INVESTMENT AGREEMENT
BY AND AMONG
LIVENT INC.,
LYNX VENTURES L.P.
AND
SOUTHAM INC.
June 23, 1998
TABLE OF CONTENTS
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. PURCHASE AND SALE OF COMMON SHARES . . . . . . . . . . . . . . . . . 5
3. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . 5
4.1 Organization, Good Standing and Qualification . . . . . . . . . 6
4.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 6
4.3 Options, Warrants and Reserved Shares . . . . . . . . . . . . . 6
4.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.5 Due Authorization . . . . . . . . . . . . . . . . . . . . . . . 7
4.6 Valid Issuance of Stock . . . . . . . . . . . . . . . . . . . . 7
4.7 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.8 No Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.9 Financial Information . . . . . . . . . . . . . . . . . . . . . 8
4.10 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . 9
4.11 Material Adverse Effect . . . . . . . . . . . . . . . . . . . . 9
4.12 Securities Laws . . . . . . . . . . . . . . . . . . . . . . . . 9
4.13 Consents and Approvals . . . . . . . . . . . . . . . . . . . . 9
4.14 Common Shares Listing . . . . . . . . . . . . . . . . . . . . 10
4.15 Board Approval . . . . . . . . . . . . . . . . . . . . . . . 10
4.16 No Shareholder Approval . . . . . . . . . . . . . . . . . . . 10
4.17 Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . 10
5. REPRESENTATIONS AND WARRANTIES OF LYNX . . . . . . . . . . . . . . 10
5.1 Organization, Good Standing and Qualification . . . . . . . . 10
5.2 Due Authorization . . . . . . . . . . . . . . . . . . . . . . 11
5.3 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . 11
6. REPRESENTATIONS AND WARRANTIES OF INVESTOR . . . . . . . . . . . . 11
6.1 Organization, Good Standing and Qualification . . . . . . . . 11
6.2 Due Authorization . . . . . . . . . . . . . . . . . . . . . . 12
6.3 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . 12
6.4 Control . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.5 Investor Status . . . . . . . . . . . . . . . . . . . . . . . 12
6.6 Accredited Investor . . . . . . . . . . . . . . . . . . . . . 12
6.7 No General Solicitation . . . . . . . . . . . . . . . . . . . 12
6.8 Private Placement Questionnaire . . . . . . . . . . . . . . . 13
6.9 Executive Committee Approval . . . . . . . . . . . . . . . . 13
7. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.1 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . 13
7.2 Company Covenants . . . . . . . . . . . . . . . . . . . . . . 13
8. CONDITIONS TO INVESTOR'S OBLIGATIONS AT CLOSING . . . . . . . . . 13
8.1 Representations and Warranties . . . . . . . . . . . . . . . 14
8.2 Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9. CONDITIONS TO THE COMPANY'S AND LYNX'S OBLIGATIONS AT CLOSING . . 14
9.1 Representations and Warranties . . . . . . . . . . . . . . . 14
9.2 Payment of Purchase Price . . . . . . . . . . . . . . . . . . 14
9.3 Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
10. VOTING; RIGHTS OF FIRST REFUSAL; PIGGYBACK REGISTRATION RIGHTS;
TAG-ALONG RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . 15
10.1 Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
10.2 Permitted Transferees . . . . . . . . . . . . . . . . . 15
10.3 Rights of First Refusal . . . . . . . . . . . . . . . . . . . 15
10.4 Piggyback Registration Rights . . . . . . . . . . . . . . . . 17
10.5 Tag-Along Rights . . . . . . . . . . . . . . . . . . . . . . 17
11. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
11.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 17
11.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . 18
12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.1 Change of Common Shares; Notice . . . . . . . . . . . . . . . 18
12.2 Successors and Assigns . . . . . . . . . . . . . . . . . . . 18
12.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 18
12.4 Currency . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12.5 Public Announcements; Confidentiality . . . . . . . . . . . . 19
12.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 19
12.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12.9 No Finder's Fees . . . . . . . . . . . . . . . . . . . . . . 22
12.10 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . 22
12.11 Amendments and Waivers . . . . . . . . . . . . . . . . . . . 22
12.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . 23
12.13 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 23
12.14 Further Assurances . . . . . . . . . . . . . . . . . . . . . 23
INVESTMENT AGREEMENT
This INVESTMENT AGREEMENT (this "Agreement") is made and entered
into as of the 23rd day of June, 1998 by and among Livent Inc., an Ontario
corporation (the "Company") and Lynx Ventures L.P., a Delaware limited
partnership ("Lynx") on the one part and Southam Inc., a Canadian
corporation ("Investor") on the other part.
W I T N E S S E T H:
WHEREAS, the Company desires to sell to Investor, and Investor
desires to purchase from the Company, Common Shares of the Company on the
terms and conditions set forth in this Agreement;
WHEREAS, in connection with the purchase of Common Shares by the
Investor, the parties hereto desire to establish certain rights and
obligations with respect to Common Shares held by Lynx and Investor;
WHEREAS, Lynx and Investor desire to establish certain terms and
conditions concerning the voting of Common Shares held by each of Lynx and
Investor;
WHEREAS, Investor desires to provide Lynx with a right of first
refusal on transfers of Common Shares held by Investor on the terms and
conditions set forth herein;
WHEREAS, the Company desires to provide certain "piggyback"
registration rights to Investor with respect to its Common Shares on the
terms and conditions set forth herein; and
WHEREAS, Lynx desires to provide Investor with certain "tag-
along" rights with respect to Common Shares held by Investor on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of valuable consideration (the
receipt and sufficiency of which is hereby acknowledged by each of the
parties hereto) and the mutual agreements, covenants, representations and
warranties set forth herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. DEFINITIONS.
"Agreement" has the meaning ascribed thereto in the preamble;
"Board of Directors" means the Board of Directors of the Company;
"Business Day" means a day on which both the TSE and NASDAQ are open
for trading;
"Closing" and "Closing Date" have the meanings ascribed thereto in
Section 3;
"Commission" shall mean the United States Securities and Exchange
Commission;
"Common Shares" means the common shares of the Company, any shares
resulting from the change of the designation of the common shares, and
any shares into which the common shares may be changed, converted,
exchanged or reclassified;
"Company" has the meaning ascribed thereto in the preamble;
"Disposition Period" has the meaning ascribed thereto in Section 10.3;
"Executives" means Xxxxx X. Xxxxxxxxx and Xxxxx X. Xxxxxxxx;
"First Preferred Shares" means the preferred shares of the Company
designated as First Preferred Shares;
"Xxxxxx" means Xxx X. Xxxxxx;
"GAAP" has the meaning ascribed thereto in Section 4.9;
"Investor" has the meaning ascribed thereto in the preamble;
"Liens" means all claims, liens, charges, restrictions, reservations
and agreements, mortgages, pledges, security interests, guarantees,
easements, rights of way and encumbrances of any kind or character;
"Lynx" has the meaning ascribed thereto in the preamble;
"Xxxxxx" means Xxxxx X. Xxxxxx;
"Market Transaction" has the meaning ascribed thereto in Section 10.3;
"Material Adverse Effect" shall mean a material adverse effect on the
business, results of operations, prospects, assets, liabilities or
condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole;
"1933 Act" means the United States Securities Act of 1933, as amended;
"1934 Act" means the United States Securities Exchange Act of 1934, as
amended;
"NASDAQ" has the meaning ascribed thereto in Section 4.14;
"Offered Shares" has the meaning ascribed thereto in Section 10.3;
"Organizational Documents" shall mean the articles of incorporation,
certificate of incorporation, by-laws, certificates of formation, or
other constitutional documents;
"Permitted By Law" means the Company shall cause an event to happen to
the extent that a failure to take such action will give rise to an
action against the Company at law or in equity;
"Permitted Encumbrance" means, collectively, any mortgage, pledge,
charge, hypothecation or other encumbrance on Purchased Shares granted
to a bank or other bona fide financial institution as collateral
security for bona fide indebtedness incurred by Investor;
"Permitted Transferee" means a corporation or other entity of which
the controlling shareholder is, directly or indirectly, Xxxxxx Xxxxx;
"Person" shall mean any natural person, company, corporation,
association, partnership, organization, business, firm, joint venture,
trust, unincorporated organization or any other entity or
organization, including a government, or any political subdivision,
department or agency of any government;
"Proposed Transferee" has the meaning ascribed thereto in Section
10.3;
"Purchase Price" has the meaning ascribed thereto in Section 2;
"Purchased Shares" has the meaning ascribed thereto in Section 2;
"Representative" shall mean a representative officer, director,
employee, agent or other representative (including, without
limitation, any investment banker, attorney or accountant);
"Response Period" has the meaning ascribed thereto in Section 10.3;
"Sale Offer" has the meaning ascribed thereto in Section 10.3;
"Shareholder Approval" means the approval by shareholders of the
Company as required by and in accordance with applicable rules,
regulations, statutes or any other pronouncements of the TSE, NASDAQ
or any federal, state, provincial or local governmental authority;
"Shareholders Agreement" means the Shareholders Agreement, dated as of
June 12, 1998, by and among the Company, the Executives, Furman,
Maisel, the THL Entities and Lynx;
"Securities Act (Ontario)" means the Securities Act, R.S.O. 1990,
c. S.5, as the same may be amended, re-enacted or replaced from time
to time;
"Selling Shareholder" has the meaning ascribed thereto in Section
10.2;
"Subsidiary" shall mean any Person of which the Company (either alone
or through or together with any other Subsidiary) owns, directly or
indirectly, 50% or more of the capital stock or other equity interest,
the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such Person;
"THL Entities" means Xxxxxx X. Xxx Equity Fund III, L.P., a Delaware
limited partnership, and THL-CCI Limited Partnership, a Massachusetts
limited partnership;
"THL Voting Agreement" means the Voting, Right of First Offer and
Waiver Agreement, dated as of June 12, 1998, by and among the THL
Entities and Lynx;
"TSE" means the Toronto Stock Exchange;
"Voting Agreement" means the Voting Agreement, dated as of June 12,
1998, by and among the Executives, Lynx, Xxxxxx, and Xxxxxx;
"Voting Trust Agreement" means the Voting Trust Agreement, dated as of
June 12, 1998, by and among the Executives, Maisel, Furman, Lynx, the
Company and Montreal Trust Company of Canada.
2. PURCHASE AND SALE OF COMMON SHARES. Upon the terms and subject to the
conditions hereof, at the Closing and taking place simultaneously
therewith, the Company shall issue, sell and deliver to Investor, and
Investor shall subscribe for and purchase from the Company, free and clear
of all Liens, 1,526,000 Common Shares (the "Purchased Shares") for an
aggregate purchase price of U.S.$12,208,000 (the "Purchase Price").
3. CLOSING. The closing of the purchase and sale of the Purchased Shares
(the "Closing") shall occur as soon as practicable after the satisfaction
or waiver of the conditions set forth in Sections 8 and 9 hereto, at the
offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, New York, New York, or
at such other place as the Company and Investor may agree. The time and
date upon which the Closing occurs is herein called the "Closing Date."
The Company shall deliver to Investor at the Closing a duly executed
certificate evidencing the Purchased Shares registered in the name of
Investor and Investor shall deliver to the Company at the Closing the
Purchase Price, payable by interbank transfer of immediately available
funds to accounts designated by the Company in writing at least two
Business Days prior to the Closing Date. In addition, each party to this
Agreement shall execute and deliver such other documents as may be required
by this Agreement or that are reasonable and customary and are requested by
the other party.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Investor that the statements in the following
paragraphs of this Section 4 are, as of the date of this Agreement, and
will be, as of the Closing Date, true and correct:
4.1 Organization, Good Standing and Qualification. The Company
is a corporation duly incorporated and organized and is validly subsisting
under the laws of the Province of Ontario. The Company has all requisite
power and authority to own, lease and operate the property and assets it
now owns, leases and operates and to conduct its business as presently
conducted and as proposed to be conducted and to execute and deliver this
Agreement and the Purchased Shares. The Company is duly qualified and
licensed as a corporation to conduct its business and is in good standing
in each jurisdiction in which the nature of the business conducted by it or
the property owned, leased or operated by it makes such qualification or
licensing necessary, except for such failures to be so duly qualified and
licensed and in good standing which will not in the aggregate have a
Material Adverse Effect.
4.2 Capitalization. The authorized capital of the Company
consists of (i) an unlimited number of Common Shares of which on the date
hereof there are 20,836,610 outstanding, all of which are duly authorized,
validly issued, fully paid and non-assessable and free of pre-emptive
rights, other than those contemplated by the Shareholders Agreement and the
THL Voting Agreement, and (ii) an unlimited number of First Preferred
Shares, of which on the date hereof there are none outstanding.
4.3 Options, Warrants and Reserved Shares. Except as set forth
in Schedule 4.3 hereto, there are no outstanding agreements, warrants,
options, rights or privileges, pre-emptive or contractual, including
convertible or exchangeable securities, to subscribe for, purchase or
otherwise acquire any Common Shares or other equity securities of the
Company or securities convertible into or exchangeable for Common Shares or
other equity securities of the Company. All Common Shares issuable as set
forth in Schedule 4.3, shall be duly authorized, validly issued, fully paid
and non-assessable and free of preemptive rights, other than those
contemplated by the Shareholders Agreement and the THL Voting Agreement,
upon issuance on the terms and conditions specified in the instruments
pursuant to which they are issuable.
4.4 Subsidiaries.
(a) Each Subsidiary of the Company is duly incorporated or
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization. Each of the
Subsidiaries of the Company has the requisite power and authority to
own, lease and operate the properties and assets it now owns, leases
and operates and to conduct its business as presently conducted and as
proposed to be conducted. Each Subsidiary is duly qualified and
licensed and is in good standing to do business in each jurisdiction
in which the property owned, leased or operated by it or the nature of
the business conducted by it makes such qualification or licensing
necessary, except for such failures to be so duly qualified and
licensed and in good standing which will not in the aggregate have a
Material Adverse Effect.
(b) Attached hereto as Schedule 4.4(b) is an organizational
chart of the Company and its Subsidiaries. All of the capital stock,
share capital, securities convertible or exercisable into capital
stock, or other equity interests of each Subsidiary are owned by the
Company or its Subsidiaries, free and clear of all Liens, other than
pledges in favor of Canadian Imperial Bank of Commerce.
(c) Except for its Subsidiaries and production-related
partnerships and as otherwise set forth on Schedule 4.4(c), the
Company owns no stock, securities or equity interests in any Person.
4.5 Due Authorization. The Company has taken all necessary
corporate action to authorize the execution, delivery and performance of
this Agreement and to issue the Purchased Shares and to consummate the
transactions contemplated hereby; this Agreement has been, and upon
execution and delivery thereof to Investor will be, duly executed and
delivered on behalf of the Company and will constitute the legal valid and
binding obligation of the Company enforceable against the Company by
Investor in accordance with its terms, except as the 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 only be granted in the discretion of a court of competent
jurisdiction.
4.6 Valid Issuance of Stock. The Purchased Shares, when issued,
paid for and delivered in accordance with the terms of this Agreement, will
be duly authorized, validly issued, fully paid and nonassessable and free
of preemptive rights, other than those contemplated by the Shareholders
Agreement and the THL Voting Agreement.
4.7 No Conflicts. Except as set forth in Schedule 4.7 attached
hereto, none of: (i) the authorization, execution, delivery and
performance by the Company of this Agreement or (ii) the issuance and sale
of the Purchased Shares as provided herein results or would result in the
creation or imposition of any Lien upon any of the properties or assets of
the Company or any of its Subsidiaries or is in conflict with or does or
will result in a breach by the Company of or does or will create a state of
facts which after notice or lapse of time or both will result in a breach
by the Company of any of the terms or provisions of (a) the Organizational
Documents of the Company or any of its Subsidiaries, (b) the resolutions of
the directors or shareholders of the Company, (c) any statute, law,
regulation, court order or decision to which the Company is subject or (d)
any material indenture, instrument, agreement or undertaking to which the
Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries or the properties or assets of the Company or any
of its Subsidiaries are or may become bound, excluding from such clauses
(c) and (d), such breaches or violations that, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
4.8 No Orders. No order suspending the sale or ceasing the
trading of the Common Shares 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, to the knowledge of the
Company, after reasonable inquiry, threatened.
4.9 Financial Information. Except as set forth in Schedule 4.11
hereto:
(a) The audited consolidated balance sheets of the Company and
its Subsidiaries as of December 31, 1997 and the related statements of
income, retained earnings and changes in financial position for the
year then ended, including footnotes thereto, certified by Deloitte &
Touche, independent certified public accountants, all of which have
been delivered to Investor, fairly present the consolidated financial
condition and consolidated results of operations of the Company and
its Subsidiaries as of such dates and for such respective periods in
accordance with generally accepted accounting principles and practices
in Canada applied consistently ("GAAP").
(b) The unaudited consolidated balance sheets of the Company and
the Subsidiaries as of March 31, 1998, and the related statements of
income, retained earnings and changes in financial position for the
three months then ended, including footnotes thereto, all of which
have been delivered to Investor, fairly present the consolidated
financial condition and consolidated results of operations of the
Company and the Subsidiaries as of such date and for such period in
accordance with GAAP applied in a manner consistent with the financial
statements described in paragraphs (a) above.
4.10 Absence of Undisclosed Liabilities. Except as set forth in
Schedule 4.11 hereto, neither the Company nor any of its Subsidiaries has
incurred any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) subsequent to December 31, 1997, except
for liabilities or obligations that were incurred in the ordinary course of
business consistent with past practice, which would not, in the aggregate,
have, or be reasonably expected to have, a Material Adverse Effect.
4.11 Material Adverse Effect. Except as set forth in Schedule
4.11 hereto, since December 31, 1997 there has been no change in the
business, results of operations, prospects, assets, liabilities and
condition (financial or otherwise) of the Company and its Subsidiaries,
individually or taken as a whole, which would have or be reasonably
expected to have a Material Adverse Effect.
4.12 Securities Laws. The Company has made all filings required
of it under all applicable securities laws, regulations and rules and none
of such filings contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. Neither the
issuance nor the sale of the Purchased Shares will result in any
contravention by the Company of any securities laws, regulations or rules
applicable to the Company.
4.13 Consents and Approvals.
(a) Except as set forth in Schedule 4.13 hereto, the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, the Company does not and will not,
require any consent, approval, authorization, registration,
qualification, declaration, filing, governmental approval or other
action by, or filing with or notification to, any third party or any
governmental authority.
(b) Except as set forth on Schedule 4.13 hereto, the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby shall not trigger any change of
control or ownership provisions or clauses in any agreement,
arrangement, understanding or contract, whether formal or informal,
written or oral, or subject the Company or its Subsidiaries to any
predetermined adverse alteration or modification in any ongoing
relationship (without consideration of the change of control or
ownership provision or the provision for the predetermined adverse
alteration or modification as part of the ongoing relationship).
4.14 Common Shares Listing. The Common Shares are registered
pursuant to Section 12(g) of the 1934 Act and are listed on the NASDAQ
National Market ("NASDAQ") and the TSE. The Company is a reporting issuer
under the Securities Act (Ontario). The Company has taken no action
designed to cause, or likely to result in, the termination of the
registration of the Common Shares under the 1934 Act or the Company's
reporting issuer status under the Securities Act (Ontario) or the delisting
of the Common Shares from NASDAQ or the TSE, nor has the Company received
any notification that the Commission or its Canadian equivalent or the
National Association of Securities Dealers, Inc. or the TSE is
contemplating the termination of such registration or listing. The
Purchased Shares shall be approved for trading on the TSE, subject to
notice of issuance.
4.15 Board Approval. This Agreement and the transactions
contemplated thereby have been duly approved by the Board of Directors.
4.16 No Shareholder Approval. No Shareholder Approval is
required for any of the matters contemplated by this Agreement.
4.17 Fairness Opinion. The Company has received an opinion from
CIBC Wood Gundy that the sale of the Purchased Shares to Investor is fair
to the Company from a financial point of view.
5. REPRESENTATIONS AND WARRANTIES OF LYNX. Lynx hereby represents and
warrants to Investor that the statements in the following paragraphs of
this Section 5 are, as of the date of this Agreement, and will be, as of
the Closing Date, true and correct:
5.1 Organization, Good Standing and Qualification. Lynx is a
limited partnership duly formed and organized and is validly subsisting
under the laws of the State of Delaware. Lynx has all necessary
partnership power to own or lease its property and to conduct its business
as presently conducted and as proposed to be conducted and to execute and
deliver this Agreement. Lynx is duly qualified as a limited partnership to
conduct its business and is in good standing in each jurisdiction in which
the nature of the business conducted by it or the property owned or leased
by it makes such qualification necessary.
5.2 Due Authorization. Lynx has taken all necessary partnership
action to authorize the execution, delivery and performance of this
Agreement and to consummate the transactions contemplated hereby. This
Agreement has been, and upon execution and delivery thereof will be, duly
executed and delivered on behalf of Lynx and will constitute legal valid
and binding obligations of Lynx enforceable against Lynx by Investor in
accordance with its terms, except as the 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 only be
granted in the discretion of a court of competent jurisdiction.
5.3 No Conflicts. The authorization, execution, delivery and
performance by Lynx of this Agreement is not 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 Organizational Documents of
Lynx or any statute, law, regulation, court order or decision to which
Investor is subject, or any material indenture, instrument, agreement or
undertaking to which Lynx is a party or by which Lynx or the properties and
assets of Lynx are or may become bound or results or would result in the
creation or imposition of any Lien upon any of the properties or assets of
Lynx.
6. REPRESENTATIONS AND WARRANTIES OF INVESTOR. Investor hereby
represents and warrants to the Company and Lynx that the statements in the
following paragraphs of this Section 6 are, as of the date of this
Agreement, and will be, as of the Closing Date, true and correct:
6.1 Organization, Good Standing and Qualification. Investor is
a corporation duly incorporated and organized and is validly subsisting
under the laws of Canada. Investor has all requisite power and authority
to own, lease and operate the property and assets it now owns, leases and
operates and to conduct its business as presently conducted and as proposed
to be conducted and to execute and deliver this Agreement and acquire the
Purchased Shares. Investor is duly qualified and licensed as a corporation
to conduct its business and is in good standing in each jurisdiction in
which the nature of the business conducted by it or the property owned,
leased or operated by it makes such qualification or licensing necessary,
except for such failures to be so duly qualified and licensed and in good
standing which will not in the aggregate have a Material Adverse Effect.
6.2 Due Authorization. Investor has taken all necessary action
to authorize the execution, delivery and performance of this Agreement and
to consummate the transactions contemplated hereby. This Agreement has
been duly executed and delivered on behalf of Investor and constitutes
legal valid and binding obligations of Investor enforceable against
Investor by the Company and/or Lynx in accordance with its terms, except as
the 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 only be granted in the discretion of a court
of competent jurisdiction.
6.3 No Conflicts. The authorization, execution, delivery and
performance by Investor of this Agreement is not 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 statute, law, regulation, court order or decision to which
Investor is subject, or any material indenture, instrument, agreement or
undertaking to which Investor is a party or by which Investor or the
properties and assets of Investor are or may become bound or results or
would result in the creation or imposition of any Lien upon any of the
properties or assets of Investor.
6.4 Control. Xxxxxx Xxxxx indirectly controls Investor.
6.5 Investor Status. Investor has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits
and risks of its investment in the Purchased Shares and is able to bear the
economic risks of such investment.
6.6 Accredited Investor. Investor is an institutional
"accredited investor" as defined in Rule 501(a)(3) under the 1933 Act.
Investor is acquiring the Purchased Shares for its own account and not with
a view to any resale, distribution or other disposition of the Purchased
Shares in violation of the United States securities laws.
6.7 No General Solicitation. Investor acknowledges that it has
not acquired the Purchased Shares as a result of any general solicitation
or general advertising (as those terms are used in Regulation D under the
1933 Act), including advertisements, articles, notices or other
communications published in any newspaper, magazine or similar media or
broadcast over radio or television, or any seminar or meeting whose
attendees have been invited by general solicitation or general advertising.
6.8 Private Placement Questionnaire. Investor has delivered a
private placement questionnaire to the Toronto Stock Exchange.
6.9 Executive Committee Approval. This Agreement and the
transactions contemplated thereby have been duly approved by the Executive
Committee of Investor.
7. COVENANTS
7.1 Best Efforts. Each of the parties hereto covenant and agree
to use its best efforts to consummate the transactions contemplated by this
Agreement, subject to the terms and conditions set forth herein.
7.2 Company Covenants. The Company covenants and agrees that it
will do or cause to be done the following:
(a) use its best efforts to obtain all consents, approvals and
authorizations set forth in Schedule 4.13;
(b) use its best efforts to maintain its status as a registrant
under the 1934 Act and a "reporting issuer" under the Securities Act
(Ontario) that is not in default or contravention of any requirement
of the 1934 Act and Securities Act (Ontario);
(c) use its best efforts to maintain the listing and posting for
trading of the Common Shares (including the Purchased Shares) on the
TSE and NASDAQ.
8. CONDITIONS TO INVESTOR'S OBLIGATIONS AT CLOSING.
The obligations of Investor to effect the transactions to be
effected by it at the Closing shall be subject to the satisfaction, or
waiver, on or prior to the Closing Date of the following conditions:
8.1 Representations and Warranties. Each of the representations
and warranties of the Company contained in Section 4 shall be true and
correct in all material respects (except that they shall be true and
correct in all respects to the extent specifically qualified by materiality
or Material Adverse Effect) on and as of the Closing with the same effect
as though such representations and warranties had been made on and as of
the date of the Closing.
8.2 Listing. The Purchased Shares shall have been approved for
listing on the TSE, subject to notice of issuance.
9. CONDITIONS TO THE COMPANY'S AND LYNX'S OBLIGATIONS AT CLOSING.
The obligations of Company and Lynx to effect the transactions to
be effected by it at the Closing shall be subject to the satisfaction, or
waiver, on or prior to the Closing Date of the following conditions:
9.1 Representations and Warranties. The representations and
warranties of Investor contained in Section 6 shall be true and correct in
all material respects on the date of the Closing with the same effect as
though such representations and warranties had been made on and as of the
Closing.
9.2 Payment of Purchase Price. Investor shall have delivered to
the Company the Purchase Price for the Purchased Shares specified for
Investor in Section 2 hereof in accordance with the provisions of Section
3.
9.3 Listing. The Purchased Shares shall have been approved for
listing on the TSE, subject to notice of issuance.
10. VOTING; RIGHTS OF FIRST REFUSAL; PIGGYBACK REGISTRATION RIGHTS; TAG-
ALONG RIGHTS.
10.1 Voting. Except with the written consent of both parties:
(a) Lynx agrees to vote or cause to be voted all Common Shares
owned by Lynx and any shares or other voting securities of the Company
which are issued to Lynx upon exercise of any options, rights or
similar arrangements held by Lynx as of the date hereof and to
exercise its influence in respect of the Company (including with
respect to its nominees who are directors of the Company) in an effort
to ensure that Investor's nominee, which shall be Xxxxxx Xxxxx or such
other person as designated by Investor, be elected as a director of
the Company; and
(b) Investor agrees not to oppose the election of the nominees
for election as directors of the Company nominated from time to time
by Lynx pursuant to the Shareholders Agreement by either voting
directly or indirectly the Purchased Shares against or abstaining from
voting the Purchased Shares for such nominees of Lynx and not to
exercise its influence in respect of the Company (including with
respect to its nominee who is a director of the Company) against such
nominees of Lynx.
10.2 Permitted Transferees. In order for a transfer to a
Permitted Transferee to be in compliance with provisions of Section 10.3,
Investor shall have provided Lynx with written notice of any proposed
transfer to a Permitted Transferee at least 15 days prior to consummating
such transfer, stating the name and address of the Permitted Transferee and
the relationship between Investor and the Permitted Transferee, and the
Permitted Transferee shall have executed a copy of this Agreement as an
assignee of Investor with respect to the transferred Purchased Shares and
such Permitted Transferee shall assume all of the obligations of Investor
with respect to the transferred Purchased Shares. The Investor and such
Permitted Transferee shall be jointly and severally liable for any breach
of this Agreement by such Permitted Transferee.
10.3 Rights of First Refusal.
(a) If Investor or a Permitted Transferee (each, a "Selling
Shareholder") desires to transfer all or some of its Purchased Shares
to any Person (the "Proposed Transferee") other than (x) to a
Permitted Transferee in accordance with Section 10.2 or (y) pursuant
to a foreclosure on Purchased Shares subject to a Permitted
Encumbrance, such Selling Shareholder shall, prior to consummating any
such Transfer, give written notice (a "Sale Offer") to Lynx,
containing (i) the number of Purchased Shares proposed to be
transferred (the "Offered Shares") pursuant to a bona fide written
offer or a Market Transaction (as defined below), (ii) where such sale
is other than pursuant to a Market Transaction, the name and address
of the Proposed Transferee, (iii) the proposed purchase price, terms
and payment and other material terms and conditions of the Proposed
Transferee's offer and (iv) an offer to sell the Offered Shares set
forth in the Sale Offer at the same price and on the same terms and
conditions as offered to the Proposed Transferee.
(b) Lynx shall have the right, during the Response Period (as
defined below), to purchase all of the Offered Shares pursuant to the
Sale Offer, exercisable by delivering a written notice to Investor
within the Response Period. The provision of such notice shall be
deemed to create a binding agreement between Lynx and Investor with
respect to the purchase and sale of the Offered Shares.
(c) In the event that Lynx shall have notified Investor within
the Response Period that Lynx desires to purchase all of the Offered
Shares, Lynx shall have 15 days from the last day of the Response
Period to complete such purchase. Without limiting any recourse
Investor has against Lynx, in the event that Lynx shall not have
completed such purchase within such 15 day period, then Investor shall
have the right to sell such Shares without the restrictions set forth
in this Section 10.3.
(d) If at the end of the Response Period Lynx has not given
notice of its decision to purchase all of the Offered Shares, then
Investor shall be entitled to sell not less than all of the Offered
Shares to the Proposed Transferee during the Disposition Period (as
defined below) at a price not lower than that contained in the Sale
Offer and on terms not more favorable to the Proposed Transferee than
were contained in the Sale Offer. Promptly after any sale pursuant to
this Section 10.3, Investor shall notify the Company and Lynx of the
consummation thereof and shall furnish such evidence of the completion
(including time of completion) of such sale and of the terms thereof
as the Company or Lynx may request. Purchased Shares sold to a
Proposed Transferee in compliance with the provisions of this Section
10.3 shall thereafter not be subject to the terms of this Agreement.
(e) If at the end of the Disposition Period Investor has not
completed the sale of all of the Offered Shares to the Proposed
Transferee, Investor shall no longer be permitted to sell such Offered
Shares pursuant to this Section 10.3 without again fully complying
with the provisions of this Section 10.3 and all the restrictions on
sale, transfer, assignment or other disposition contained in this
Agreement shall again be in effect.
(f) As used herein, the term "Market Transaction" shall mean a
sale of Purchased Shares through the facilities of the TSE, NASDAQ or
any other stock exchange on which the Common Shares are actively
xxxxxx.Xx used herein, the term "Response Period" shall mean a period
of two Business Days after receipt of the Sale Offer.
(g) As used herein, the term "Disposition Period" shall mean a
period of 30 days following the end of the Response Period.
(h) Notwithstanding anything to the contrary contained herein,
the provisions of this Section 10.3 shall not apply to sales of
Purchased Shares by Investor pursuant to Investor's exercise of its
right to have such Purchased Shares included in a registration
statement filed by the Company on Lynx's behalf in accordance with the
provisions of Section 10.4 hereof.
10.4 Piggyback Registration Rights. The Company agrees to use
its best efforts to cause the Purchased Shares to be registered for resale
under Canadian or United States securities laws in accordance with Schedule
10.4 hereto.
10.5 Tag-Along Rights. Simultaneous with the execution and
delivery of this Agreement, Investor shall execute and deliver a joinder to
the Shareholders Agreement, in the form attached hereto as Exhibit A, by
which Investor shall thereafter be a "Notice Party" with respect to the
Purchased Shares for the purposes of Section 4.4 thereunder.
11. TERMINATION.
11.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned by any one of the parties
hereto:
(a) if the Closing shall not have occurred on or prior to July
30, 1998; or
(b) if consummation of the transactions contemplated hereby
would violate any nonappealable final order, decree or judgment of any
court or governmental body having competent jurisdiction.
11.2 Effect of Termination. In the event of a termination of
this Agreement pursuant to Section 11.1, this Agreement will become void
and of no further force and effect, except for the provisions of Sections
12.3, 12.5, 12.8, 12.10, 12.11, 12.12, 12.13 and this Section 11.2;
provided, however, nothing in this Section 11.2 will be deemed to release
any party from any liability for breach by any such party of the terms and
provisions of this Agreement or from the right to seek specific performance
by or seek equitable relief or similar remedies from the other party of its
obligations under this Agreement.
12. MISCELLANEOUS.
12.1 Change of Common Shares; Notice. The parties hereto agree
that the provisions of this Agreement relating to the Common Shares shall
apply, mutatis mutandis, to any shares or securities into which such Common
Shares may be converted, changed, reclassified, redivided, redesignated,
subdivided or consolidated, to any shares or securities which are received
by Lynx or Investor as a stock dividend or distribution payable in shares
or securities of the Company which entitle the holder thereof to vote at
any meeting of the shareholders of the Company and to any shares or
securities of the Company or of any successor or continuing company or
corporation to the Company which may be received by Lynx or Investor on a
reorganization, amalgamation, consolidation or merger, statutory or
otherwise. Lynx and Investor hereby agree to provide prompt notice to the
other in the event of a change in the number of Common Shares beneficially
owned by such notifying party.
12.2 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. None of the parties may assign this
Agreement without the prior written consent of the other parties hereto.
12.3 Governing Law. This Agreement shall be governed by and
construed under the internal laws of the State of New York, without
reference to principles of conflict of laws or choice of laws.
12.4 Currency. Unless otherwise indicated, all dollar amounts
referred to in this Agreement are expressed in U.S. funds.
12.5 Public Announcements; Confidentiality. This Agreement and
any other related documents and the transactions contemplated hereby and
thereby shall be kept confidential by the parties hereto and no public
announcement, press release or public filing concerning this Agreement or
any related documents or the transactions contemplated hereby and thereby
shall be made by any party except with the consent of the other parties or
except as may be required by law and applicable stock exchange and NASDAQ
regulations.
12.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.7 Headings. The headings and captions used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs and schedules shall, unless otherwise provided, refer to
sections and paragraphs hereof and schedules attached hereto, all of which
exhibits and schedules are incorporated herein by this reference.
12.8 Notices. All notices, requests, demands and other
communications shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by United States or Canadian mails or
by telegram or telex confirmed by letter, or by facsimile transmission,
receipt confirmed, to the address set forth below. All notices requiring
timely attention shall be sent by facsimile transmission, telex or
overnight mail. Any notice shall be deemed received, unless earlier
received, (a) if sent by certified or registered mail, return receipt
requested, when actually received, (b) if sent by overnight mail, on the
next Business Day, (c) if sent by telegram or telex, on the date sent, and
(d) if sent by facsimile transmission or delivered by hand, on the date of
receipt.
(i) Notices to the Company shall be addressed as follows:
Livent Inc.
Xxxxx 000
000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Fax No.: (000) 000-0000
Attention: Xxx X. Xxxxxx and
Xxxxx X. Xxxxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
X.X.X.
Fax No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
(ii) in the case of Lynx:
Lynx Ventures L.P.
c/x Xxxxxx, Xxxxxxx & Associates
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
U.S.A.
Fax No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
U.S.A.
Fax No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
with a courtesy copy to:
Xxxxxx, Xxxxxx & Xxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
U.S.A.
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
(iii) Notices to Investor shall be addressed as follows:
Southam Inc.
0000 Xxx Xxxxx Xxxx
Xxx Xxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Fax No.: (000) 000-0000
Attention: Vice President and General Counsel
with a copy to:
Tory Xxxx XxxXxxxxxxx & Xxxxxxxxxx
Suite 3000
Aetna Tower
Toronto - Dominion Center
Xxxxxxx, Xxxxxxx
X0X 0X0
Fax No.: (000) 000-0000
Attention: Xxxx XxXxxxxxxx
with a courtesy copy to:
Xxxxxxxxx Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Fax No.: (000) 000-0000
Attention: Vice President and General Counsel
12.9 No Finder's Fees. Each party represents that it neither is
nor will be obligated for any finder's or broker's fee or commission in
connection with this transaction. Investor agrees to indemnify and to hold
harmless the Company and Lynx from any liability for any commission or
compensation in the nature of a finders' or broker's fee (and any asserted
liability) for which Investor or any of its officers, partners, employees,
or representatives is responsible. The Company and Lynx agree to indemnify
and hold harmless Investor from any liability for any commission or
compensation in the nature of a finder's or broker's fee (and any asserted
liability) for which the Company or Lynx or any of their officers,
employees or representatives is responsible.
12.10 Costs and Expenses. All costs and expenses, including,
without limitation, fees and disbursements of counsel, financial advisors
and accountants, incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
costs and expenses.
12.11 Amendments and Waivers. Any term of this Agreement may
be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of all parties hereto. Any
amendment or waiver effected in accordance with this Section shall be
binding upon each holder of any Purchased Shares at the time outstanding,
each future holder of such securities, and the Company.
12.12 Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such
provisions shall be excluded from this Agreement and the balance of the
Agreement shall be interpreted as if such provisions were so excluded and
shall be enforceable in accordance with its terms.
12.13 Entire Agreement. This Agreement, together with any
exhibits or schedules hereto, constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, correspondence, agreements,
understandings duties or obligations between the parties with respect to
the subject matter hereof.
12.14 Further Assurances. From and after the date of this
Agreement, upon the request of any party hereto, all parties shall execute
and deliver such instruments, documents or other writings as may be
reasonably necessary or desirable to confirm and carry out and to
effectuate fully the intent and purposes of this Agreement.
* * * *
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
LIVENT INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
LYNX VENTURES L.P.
By: Lynx Ventures L.L.C.,
its General Partner
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Manager
SOUTHAM INC.
By: /s/ X.X. XxxXxxxxx
------------------------------
Name: X.X. XxxXxxxxx
Title: Vice President, General Counsel
and Secretary
AMENDMENT TO INVESTMENT AGREEMENT
June 25, 1998
This Amendment (the "Amendment") to the Investment Agreement (the
"Investment Agreement"), dated as of June 23, 1998 by and among Livent
Inc., Southam Inc. and Lynx Ventures L.P., is made as of the date first
above written by and among the undersigned pursuant to Section 12.11 of the
Investment Agreement.
Each of the parties hereto hereby agrees that Section 10.1(b) of
the Investment Agreement is amended and restated to read in its entirety as
follows:
(b) Investor agrees that it shall not exercise its voting rights
with respect to the Purchased Shares so as to oppose the election of
nominees for directors of the Company nominated from time to time by
Lynx pursuant to the Shareholders Agreement and not to otherwise
exercise its influence in respect of the Company (including with
respect to its nominee who is a director of the Company) against such
nominees of Lynx.
* * * *
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the date first above written.
LIVENT INC.
By: /s/ Xxxxx X. Xxxxxx
_______________________________
Name: Xxxxx X. Xxxxxx
Title: President
LYNX VENTURES L.P.
By: Lynx Ventures L.L.C.,
its General Partner
By: /s/ Xxxxx X. Xxxxxx
_____________________________
Name: Xxxxx X. Xxxxxx
Title: Manager
SOUTHAM INC.
By: /s/ X.X. XxxXxxxxx
______________________________
Name: X.X. XxxXxxxxx
Title: Vice President, General Counsel
and Secretary
