EXHIBIT 7(H)
EXECUTION COPY
TRANSFER AGREEMENT
TRANSFER AGREEMENT (the "AGREEMENT") dated as of December 28, 2001
among XXXXX CORPORATION LIMITED, a corporation incorporated under the laws of
the Province of Ontario (the "CORPORATION"), Greenwich Street Capital Partners
II, L.P., a Delaware limited partnership ("GREENWICH FUND II"), and the other
Persons listed in the Schedule of Investors attached hereto as SCHEDULE A
(together with Greenwich Fund II, the "INVESTORS" and individually, an
"INVESTOR"). Capitalized terms used herein but not defined when used shall have
the meanings ascribed to such terms in Section 1.1.
WITNESSETH:
WHEREAS, the Corporation and the Partnership entered into that
certain Debenture Purchase Agreement dated as of December 12, 2000 (the
"DEBENTURE PURCHASE AGREEMENT");
WHEREAS, as contemplated under the Debenture Purchase Agreement,
on December 21, 2000, the Partnership purchased, and the Corporation sold and
issued to the Partnership, 8.70% Subordinated Convertible Debentures due 2009 in
the original aggregate principal amount of $70,500,000 (the "DEBENTURES");
WHEREAS, the Corporation and the Partnership entered into that
certain Conversion Inducement Agreement dated as of the date hereof (the
"CONVERSION INDUCEMENT AGREEMENT") pursuant to which, among other things, (i)
the Corporation agreed to cause Xxxxx Holdings U.S.A. Inc., a corporation
incorporated under the laws of the State of Delaware and a wholly-owned
subsidiary of the Corporation ("SUBCO"), to issue to the Partnership an
aggregate amount of 1,650,000 Preferred Shares (the "SUBCO PREFERRED SHARES")
and covenanted to deliver the Contingent Consideration and (ii) the Partnership
agreed to cause the Subco Preferred Shares to be transferred to the Corporation
in exchange for 1,650,000 Common Shares (the "INITIAL SHARES") upon the terms
and conditions therein;
WHEREAS, pursuant to that certain Second Amendment to Partnership
Agreement and Conversion Agreement dated as of the date hereof, the Partnership
distributed the Subco Preferred Shares to the Investors and assigned its rights
and obligations with respect to the Initial Shares and the Contingent
Consideration to the Investors in accordance with the terms thereof and as
permitted under the terms of the Conversion Inducement Agreement;
WHEREAS, the parties hereto have agreed to enter into this
Agreement to effectuate the exchange of the Subco Preferred Shares upon the
terms and conditions herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged by each party), the
parties hereto agree as follows:
1. INTERPRETATION
1.1 DEFINITIONS. Capitalized used and not otherwise defined herein shall have
the meanings ascribed to them in the Conversion Inducement Agreement. Where used
in this Agreement and
any Schedule annexed hereto or in any amendments hereto, the following terms
shall have the following meanings, respectively:
"2002 ADDITIONAL SHARES" has the meaning set out in Section 2.2(b);
"2003 ADDITIONAL SHARES" has the meaning set out in Section 2.2(c);
"2002 BLACKOUT PERIOD" means the 30-day period immediately prior to December 31,
2002;
"2003 BLACKOUT PERIOD" means the 30-day period immediately prior to December 31,
2003;
"2002 CONTINGENT CASH PAYMENT" has the meaning set out in Section 2.2(b);
"2003 CONTINGENT CASH PAYMENT" has the meaning set out in Section 2.2(c);
"2002 PRICE" has the meaning set out in Section 2.2(b);
"2003 PRICE" has the meaning set out in Section 2.2(c);
"2002 RESTRICTED PERIOD" means the 60-day period immediately prior to the 2002
Blackout Period;
"2003 RESTRICTED PERIOD" means the 60-day period immediately prior to the 2003
Blackout Period;
"ADDITIONAL SHARES" means the 2002 Additional Shares, if any, and the 2003
Additional Shares, if any;
"AFFILIATE" means, at any time, and with respect to any Person, any other Person
that at such time directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control with, such first
Person. As used in this definition, "CONTROL" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Corporation;
"ANCILLARY AGREEMENTS" means, collectively, the Registration Rights Agreement
and any agreements or other documents delivered pursuant to this Agreement or
thereto;
"BOARD" means the Board of Directors of the Corporation;
"BUSINESS DAY" means a day which is not a Saturday, a Sunday or a day observed
as a bank holiday in Toronto, Ontario or New York, New York;
"CAPITAL LEASE" means, at any time, a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP;
"CLAIM" has the meaning set out in Section 7.2;
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"CLOSING" has the meaning set out in Section 3.1;
"CLOSING DATE" has the meaning set out in Section 3.1;
"COMMON SHARES" means the common shares in the capital of the Corporation as
currently constituted, any shares resulting from the change of the designation
of such common shares, and any shares into which such common shares may be
changed, converted, exchanged or reclassified;
"CONFIDENTIAL INFORMATION" has the meaning set out in Section 10.2(a);
"CONTINGENT CASH PAYMENTS" means the 2002 Contingent Cash Payment, if any, and
the 2003 Contingent Cash Payment, if any;
"CONTINGENT CONSIDERATION" means (i) the 2002 Contingent Cash Payment or, at the
option of the Corporation as provided in Section 2.2(b), the 2002 Additional
Shares and (ii) the 2003 Contingent Cash Payment or, at the option of the
Corporation as provided in Section 2.2(c), the 2003 Additional Shares, as the
case may be;
"CONVERSION INDUCEMENT AGREEMENT" has the meaning set out in the Recitals;
"CORPORATION" has the meaning set out in the Preamble;
"DEBENTURE PURCHASE AGREEMENT" has the meaning set out in the Recitals;
"DEBENTURES" has the meaning set out in the Recitals;
"DOJ" has the meaning set out in Section 5.3;
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended;
"EXCHANGES" means The Toronto Stock Exchange and the NYSE;
"FTC" has the meaning set out in Section 5.3;
"GAAP", in respect of any Person, means generally accepted accounting principles
as in effect from time to time in the country of organization of such Person (it
being understood that for the Corporation, GAAP means Canadian GAAP);
"GENERAL PARTNER" means Greenwich Street Investments II, L.L.C.;
"GOVERNMENTAL AUTHORITY" means any national, federal, state, provincial, county,
municipal, district or local government or government body, or any public
administrative or regulatory agency, political subdivision, commission, court,
arbitral body, board or body, or representative of any of the foregoing, foreign
or domestic, of, or established by any such government or government body which
has authority in respect of a particular matter or any quasi-governmental body
having the right to exercise any regulatory authority thereunder;
"GREENWICH FUND II" has the meaning set out in the Preamble;
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"GUARANTEE" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person (other than
Guarantees between members of such Person's consolidated financial reporting
group) in any manner, whether directly or indirectly, including (without
limitation) obligations incurred through an agreement, contingent or otherwise,
by such Person:
(a) to purchase such Indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such
Indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make
available funds for the purchase or payment of such Indebtedness
or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of any other Person to
make payment of the Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or obligation
against loss in respect thereof;
"HSR ACT" has the meaning set out in Section 5.3;
"INDEBTEDNESS" means, in respect of any Person at any date, without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other than
trade payables incurred in the ordinary course of such Person's business), (c)
all obligations of such Person evidenced by notes, bonds, debentures (including
the Debentures) or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all Capital Leases of such
Person, (f) all obligations of such Person, contingent or otherwise, as an
account party under acceptance, letter of credit or similar facilities, (g) all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire
or otherwise acquire for value any capital stock (other than common shares) of
such Person, (h) all Guarantees of such Person in respect of obligations of the
kind referred to in clauses (a) through (g) above to the extent quantified as
liabilities, contingent obligations or like term in accordance with GAAP on the
balance sheet (including notes thereto) of such Person, (i) all obligations of
the kind referred to in clauses (a) through (h) above secured by (or for which
the holder of such obligation has an existing right, contingent or otherwise, to
be secured by) any Lien on property (including, without limitation, accounts and
contract rights) owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation, (but only to the extent of the
fair market value of such Property), (j) all Swaps of such Person and (k) the
liquidation value of any preferred capital stock of such Person or its
Subsidiaries held by any Person other than such Person and its Wholly-Owned
Subsidiaries;
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"INDEMNIFIED PARTY" has the meaning set out in Section 7.2;
"INDEMNIFYING PARTY" has the meaning set out in Section 7.2;
"INITIAL SHARES" has the meaning set out in the Recitals;
"INTENT NOTICE" has the meaning set out in Section 6.2;
"ITA" means the Income Tax Act (Canada);
"OFFER NOTICE" has the meaning set out in Section 6.2;
"OBCA" means the BUSINESS CORPORATIONS ACT (Ontario);
"PARTNERSHIP" means Chancery Lane/GSC Investors L.P., a Delaware limited
partnership in which each of the Investors holds certain partnership interests;
"PARTNERSHIP AGREEMENT" means that certain Partnership Agreement of the
Partnership dated as of December 12, 2000, as amended, supplemented, changed or
modified from time to time;
"PERSON" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization or Governmental
Authority;
"PREFERRED SHARES" means the exchangeable preferred stock, no par value per
share, of Subco;
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, xxxxxx or inchoate;
"PROPOSED SHARES" has the meaning set out in Section 6.2;
"PROSPECTIVE SELLER" has the meaning set out in Section 6.2;
"PURCHASE OF COMMON SHARES" means the purchase of any Common Shares or entering
into of any derivative securities transaction related thereto that results in
the purchase of Common Shares, other than purchasing puts or purchases required
to meet obligations under employee benefit plans;
"REGISTRATION RIGHTS AGREEMENT" means the registration rights agreement to be
entered into by the Corporation, the Partnership and certain limited partners of
the Partnership on the Closing Date, substantially in the form annexed hereto as
EXHIBIT 1, as amended, supplemented, changed or modified from time to time;
"REPRESENTATIVES" has the meaning set out in Section 10.2(b);
"RESPONSIBLE OFFICERS" means, with respect to any Person, any chief financial
officer, treasurer or controller of the Person and any other officer of the
Person reasonably expected to have knowledge of the matter as to which such
officer's knowledge is required;
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"SALE OF COMMON SHARES" means the sale of any Common Shares or entering into of
any derivative securities transaction related thereto that results in the sale
of Common Shares, other than any such sale by the Partnership or its Affiliates
to an Affiliate of the Partnership;
"SEC" means the United States Securities and Exchange Commission;
"SENIOR FINANCIAL OFFICER" means the chief financial officer, treasurer or
controller of the Corporation;
"SIGNIFICANT SUBSIDIARY" means (i) any Subsidiary that, as of the relevant date
of determination, had assets that had a fair market value representing 10% or
more of the total consolidated assets of the Corporation and its Subsidiaries or
revenues representing 10% or more of the total consolidated revenues of the
Corporation and its Subsidiaries and (ii) Subco (for the purposes of this
Agreement);
"SUBCO" has the meaning set out in the Preamble;
"SUBCO PREFERRED SHARES" has the meaning set out in the Recitals;
"SUBSIDIARY" means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership, limited liability
company or joint venture if more than a 50% interest in the profits or capital
thereof is owned by such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries (unless such partnership, limited
liability company or joint venture can and does ordinarily take major business
actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Corporation;
"SWAPS" means, with respect to any Person, payment obligations with respect to
interest rate swaps, currency swaps and similar obligations obligating such
Person to make payments, whether periodically or upon the happening of a
contingency. For the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount determined in respect thereof as of the end
of the then most recently ended fiscal quarter of such Person, based on the
assumption that such Swap had terminated at the end of such fiscal quarter, and
in making such determination, if any agreement relating to such Swap provides
for the netting of amounts payable by and to such Person thereunder or if any
such agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligation shall be the net
amount so determined;
"TRADING PRICE" means, at the time of determination, the most recent reported
per share price at which a transaction in the Common Shares was executed on the
NYSE;
"U.S. SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time; and
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"WEIGHTED AVERAGE TRADING PRICE PER SHARE" means the weighted average of the
reported per share prices at which transactions in the Common Shares are
executed on the NYSE during the twenty consecutive NYSE trading days (defined as
9:30 a.m. through 4:00 p.m., Eastern Time) ending on the trading day immediately
prior to the date of determination (weighted based on the number of shares of
Common Shares traded), as such weighted average price appears on the Bloomberg
screen "Volume at Price" page for the Common Shares.
1.2 RULES OF CONSTRUCTION. Unless the context otherwise requires, in this
Agreement:
(a) "Agreement", "this Agreement", "the Agreement", "hereto",
"hereof", "herein", "hereby", "hereunder" and similar expressions
mean or refer to this Agreement as amended from time to time,
including the Schedules and Exhibits annexed hereto or to any
amendment to this Agreement, and any agreement or instrument
supplemental hereto and the expressions "Article", "Section",
"Schedule" and "Exhibit" followed by a number or letter mean and
refer to the specified Article, Section, Schedule or Exhibit of
this Agreement;
(b) the division of this Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation thereof;
(c) words importing the singular number only shall include the plural
and vice versa and words importing the use of any gender shall
include all genders;
(d) reference to any agreement, indenture or other instrument in
writing means such agreement, indenture or other instrument in
writing as amended, modified, replaced or supplemented from time
to time;
(e) reference to any statute shall be deemed to be a reference to such
statute as amended, re-enacted or replaced from time to time;
(f) if there is any conflict or inconsistency between the provisions
contained in the body of this Agreement and those of any Schedule
or Exhibit (other than the Ancillary Agreements) hereto, the
provisions contained in the body of this Agreement shall prevail;
(g) time periods within which a payment is to be made or any other
action is to be taken hereunder shall be calculated excluding the
day on which the period commences and including the day on which
the period ends; and
(h) whenever any payment to be made or action to be taken hereunder is
required to be made or taken on a day other than a Business Day,
such payment shall be made or action taken on the next following
Business Day.
1.3 SEVERABILITY. If any provision of this Agreement is determined by a court
of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is hereby
declared to be separate, severable and distinct. To the extent that any
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such provision is found to be invalid, illegal or unenforceable, the parties
hereto shall act in good faith to substitute for such provision, to the extent
possible, a new provision with content and purpose as close as possible to the
provision so determined to be invalid, illegal or unenforceable.
1.4 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be
construed, interpreted and enforced in accordance with, and the respective
rights and obligations of the parties shall be governed by, the laws of the
State of New York, without regard to principles governing conflicts of law. Each
of the parties hereby submits to the exclusive jurisdiction of the courts of the
State of New York and all courts competent to hear appeals therefrom, and waives
any objection as to venue in the County of New York, State of New York with
respect to any suit, claim or other dispute arising out of or related to this
Agreement or the Ancillary Agreements.
1.5 WAIVER OF IMMUNITY. To the extent that any of the parties hereto has or
hereafter may be entitled to claim or may acquire, for itself or any of its
assets, any immunity from suit, jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, or otherwise) with respect to itself or its
property, it hereby irrevocably waives such immunity in respect of its
obligations hereunder or under the Ancillary Agreements to which it may be a
party to the fullest extent permitted by applicable law and, without limiting
the generality of the foregoing, agrees that the waivers set forth in this
Section 1.5 shall be effective to the fullest extent now or hereafter permitted
under the Foreign Sovereign Immunities Act of 1976 of the United States of
America and are intended to be irrevocable for purposes of such Act.
1.6 WAIVER OF JURY TRIAL. Each party hereto hereby waives, to the fullest
extent permitted by applicable laws, any right it may have to a trial by jury in
respect of any litigation directly or indirectly arising out of, under or in
connection with this Agreement or the Ancillary Agreements. Each party hereto
(a) certifies that no representative, agent or counsel of the other party has
represented expressly or otherwise that the other party would not, in the event
of litigation, seek to enforce the foregoing waiver, and (b) acknowledges that
it and the other party hereto have been induced to enter into this Agreement and
the Ancillary Agreements by, among other things, the mutual waivers and
certifications contained in this Section 1.6.
1.7 CURRENCY. All references to currency herein are to lawful money of the
United States of America.
1.8 TAX EFFECT. The parties hereto intend, for United States federal income
tax purposes, that the transactions contemplated hereby qualify as a
reorganization within the meaning of Section 368(a)(1)(E) of the United States
Internal Revenue Code of 1986, as amended, and shall file all United States
federal income tax returns consistently with such treatment.
1.9 CONFLICT WITH CONVERSION INDUCEMENT AGREEMENT. In the event of any
conflict between the provisions of this Agreement and the provisions of the
Conversion Inducement Agreement, the provisions of this Agreement shall govern.
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2. EXCHANGE OF SUBCO PREFERRED SHARES; CONTINGENT CONSIDERATION
2.1 INITIAL SHARES. Upon the terms and subject to the conditions of this
Agreement, the Corporation shall issue the Initial Shares to the
Investors in exchange for the Subco Preferred Shares, free and clear of
any Liens, other than Liens created under this Agreement. Each Investor
shall be entitled to receive the number of Initial Shares that is
specified opposite its name on SCHEDULE A attached hereto. At the request
of the Corporation, each Investor agrees to make and cause to be filed an
election under subsection 85(1) or 85(2) of the ITA, as applicable, in
respect of the transfer of Subco Preferred Shares transferred by such
Investor, at an elected amount equal to the fair market value of the
Subco Preferred Shares transferred by such Investor.
2.2 CONTINGENT CONSIDERATION.
(a) Upon the terms and subject to the conditions of this Agreement,
the Corporation shall issue or pay the Contingent Consideration to
the Investors in accordance with the terms of this Section 2.2.
(b) If the Weighted Average Trading Price Per Share determined as of
December 31, 2002 (as adjusted pursuant to paragraph (e) of this
Section 2.2, the "2002 PRICE") is less than $8.00 per share (as
adjusted pursuant to paragraph (e) of this Section 2.2), then the
Corporation shall pay to the Investors, on December 31, 2002, an
amount in cash (the "2002 CONTINGENT CASH PAYMENT") equal to the
lesser of : (i) (A) $14,000,000 minus (B) the value of the Initial
Shares on such date, determined by multiplying the number of
Initial Shares (as adjusted pursuant to paragraph (e) of this
Section 2.2) by the 2002 Price; and (ii) the value of 3,000,000
Common Shares (as adjusted pursuant to paragraph (e) of this
Section 2.2), on such date, determined by multiplying 3,000,000 by
the 2002 Price. At the option of the Corporation, the Corporation
may satisfy the 2002 Contingent Cash Payment obligation by issuing
to the Investors, on December 31, 2002, instead of the 2002
Contingent Cash Payment, an additional number of Common Shares,
free and clear of any Liens other than Liens created under this
Agreement (the "2002 ADDITIONAL SHARES") equal to the number
obtained by dividing the 2002 Contingent Cash Payment by the 2002
Price.
(c) If the Weighted Average Trading Price Per Share determined as of
December 31, 2003 (as adjusted pursuant to paragraph (e) of this
Section 2.2, the "2003 PRICE") is less than $10.83 per share (as
adjusted pursuant to paragraph (e) of this Section 2.2), then the
Corporation shall pay to the Investors, on December 31, 2003, an
amount in cash (the "2003 CONTINGENT CASH PAYMENT") equal to the
lesser of : (i) $9,000,000 and (B) the value of 6,000,000 Common
Shares (as adjusted pursuant to paragraph (e) of this Section
2.2), on such date, determined by multiplying 6,000,000 by the
2003 Price; PROVIDED, HOWEVER, that if, prior to December 31,
2003, the Investors sell any of the Initial Shares or the 2002
Additional Shares issued pursuant to paragraph (b) of this Section
2.2 to any Person (other than another Investor or an Affiliate of
an Investor), then the
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foregoing amount shall be reduced on a dollar-for-dollar basis by
the amount, if any, that the aggregate cash proceeds received from
any such sale(s) prior to December 31, 2003 of Initial Shares or
2002 Additional Shares exceeds the product of (i) the number of
such Initial Shares and 2002 Additional Shares that have been sold
prior to December 31, 2003 and (ii) the Weighted Average Trading
Price Per Share determined as of the Closing Date. At the option
of the Corporation, the Corporation may satisfy the 2003
Contingent Cash Payment obligation by issuing to the Investors, on
December 31, 2003, instead of the 2003 Contingent Cash Payment, an
additional number of Common Shares, free and clear of any Liens
other than Liens created under this Agreement (the "2003
ADDITIONAL SHARES") equal to the number obtained by dividing the
2003 Contingent Cash Payment by the 2003 Price. In order to
determine whether any Initial Shares or 2002 Additional Shares
have been sold as provided in the proviso of the first sentence of
this paragraph (c), all Common Shares received by the Investors
upon conversion of the Debentures shall be deemed to have been
sold first and shall not be considered in the application of such
proviso. In addition, the Initial Shares and any 2002 Additional
Shares that were issued pursuant to paragraph (b) of Section 2.1
and paragraph (b) of this Section 2.2 shall be kept in a
segregated account separate and apart from any shares issued upon
conversion of the Debentures or otherwise acquired by the
Investors or their Affiliates. Prior to issuing any of the 2003
Additional Shares, the Investors shall provide a certificate to
the Corporation certifying the number and sale price of any
Initial Shares and any 2002 Additional Shares that were issued
pursuant to paragraph (b) of Section 2.1 and paragraph (b) of this
Section 2.2 that were sold by the Investors or their Affiliates
prior to December 31, 2003 (other than to another Investor or an
Affiliate of an Investor), together with a copy of the broker's
account statement for such sales if requested by the Corporation.
(d) Any Additional Shares issued in satisfaction of the Contingent
Cash Payments may be issued to the Investors on exchange of
exchangeable preferred shares of a wholly-owned non-Canadian
subsidiary of the Corporation using the structure contemplated in
Sections 3.2(a), 3.2(b) and 3.3(c) of the Conversion Inducement
Agreement; PROVIDED, that, at the time of such issuance, the
Corporation makes representations, warranties, covenants and
indemnities to the Investors with respect to such exchangeable
preferred shares that are substantially the same as those made by
the Corporation to the Investors with respect to the Subco
Preferred Shares.
(e) The number of Common Shares used to determine the 2002 Contingent
Cash Payment and the 2003 Contingent Cash Payment pursuant to
paragraphs (b) and (c) above and the 2002 Price and the 2003 Price
shall be adjusted in the event of a merger, consolidation,
recapitalization, stock split, reclassification or other similar
event or distribution in which the Common Shares are converted,
exchanged or otherwise changed. The Corporation shall forthwith
give notice to the Investors in the manner provided in Section 11
specifying the event requiring such adjustment or readjustment and
the results thereof, including the number of Common Shares used to
determine the 2002 Contingent Cash Payment and the
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2003 Contingent Cash Payment pursuant to paragraphs (b) or (c)
above and the resulting 2002 Price and 2003 Price. Furthermore,
the Corporation shall give notice to the Investors, in the manner
provided in Section 11, of its intention to take any action that
may give rise to any such adjustment or readjustment at the same
time as any public announcement thereof and in any event no later
than the time at which holders of Common Shares are notified of
any such action, and, in each case, such notice shall specify the
particulars of such event and the record date and the effective
date for such event; PROVIDED, that the Corporation shall only be
required to specify in such notice such particulars of such event
as shall have been fixed and determined on the date on which such
notice is given. Such notice shall be given not less than 7 days
in each case prior to such applicable record date or effective
date, whichever is earlier.
(f) Upon the issuance of any 2002 Additional Shares and 2003
Additional Shares as contemplated by this Section 2.2, the
Corporation shall deliver to the Investors a duly executed stock
certificate or certificates representing such shares registered in
the Investors' names in the amounts that correspond to their
original percentage ownership of the Initial Shares as promptly on
or after the relevant December 31 delivery date as the
Corporation's transfer agent can prepare such certificate or
certificates for such delivery. In addition, the Corporation shall
enter in an agreement with the Investors containing substantially
the same representations, warranties, covenants and indemnities,
as applicable, as set forth in this Agreement with respect to the
2002 Additional Shares and the 2003 Additional Shares and also
shall issue the opinions of counsel to the Corporation, dated the
issuance dates of the 2002 Additional Shares and the 2003
Additional Shares, with respect to the issuance of such Additional
Shares, each substantially in the form of the opinions deliverable
to the Partnership pursuant to Section 3.2(c)(ii).
3. CLOSING; DELIVERY
3.1 CLOSING. The closing of the transactions contemplated by Section 3 (the
"CLOSING") shall occur concurrently with the closing of the transactions
contemplated by the Conversion Inducement Agreement. The Closing shall take
place at 10:00 a.m. (New York City time) at the offices of Squadron Ellenoff
Plesent & Xxxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx December 28,
2001, (such closing day or such other time being hereinafter referred to as the
"CLOSING DATE") or at such other time or place as may be agreed by the parties
hereto in writing.
3.2 ACTIONS BY THE CORPORATION AT CLOSING. At the Closing, the Corporation
shall:
(a) against delivery by the Investors of the Subco Preferred Shares as
contemplated in Section 3.3(a) below, deliver to Investors a duly
executed stock certificate or certificates registering that number
of Initial Shares set forth opposite such Investor's name on
SCHEDULE A attached hereto;
(b) deliver to the Investors the Ancillary Agreements duly executed by
the Corporation; and
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(c) deliver or cause to be delivered to the Investors the following:
(i) copies of resolutions of the Board authorizing the
transactions contemplated by this Agreement and the
Ancillary Agreements, each certified as being true
and correct and not having been modified or
rescinded since their adoption by the Secretary or
Assistant Secretary of the Corporation, together
with an incumbency certificate duly executed by the
Secretary or Assistant Secretary of the Corporation
for those officers of the Corporation executing this
Agreement and any of the Ancillary Agreements on its
behalf;
(ii) the opinions of counsel addressed to the Investors,
each dated the Closing Date, covering the matters
set forth on EXHIBIT 2; and
(iii) such other documents and certificates duly executed
as the Investors may reasonably request in order to
effect the transactions contemplated hereby.
3.3 ACTIONS BY THE INVESTORS AT CLOSING. At the Closing, the Investors shall:
(a) deliver the Subco Preferred Shares to the Corporation in exchange
for the Initial Shares contemplated in Section 3.2(a) above;
(b) deliver to the Corporation the Ancillary Agreements duly executed
by the parties thereto other than the Corporation; and
(c) deliver or cause to be delivered to the Corporation the following:
(i) an incumbency certificate duly executed by a Member
of the General Partner for those officers of the
General Partner executing this Agreement and any of
the Ancillary Agreements on its behalf; and
(ii) such other documents and certificates duly executed
as the Corporation may reasonably request in order
to effect the transactions contemplated hereby.
4. REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. The representations
and warranties of the Corporation set forth in Section 4.1 of the Conversion
Inducement Agreement are hereby incorporated by reference in their entirety and
references therein to the Partnership shall be deemed to be references to the
Investors for all purposes of this Agreement and such representations and
warranties shall enure to the benefit of the Investors without any qualification
or limitation, other than as expressly set forth in such representations and
warranties. The Corporation acknowledges that the Investors are relying upon
such representations and warranties in connection with their entering into this
Agreement.
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4.2 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each Investor severally
and not jointly represents and warrants to the Corporation as follows and
acknowledges that the Corporation is relying upon such representations and
warranties in connection with its entering into this Agreement:
(a) ORGANIZATION; POWER AND AUTHORITY. The Investor is a limited
partnership duly organized and is validly existing under the laws
of its jurisdiction of organization; the General Partner is the
sole general partner of the Investor; the General Partner has all
necessary limited liability company or partnership power to
execute and deliver this Agreement and each of the Ancillary
Agreements on behalf of the Investor and the Investor has all
necessary partnership power to enter into this Agreement and each
of the Ancillary Agreements and to comply with its obligations
hereunder and thereunder.
(b) AUTHORIZATION, ETC. The General Partner has taken all necessary
limited liability company or partnership action to authorize the
execution, delivery and performance of this Agreement and the
Ancillary Agreements; this Agreement and the Ancillary Agreements
have been duly executed and delivered by the General Partner on
behalf of the Investor and constitute the legal, valid and binding
obligations of the Investor enforceable by the Corporation in
accordance with their respective terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other laws of
general application affecting the enforcement of creditors' rights
and subject to the qualification that specific performance and
injunction, being equitable remedies, may be granted only in the
discretion of a court of competent jurisdiction.
(c) COMPLIANCE WITH OTHER INSTRUMENTS, ETC. Neither: (i) the
authorization, execution, delivery or performance by the Investor
of this Agreement and the Ancillary Agreements; (ii) the
conversion of the Debentures held by the Investor; or (iii) the
acquisition of the Initial Shares as provided herein, is in
conflict with and does not and will not result in any breach of
and does not and will not create a state of facts which after
notice or lapse of time or both will result in a breach of any of
the terms or provisions of the limited partnership agreement of
the Investor, the resolutions of the board of directors of the
General Partner, or results or would result in the creation or
imposition of any security interest, mortgage, Lien, charge or
encumbrance of any nature whatsoever upon any of the Material
Properties or assets of the Investor pursuant to the terms of any
indenture, instrument, agreement or undertaking.
(d) NO ORDERS. To the knowledge of the General Partner, after
reasonable inquiry, no order suspending the transfer of the Subco
Preferred Shares, the conversion of the Debentures held by the
Investor or the acquisition of the Initial Shares by the Investor
has been issued by any court, securities commission or regulatory
authority in Canada or the United States, and no proceedings for
such purpose are pending or threatened.
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(e) INVESTMENT REPRESENTATION. The Investor is acquiring the Initial
Shares as principal for investment purposes only, and not with a
view to, or for, resale, distribution or any present intention of
distributing or selling the Initial Shares or any part thereof.
The Investor is acquiring the Initial Shares as principal for its
own account and the Investor is an "accredited investor" as the
term is defined in Regulation D under the U.S. Securities Act and
OSC Rule 45-501. The Investor is not a resident of Canada.
(f) ACKNOWLEDGEMENT RE: SECURITIES LAWS. The Investor understands,
recognizes and acknowledges that the Initial Shares have not been
qualified for distribution or registered under any applicable
securities legislation, including the Ontario Securities Act, the
U.S. Securities Act or any other applicable federal, provincial or
state securities laws by reason of exemptions from such
requirements being available, and that the Initial Shares may not
be sold, pledged, assigned or otherwise disposed of in the absence
of compliance with such law or unless an exemption from the
application of such law is applicable, and certificates issued in
respect of the Initial Shares will be legended to reflect such
restrictions.
4.3 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. All covenants,
representations and warranties of each party made herein and in any certificate
or other document delivered by it or on its behalf pursuant to the provisions
hereof or otherwise with respect to this Agreement and the transactions
contemplated hereby, shall survive the Closing and, notwithstanding such
closing, nor any investigation made by or on behalf of such party, shall
continue in full force and effect, subject as hereinafter provided, for a period
of eighteen months from the Closing Date for the benefit of the party to whom
the covenants, representations and warranties are made; PROVIDED, HOWEVER, that
notwithstanding anything herein contained, the representations and warranties
contained in Sections 4.1(b), (c), (d) and (e) of the Conversion Inducement
Agreement which have been incorporated herein by reference shall survive the
Closing and shall continue in full force and effect for the benefit the
Investors without any limitation period and the representation and warranty
contained in Section 4.1(k) of the Conversion Inducement Agreement which has
been incorporated herein by reference shall survive the Closing and shall
continue in full force and effect for the benefit of the Investors until the
60th day after the expiration of the relevant statute of limitations period.
5. COVENANTS OF THE PARTIES
5.1 AFFIRMATIVE COVENANTS OF THE CORPORATION. The Corporation covenants and
agrees with the Investors that it will do or cause to be done, and, as
applicable, will cause Subco to do or cause to be done, the following:
(a) use its reasonable best efforts to comply with, satisfy and
fulfill promptly all prerequisites, conditions and requirements
imposed by or arising out of legal, regulatory and administrative
requirements applicable to the Corporation with respect to the
consummation of the transactions contemplated hereby, including,
without limiting the generality of the foregoing, (i) filing or
causing to be filed all documents, certificates, opinions, forms
or undertakings required to be filed by the Corporation in
connection with the acquisition by the Investors of the Initial
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Shares, the issuance of the Initial Shares and the listing and
posting for trading of the Initial Shares on the Exchanges, and
(ii) subject to Section 5.3, obtaining all necessary legal,
regulatory and administrative approvals, consents, authorizations,
rulings, orders and permits;
(b) maintain its status as a "reporting issuer" in good standing under
the Ontario Securities Act and other applicable Canadian
securities legislation and as a "registrant" in good standing
under the Exchange Act;
(c) maintain the listing or posting for trading of the Common Shares
(including the Initial Shares) on the NYSE; and
(d) pay all stamp or duty or similar taxes, if any, associated with
the issuance and/or delivery of the Initial Shares.
5.2 AFFIRMATIVE COVENANTS OF THE INVESTORS. Subject to Section 5.3, the
Investors covenants and agrees with the Corporation that it will use its
reasonable best efforts to comply with, satisfy and fulfill promptly all
prerequisites, conditions and requirements imposed by or arising out of legal,
regulatory and administrative requirements applicable to the Investors with
respect to the consummation of the transactions contemplated hereby, including,
without limiting the generality of the foregoing, (i) filing or causing to be
filed all documents, certificates, opinions, forms or undertakings required to
be filed by the Investors in connection with the acquisition by the Investors of
the Initial Shares and the issuance of the Initial Shares, and (ii) obtaining
all necessary legal, regulatory and administrative approvals, consents,
authorizations, rulings, orders and permits.
5.3 HSR ACT. The Corporation and Greenwich Fund II have filed or will file
concurrently with the execution of this Agreement (a) all Notification and
Report Forms and related material required to be filed by it with the Federal
Trade Commission ("FTC") and the Antitrust Division of the United States
Department of Justice ("DOJ") under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder
(the "HSR ACT") with respect to the transactions contemplated hereby and by the
Ancillary Agreements and (b) the necessary filings and notifications with any
other jurisdictions with respect to the transactions contemplated hereby and the
Ancillary Agreements to the extent required to effect the conversion of the
Debentures and, in each case, shall promptly make any further filings pursuant
thereto that may be required by law. Each of the Corporation and Greenwich Fund
II shall use its commercially reasonable efforts to furnish to the other party
such information, cooperation and assistance as the other party reasonably may
request in connection with the submissions to, or agency proceedings by, any
Governmental Authority under the HSR Act, or any comparable laws of foreign
jurisdictions, and each of the parties hereto shall keep the other promptly
apprised of any communications with, and inquiries or requests for information
from, such Governmental Authorities.
5.4 VCOC. The rights granted to the Investors under Section 8.1 of this
Agreement and the existing rights with respect to the nomination of directors
are intended to satisfy the requirement of management rights for purposes of
qualifying the investment by the Investors in the ownership of Common Shares as
a venture capital investment for purposes of the Department of
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Labor "plan asset" regulations, 9 C.F.R. Section 2510.3-101, and in the event
such rights are not satisfactory for such purpose, the Corporation and the
Investors shall reasonably cooperate in good faith to agree upon mutually
satisfactory access rights which satisfy such regulations.
6. RESTRICTIONS ON TRANSFERS OF THE COMMON SHARES
6.1 RESTRICTIONS ON SALE OF COMMON SHARES.
(a) 30 DAY BLACKOUT PERIOD. The Investors and their Affiliates shall
not engage in any Sale of Common Shares during the 2002 Blackout
Period and the 2003 Blackout Period. The Corporation and its
Affiliates shall not engage in any Purchase of Common Shares
during the 2002 Blackout Period and the 2003 Blackout Period.
(b) 60 DAY RESTRICTED PERIOD.
(i) During the 2002 Restricted Period, the Investors and their
Affiliates shall not engage in any Sale of Common Shares if
at the time of the proposed sale the Trading Price is
between $7.00 and $9.00.
(ii) During the 2003 Restricted Period, each of the Investors
and their Affiliates shall not engage in any Sale of Common
Shares if at the time of the proposed sale the Trading
Price is between $9.00 and $12.50.
(iii) Subject to paragraphs (i) and (ii) above, the Investors and
their Affiliates may, during each of the 2002 Restricted
Period and 2003 Restricted Period, (A) sell Common Shares
in one or more registered public offerings; (B) sell up to
3,750,000 Common Shares in open-market transactions; and
(C) sell Common Shares in one or more private placements so
long as the buyer(s) in such private placement(s) agrees in
writing to be bound by the provisions of paragraphs (i) and
(ii) above.
(c) The per share prices of Common Shares contained in this paragraph
(b) above shall be adjusted in the event of a merger,
consolidation, recapitalization, stock split, reclassification or
other similar event or distribution with respect to, or in
exchange for or in replacement of, the Common Shares.
6.2 RIGHT OF FIRST OFFER. If any Investor or an Affiliate of an Investor (the
"PROSPECTIVE Seller") wishes to sell any of its Common Shares prior to December
31, 2003 (other than a sale to another Investor or an Affiliate of an Investor
and other than pursuant to the exercise of registration rights or an open-market
sale on the NYSE or The Toronto Stock Exchange), the Prospective Seller shall
deliver a written notice ("INTENT NOTICE") to the Corporation specifying the
number of Common Shares which are proposed to be sold and the desired price for
such shares (the "PROPOSED SHARES"). The Corporation shall, upon receipt of an
Intent Notice, have ten (10) Business Days to deliver a written notice ("OFFER
NOTICE") to the Prospective Seller specifying the name(s) of one or more
bona-fide purchasers offering to purchase the Proposed Shares at a cash purchase
price equal to or greater than the purchase price specified in the Intent Notice
within three (3) Business Days from the date such Offer Notice is delivered to
the
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Prospective Seller. The Prospective Seller shall forthwith accept any Offer
Notice delivered in accordance with the requirements of this Section 6.2, and
the closing of the purchase and sale of the Proposed Shares shall occur within
three (3) Business Days thereafter. If at the end of such ten-day period, the
Prospective Seller has not received an Offer Notice or the purchase and sale of
the Proposed Shares pursuant to the Offer Notice has not occurred within such
3-day period (and such failure to close has not been caused by the Prospective
Seller), the Prospective Seller shall be permitted to sell the Proposed Shares
during the 90 day period thereafter at a price which is not less than 90% of the
desired price specified in the Intent Notice.
6.3 RESTRICTION ON DISTRIBUTION. Notwithstanding any other provision of this
Agreement, the Investors shall not distribute the Initial Shares or the Common
Shares received by them upon conversion of the Debentures to their limited
partners for a period of one year from the Closing Date.
7. INDEMNIFICATION
7.1 INDEMNIFICATION BY THE CORPORATION. From and after the Closing, the
Corporation agrees to indemnify and save harmless the Investors and their
Affiliates and the directors, officers, general partners, employees,
shareholders, representatives and agents of the Investors and their Affiliates
(collectively, the "INDEMNITEES") from all Losses suffered or incurred by any of
them as a result of or arising directly or indirectly out of or in connection
with: (a) any breach by the Corporation of or any inaccuracy of any
representation or warranty of the Corporation contained in this Agreement, the
Ancillary Agreements or in any agreement, certificate or other document
delivered pursuant hereto and (b) any breach or non-performance by the
Corporation of any covenant to be performed by any of them which is contained in
this Agreement, the Ancillary Agreements or in any agreement, certificate or
other document delivered pursuant hereto. Notwithstanding anything contained
herein to the contrary, the indemnification provided above (except with respect
to any breach of the representations and warranties set forth in Sections
4.1(b), (c), (d), (e) and (k) of the Conversion Inducement Agreement which have
been incorporated herein by reference) shall (i) only apply to the extent that,
and not until, the aggregate of all amounts subject to indemnification under
clause (a) of this Section 7.1 exceeds $1,000,000 (in which event, the
Indemnitees shall be entitled to indemnification as provided herein for all such
Losses and not just the excess over $1,000,000) and (ii) not exceed $23,000,000
in the aggregate. The indemnification with respect to any breach of Section
4.1(k) of the Conversion Inducement Agreement shall be increased by an amount
such that the Indemnitees will receive cash, after taking into account any
Canadian non-resident withholding tax imposed under Part XIII of the ITA, equal
to the amount owing pursuant to this Section 7.1 (without regard to this
sentence) as a result of the breach of Section 4.1(k).
7.2 NOTICE OF CLAIM; INVESTIGATIONS; DETERMINATION. Subject to Section 7.3,
in the event that a party (the "INDEMNIFIED PARTY") shall become aware of any
claim, proceeding or other matter (a "CLAIM") in respect of which another party
(the "INDEMNIFYING PARTY") agreed to indemnify the Indemnified Party pursuant to
this Agreement and, if a claim for breach of representation and warranty of the
Indemnifying Party, in respect of which the applicable survival period shall not
have lapsed, the Indemnified Party shall promptly give written notice thereof to
the Indemnifying Party. Such notice shall specify the factual basis for the
Claim and the amount of the Claim, if known. Following receipt of notice from
the Indemnified Party of
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the Claim, the Indemnifying Party shall have 60 days to make such investigation
of the Claim as is considered necessary or desirable. For the purpose of such
investigation, the Indemnified Party shall make available to the Indemnifying
Party the information relied upon by the Indemnified Party to substantiate the
Claim, together with all such other information as the Indemnifying Party may
reasonably request. If both parties agree at or prior to the expiration of such
60-day period (or any mutually agreed upon extension thereof) to the validity
and amount of such Claim, the Indemnifying Party shall immediately pay to the
Indemnified Party the full agreed upon amount of the Claim.
7.3 CERTAIN CLAIMS. If any Claim arises directly or indirectly out of or in
connection with the Corporation's execution, delivery and performance of this
Agreement or the Ancillary Agreements and is asserted against any Indemnitee,
such Indemnitee shall promptly give the Corporation notice thereof in accordance
with Section 7.2. The Corporation shall have the right to control negotiations
toward resolution of such Claim without the necessity of litigation, and, if
litigation ensues, to defend the same with counsel chosen by the Corporation and
reasonably acceptable to the such Indemnitee, at the Corporation's expense with
respect to the conduct of such defense, and such Indemnitee shall in such case
extend reasonable cooperation in connection with such negotiation and defense
and the Corporation shall keep such Indemnitee reasonably informed as to such
case. If the Corporation fails to assume control of the negotiations prior to
litigation or to defend such action within a reasonable time, such Indemnitee
shall be entitled, but not obligated, to assume control of such negotiations or
defense of such action, and the Corporation shall be liable to such Indemnitee
for its expenses reasonably incurred in connection therewith which the
Corporation shall promptly pay. Neither party shall settle, compromise, or make
any other disposition of any Claims, which would or might result in any
liability to the Indemnitee or the Corporation, respectively, under this Section
7 without the written consent of the Indemnitee or the Corporation,
respectively, which consent shall not be unreasonably withheld.
7.4 THIRD PARTY CLAIMS. If any Claim covered by the foregoing indemnities is
asserted against any Indemnified Party, it shall be a condition to the
obligations under this Section 7 that the Indemnified Party shall promptly give
the Indemnifying Party notice thereof in accordance with Section 7.2. The
Indemnifying Party shall be entitled to control negotiations toward resolution
of such claim without the necessity of litigation, and, if litigation ensues, to
defend the same with counsel reasonably acceptable to the Indemnified Party, at
the Indemnifying Party's expense, and the Indemnified Party shall in such case
extend reasonable cooperation in connection with such negotiation and defense.
If the Indemnifying Party fails to assume control of the negotiations prior to
litigation or to defend such action within a reasonable time, the Indemnified
Party shall be entitled, but not obligated, to assume control of such
negotiations or defense of such action, and the Indemnifying Party shall be
liable to the Indemnified Party for its expenses reasonably incurred in
connection therewith which the Indemnifying Party shall promptly pay. Neither
the Indemnifying Party nor the Indemnified Party shall settle, compromise, or
make any other disposition of any Claims, which would or might result in any
liability to the Indemnified Party or the Indemnifying Party, respectively,
under this Section 7 without the written consent of the Indemnified Party or the
Indemnifying Party, respectively, which consent shall not be unreasonably
withheld.
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7.5 EXCLUSIVITY. The provisions of this Section 7 shall be the exclusive
remedy with respect to any Claim for breach by the Corporation of any of its
covenants, representations, warranties or agreements under this Agreement or the
Ancillary Agreements, or any agreement, certificate or other document delivered
pursuant thereto (other than a Claim for specific performance or injunctive
relief) and all such Claims against the Corporation shall be subject to the
limitations and other provisions contained in this Section 7, other than claims
against the Corporation for fraud or fraudulent misrepresentation.
8. INFORMATION AS TO THE CORPORATION
8.1 FINANCIAL AND BUSINESS INFORMATION. So long as an Investor together with
any of its Affiliates holds at least 2.5% of the issued and outstanding Common
Shares, the Corporation shall deliver to the Investor:
(a) MONTHLY STATEMENTS - within 20 Business Days after the end of each
month upon the written request of the Investor to the Corporation,
duplicate copies of financial reports prepared monthly in the
normal course of business for the Corporation's management and/or
the Board with respect to the Corporation's operations by region
and business segment, including an income statement, balance sheet
and statement of cash flows;
(b) QUARTERLY STATEMENTS - within 45 days after the end of each
quarterly fiscal period in each fiscal year of the Corporation
(other than the last quarterly fiscal period of each such fiscal
year), duplicate copies of:
(i) a consolidated balance sheet of the Corporation and
its Subsidiaries as at the end of such quarter; and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the
Corporation and its Subsidiaries, for such quarter
and (in the case of the second and third quarters)
for the portion of the fiscal year ending with such
quarter,
setting forth in each case in comparative form the figures
for the corresponding periods in the previous fiscal year,
all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial
position of the companies being reported on and their
results of operations and cash flows, subject to changes
resulting from year-end adjustments, provided that delivery
within the time period specified above of copies of the
Corporation's Quarterly Report on Form 10-Q prepared in
compliance with the requirements therefor applicable to the
Corporation (or such other quarterly report as is
applicable to the Corporation) and filed with the SEC shall
be deemed to satisfy the requirements of this Section
8.1(b);
(c) ANNUAL STATEMENTS - within 90 days after the end of each fiscal
year of the Corporation, duplicate copies of:
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(i) a consolidated balance sheet of the Corporation and its
Subsidiaries, as at the end of such year; and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Corporation and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP, and accompanied by an opinion thereon of
independent certified public accountants of recognized national
standing in the Corporation's jurisdiction, which opinion shall
state that such financial statements present fairly, in all
material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and
have been prepared in conformity with GAAP, and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable
basis for such opinion in the circumstances, provided that the
Corporation's Annual Report on Form 10-K for such fiscal year
(together with the Corporation's annual report to shareholders, if
any, prepared pursuant to Rule 14a-3 under the Exchange Act)
prepared in accordance with the requirements therefor applicable
to the Corporation (or such other annual report as is applicable
to the Corporation) and sent to shareholders with the annual proxy
statement and filed with the SEC shall be deemed to satisfy the
requirements of this Section 8.1(c);
(d) SEC, OSC AND OTHER REPORTS - promptly upon their becoming publicly
available and upon request by the Investor to the Corporation, one
copy of (i) each financial statement, report, notice or proxy
statement sent by the Corporation or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic
report, each registration statement that shall have become
effective (without exhibits except as expressly requested by such
holder), and each final prospectus and all amendments thereto
filed by the Corporation or any Subsidiary with the SEC, the OSC
or any other Canadian securities regulatory authorities;
(e) REQUESTED INFORMATION - with reasonable promptness, such other
data and information relating to the business, operations,
affairs, financial or other condition, prospects, assets or
properties of the Corporation or any of its Subsidiaries or
relating to the ability of the Corporation to perform its
obligations under this Agreement and the Ancillary Agreements
prepared by the Corporation in the normal course of business for
the Corporation's management prior to such request as from time to
time may be reasonably requested by any such holder of Common
Shares.
8.2 INSPECTION. The Corporation shall permit an Investor, at the expense of
the Investor and upon reasonable prior notice to the Corporation, to visit the
principal executive office of the
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Corporation, to discuss the affairs, finances and accounts of the Corporation
and its Subsidiaries with the Corporation's officers, and, with the consent of
the Corporation (which consent will not be unreasonably withheld) to visit the
other offices and properties of the Corporation and each Significant Subsidiary,
all at such reasonable times during normal business hours and as often as may be
reasonably requested in writing.
9. EXPENSES, ETC. The Corporation shall pay up to $275,000 of the Investors'
reasonable costs and expenses (including legal fees and disbursements) incurred
in connection with the transactions contemplated by this Agreement and the
Conversion Inducement Agreement (but excluding any reasonable costs and expenses
incurred by the Investors in connection with the payment or issuance of the
Contingent Consideration). Such expenses shall be paid in cash at the Closing by
way of wire transfer of immediately available funds in accordance with the
Investors' instructions.
10. CONFIDENTIALITY
Neither the Investors nor the Corporation shall make any public
disclosure, except to the extent required by law or the rules and procedures of
the Exchanges, of the terms of this Agreement or regarding the transaction
contemplated hereby without the prior consent of the other, such consent not to
be unreasonably withheld. The wording of any public disclosure to be made in
respect of the transactions contemplated by this Agreement must be approved by
each of the Corporation and the General Partner. This Section 10.1 shall survive
any termination of this Agreement.
10.2 CONFIDENTIAL INFORMATION.
(a) Any information furnished to an Investor (or an Investor's
Affiliate) concerning the Corporation under Sections 8.1(a) and
(e) and Section 8.2 hereof (including through its director
nominees) shall be deemed to be "CONFIDENTIAL INFORMATION."
Notwithstanding the generality of the foregoing, information that
is publicly available or becomes publicly available other than
through disclosure by an Investor (or an Investor's Affiliate) or
its Representatives (as defined below) or otherwise was known to
an Investor (or an Investor's Affiliate) or its Representatives
prior to disclosure to any of them by the Corporation or its
Representatives other than as a result of disclosure by a Person
under an obligation of confidentiality to the Corporation known to
an Investor (or an Investor's Affiliate) or its Representatives
shall not be deemed to be Confidential Information.
(b) Except as may be otherwise required by law, legal process or the
rules of any securities regulatory organization (in which event
the Investors shall provide advance notice to the Corporation, to
the extent practicable), each Investor shall (and shall use its
reasonable best efforts to cause its Affiliates to) keep all
Confidential Information confidential, and shall not disclose it
to anyone except to another Investor or an Investor's Affiliate
and to its and their own employees, directors, attorneys,
accountants, financial advisers and other consultants and agents
with a need to know (collectively, "REPRESENTATIVES") (and each
Investor
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shall be responsible for any violation of the terms hereof by its
Representatives) or to such Persons as required by law. Each
Person to whom such Confidential Information is disclosed must be
advised of its confidential nature and of the terms of this
Section 10.2. The Investors acknowledge that Confidential
Information may include material, non-public information and that
the United States and Canadian federal, state and provincial
securities laws restrict the ability of any Person in possession
of such information to acquire or dispose of affected securities,
and that such laws impose liability on such Person for doing so.
(c) This Section 10.2 shall survive any termination of this Agreement.
11. GENERAL PROVISIONS
11.1 NOTICES. Any notice, direction or other instrument required or permitted
to be given or made hereunder shall be in writing and shall be sufficiently
given or made if delivered in person to the address set forth below or if
facsimiled or sent by other means of recorded electronic communication and
confirmed by delivery as soon as practicable thereafter.
Notices to the Corporation shall be addressed as follows:
Xxxxx Corporation Limited
c/x Xxxxx Executive Xxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Chief Financial Officer
Fax: 000-000-0000
with copies to:
Xxxxx Corporation Limited
c/x Xxxxx Executive Xxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
Fax: 000-000-0000
Notices to the Investors shall be addressed as follows:
Greenwich Street Capital Partners II, L.P.
GSCP Offshore Fund, L.P.
Greenwich Fund, L.P.
Greenwich Street Employees Fund, L.P.
TRV Executive Fund, L.P.
x/x Xxxxxxxxx Xxxxxx Investments II, L.L.C., General Partner
00 Xxxx 00xx Xxxxxx - Xxxxx 0000
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New York, New York, 10017
Attention: Xxxxxxx Xxxxxxx
Fax: 000-000-0000
with copies to:
Squadron Ellenoff Plesent & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxx
Fax: 000-000-0000
Any notice, direction or other communication so given or made shall be deemed to
have been given or made and to have been received on the day of delivery, if
delivered, or on the day of sending if sent by facsimile or other means of
recorded electronic communication (provided such day of delivery or sending is a
Business Day and, if not, then on the first Business Day thereafter). Any party
hereto may change its address for notice to the other parties by notice given in
the manner aforesaid.
11.2 ASSIGNMENT. No party hereto may assign this Agreement or its rights or
obligations hereunder without the prior written consent of the other parties,
except that the Investors may assign its rights and obligations hereunder, in
whole or in part, to any Affiliate of an Investor; PROVIDED, that any such
assignee agrees to be bound by the terms and conditions of this Agreement
relating to the assigned portion of the Agreement.
11.3 ENUREMENT. This Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns.
11.4 FURTHER ASSURANCES. Each of the parties agrees to take all such
reasonable actions as may be requested by any other party hereto to implement
and give full effect to the provisions of this Agreement.
11.5 TIME OF THE ESSENCE. Time shall be of the essence of this Agreement.
11.6 ENTIRE AGREEMENT. This Agreement, the Ancillary Agreements and the
Conversion Inducement Agreement constitute the entire agreement between the
parties hereto pertaining to the transfer of the Subco Preferred Shares upon the
conditions described herein and supersede all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties and there
are no other agreements between the parties in connection with such subject
matter hereof. No supplement, modification or termination of this Agreement and
the Ancillary Agreements shall be binding unless executed in writing by both of
the parties hereto.
11.7 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which when taken together shall constitute this Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above stated.
XXXXX CORPORATION LIMITED
By: /s/ XXXXXX X. XXXXX
-------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
GREENWICH STREET CAPITAL PARTNERS II, L.P.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
GREENWICH STREET EMPLOYEES FUND, L.P.
TRV EXECUTIVE FUND, L.P.
By: Greenwich Street Investments II,
L.L.C., its General Partner
By: /s/ XXXXXXX XXXXXXX
-------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
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SCHEDULE A
----------
SCHEDULE OF INVESTORS
---------------------
INVESTOR NUMBER OF INITIAL SHARES
-------- ------------------------
Greenwich Street Capital Partners II, L.P. 1,474,074
GSCP Offshore Fund, L.P. 30,731
Greenwich Fund, L.P. 49,932
Greenwich Street Employees Fund, L.P. 87,998
TRV Executive Fund, L.P. 7,265
---------
Total: 1,650,000
---------
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EXHIBIT 1
---------
FORM OF REGISTRATION RIGHTS AGREEMENT
-------------------------------------
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EXHIBIT 2
---------
OPINIONS TO BE DELIVERED BY THE CORPORATION
-------------------------------------------
(a) Favorable written opinions from nationally-recognized counsel (in
the appropriate jurisdiction) (reasonably satisfactory to the
Investors) to the Corporation (who may rely on certificates from
the Corporation with respect to factual matters), dated the
Closing Date and satisfactory in scope and substance to the
Investors and its counsel, acting reasonably, with respect to the
following substantive matters:
(i) the Corporation is a corporation incorporated under
the laws of the Province of Ontario and has all
necessary corporate power and authority to own its
property and to execute and deliver this Agreement
and the Ancillary Agreements and to perform all its
respective obligations hereunder and thereunder;
(ii) all necessary corporate action has been taken by the
Corporation to authorize the issuance of the Initial
Shares and the execution and delivery of this
Agreement and the Ancillary Agreements and, upon
issuance the Initial Shares will have been validly
issued, as fully paid and non-assessable Common
Shares;
(iii) no action of the shareholders of the Corporation is
required to authorize the issuance of the Initial
Shares and the execution and delivery of this
Agreement and the Ancillary Agreements;
(iv) each of this Agreement and the Ancillary Agreements
has been duly executed and delivered by the
Corporation;
(v) the authorization, execution, delivery and
performance by the Corporation of this Agreement and
the Ancillary Agreements and the issuance of the
Initial Shares do not conflict with, and do not
result in a breach of, the articles or by-laws of
the Corporation;
(vi) the issuance of the Initial Shares to the Investors
pursuant to this Agreement are exempt from the
registration and prospectus requirements of the
Ontario Securities Act; and
(vii) the issuance of the Initial Shares to the Investors
pursuant to this Agreement are not in violation of
United States federal securities laws.
(b) Favorable written opinion from in-house counsel or any reputable
outside counsel to the Corporation (at the Corporation's
election), dated the Closing Date and satisfactory in scope and
substance to the Investors and its counsel, acting reasonably,
with respect to the following substantive matters:
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(i) the Corporation is duly qualified to carry on
business in all jurisdictions in which it currently
carries on business, and has all necessary corporate
power and authority to carry on its business as
aforesaid; and
(ii) none of: (A) the authorization, execution, delivery
or performance by the Corporation of this Agreement
or the Ancillary Agreements, including, without
limitation, or (B) the allotment and issuance of the
Initial Shares as provided herein, will contravene,
result in any breach of or is in conflict with and
does not and will not result in a breach of and does
not and will not create a state of facts which after
notice or lapse of time or both will result in a
breach of any of the terms or provisions of the
articles or by-laws of the Corporation, the
resolutions of the directors or shareholders of the
Corporation or any Material Contract to which the
Corporation is a party or by which the Corporation
or the Properties or assets of the Corporation are
bound or results in the creation or imposition of
any Lien upon any of the Material Properties or
assets of the Corporation pursuant to the terms of
any Material Contract.
(c) Favorable written opinions from nationally-recognized counsel (in
the appropriate jurisdiction) (reasonably satisfactory to the
Investors) to Subco (who may rely on certificates from Subco with
respect to factual matters), dated the Closing Date and
satisfactory in scope and substance to the Investors and its
counsel, acting reasonably, with respect to the following
substantive matters:
(i) Subco is a corporation incorporated under the laws
of the State of Delaware and has all necessary
corporate power and authority to own its property
and to execute and deliver this Agreement and to
perform all its obligations hereunder;
(ii) all necessary corporate action has been taken by
Subco to authorize the issuance of the Subco
Preferred Shares and the execution and delivery of
this Agreement and, upon issuance the Subco
Preferred Shares will have been validly issued, as
fully paid and non-assessable shares;
(iii) all necessary action of the shareholders of Subco
has been taken to authorize the creation of the
Subco Preferred Shares and the execution and
delivery of this Agreement;
(iv) this Agreement has been duly executed and delivered
by Subco;
(v) the authorization, execution, delivery and
performance by Subco of this Agreement and the
issuance of the Subco Preferred Shares do not
conflict with, and do not result in a breach of, the
articles or by-laws of Subco;
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(vi) the issuance of the Subco Preferred Shares to the
Partnership pursuant to the Conversion Inducement
Agreement and the distribution of the Subco
Preferred Shares to the limited partners of the
Partnership are exempt from the registration and
prospectus requirements of the Ontario Securities
Act;
(vii) the acquisition of the Corporation of the Subco
Preferred Shares from the Investors does not
constitute a "take-over bid" or an "issuer bid" for
the purposes of Part XX of the Securities Act
(Ontario); and
(viii) the issuance of the Subco Preferred Shares to the
Partnership pursuant to the Conversion Inducement
Agreement and the distribution of the Subco
Preferred Shares to the limited partners of the
Partnership are not in violation of United States
federal securities laws.
(d) A favorable written opinion from in-house counsel or any reputable
outside counsel to Subco (at Subco's election), dated the Closing
Date and satisfactory in scope and substance to the Investors and
their counsel, acting reasonably, with respect to the following
substantive matters:
(i) Subco is duly qualified to carry on business in all
jurisdictions in which it currently carries on
business, and has all necessary corporate power and
authority to carry on its business as aforesaid; and
(ii) none of: (A) the authorization, execution, delivery
or performance by Subco of this Agreement,
including, without limitation, the allotment and
issuance of the Subco Preferred Shares; or (B) the
issuance of the Subco Preferred Shares as provided
herein, (x) will violate the provision of any
statute or other rule or regulation of any
Governmental Authority or (y) will contravene,
result in any breach of or is in conflict with and
does not and will not result in a breach of and does
not and will not create a state of facts which after
notice or lapse of time or both will result in a
breach of any of the terms or provisions of the
articles or by-laws of Subco.
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