EXHIBIT 9.1
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SHAREHOLDERS' AGREEMENT
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BY AND AMONG
THE MANAGEMENT INVESTORS IDENTIFIED IN APPENDIX A HERETO
AND
XXXXX XXXXX & SONS HOLDINGS INC.
AND
XXXXX XXXXX & SONS INC.
MADE AS OF AUGUST 31, 1998
AMENDED AS OF ______________, 2002
TABLE OF CONTENTS
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ARTICLE I INTERPRETATION.................................................. 1
1.1 Definitions....................................................... 1
1.2 Gender............................................................ 5
1.3 Headings.......................................................... 5
1.4 Severability...................................................... 5
1.5 Entire Agreement.................................................. 5
1.6 Amendments........................................................ 5
1.7 Waiver............................................................ 5
1.8 Governing Law..................................................... 6
1.9 Language.......................................................... 6
1.10 Delays............................................................ 6
1.11 Conflict.......................................................... 6
1.12 Statutes.......................................................... 6
1.13 Preamble.......................................................... 6
ARTICLE II VOTING AGREEMENT............................................... 6
2.1 Voting Agreement.................................................. 6
ARTICLE III RESTRICTIONS ON TRANSFER...................................... 7
3.1 No Transfer....................................................... 7
3.2 Assignment to and From a Permitted Transferee..................... 7
3.3 Right of First Refusal -- Holdings................................ 7
3.4 Right of First Refusal - Management Investors..................... 9
3.5 Drag Along Rights; Piggy-Back Rights.............................. 10
3.6 Nominee........................................................... 10
3.7 Trigger Event..................................................... 11
3.8 Precedence of Offers and Rights................................... 11
3.9 Refusal of Corporation............................................ 11
3.10 Offer; Third Party Offer Notice................................... 12
3.11 Irrevocability.................................................... 12
3.12 Inscription....................................................... 12
3.13 Determination of Value............................................ 12
ARTICLE IV CONVERSION..................................................... 13
4.1 Conversion Privilege.............................................. 13
4.2 No Fractional Shares.............................................. 13
ARTICLE V CLOSING......................................................... 13
5.1 Time, Place, Terms and Conditions................................. 13
5.2 Further Assurances................................................ 14
ARTICLE VI GENERAL PROVISIONS............................................. 15
6.1 Successors in Interest............................................ 15
6.2 Notice............................................................ 15
6.3 Purported Transfers............................................... 16
6.4 Time.............................................................. 16
6.5 Execution of Counterpart.......................................... 16
6.6 Termination....................................................... 16
Schedules:
Schedule 6.5 - Counterpart
SHAREHOLDERS' AGREEMENT
MEMORANDUM OF AGREEMENT made at Montreal, Quebec, as of the 31st day of
August, 1998, and amended and restated as of the _______ day of __________,
2002.
BY AND AMONG: THE MANAGEMENT INVESTORS LISTED IN APPENDIX A
HERETO, (hereinafter, the "MANAGEMENT INVESTORS");
AND: XXXXX XXXXX & SONS HOLDINGS INC. a corporation
incorporated under the laws of Canada, (hereinafter
"HOLDINGS");
AND: XXXXX XXXXX & SONS INC., a corporation amalgamated
under the laws of Canada, (hereinafter, the "CORPORATION").
THIS AGREEMENT WITNESSETH THAT, in consideration of the mutual covenants
herein contained, it is agreed by and among the Parties as follows:
ARTICLE I
INTERPRETATION
1.1 DEFINITIONS
For the purposes of this Agreement or any offer, acceptance, rejection,
notice, consent, request, authorization, permission, direction or other
instrument required or permitted to be given hereunder, the following words and
phrases shall have the following meanings, respectively, unless the context
otherwise requires:
"ACT" shall mean the Canada Business Corporations Act.
"ADDITIONAL OFFER" shall have the meaning ascribed thereto at Section
3.4(c).
"AFFILIATE" shall have the meaning ascribed thereto in the Act.
"AGREEMENT" shall mean this Shareholders' Agreement and all instruments
supplemental hereto or in amendment or confirmation hereof; "herein",
"hereof", "hereto", "hereunder" and similar expressions mean and refer to
this Agreement and not to any particular Article, Section, Subsection or
other subdivision; "Article", "Section", "Subsection" or other subdivision
of this Agreement means and refers to the specified Article, Section,
Subsection or other subdivision of this Agreement.
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"BUSINESS DAY" shall mean any day, other than a Saturday, Sunday, or other
day on which the principal commercial banks in Montreal are not open for
business during normal banking hours.
"BOARD" shall mean the Board of Directors of the Corporation.
"CLOSING" shall mean the sale of Shares pursuant to this Agreement.
"CLOSING DATE" shall mean:
(i) in the case of a Closing pursuant to Section 3.3 or Section
3.4, the date which is ten (10) Business Days after the
acceptance of the Offer or, in the circumstances described in
Section 3.13, the date which is ten (10) Business Days after
the Value is determined.
(ii) in the case of a Closing pursuant to Section 3.5, the date
which is contemplated by the Third Party Offer for the Closing
of the sale; and
(iii) in the case of a Closing pursuant to Section 3.7, the date
which is thirty (30) Business Days after the Trigger Date, or
if the Trigger Event is death or bankruptcy, the date which is
seven (7) Business Days after the receipt of all necessary
releases, consents or approvals required under all Laws to be
obtained in order to effect a valid transfer of the purchased
Shares (the Parties shall use their best efforts to obtain
such releases, consents and approvals).
"CONTROL" means, in relation to a Person that is a corporation or other
body corporate, the ownership, directly or indirectly, of voting
securities of such Person carrying more than 50% of the voting rights
attaching to all voting securities of such Person and which are
sufficient, if exercised, to elect a majority of its board of directors or
other governing body; and "CONTROLLED" shall have a similar meaning.
"CORPORATION" shall mean Xxxxx Xxxxx & Sons Inc.; for the purposes of the
definition of "TRIGGER EVENT" in this Section 1.1, "CORPORATION" shall
also include any corporation or other body corporate Controlled by the
Corporation.
"DOLLAR", "DOLLARS" and the sign "$" shall each mean lawful money of
Canada.
"GOVERNMENTAL BODY" shall mean (i) any domestic or foreign national,
federal, provincial, state, municipal or other government or body, (ii)
any multinational, multilateral or international body, (iii) any
subdivision, agent, commission, board, instrumentality or authority of any
of the foregoing governments or bodies, (iv) any quasi-governmental or
private body exercising any regulatory, expropriation or taxing authority
under or for the account of any of the foregoing governments or bodies, or
(v) any domestic, foreign, international, multilateral or multinational
judicial, quasijudicial, arbitration or administrative court, tribunal,
commission, board or panel.
"HOLDINGS" shall mean Xxxxx Xxxxx & Sons Holdings Inc.
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"LAWS" shall mean (i) all constitutions, treaties, laws, statutes, codes,
ordinances, orders, decrees, rules, regulations, and municipal by-laws,
whether domestic, foreign or international, and (ii) all judgments,
orders, writs, injunctions, decisions, rulings, decrees, and awards of any
Governmental Body, in each case binding on or affecting the Person
referred to in the context in which such word is used; and "LAW" shall
mean any one of them.
"MAJORITY OFFERING PARTY" shall have the meaning ascribed thereto at
Section 3.4(a).
"MANAGEMENT INVESTOR OFFER" shall have the meaning ascribed thereto at
Section 3.3(a).
"MANAGEMENT INVESTORS" shall mean the management investors listed in
Appendix A hereto together with such further management investors as may
become a party to this Agreement pursuant to its terms so long, in the
case of each of the foregoing, as such management investor remains a
Shareholder of the Corporation.
"NOMINEE" shall have the meaning ascribed thereto at Section 3.6.
"NOTIFIED PARTY" and "NOTIFIED PARTIES" shall have the meaning ascribed
thereto at Section 3.3(a).
"OFFER" shall have the meaning ascribed thereto at Section 3.3(a) or
Section 3.4(a), as the case may be.
"OFFER PERIOD" shall have the meaning ascribed thereto at Section 3.3(a)
or Section 3.4(a), as the case may be.
"OFFERED SECURITIES" shall have the meaning ascribed thereto at Section
3.3(a), Section 3.4(a) or Section 3.7, as the case may be.
"OFFERING PARTY" shall have the meaning ascribed thereto at Section
3.3(a), Section 3.4(a) or Section 3.7, as the case may be.
"PARTIES" shall mean the Management Investors, Holdings and the
Corporation; and "PARTY" shall mean any one of them.
"PERMITTED TRANSFEREE" shall, in respect of a Person, mean a corporation
incorporated under the Act, all of the shares of which are held by such
Person and in respect of Holdings, shall mean Xxxxx Xxxxx & Sons Holdings
Inc., Montroluxe S.A., and Investment Regaluxe Sarl.
"PERSON" shall mean an individual, corporation, company, co-operative,
partnership, trust, unincorporated association, Governmental Body; and
pronouns when they refer to a Person shall have a similarly extended
meaning.
"PRIME RATE" shall mean the rate of interest per annum reported, quoted,
published and commonly known as the prime rate of interest of Canadian
Imperial Bank of Commerce for loans in dollars made in Canada to
substantial and responsible customers. Each
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announced change in the prime rate of interest of Canadian Imperial Bank
of Commerce will be effective as of the effective date specified in the
relevant announcement or, if no effective date is so specified, as of the
date of such announcement. With each change in the Prime Rate there shall
be a corresponding change in any rate of interest based thereon and
payable pursuant hereto.
"SHAREHOLDERS" shall mean all of the registered holders of Shares; and
"SHAREHOLDER" shall mean any one of them.
"SHARES" shall mean (i) any share of any class, series or category of the
capital stock of the Corporation, or (ii) any equity security in the
capital of the Corporation including, without limitation, purchase
warrants, options or securities in whole or in part convertible or
exchangeable for or into shares of any class, series or category of the
capital stock of the Corporation; and "SHARE" shall mean any one of them.
"THIRD PARTY" shall have the meaning ascribed thereto at Section 3.3(a) or
Section 3.4(a), as the case may be.
"THIRD PARTY OFFER" shall have the meaning ascribed thereto at Section
3.3(a) or Section 3.4(a), as the case may be.
"TRANSFER", and any derivative thereof, shall, when used as a verb or a
noun in this Agreement, mean to sell, assign, surrender, exchange, give,
donate, transfer, pledge, mortgage, charge, create a security interest in,
hypothecate, grant an option in, or otherwise dispose, alienate, encumber
or deal with any of the Shares; however, if the Shareholder is a body
corporate, then (i) any amalgamation, merger, dissolution, liquidation or
winding up of such body corporate, or (ii) any change of control of such
body corporate, shall each also be deemed a Transfer.
"TRIGGER DATE" shall mean the date on which a Trigger Event occurs.
"TRIGGER EVENT" shall mean any of the following events:
(i) in respect of an individual Management Investor, the death of such
Management Investor;
(ii) in respect of an individual Management Investor, any incapacity or
disability of such severity that such Management Investor shall be
unable to attend to such Management Investor's duties with the
Corporation for more than six (6) consecutive months or for nine (9)
months out of any period of fifteen (15) consecutive months;
(iii) in respect of an individual Management Investor, the resignation of
such Management Investor from the Corporation;
(iv) the termination of an individual Management Investor's employment
with the Corporation.
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"TRIGGER EVENT OFFERING PARTY" shall have the meaning ascribed thereto at
Section 3.7.
"VALUE" shall mean the value of a Share as determined by the auditors of
the Corporation pursuant to Section 3.13 and in accordance with Canadian
generally accepted accounting principles, consistently applied.
1.2 GENDER
Any reference in this Agreement to any gender shall include all genders
and words used herein importing the singular number only shall include the
plural and vice versa.
1.3 HEADINGS
The division of this Agreement into Articles, Sections, Subsections and
other subdivisions and the insertion of headings are for convenience of
reference only and shall not affect or be utilised in the construction or
interpretation of this Agreement.
1.4 SEVERABILITY
Any Article, Section, Subsection or other subdivision of this Agreement or
any other provision of this Agreement which is, or becomes, illegal, invalid or
unenforceable shall be severed herefrom and shall be ineffective to the extent
of such illegality, invalidity or unenforceability and shall not affect or
impair the remaining provisions hereof, which provisions shall be severed from
an illegal or unenforceable Article, Section, Subsection or other subdivision of
this Agreement or any other provisions of this Agreement.
1.5 ENTIRE AGREEMENT
This Agreement together with any other instruments to be delivered
pursuant hereto, constitute the entire agreement among the Parties pertaining to
the subject matter hereof and supersede all prior agreements, understandings,
negotiations, and discussions, whether oral or written, among any or all of the
Parties.
1.6 AMENDMENTS
No amendment of this Agreement shall be binding unless otherwise expressly
provided in an instrument duly executed in writing by the Parties.
1.7 WAIVER
Except as otherwise provided in this Agreement, no waiver of any of the
provisions of this Agreement shall be deemed to constitute a waiver of any other
provisions (whether or not similar) nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided in an instrument duly
executed in writing by the Parties.
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1.8 GOVERNING LAW
This Agreement shall be governed, interpreted and construed by and in
accordance with the Laws of the Province of Quebec and the Laws of Canada
applicable therein and shall be treated in all respects as a Quebec contract.
1.9 LANGUAGE
The Parties have required that this Agreement and all instruments relating
thereto be in the English language; les parties ont exige que la presente
convention et tout autre document afferent aux presentes soient en langue
anglaise.
1.10 DELAYS
When calculating the period of time within which or following which any
act is to be done or step taken pursuant to this Agreement, the day which is the
reference day in calculating such period shall be excluded.
1.11 CONFLICT
If any conflict should appear between this Agreement and the by-laws or
resolutions of the Corporation, then the provisions of this Agreement shall
prevail.
1.12 STATUTES
References in this Agreement to statutes shall include any statute
amending, modifying, re-enacting, restating, extending or made pursuant to the
same or which is amended, modified, re-enacted, restated, or extended by the
same.
1.13 PREAMBLE
The preamble hereto is incorporated herein by reference and deemed to be a
part of this Agreement.
ARTICLE II
VOTING AGREEMENT
2.1 VOTING AGREEMENT
During the period from and including the date hereof through and including
the termination date of this Agreement, each of the Management Investors hereby
appoints Xx. Xxxxxxx Xxxxx di Montelera as the nominee of such Management
Investor to attend and act for and on behalf of such Management Investor at any
meeting of the shareholders of the Corporation and at any adjournment thereof to
the same extent and with the same power as if the Management Investors were
personally present at the said meeting or such adjournment thereof. Each
Management Investor represents that any outstanding proxies heretobefore given
in respect of any Shares held by such Management Investor are not irrevocable,
and that such Management Investor shall revoke all such proxies forthwith.
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ARTICLE III
RESTRICTIONS ON TRANSFER
3.1 NO TRANSFER
Except as permitted in this Article III and except for pledges granted by
the Management Investors to the Corporation, the Management Investors may not
transfer, pledge, encumber or otherwise dispose in whole or in part, directly or
indirectly, any Shares or any right, title or interest therein.
3.2 ASSIGNMENT TO AND FROM A PERMITTED TRANSFEREE
A Shareholder may assign some or all of the Shares held by such
Shareholder to a Permitted Transferee, provided that:
(a) in the case of a Management Investor, one or more Shareholders
holding not less than seventy-five percent (75%) of the issued and
outstanding Shares consent to such assignment, which consent cannot
be arbitrarily withheld by such Shareholder or Shareholders, as the
case may be;
(b) the Permitted Transferee has executed prior to such assignment a
counterpart of this Agreement in accordance with Section 6.5; and
(c) the assignor has agreed prior to such assignment, in form and terms
satisfactory to the legal counsel of the Corporation, acting
reasonably, that as long as the Permitted Transferee holds such
Shares the assignor shall (i) not transfer to any Person the legal
and/ or beneficial ownership of any issued and outstanding share,
equity security or ownership, participatory or profit interest in
the Permitted Transferee or otherwise transfer the control of the
Permitted Transferee by any mechanism whatsoever, (ii) not be
relieved of its obligations hereunder and continue to be bound by
this Agreement as if it continued to be a Shareholder, (iii)
represent the Permitted Transferee in all of the Permitted
Transferee's dealings with the Corporation and the other
Shareholders, (iv) guarantee to the other Parties the timely
performance and fulfilment by the Permitted Transferee of its
obligations and covenants under this Agreement, and (v) solidarily
with the Permitted Transferee, each waiving the benefit of division
and discussion, be liable to the other Parties for the obligations
of the Permitted Transferee under this Agreement.
A Permitted Transferee may assign some or all of the Shares held by it to
the Person from whom it acquired such Shares, subject to the consent described
at item (a) above and to compliance with Section 6.5.
3.3 RIGHT OF FIRST REFUSAL -- HOLDINGS
(a) A Management Investor shall not be entitled to transfer Shares it
holds other than by sale of all of the Shares it holds. If a
Management Investor (the "OFFERING PARTY") desires to sell all (but
not less than all) of its Shares (the "MANAGEMENT
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INVESTOR OFFER"), or wishes to accept a bona fide irrevocable written
offer from a person dealing at arms' length (within the meaning the Income
Tax Act (Canada)) with the Offering Party (the "THIRD PARTY") to purchase
all (but not less than all) of the Shares held by the Offering Party (the
"THIRD PARTY OFFER"), then it shall first offer to sell (the "OFFER") such
Shares (the "OFFERED SECURITIES") to the Corporation and to Holdings, or
to Holdings' assignee, as the holder of the majority of the common shares
of the Corporation (the "NOTIFIED PARTIES") in accordance with the
procedure set forth in this Section 3.3. The Offer shall be sent to each
Notified Party and shall respect the following conditions:
(i) in the case of a Third Party Offer, the Offer shall include a copy
of the Third Party Offer, and reasonable detail as to the identity
and, where applicable, the ownership of the Third Party, and the
terms and conditions of the Offer shall be not less favourable, in
the aggregate, for the Notified Parties than those contained in the
Third Party Offer;
(ii) in the case of a Management Investor Offer, the sale price in the
Offer shall be the Value of the Offered Securities as at the last
day of the Corporation's most recently-completed fiscal year, or as
otherwise determined pursuant to Section 3.13 hereof; and
(iii) in all cases, the Offer shall open for acceptance by the Notified
Parties for thirty (30) Business Days (the "OFFER PERIOD") from the
receipt of the Offer by the Notified Parties.
The Notified Parties shall be obliged by delivering notice to the Offering
Party within, but not after the expiration of, the Offer Period at their
sole option to either accept the Offer or reject the Offer. If a Notified
Party does not accept the Offer, then such Notified Party shall be deemed
to have rejected the Offer. If a Notified Party has accepted the Offer,
then the Offering Party shall sell to the Notified Party, and the Notified
Party shall purchase from the Offering Party, the Offered Securities in
accordance with this Agreement. If both Notified Parties accept the Offer,
the Offered Securities shall be sold to the Corporation.
(b) If both of the Notified Parties have or are deemed to have rejected the
Offer, then the Offering Party shall be free for a period of thirty (30)
Business Days from the end of the Offer Period to sell all, but not less
than all, of the Offered Securities
(i) in the case of a Third Party Offer, to the Third Party on terms not
more favourable in the aggregate for the Third Party than those
contained in the Third Party Offer; or
(ii) in the case of a Management Investor Offer, to any Person on terms
not more favourable, in the aggregate, for such Person than those
contained in the Offer;
provided, however, that in either case it shall be a condition precedent
to the right of the Offering Party to sell the Offered Securities that the
purchaser has
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executed a counterpart of this Agreement in accordance with Section
6.5. If no sale takes place within the said thirty (30) Business Day
period, then the Offering Party shall not transfer the Offered
Securities without again following and being subject to this Article
III.
3.4 RIGHT OF FIRST REFUSAL - MANAGEMENT INVESTORS
(a) If one or more Shareholders holding, in the aggregate, not less than
seventy-five percent (75%) of the Shares (collectively, the
"MAJORITY OFFERING PARTY") should receive a bona fide irrevocable
written offer (the "THIRD PARTY OFFER") from a Person dealing at
arms' length (within the meaning of the Income Tax Act (Canada))
with the Majority Offering Party (the "THIRD PARTY"), to purchase
all (but not less than all) of the Shares held by the Majority
Offering Party, which it has accepted or intends to accept, then the
Majority Offering Party shall first offer to sell (the "OFFER") such
Shares (the "OFFERED SECURITIES") to the Management Investors in
accordance with the procedure set forth in this Section 3.4. The
Offer shall be sent to each Management Investor, shall include a
copy of the Third Party Offer, and shall contain terms and
conditions not less favourable, in the aggregate, for the Management
Investors than those contained in the Third Party Offer. The Offer
shall open for acceptance by the Management Investors for thirty
(30) Business Days (the "OFFER PERIOD") from the receipt of the
Offer by the Management Investors.
(b) The Management Investors shall be obliged by notice delivered by the
Nominee to the Majority Offering Party within, but not after the
expiration of, the Offer Period at their sole option to either
accept the Offer or reject the Offer. If a Management Investor does
not accept the Offer, then such Management Investor shall be deemed
to have rejected the Offer. If all of the Management Investors have
accepted the Offer, then the Majority Offering Party shall sell to
each Management Investor, and each Management Investor shall
purchase from the Majority Offering Party, within thirty (30)
Business Days following the end of the Offer Period, such Management
Investor's pro rata share of the Offered Securities in accordance
with this Agreement.
(c) If one or more (but not all) of the Management Investors reject or
are deemed to have rejected the Offer, then every Management
Investor having accepted the Offer shall have the right to purchase
his or her pro rata share of the unaccepted Offered Securities (the
"ADDITIONAL OFFER"); and the Additional Offer shall be repeated
until (i) all of the Offered Securities are accepted or (ii) the
Offer Period expires without all of the Offered Securities having
been accepted. If, following one or more Additional Offers, all of
the unaccepted Offered Securities are accepted, then the Majority
Offering Party shall sell to each Management Investor having
accepted the Offer or the Additional Offer, and each such Management
Investor shall purchase from the Majority Offering Party, within
thirty (30) Business Days following the end of the Offer Period,
such Management Investor's pro rata share of the Offered Securities
and the unaccepted Offered Securities in accordance with this
Agreement. If less than all
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of the Offered Securities are accepted following one or more
Additional Offers, then all of the Management Investors shall be
deemed to have rejected the Offer and the Additional Offer.
(d) If the Management Investors have or are deemed to have rejected the
Offer and the Additional Offer, then the Majority Offering Party
shall be free for a period of thirty (30) Business Days from the end
of the Offer Period to sell all, but not less than all, of the
Offered Securities to the Third Party on terms not more favourable
in the aggregate for the Third Party than those contained in the
Third Party Offer; provided, however, that it shall be a condition
precedent to the right of the Majority Offering Party to sell the
Offered Securities that the purchaser has executed a counterpart of
this Agreement in accordance with Section 6.5. If no sale takes
place within the said thirty (30) Business Day period, then the
Majority Offering Party shall not transfer the Offered Securities
without again following and being subject to this Article III.
3.5 DRAG ALONG RIGHTS; PIGGY-BACK RIGHTS
If the Management Investors have or are deemed to have rejected the Offer
and the Additional Offer pursuant to Section 3.4(d), such that the Majority
Offering Party has the right to sell all but not less than all of the Offered
Securities to the Third Party, then:
(a) the Majority Offering Party shall also have the right, upon written
notice to the other Shareholders, to require that the other
Shareholders sell all of the Shares held by such Shareholders
together with the Shares held by the Majority Offering Party on the
same terms as those contained in the Third Party Offer. In such
event, such Shareholders shall be obliged to sell all of the Shares
held by them in accordance with the terms of the Third Party Offer;
and
(b) each Management Investor shall have the right, at such Management
Investor's option, to require that all of the Shares held by such
Management Investor be included in the sale contemplated by the
Third Party Offer. If a Management Investor wishes to exercise the
right granted in this Section 3.5(b), then it shall do so by notice
sent by the Nominee to the Majority Offering Party within, but not
after, five (5) Business Days of the end of the Offer Period.
3.6 NOMINEE
(a) For the purposes of Section 3.4 and Section 3.5(b), each Management
Investor hereby appoints Xxxxxx X. Xxxxxxxxxxxx (or any other
individual designated by the Management Investors in accordance with
Section 3.6(b) below) as its nominee (the "NOMINEE") to represent
such Management Investor in the exercise of its rights under Section
3.4 and Section 3.5(b), including, without limitation, to represent
and act on behalf of each Management Investor, in accordance with
the instructions of each such Management Investor, in all
correspondence and other communications to and from Holdings in
accordance with Section 6.2 hereof.
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(b) The Nominee may be replaced (i) at any time by the Management
Investors, by the vote of the holders of a majority of the Shares
held in the aggregate by Management Investors as at such date; or
(ii) by Holdings, in the event that the Nominee resigns, is
incapable of acting or refuses to act, if the Nominee is not
replaced in accordance with the provisions hereof within five (5)
Business Days of written notice from Holdings of such resignation,
incapacity or refusal to act. All Parties shall be notified of any
such change of Nominee in accordance with the notice provisions set
out in Section 6.2 hereof.
3.7 TRIGGER EVENT
Upon the occurrence of a Trigger Event in connection with a Management
Investor, such Management Investor or his heirs, executors or other legal
representatives, as the case may be, (the "TRIGGER EVENT OFFERING PARTY") shall
be deemed to have offered for sale to Holdings all, but not less than all, of
the Shares held by the Trigger Event Offering Party immediately prior to the
Trigger Event (the "OFFERED SECURITIES") for an amount per share equal to the
Value of the Offered Securities, and Holdings shall have the option to purchase
such Offered Securities.
This option may be exercised by Holdings giving notice thereof to the
Trigger Event Offering Party within fifteen (15) Business Days from the Trigger
Date. The Trigger Event Offering Party shall forthwith give notice to Holdings
of any Trigger Event.
If Holdings does not exercise the option in this Section 3.7, then, to the
extent permitted by law, the Corporation shall purchase from the Trigger Event
Offering Party, and the Trigger Event Offering Party shall sell to the
Corporation, the Offered Securities for an amount per share equal to the Value
of the Offered Security.
3.8 PRECEDENCE OF OFFERS AND RIGHTS
In the event that any Offer or Third Party Offer or Trigger Event shall
take place pursuant to Sections 3.3, 3.4, 3.5 or 3.7, respectively at a time
when any other such Offer or Third Party Offer or Trigger Event may have been
made with respect to Shares, or occurred, and prior to the conclusion of the
transactions contemplated by such Offer, Third Party Offer or Trigger Event,
then:
(a) the provisions of Section 3.5 shall have precedence over the
provisions of Sections 3.3, 3.4 and 3.7; and
(b) the provisions of Section 3.7 shall have precedence over the
provisions of Sections 3.3 and 3.4.
3.9 REFUSAL OF CORPORATION
The Corporation shall record each transfer of Shares; provided, however,
that the Corporation shall refuse to record a transfer of Shares made in
contravention of this Agreement. The Corporation and its board of directors,
prior to consenting to the transfer of Shares, shall be entitled to require
proof that the transfer took place in accordance with this Agreement.
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3.10 OFFER; THIRD PARTY OFFER NOTICE
Each Offer and Third Party Offer Notice shall be in writing signed by the
Offering Party and shall:
(a) identify the Section pursuant to which it is delivered;
(b) identify and provide particulars of the Offered Securities;
(c) state the purchase price per Offered Security;
(d) in the case of a Third Party Offer, state the identity and address
of the Person (who shall deal at arm's length with the Offering
Party within the meaning of the Income Tax Act (Canada)) to whom it
proposes to sell the Offered Securities;
(e) in the case where a Third Party Offer is made, the Offer or Third
Party Offer Notice shall be accompanied by a true copy of the Third
Party Offer;
(f) in the case where a Third Party Offer is made, be accompanied by an
affidavit of the Offering Party attesting that there is no
commission or similar fee that may be or may become due and payable
to any broker, agent or other intermediary in connection with the
sale of the Offered Securities; and
(g) in the case of an Offer, be accompanied by the certificate or
certificates representing the Offered Securities.
3.11 IRREVOCABILITY
All Offers and Third Party Offer Notices and their acceptance, rejection
or deemed acceptance or rejection are irrevocable.
3.12 INSCRIPTION
The Corporation shall cause, and the Shareholders shall vote their Shares
to cause the Corporation to cause, all certificates for Shares to be endorsed
with the following inscription:
"OWNERSHIP, ALIENATION AND ENCUMBRANCE OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF THE SHAREHOLDERS AGREEMENT
MADE AS OF AUGUST 31, 1998 AS AMENDED, A COPY OF WHICH IS ON FILE AT THE
REGISTERED OFFICE OF THE CORPORATION."
3.13 DETERMINATION OF VALUE
The auditors of the Corporation (the "AUDITORS") shall determine the Value
of a Share at least once in every fiscal year of the Corporation and, in any
event, they shall determine the value as at the last day of each fiscal year of
the Corporation. In the event that, at the time a Value must be attributed to
Shares for purposes of any of the provisions of this Article III or Section 4.1,
the Value has not been determined by the Auditors as at the last day of the most
recently completed fiscal year of the Corporation, then the Closing of the
relevant transaction
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shall be deferred until such Value has been determined, and it is such Value
which shall be applied to such transaction.
Notwithstanding the foregoing, in the event that, at the time that a Value
must be attributed to Shares for purposes of any of the provisions of this
Article III or Section 4.1, more than three (3) months have passed since the
date as of which the Value of the Shares was last determined by the Auditors,
any Management Investor who is selling Shares pursuant to this Article III shall
be entitled to require a new valuation of the Shares, in which case the Auditors
shall determine the Value of the Shares as at the last day of the most
recently-completed monthend of the Corporation, and all costs, fees and expenses
of such valuation shall be borne equally by such Management Investor and the
Corporation.
ARTICLE IV
CONVERSION
4.1 CONVERSION PRIVILEGE
In the event that the Corporation does not issue and does not intend to
issue shares of its share capital to the general public and that Holdings
intends to issue shares in its share capital to the general public and such
offering subsequently occurs, then each Management Investor shall have the right
and option (exercised by written notice to Holdings) to cause Holdings to
exchange the Shares held by such Management Investors for securities in the
share capital of Holdings which securities shall have a value (without reference
to their proposed issue price) identical to the Value of the Shares held by the
Management Investors. In the event of any dispute between Holdings and the
Management Investors as to the number or value of the securities in the share
capital of Holdings to be issued in accordance herewith (or anything incidental
thereto), same shall be absolutely determined by a recognized business valuator
having offices in Montreal, to be designated by Holdings with the approval of
Management Investors holding at least twenty-five percent (25%) of the total
number of Shares held by all Management Investors, whose determination shall be
final and binding on the parties hereto, to the complete exclusion of any court
or trial.
4.2 NO FRACTIONAL SHARES
Notwithstanding anything herein contained, Holdings shall in no case be
required to issue fractional securities upon the conversion of the Shares. If
any fractional share would, except for this Section 4.2, be deliverable upon the
conversion of the Shares, Holdings shall satisfy all of its obligations under
this Agreement with respect to such fractional share by paying to the
Shareholder an amount in cash equal (to the nearest cent) to the value of the
fractional share.
ARTICLE V
CLOSING
5.1 TIME, PLACE, TERMS AND CONDITIONS
(a) Each Closing shall be held at the registered office of the
Corporation at 10:00 a.m. on the Closing Date, or at such other
place, at such other time or on such other
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date as the Parties thereto may agree, in accordance with the
following terms and conditions:
(i) at Closing, the selling Shareholder shall deliver to the
purchaser certificates representing the Shares being
transferred, which certificates shall, in the case of a sale,
be accompanied by a duly executed assignment of the Shares to
the purchaser; and
(ii) payment for Shares shall be made in full at Closing.
(b) At Closing, the selling Shareholder shall deliver to the purchaser a
written warranty that:
(i) there are no contractual or other restrictions on the transfer
of the purchased Shares (other than the restrictions set out
in the Articles of the Corporation and in this Agreement); and
(ii) the Selling Shareholder is the sole beneficial owner of the
purchased Shares with full right, title and authority to
transfer the purchased Shares to the purchaser, free and clear
of all claims, liens and other encumbrances whatsoever.
(c) At Closing, all necessary and proper corporate proceedings required
by counsel for the purchaser, acting reasonably, shall be taken for
the transfer of the purchased Shares.
(d) If the purchaser fails for any reason whatsoever to proceed with
Closing or to pay to the selling Shareholder any amount due
hereunder, then all amounts due hereunder but not paid shall bear
interest from the date of Closing until paid in full at a rate of
interest per annum equal to the Prime Rate plus three percent (3%).
Such interest shall be payable on demand.
The conditions set forth in this Section 5.1 are each made for the
exclusive benefit of the purchaser and if any such conditions is not satisfied
at the Closing, then the purchaser may, at its option, either refuse to proceed
with the Closing or proceed with the Closing, in either case without prejudice
to its remedies and recourses against the selling Shareholder as a result of
such condition not being satisfied.
5.2 FURTHER ASSURANCES
Each Party upon the request of the other, whether before or after the
Closing, shall do, execute, acknowledge and deliver or cause to be done,
executed, acknowledged or delivered all such further acts, deeds, documents,
assignments, transfers, conveyances, powers of attorney and assurances as may be
reasonably necessary or desirable to effect complete consummation of the
transactions contemplated by this Agreement.
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ARTICLE VI
GENERAL PROVISIONS
6.1 SUCCESSORS IN INTEREST
This Agreement and the provisions hereof shall enure to the benefit of and
be binding upon the Parties and their respective heirs, legatees, successors,
testamentary executors and permitted assigns.
6.2 NOTICE
Any offer, acceptance, rejection, notice, consent, request, authorisation,
permission, direction or other instrument required or permitted to be given
hereunder shall be in writing and given by delivery or sent by telecopier or
similar telecommunications device and addressed:
(a) in the case of a Shareholder, to such Shareholder at the address set
forth in the Register of Shareholders of the Corporation; except
that, for the purposes of Section 3.4 and Section 3.5, any such
notice or other communication to be sent to a Management Investor
shall be addressed as follows:
c/ o Xxxxxx X. Xxxxxxxxxxxx
XXXXX XXXXX & SONS INC.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Telecopier: (000) 000-0000
(b) in the case of the Corporation, to it at:
XXXXX XXXXX & SONS INC.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: The President, and Xxxxxx Xxxxxxxx, Corporate Secretary
Telecopier: (000) 000-0000
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- with a copy to:
XXXXX XXXXX & SONS HOLDINGS INC.
X/X XXXXXXXX XXXXXXXXXX XXXX
00X, xxxxxxxxx Xxxxx
Xxxxxxxxxx, 0000
Attention: The President, and Xxxxxx Xxxxxxxx, Corporate Secretary
Telecopier: 011 39 118 174 827
Any offer, acceptance, rejection, notice, consent, request, authorisation,
permission, direction or other instrument given as aforesaid shall be deemed to
have been received, if sent by telecopier or similar telecommunications device
on the next Business Day following such transmission or, if delivered, to have
been given and received on the date of such delivery. Any address for service
may be changed by written notice given as aforesaid.
6.3 PURPORTED TRANSFERS
Any purported transfer of Shares contrary to the terms of this Agreement
shall be null and void and have no legal effect.
6.4 TIME
Time shall be of the essence in this Agreement.
6.5 EXECUTION OF COUNTERPART
No Person shall become a holder of Shares of the Corporation without first
having executed a counterpart of this Agreement in accordance with Schedule 6.5.
Each such counterpart so executed shall be deemed to be an original and
such counterparts together shall constitute one and the same instrument.
Each Person who becomes a holder of Shares of the Corporation and who has
executed a counterpart of this Agreement in accordance with Schedule 6.5 shall
become a Party hereto.
6.6 TERMINATION
This Agreement shall terminate automatically upon occurrence of any of the
following events:
(a) the bankruptcy or dissolution (whether voluntary or involuntary) of
the Corporation;
(b) the Corporation ceasing to carry on business for any reason
whatsoever or howsoever arising;
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(c) all issued and outstanding Shares of the Corporation are held by one
Person only;
(d) upon the closing of the initial public offering of Shares of the
Corporation; or
(e) by written agreement of the Shareholders and the Corporation.
IN WITNESS WHEREOF this Agreement was executed on the date and at the
place first mentioned above.
XXXXX XXXXX & SONS INC. XXXXX XXXXX & SONS HOLDINGS INC.
Per: ______________________________ Per: _____________________________
Per: ______________________________ Per: _____________________________
_____________________________ ____________________________
T.A. AND RUSKEVICH X.X. XXXX
_____________________________ ____________________________
X. XXXXXX X. XXXXXX
_____________________________ ____________________________
X. XXXXXXXX X. XXXXXXX
_____________________________ ____________________________
X. XXXXXXXX X. XXXXXXXX
_____________________________ ____________________________
X. XXXXXXX X. XXXXXX
_____________________________ ____________________________
X. XXXXXXXXXX X. X'XXXXX
SCHEDULE 6.5
To the Shareholders Agreement by and among the management investors
identified in Appendix A hereto and Xxxxx Xxxxx & Sons Holdings Inc. and Xxxxx
Xxxxx & Sons Inc. made as of August 31, 1998 as amended by agreement dated as of
-, 2002.
COUNTERPART
THIS INSTRUMENT forms part of the Shareholders Agreement (the "AGREEMENT")
made August 31, 1998 as amended, by and among the management investors
identified in Appendix A thereto, Xxxxx Xxxxx & Sons Holdings Inc. and Xxxxx
Xxxxx & Sons Inc., which Agreement permits execution by counterparts. The
undersigned hereby acknowledges having received a copy of the said Agreement
(which is annexed hereto as Schedule A) and, having read the said Agreement in
its entirety, hereby agrees that the terms and conditions of the said Agreement
shall be binding upon the undersigned as if the undersigned had been an original
party to the Agreement as a Shareholder (as such term is defined in the
Agreement) and such terms and conditions shall enure to the benefit of and be
binding upon the undersigned, its successors and assigns.
IN WITNESS WHEREOF the undersigned has executed this instrument this
[____] day of [____],____.
[SHAREHOLDER]
Per: __________________________________
APPENDIX A
To the Shareholders Agreement by and among the management investors
identified in Appendix A hereto and Xxxxx Xxxxx & Sons Holdings Inc., and Xxxxx
Xxxxx & Sons Inc. made as of August 31, 1998 as amended by agreement dated as of
____________, 2002.
Set forth below, are the names of the Management Investors:
X.X. Xxxxxxxxxxxx
X.X. Xxxx
X. Xxxxxx
X. Xxxxxx
X. Xxxxxxxx
X. XxXxxxx
X. Xxxxxxxx
X. Xxxxxxxx
X. Xxxxxxx
X. Xxxxxx
X. Xxxxxxxxxx
X. X'Xxxxx
