer own at least 47% of the Common Stock
Equivalents, each Institutional Holder whose Designated Percentage is at least
5% shall be entitled to nominate for election as directors of the Company a
number of individuals (so nearly as may be possible) equal to the product of (x)
its Designated Percentage and (y) the authorized number of directors, provided
that in such case, the authorized number of directors of the Company shall be
the lowest number as accommodates the entitlement of each Institutional Holder.
If, at any time, an Institutional Holder's Designated Percentage increases or
decreases with the result that it is entitled to nominate for election as
directors of the Company more or less than the number of individuals who are
then its nominees on the Board of Directors, the composition of the Board of
Directors shall forthwith be adjusted to comply with this Section 4.1(f) and any
Institutional Holder that is then entitled to nominate for election as directors
of the Company a number of directors which is less than the number of its
nominees who are then directors, shall cause an appropriate number of its
nominees to resign.
(g) The chairman of any meeting of the Board of Directors or any
committee shall not have a second or tie-breaking vote in the event of a tie in
the votes cast at any meeting of the Board of Directors or any committee.
(h) Any director may call a meeting of the Board of Directors on not
less than 48 hours' written notice.
(i) The Board of Directors shall meet at least once in each calendar
quarter.
(j) The Company shall obtain and maintain directors' and officers'
liability insurance and shall provide contractual indemnities to its officers
and directors having such terms and in such amounts as are determined
appropriate by a majority of the JWC Holders, a majority of the Borealis
Holders, and a majority of the OMERS Holders.
(k) Each of the Institutional Holders shall have the right to appoint
to the board of directors or similar governing body of each Subsidiary of the
Company the same number of directors as such Institutional Holder has the right
to appoint to the Board of
42
Directors, and the Chief Executive Officer of the Company shall have the right
to be a member of the board of directors or similar governing body of each
Subsidiary of the Company.
(l) For so long as Xxxxx Xxxxxx is Chief Executive Officer of MAAX
Canada Inc., he shall be Chief Executive Officer of the Company. For so long as
Xxxxx Xxxxx is Chief Financial Officer of MAAX Canada Inc., he shall be Chief
Financial Officer of the Company. For so long as Xxxxxx Xxxxxx is Corporate
Controller of MAAX Canada Inc., he shall be Corporate Controller of the Company.
(m) The board of directors of MAAX Corporation shall consist of the
same members as the Board of Directors.
4.2 Observer Rights.
(a) For so long as the Borealis Holders have the right to appoint a
director to the Board of Directors pursuant to Section 4.1(c), the Borealis
Holders shall have the right to designate, by holders of a majority of the
Common Stock Equivalents held by the Original Borealis Holders and their
Permitted Transferees (other than the JWC Holders, the OMERS Holders and the
Management Holders) or on their behalf by the Borealis Representative, one
observer (the "BOREALIS OBSERVER") who will be entitled to attend all meetings
of the Board of Directors; provided that the Borealis Observer shall have no
voting rights with respect to actions taken or elected not to be taken by the
Board of Directors; provided, further, that the Borealis Observer (A) is
acceptable to the Board of Directors acting reasonably and in good faith, (B)
shall not take any action or fail to take any action which would, if the
Borealis Observer were a director of the Company, violate his or her fiduciary
duties to the Company and (C) shall recuse himself or herself from any part of
any meeting of the Board of Directors if the Borealis Director recuses himself
or herself.
(b) For so long as the OMERS Holders have the right to appoint a
director to the Board of Directors pursuant to Section 4.1(d), the OMERS Holders
shall have the right to designate, by holders of a majority of the Common Stock
Equivalents held by the Original OMERS Holders and their Permitted Transferees
(other than the JWC Holders, the Borealis Holders and the Management Holders) or
on their behalf by the OMERS Representative, one observer (the "OMERS OBSERVER")
who will be entitled to attend all meetings of the Board of Directors; provided
that the OMERS Observer shall have no voting rights with respect to actions
taken or elected not to be taken by the Board of Directors; provided, further,
that the OMERS Observer (A) is acceptable to the Board of Directors acting
reasonably and in good faith, (B) shall not take any action or fail to take any
action which would, if the OMERS Observer were a director of the Company,
violate his or her fiduciary duties to the Company and (C) shall recuse himself
or herself from any part of any meeting of the Board of Directors if the OMERS
Director recuses himself or herself.
43
4.3 Blocking Rights. Subject to Section 2.4, the Company shall not take,
and no Stockholder shall cause the Company to take, any of the following actions
if prior to the time such action is taken, Institutional Stockholders holding in
the aggregate 30% of the outstanding Common Stock Equivalents shall have voted
against such action either by written consent or at a meeting held for the
purpose of voting on such action:
(a) the redemption, purchase or other acquisition of any Common Stock
Equivalents, other than those redemptions, purchases or acquisitions made (A)
pursuant to this Agreement or any employment agreement or option agreement
entered into by the Company or any of its Subsidiaries, (B) on a pro rata basis
among the holders of a particular class or series of securities of the Company
or (C) pursuant to the terms of securities of the Company created after the date
hereof which require or permit such redemption, purchase or acquisition;
(b) the amendment of the Company's or any Subsidiary's certificate of
incorporation or bylaws;
(c) the declaration or payment of any dividend or other distribution
by the Company with respect to any Common Stock Equivalents, other than those
declarations or payments of dividends or other distributions that are made (A)
on pro rata basis among the holders of a particular class or series of
securities of the Company, (B) pursuant to the terms of securities of the
Company created after the date hereof which require or permit such declaration,
payment or other distribution or (C) to the Company or any Subsidiary;
(d) the termination or appointment of the Chief Executive Officer or
Chief Financial Officer of the Company or any Subsidiary;
(e) any issuance of Common Stock Equivalents or Subsidiary Common
Stock Equivalents (which are not subject to the Preemptive Rights set forth in
Section 5.1) in connection with a transaction or series of related transactions
involving an acquisition of the equity or assets of a Third Party which results
in an aggregate issuance of greater than 10% of the total outstanding Common
Stock Equivalents or Subsidiary Common Stock Equivalents (other than issuances
to the Company or any Subsidiary),
(f) the entering into of any transaction or agreement, directly or
indirectly, by the Company or any Subsidiary with any Institutional Holder or
any director, officer or Affiliate of any Institutional Holder, including any of
the portfolio companies held or managed by the Institutional Holders;
(g) any significant change in the nature of the Company's or any of
its Subsidiary's business as of the date hereof;
(h) until the third anniversary of the date hereof, a sale, merger,
winding up, reorganization or dissolution of the Company or its Subsidiaries
resulting in a Transfer, directly or indirectly, to a Third Party of all or
substantially all of the stock or assets of the Company and its Subsidiaries (on
a consolidated basis); or
44
(i) incurrence of indebtedness by the Company or any Subsidiary, other
than in the ordinary course of business (including, without limitation, any
extensions, renewals or replacements of existing indebtedness, indebtedness
consisting of purchase money indebtedness to finance capital expenditures,
indebtedness in respect of capital lease obligations, indebtedness in respect of
rate protection agreements and interest rate or currency protection agreements
and indebtedness of the Company to any of its Subsidiaries or of any of the
Company's Subsidiaries to the Company).
Notwithstanding the foregoing, if between the second anniversary of the date
hereof and the third anniversary of the date hereof a transaction of the type
contemplated by Section 4.3(h) cannot be consummated as a result of the exercise
by the Institutional Holders (other than the JWC Holders) of their rights under
this Section 4.3, then the JWC Holders shall have the right to require the
Company to purchase, by delivery of a written notice to the Company during the
30-day period after the date of the vote, and the Company shall be required to
purchase, the number of Common Stock Equivalents proposed to be Transferred by
the JWC Holders in such transaction, at fair market value, to be agreed in good
faith by the JWC Holders and the Company (it being agreed that any nominees of
the JWC Holders to the Board of Directors shall be excluded from all such
deliberations) in consultation with at least two, but not more than three,
nationally recognized investment banks. The closing of any purchase by the
Company from the JWC Holders pursuant to this Section 4.3 shall take place at
the principal office of the Company on such date as the Company shall specify to
the JWC Holders in writing, but not more than 60 days after delivery by the JWC
Holders to the Company of the notice to sell their Common Stock Equivalents to
the Company pursuant to this Section 4.3. At such closing, the JWC Holders shall
deliver to the Company, against payment by the Company of the purchase price for
the JWC Holders' Common Stock Equivalents in cash (by wire transfer of
immediately available funds to the JWC Holders), certificates and/or other
instruments representing, together with stock or other appropriate powers duly
endorsed with respect to the JWC Holders' Common Stock Equivalents, free and
clear of all Liens (other than pursuant to securities laws, this Agreement or a
Stock Option Agreement). All of the foregoing deliveries will be deemed to be
made simultaneously and none shall be deemed completed until all have been
completed. Notwithstanding anything set forth in this Section 4.3 to the
contrary, the OMERS Holders and/or the Borealis Holders may agree with the
Company to acquire, in lieu of the Company, some (if the Company is acquiring
the remaining Common Stock Equivalents that the JWC Holders have determined to
sell) or all (if the Company is not acquiring any of the Common Stock
Equivalents that the JWC Holders have determined to sell) of the Common Stock
Equivalents that the Company is required to purchase from the JWC Holders under
this Section 4.3 on the same terms and conditions as set forth in this Section
4.3 which apply to the repurchase of Common Stock Equivalents by the Company
from the JWC Holders.
4.4 Transferability of Rights. Notwithstanding anything to the contrary
herein, the rights of the Original JWC Holders, the Original Borealis Holders,
the Original OMERS Holders and their respective Permitted Transferees under
Sections 4.3(d), (e), (h) and (i) may only be exercised by the Original JWC
Holders, the Original Borealis Holders, the Original OMERS Holders and their
respective Permitted Transferees, as applicable, and may not be transferred or
45
assigned in connection with any other Transfer of Subject Securities or
otherwise, it being acknowledged that all other rights may be transferred and
assigned.
4.5 Sale of the Company. Upon any sale, merger, winding up, reorganization
or dissolution of the Company resulting in a Transfer, directly or indirectly,
to an unaffiliated Third Party of all or substantially all of the stock or
assets of the Company and its Subsidiaries, the Board of Directors will, prior
to consummation thereof, review and consider the tax implications to the
Stockholders of such transaction.
4.6 Reports. In addition to any information that the Company is required by
applicable law to deliver to the Institutional Holders, the Company shall
deliver to each Institutional Holder, for so long as such Institutional Holder
holds at least 5% of the outstanding Common Stock Equivalents, and to any
Management Holder, if such Management Holder's employment is terminated without
Cause by the Company or its Subsidiaries or with Good Reason by the Management
Holder for a period of one year from the date of such termination:
(a) As soon as available, and in any event within 120 days after the
end of each fiscal year of the Company, a copy of the audited consolidated
financial statements of each of the Company and its Subsidiaries for such fiscal
year, consisting of a balance sheet, statement of income, statement of cash
flow, statement of Stockholders' equity and management's discussion and analysis
(including a discussion of the Company's working capital and supporting detail),
together with the notes thereto, all prepared in accordance with GAAP,
consistently applied;
(b) As soon as available, and in any event prior to the expiry of the
earlier of the shortest period of time required by any of its lenders for the
delivery of quarterly financial statements and the 45-day period following the
end of each fiscal quarter of the Company, a copy of the unaudited financial
statements of the Company and its Subsidiaries for such fiscal quarter,
consisting of a balance sheet, statement of income, statement of cash flow and
statement of Stockholders' equity, in reasonable detail and stating in
comparative form the information for the same period in the prior fiscal year
and the budget figures for the same date and period;
(c) Within 30 days following the end of each fiscal year of the
Company, an annual business plan for the next fiscal year of the Company
including a profit forecast, a balance sheet forecast, and a detailed breakdown
of projected cash flow, capital expenditures and income;
(d) At least 45 days after the end of each fiscal quarter of the
Company, a report setting out whether the Company and each of its Subsidiaries
(and all of the foregoing on a consolidated basis) are then, and have been
during such completed fiscal quarter, in compliance with all material covenants
and financial capability test to which any of them is subject (with particulars
of any non-compliance). Such report shall include a copy of each covenant and
financial capability test and detailed calculations supporting the Company's
determinations (including on a consolidated basis) in respect of each such
covenant and test;
46
(e) Simultaneously with furnishing such information to any Person as
required under any of its debt facilities, copies of all other financial
statements, reports or projections with respect to the Company and/or any of its
Subsidiaries (including, in each case, on a combined basis) which are broader in
scope or on a more frequent basis than the Company is otherwise required to
provide under this Agreement and as well as any other information or documents
provided from time to time to any Person under any debt facilities; and
(f) With reasonable promptness, such other data and information
relating to the business, operations, affairs, financial condition, assets,
liabilities or properties of the Company and/or any of its Subsidiaries or
relating to the ability of the Company to perform its obligations hereunder and
under any other agreement as from time to time as may be reasonably requested by
any of such Institutional Holder.
4.7 Access. The Company shall, and the Company shall cause each of its
Subsidiaries to, at any and all reasonable times on reasonable notice and during
business hours on any Business Day and in such manner as is not reasonably
likely to adversely affect the operation of the business, permit the
Institutional Holders and their authorized representatives to examine all of the
books of account, records, reports, documents, papers and data of the Company
and any Subsidiary, whether in ordinary or machine language, and to make copies
and take extracts, and to discuss its business, affairs, finances and accounts
with its executive officers, senior financial officers, accountants and other
advisors. The Company authorizes its accountants and other financial advisors to
so discuss its and the Company's Subsidiaries' finances and affairs, and agrees
to furnish each Institutional Holder and its authorized representatives with any
information reasonably requested regarding its business, affairs, finances and
accounts or those Subsidiaries at the Company or the relevant Subsidiary, as
applicable (provided such costs are reasonable in the circumstances).
Notwithstanding the foregoing, an Institutional Holder shall have the rights
provided by this Section 4.7 only for so long as such Institutional Holder holds
at least 5% of the outstanding Common Stock Equivalents.
ARTICLE V
Preemptive Rights/Redemptions by the Company
5.1 Rights to Subscribe for Securities.
(a) Preemptive Offer. Except in the case of Excluded Securities (as
defined in Section 5.1(e)), the Company shall not issue or sell any Common Stock
Equivalents, and shall cause its Subsidiaries not to issue or sell any
Subsidiary Common Stock Equivalents, unless the Company shall have first offered
or caused such Subsidiary to offer (the "PREEMPTIVE OFFER") to sell such Common
Stock Equivalents or Subsidiary Common Stock Equivalents (the "OFFERED
SECURITIES") to the Institutional Holders and the Chief Executive Officer of the
MAAX Corporation (collectively, the "PREEMPTIVE RIGHTS HOLDERS") by delivery to
such Preemptive Rights Holders of written notice of such offer stating that the
Company or such Subsidiary proposes to sell such Offered Securities, the number
or amount of the Offered Securities
47
proposed to be issued or sold, the proposed purchase price therefor (or, in the
case of an offering in which the price is not known at the time notice is given,
the method of determining such price and a good faith estimate thereof) and any
other terms and conditions of such offer. The Preemptive Offer shall by its
terms remain open and irrevocable for a period of ten Business Days from the
date it is received from the Company (the "PREEMPTIVE OFFER PERIOD").
(b) Preemptive Offer Acceptance. Each Preemptive Rights Holder shall
have the option, exercisable at any time during the Preemptive Offer Period by
delivering written notice to the Company or such Subsidiary (a "PREEMPTIVE OFFER
ACCEPTANCE NOTICE"), to subscribe for the number or amount of such Offered
Securities that would permit such Preemptive Rights Holder to maintain its
Offeree Percentage as it existed immediately prior to such issuance, sale or
exchange. The Company or such Subsidiary shall notify each Preemptive Rights
Holder within five days following the expiration of the Preemptive Offer Period
of the number or amount of Offered Securities which such Preemptive Rights
Holder has subscribed to purchase and of the number, if any, of Offered
Securities for which Preemptive Offer Acceptance Notices have not been received
(the "SUBSCRIPTION NOTICE").
(c) Offer of Refused Securities. If Preemptive Offer Acceptance
Notices are not given by the Preemptive Rights Holders for all of the Offered
Securities, then the Preemptive Rights Holders that have given Preemptive Offer
Acceptance Notices to the Company or such Subsidiary shall be entitled to
subscribe for such Offered Securities by delivering to the Company, within five
Business Days of receipt of the Subscription Notice, a Preemptive Offer
Acceptance Notice for the Offered Securities for which Preemptive Offer
Acceptance Notices have not been given (pro rata based upon their respective
Offeree Percentages at the time held, or as otherwise agreed, by such Preemptive
Rights Holders). Thereafter, the Company or the Subsidiary making such
Preemptive Offer shall have 60 days from the expiration of the Preemptive Offer
Period to sell all or any part of such Offered Securities as to which Preemptive
Offer Acceptances Notices have not been given by the Preemptive Rights Holders
(the "REFUSED SECURITIES") to any other Persons upon the terms and conditions
including price, which are no more favorable, in the aggregate, to such other
Persons or less favorable to the Company or such Subsidiary than those set forth
in the Preemptive Offer.
(d) Closing. Upon the closing, which shall include full payment to the
Company or such Subsidiary, of the sale to such other Persons of all of the
Refused Securities, such Preemptive Rights Holders shall purchase from the
Company or such Subsidiary, and the Company or such Subsidiary shall sell to
such Preemptive Rights Holders, the Offered Securities with respect to which
Preemptive Offer Acceptance Notices were delivered by such Preemptive Rights
Holders, at the same terms specified in the Preemptive Offer.
(e) Excluded Securities. The rights of the Preemptive Rights Holders
under this Section 5.1 shall not apply to the following securities (the
"EXCLUDED SECURITIES"):
(i) any Common Stock Equivalents or Subsidiary Common Stock
Equivalents issued or granted pursuant to a stock option or other similar equity
incentive plan providing for issuance to employees or consultants of the Company
or its Subsidiaries or upon
48
the exercise or conversion of options or other Common Stock Equivalents or
Subsidiary Common Stock Equivalents issued to employees and consultants of the
Company or its Subsidiaries;
(ii) any Common Stock Equivalents, Subsidiary Common Stock
Equivalents and other derivative securities issued upon the exercise or
conversion of outstanding Common Stock Equivalents or Subsidiary Common Stock
Equivalents;
(iii) any Common Stock Equivalents or Subsidiary Common Stock
Equivalents issued to any individual or entity which, in connection with the
issuance of Common Stock Equivalents or Subsidiary Common Stock Equivalents to
such entity, simultaneously enters into a significant business transaction
(including, but not limited to, debt financings and acquisitions of businesses
or assets) with the Company which is directly related to the Company's business;
(iv) any Common Stock Equivalents or Subsidiary Common Stock
Equivalents issued as part of a Public Offering or any effective registration
statement under the Securities Act;
(v) any Common Stock Equivalents or Subsidiary Common Stock
Equivalents issued to the Company or a Subsidiary;
(vi) any Common Stock Equivalents or Subsidiary Common Stock
Equivalents issued in connection with the exercise of the "dragalong" pursuant
to Section 2.4;
(vii) any Common Stock Equivalents or Subsidiary Common Stock
Equivalents issued in connection with a Pre-Public Offering Transaction; and
(viii) any Common Stock Equivalents or Subsidiary Common Stock
Equivalents issued in connection with the promissory note between MAAX Canada
Inc. and MAAX Corporation dated as of the date hereof and the Forward Purchase
Agreement between Beauceland Corporation and MAAX Canada Inc. dated as of the
date hereof.
5.2 Rights of JWC Holders to Subscribe for Securities. Subject to the last
sentence of this Section 5.2, if, at any time, as a result of issuances or sales
of Common Stock Equivalents by the Company (other than pursuant to Sections
5.1(e) (iii), (iv), (v), (vi), (vii) and (viii)) (a "STOCK ISSUANCE"), the JWC
Holders will no longer own at least 47% of the outstanding Common Stock or
Common Stock Equivalents of the Company, then the JWC Holders shall have the
option, at any time within 30 days prior to the issuance or sale of such Common
Stock Equivalents, by delivering written notice to the Company, to subscribe at
fair market value (determined in the same manner as provided in Section 4.3) for
the number or amount of shares of Common Stock or Common Stock Equivalents that
would result in the JWC Holders maintaining at least 47% of the outstanding
Common Stock and Common Stock Equivalents of the Company; provided, however,
that in the event that the JWC Holders' rights under this Section 5.2 are with
respect to a Stock Issuance which is in the form of stock options, warrants or
similar securities, the JWC
49
Holders in exercising their rights hereunder shall, in lieu of purchasing such
stock options, warrants or similar securities, purchase shares of Common Stock.
The Company shall notify the JWC Holders within five days following exercise of
such option of the number or amount of shares of Common Stock or Common Stock
Equivalents which the JWC Holders have subscribed to purchase. Simultaneously
with the closing of the Stock Issuance, which shall include full payment to the
Company by the purchaser or recipient of such Stock Issuance, the JWC Holders
shall purchase from the Company, and the Company shall sell to the JWC Holders,
the shares of Common Stock or Common Stock Equivalents for which the JWC Holders
subscribed pursuant to this Section 5.2. Notwithstanding the foregoing, if at
any time the JWC Holders are entitled to exercise their rights under Section 5.1
or this Section 5.2 and do not exercise their rights hereunder or thereunder to
the full extent permitted hereunder or thereunder, then their rights under this
Section 5.2 shall terminate thereafter with respect to such Stock Issuance and
any future Stock Issuance.
5.3 Redemptions and Purchases by the Company. In the event of any
redemption, purchase or other acquisition of Common Stock Equivalents by the
Company pro rata among the Institutional Holders, the Management Holders and the
Additional Holders will have the right to participate in such redemption,
purchase or other acquisition pro rata in accordance with their Redemption
Percentage, provided, however, that the provisions of this Section 5.3 shall not
apply to redemptions, purchases or other acquisitions of Common Stock
Equivalents (a) specifically provided in this Agreement, (b) on a pro rata basis
among the holders of a particular class or series of securities of the Company
or (c) pursuant to the terms of securities of the Company created after the date
hereof which require or permit such redemption, purchase or acquisition.
ARTICLE VI
Certain Miscellaneous Other Provisions
6.1 Remedies. Each of the parties hereto acknowledges and agrees that no
remedy at law would be adequate in the event of any breach of this Agreement.
Accordingly, if any dispute arises concerning the sale or other disposition of
any of the securities of the Company subject to this Agreement or concerning any
other provisions hereof or the obligations of the parties hereunder, each party
hereto agrees that, in addition to any other remedy to which they may be
entitled at law or in equity, the other parties hereto shall be entitled to a
decree of specific performance to enforce this Agreement (without bond or other
security being required unless the party seeking such remedy fails to
demonstrate to an appropriate court having jurisdiction that such party has a
likelihood of success on the merits), and each party hereto waives the defense
in any action or proceeding brought to enforce this Agreement that there exists
an adequate remedy at law. Such remedies shall be cumulative and non-exclusive
and shall be in addition to any other rights and remedies the parties may have
under this Agreement or otherwise.
50
6.2 Entire Agreement; Amendment; Termination.
(a) This Agreement sets forth the entire understanding of the parties,
and supersedes all prior agreements (including, without limitation, the Original
Agreement and that certain letter agreement among X.X. Childs Equity Funding
III, Inc., Borealis and OMERS dated as of March 10, 2004) and all other
arrangements and communications, whether oral or written, with respect to the
subject matter hereof.
(b) The Schedule of Stockholders may be amended in writing by the
Company to reflect changes in the composition of the Stockholders and changes in
their addresses or telecopy numbers that may occur from time to time as a result
of Permitted Transfers, Transfers permitted under Article II hereof or any new
issuance by the Company of Stock or Stock Equivalents; provided, however, that
no new issuance of Stock or Stock Equivalents shall be effective unless and
until the Person receiving such securities (if not already a party hereto in
such capacity) executes and delivers to the Company an executed Joinder
Agreement in accordance with Section 2.16 hereof. Amendments to the Schedule of
Stockholders reflecting Permitted Transfers or Transfers permitted under Article
II hereof shall become effective when the amended Schedule of Stockholders, and
a copy of a Joinder Agreement as executed by any new transferee in accordance
with Section 2.16, are filed with the Company.
(c) Any other amendment to this Agreement shall be in writing and
shall require the written consent of (i) the Company and (ii) either the JWC
Representative or the holders of a majority of Common Stock Equivalents at the
time held by the JWC Holders and (iii) either the Borealis Representative or the
holders of a majority of Common Stock Equivalents at the time held by the
Borealis Holders and (iv) either the OMERS Representative or the holders of a
majority of Common Stock Equivalents at the time held by the OMERS Holders and
(v) the Chief Executive Officer of MAAX Corporation and (vi) if adverse to the
interests of a particular Stockholder or Stockholder Group, then the consent of
each particular Stockholder or the holders of a majority of the Common Stock
Equivalents at the time held by such particular Stockholder Group, as the case
may be, to whose interest such amendment is adverse.
(d) Notwithstanding the foregoing provisions of this Section 6.2, this
Agreement may be terminated at any time upon the written consent of (i) the
Company and (ii) the holders of a majority of the Common Stock Equivalents at
the time held by the Management Holders and (iii) the holders of a majority of
the Common Stock Equivalents at the time held by the JWC Holders (or the JWC
Representative) and (iv) the holders of a majority of the Common Stock
Equivalents at the time held by the Borealis Holders (or the Borealis
Representative) and (v) the holders of a majority of the Common Stock
Equivalents at the time held by the OMERS Holders (or the OMERS Representative),
each voting separately as a group. Upon consummation of an initial Public
Offering, the provisions of this Agreement, other than Article III, shall
terminate.
51
6.3 Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties agree that the body making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
6.4 Notices. All notices, consents and other communications required, or
contemplated under this Agreement shall be in writing and shall be delivered in
the manner specified herein or, in the absence of such specification, shall be
deemed to have been duly given (i) 3 Business Days after mailing by first class
certified mail, postage prepaid, (ii) when delivered by hand, (iii) upon
confirmation of receipt by telecopy, or (iv) 1 day after sending by overnight
delivery service, to the respective addresses or telecopy numbers of the parties
set forth below:
(a) For notices and communications to the Company:
c/o X.X. Childs Associates, L.P.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telecopy: 617-753-1101
and
MAAX Holdings, Inc.
c/o X.X. Childs Associates, L.P.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telecopy: 617-753-1101
(b) For notices and communications to the Stockholders, to the
respective addresses or telecopy numbers set forth in the
Schedule of Stockholders.
52
(c) With a copy in the case of the JWC Holders and the Company to:
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Fax: 000-000-0000
and
Fasken Xxxxxxxxx DuMoulin LLP
Stock Exchange Tower
800, Place Victoria, Suite 3400
X.X. Xxx 000
Xxxxxxxx, Xxxxxx X0X 0X0
Attention.: Xxxxxx Xxxx, Esq.
Fax: (000) 000-0000
(d) With a copy in the case of the Borealis Holders to:
Borealis Capital Corporation
One Financial Place
0 Xxxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx, X0X 0X0
Attention: Andre La Forge
Fax: (000) 000-0000
and
Xxxxxxx and Xxxx LLP
000 Xxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
(e) With a copy in the case of the OMERS Holders to:
Ontario Municipal Employees Retirement Board
Xxx Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxx Xxxxxx
Fax: (000) 000-0000
53
and
Goodmans LLP
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
(f) With a copy in the case of the Management Holders to:
0000 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxx Xxxxx
Fax: (000) 000-0000
By notice complying with the foregoing provisions of this Section 6.4, each
party shall have the right to change the mailing address or telecopy numbers for
future notices and communications to such Party.
6.5 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and to their respective transferees,
successors, assigns, heirs and administrators, provided that the rights under
this Agreement may not be assigned except as expressly provided herein. No such
assignment shall relieve an assignor of its obligations hereunder.
6.6 Termination. Without affecting any other provision of this Agreement
requiring termination of any rights in favor of any Stockholder, Permitted
Transferee or any other transferee of Stock Equivalents, the provisions of
Articles II and III (other than the indemnity and contribution provisions set
forth therein) of this Agreement shall terminate as to such Stockholder,
Permitted Transferee or other transferee, when, pursuant to and in accordance
with this Agreement, such Stockholder, Permitted Transferee or other transferee,
as the case may be, no longer owns any Stock Equivalents.
6.7 Recapitalizations, Exchanges, etc. The provisions of this Agreement
shall apply, to the full extent set forth herein with respect to Stock
Equivalents, to any and all shares of capital stock of the Company or any
successor or assign of the Company (whether by merger, consolidation, sale of
assets or otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Stock Equivalents, by reason of a stock dividend, stock
split, stock issuance, reverse stock split, combination, recapitalization,
reclassification, merger, consolidation or otherwise. Upon the occurrence of any
such events, amounts (including the Cost Price) hereunder shall be appropriately
adjusted. For the avoidance of doubt, the Equity Xxxxxxxxxx
00
shall be deemed not to be such an event, and no adjustment shall be made as a
result of the Equity Repurchase except as expressly set forth herein.
6.8 JWC Representative. Each JWC Holder hereby designates and appoints (and
each Permitted Transferee of each such JWC Holder shall be deemed to have so
designated and appointed) Xxxxxx Xxxxx and Xxxxx Xxxx (so long as they are
employees of X.X. Childs Associates, Inc. or its Affiliates or successor
entities), or either of them, with full power of substitution (the "JWC
REPRESENTATIVE") the representative of each such Person to perform all such acts
as are required, authorized or contemplated by this Agreement to be performed by
any such Person and hereby acknowledges that the JWC Representative shall be the
only Person authorized to take any action so required, authorized or
contemplated by this Agreement by each such Person. Each such Person further
acknowledges that the foregoing appointment and designation shall be deemed to
be coupled with an interest and shall survive the death or incapacity of such
Person. Each such Person hereby authorizes (and each Permitted Transferee shall
be deemed to have authorized) the other parties hereto to disregard any notice
or other action taken by such Person pursuant to this Agreement except for the
JWC Representative. The other parties hereto are and will be entitled to rely on
any action so taken or any notice given by the JWC Representative and are and
will be entitled and authorized to give notices only to the JWC Representative
for any notice contemplated by this Agreement to be given to any such Person. A
successor to the JWC Representative may be chosen by the holders of a majority
of the Common Stock Equivalents at the time held by the JWC Holders, provided
that written notice thereof is given by the successor JWC Representative to the
Company, the Borealis Holders, the OMERS Holders the Management Holders, the
Additional Holders and the other JWC Holders.
6.9 Borealis Representative. Each Borealis Holder hereby designates and
appoints (and each Permitted Transferee of each such Borealis Holder shall be
deemed to have so designated and appointed) Andre La Forge and Xxxxxx XxXxxxx
(so long as they are employees of Borealis Capital Corporation or its Affiliates
or successor entities), or either of them, with full power of substitution (the
"BOREALIS REPRESENTATIVE") the representative of each such Person to perform all
such acts as are required, authorized or contemplated by this Agreement to be
performed by any such Person and hereby acknowledges that the Borealis
Representative shall be the only Person authorized to take any action so
required, authorized or contemplated by this Agreement by each such Person. Each
such Person further acknowledges that the foregoing appointment and designation
shall be deemed to be coupled with an interest and shall survive the death or
incapacity of such Person. Each such Person hereby authorizes (and each
Permitted Transferee shall be deemed to have authorized) the other parties
hereto to disregard any notice or other action taken by such Person pursuant to
this Agreement except for the Borealis Representative. The other parties hereto
are and will be entitled to rely on any action so taken or any notice given by
the Borealis Representative and are and will be entitled and authorized to give
notices only to the Borealis Representative for any notice contemplated by this
Agreement to be given to any such Person. A successor to the Borealis
Representative may be chosen by the holders of a majority of the Common Stock
Equivalents at the time held by the Borealis Holders, provided that written
notice thereof is given by the successor Borealis Representative to the
55
Company, the JWC Holders, the OMERS Holders, the Management Holders, the
Additional Holders and the other Borealis Holders.
6.10 OMERS Representative. Each OMERS Holder hereby designates and appoints
(and each Permitted Transferee of each such OMERS Holder shall be deemed to have
so designated and appointed) Xxxxxxx Xxxxxx and Xxxxx Xxxxxx (so long as they
are employees of OMERS or its Affiliates or successor entities), or either of
them, with full power of substitution (the "OMERS REPRESENTATIVE") the
representative of each such Person to perform all such acts as are required,
authorized or contemplated by this Agreement to be performed by any such Person
and hereby acknowledges that the OMERS Representative shall be the only Person
authorized to take any action so required, authorized or contemplated by this
Agreement by each such Person. Each such Person further acknowledges that the
foregoing appointment and designation shall be deemed to be coupled with an
interest and shall survive the death or incapacity of such Person. Each such
Person hereby authorizes (and each Permitted Transferee shall be deemed to have
authorized) the other parties hereto to disregard any notice or other action
taken by such Person pursuant to this Agreement except for the OMERS
Representative. The other parties hereto are and will be entitled to rely on any
action so taken or any notice given by the OMERS Representative and are and will
be entitled and authorized to give notices only to the OMERS Representative for
any notice contemplated by this Agreement to be given to any such Person. A
successor to the OMERS Representative may be chosen by the holders of a majority
of the Common Stock Equivalents at the time held by the OMERS Holders, provided
that written notice thereof is given by the successor OMERS Representative to
the Company, the JWC Holders, the Borealis Holders, the Management Holders, the
Additional Holders and the other OMERS Holders.
6.11 Action Necessary to Effectuate the Agreement. The parties hereto agree
to take or cause to be taken all such corporate and other action as may be
necessary to effect the intent and purposes of this Agreement.
6.12 No Waiver. No course of dealing and no delay on the part of any party
hereto in exercising any right, power or remedy conferred by this Agreement
shall operate as waiver thereof or otherwise prejudice such party's rights,
powers and remedies. No single or partial exercise of any rights, powers or
remedies conferred by this Agreement shall preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.
6.13 Counterparts. This Agreement may be executed in two or more
counterparts (including Joinder Agreements as counterparts), each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument, and all signatures need not appear on any one counterpart. Any
counterpart or other signature hereupon delivered by facsimile shall be deemed
for all purposes as constituting good and valid execution and delivery of this
Agreement by such party. The failure of any Stockholder to execute this
Agreement does not make it invalid as against any other Stockholder.
56
6.14 Headings, etc. All headings and captions in this Agreement are for
purposes of references only and shall not be construed to limit or affect the
substance of this Agreement. Words used in this Agreement, regardless of the
gender and number used, will be deemed and construed to include any other
gender, masculine, feminine, or neuter, and any other number, singular or
plural, as the context requires. As used in this Agreement, the word "INCLUDING"
is not limiting, and the word "OR" is not exclusive. The words "THIS AGREEMENT,"
"HERETO," "HEREIN," "HEREUNDER," "HEREOF," and words or phrases of similar
import refer to this Agreement as a whole, together with any and all Schedules
and Exhibits hereto, and not to any particular article, section, subsection,
paragraph, clause or other portion of this Agreement.
6.15 Governing Law; Jurisdiction; Service of Process. This Agreement shall,
in accordance with section 5-1401 of the General Obligations Law of the State of
New York, be governed by the laws of the State of New York, without regard to
any conflicts of laws principles thereof that would call for the application of
the laws of any other jurisdiction. Any action or proceeding seeking to enforce
any provision of, or based on any right arising out of, this Agreement may be
brought against either of the parties in the courts of the State of New York, or
if it has or can acquire jurisdiction, in the United States District Court for
the Southern District of New York, and each of the parties hereby consents to
the jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world, whether within or without the State
of New York.
6.16 Reproduction of Documents. This Agreement and all documents relating
thereto, including, without limitation, (i) consents, waivers and modifications
which may hereafter be executed and (ii) documents received by each Stockholder
or the Company pursuant hereto, may be reproduced by each party hereto by a
photographic, photostatic, microfilm, microcard, microfiche, miniature
photographic or other similar process and each party may destroy any original
document so reproduced. All parties hereto agree and stipulate that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by each party in the
regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
6.17 Conflicts, etc. To the extent that any conflict exists between the
provisions of this Agreement and the certificate of incorporation of the Company
and any amendments thereto or the by-laws of the Company, the provisions of this
Agreement shall prevail and the parties hereto shall take such steps as may be
required or desirable to conform the conflicting provisions of such certificate
of incorporation and any amendments thereto or by-laws to this Agreement.
6.18 Certain Provisions relating to the Class A Common Stock.
(a) Each Stockholder other than OMERS Holders and Borealis Holders
agrees that it shall not exercise its right to convert Common Stock into Class A
Common Stock without the prior written consent of the OMERS Holders and the
Borealis Holders.
57
(b) If any of the OMERS Holders or Borealis Holders buy any Common
Stock from any other Stockholder, the transferor thereof shall, prior to the
transfer thereof to the OMERS Holders or Borealis Holders, as the case may be,
convert into Class A Common Stock such number of the Common Stock to be
transferred as is requested in writing by the OMERS Holders or Borealis Holders,
as the case may be.
(c) Notwithstanding anything to the contrary contained in Article V
hereof, in the event that the Company issues any Common Stock Equivalents and
any of the OMERS Holders or Borealis Holders desire to participate in such
offering as provided in Article V, then the Common Stock Equivalents issued to
them shall be apportioned as between Common Stock and Class A Common Stock as
the OMERS Holders or the Borealis Holders, as the case may be, shall direct.
(d) The parties hereto acknowledge and agree that other than with
respect to certain voting rights relating to the election of directors, the
Common Stock and the Class A Common Stock are to be treated identically.
Accordingly, it is acknowledged and agreed that other than with respect to such
voting rights, any change made with respect to the Common Stock including,
without limitation, any classification, subdivision or consolidation shall be
effected with respect to the Class A Common Stock and vice versa. Further, any
dividend, rights offering or any other form of distribution shall be effected on
a pro rata basis as between the Common Stock and the Class A Common Stock.
6.19 Confidentiality; Public Announcements. No Institutional Holders,
Management Holder or Additional Holder shall disclose or use in any manner
whatsoever, in whole or in part, any information concerning the Company or any
of its direct or indirect shareholders, or any of their respective employees,
directors or Subsidiaries or Affiliates (including, without limitation, the JWC
Holders) received on a confidential basis from the Company or any other Person
under or pursuant to this Agreement or any other agreement with the Company
including without limitation financial terms and financial and organizational
information contained in any documents, statements, certificates, materials or
information furnished, or to be furnished, by or on behalf of the Company or any
other Person in connection with the purchase or ownership of any Stock
Equivalent; provided, however, that the foregoing shall not be construed, now or
in the future, to apply to any information reflected in any recorded document,
information which is independently developed by such Stockholder, information
obtained from sources other than the Company or any of its direct or indirect
shareholders, or any of their respective employees, directors, Subsidiaries or
Affiliates (including without limitation the JWC Holders) or any of their
respective agents or representatives (including without limitation attorneys,
accountants, financial advisors, engineers and insurance brokers) or information
that is or becomes in the public domain, nor shall it be construed to prevent
such Stockholder from (i) making any disclosure of any information (A) if
required to do so by any statute, law, treaty, rule, regulation, order, decree,
writ, injunction or determination of any court or other governmental authority,
in each case applicable to or binding upon such Stockholder, (B) to any
governmental authority having or claiming authority to regulate or oversee any
aspect of such Stockholder business or that of the corporate parent or
affiliates of such Stockholder in connection with the exercise of such authority
or claimed authority, or (C) pursuant to subpoena; or (ii) making, on a
confidential
58
basis, such disclosures as such Stockholder deem necessary or appropriate to
such Stockholder's legal counsel, accountants (including outside auditors),
investors or general or managing partner; (iii) making such disclosures as such
Stockholder reasonably deem necessary or appropriate to any Transferee and/or
counsel to or other representatives of such bank or financial institution or
other entity, to which such Stockholder in good faith desires to Transfer all or
a portion of its interest in any Stock Equivalents; provided, however, that such
Transferee or counsel to or representative thereof, agree to maintain the
confidentiality of such disclosures pursuant to a confidentiality agreement
approved by the Board of Directors; or (iv) making, on a confidential basis,
disclosures of such information to current Stockholders.
[Signatures on Following Pages]
59
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first set forth above.
THE COMPANY:
MAAX HOLDINGS, INC.
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title: Vice-President Executif
et Chef des Services Financiers
Executive Vice President & CFO
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
CONTINUATION OF COUNTERPART SIGNATURE PAGES
THE JWC HOLDERS:
JWC EQUITY FUNDING III, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
By executing above, each of the foregoing JWC Holders acknowledges that,
pursuant to Section 6.8 of this Amended and Restated Stockholders Agreement,
each of the foregoing JWC Holders has designated and appointed Xxxxxx Xxxxx and
Xxxxx Xxxx or either of them, as its representative to perform all acts as are
required, authorized or contemplated by this Amended and Restated Stockholders
Agreement.
THE BOREALIS HOLDERS:
BOREALIS PRIVATE EQUITY LIMITED
PARTNERSHIP
AND
BOREALIS (QLP) PRIVATE EQUITY LIMITED
PARTNERSHIP
By: their sole general partner Borealis
Private Equity General Partner Inc.
By: /s/ Andre La Forge
--------------------------------------
Name: Andre La Forge
Title: Senior Vice President
By: /s/ Xxxxxx X. XxXxxxx
--------------------------------------
Name: Xxxxxx X. XxXxxxx
Title: Executive Vice-President
By executing above, each of the foregoing Borealis Holders acknowledges that,
pursuant to Section 6.9 of this Amended and Restated Stockholders Agreement,
each of the foregoing Borealis Holders has designated and appointed Andre La
Forge and Xxxxxx X. XxXxxxx or either of them, as its representative to perform
all acts as are required, authorized or contemplated by this Amended and
Restated Stockholders Agreement.
THE OMERS HOLDERS:
ONTARIO MUNICIPAL EMPLOYEES RETIREMENT
BOARD
By: /s/ Xxxx X. Xxxx
--------------------------------------
Name: Xxxx X. Xxxx
Title: Sr. Vice President, Public
Investments
By: /s/ Xxxxxx X. Xxxxxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxxx
Title: Vice-President
Derivative and Quantitative
Investments
By executing above, the OMERS Holders acknowledge that, pursuant to Section 6.10
of this Amended and Restated Stockholders Agreement, the OMERS Holders have
designated and appointed Xxxxxxx Xxxxxx and Xxxxx Xxxxxx or either of them, as
its representative to perform all acts as are required, authorized or
contemplated by this Amended and Restated Stockholders Agreement.
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
CONTINUATION OF COUNTERPART SIGNATURE PAGES
MANAGEMENT HOLDERS:
/s/ Xxxxx Xxxxx
------------------------------------------
Xxxxx Xxxxx
/s/ Xxx Xxxxxx
------------------------------------------
Xxx Xxxxxx
/s/ Xxxxxx Xxxxxx
------------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxxx
------------------------------------------
Xxxxxxx Xxxxxxx
/s/ Xxxxx Xxxxxx
------------------------------------------
Xxxxx Xxxxxx
/s/ Xxxxx Xxxx
------------------------------------------
Xxxxx Xxxx
/s/ Xxxx Xxxxxxxx
------------------------------------------
Xxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxx
------------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxxx
------------------------------------------
Xxxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxx
------------------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxxxxx
------------------------------------------
Xxxxxxx Xxxxxxxxx
/s/ Xxx XxXxxx
------------------------------------------
Xxx XxXxxx
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
CONTINUATION OF COUNTERPART SIGNATURE PAGES
ADDITIONAL HOLDERS:
/s/ Xxxxxx X. Xxxxx
------------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxx
------------------------------------------
Xxxxx X. Xxxxxx
EXHIBIT A
SCHEDULE OF STOCKHOLDERS
JWC Equity Funding III, Inc.
Borealis Private Equity Limited Partnership
Borealis (QLP) Private Equity Limited Partnership
Ontario Municipal Employees Retirement Board
Xxxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxxxx
Xxxxxx Xxxxxx
Xxxxxxx Xxxxxxx
Xxxx Xxxxxxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxx
Xxxxxx Xxxxxxxx
Xxxxxx X. Xxxxx
Xxxxx X. Xxxxxx
Xxxxx Xxxxxx
Xxxxxxx Xxxxxxxxx
Xxx XxXxxx
EXHIBIT B
JOINDER AGREEMENT
The undersigned is executing and delivering this Joinder Agreement pursuant
to the Amended and Restated Stockholders Agreement, dated as of ____________,
2004 (the "STOCKHOLDERS AGREEMENT"), among MAAX Holdings, Inc., a Delaware
corporation (the "COMPANY"), the JWC Holders, the Borealis Holders, the OMERS
Holders, Management Holders and Additional Holders named therein.
By executing and delivering this Joinder Agreement to the Company, the
undersigned hereby agrees to become a party to, to be bound by, and to comply
with the provisions of the Stockholders Agreement in the same manner as if the
undersigned were an original signatory to such agreement as a
[JWC/Borealis/OMERS/Additional/Management] Holder. In connection therewith,
effective as of the date hereof the undersigned hereby makes the representations
and warranties contained in the Stockholders Agreement.
Accordingly, the undersigned has executed and delivered this Joinder
Agreement as of the __ day of ____________, _____.
------------------------------------------
Signature of Stockholder
------------------------------------------
Printed Name of Stockholder
