UNANIMOUS SHAREHOLDERS AGREEMENT
Between:
XXXXX X. XXXXXXX
of the City of Vancouver,
Province of British Columbia,
Canada
(hereinafter referred to as "Xxxxxxx")
OF THE FIRST PART,
And
XXXXX X. XXXXXX
of the City of Toronto,
Province of Ontario,
Canada
(hereinafter referred to as "Austin")
OF THE SECOND PART,
And
XXXX X. XXXXXXXXX
of the City of Toronto,
Province of Ontario,
Canada
(hereinafter referred to as "Xxxxxxxxx")
OF THE THIRD PART,
And
XXXXX 14. XXXXXXXX
of the City of Toronto,
Province of Ontario,
Canada
(hereinafter referred to as "Xxxxxxxx")
OF THE FOURTH PART,
And
MENTOR ON CALL, INC.
A corporation existing under the laws of Nevada, U.S.A.
(hereinafter referred to as "Mentor")
OF THE FIFTH PART,
And
MENTOR ON CALL HOLDINGS, INC.
A CORPORATION TO BE INCORPORATED UNDER THE LAWS OF BARBADOS, W.I.
(hereinafter referred to as "Holdings")
OF THE SIXTH PART.
RECITALS
WHEREAS Rodgers, Austin, Xxxxxxxxx and Xxxxxxxx (or nominees) own in
equal amounts as the registered and beneficial owners all of the issued and
outstanding and authorized shares of Holdings and all of the restricted shares
of Mentor;
AND WHEREAS Rodgers, Austin, Pritchard, Figueroa, Mentor and Holdings
wish to establish their respective rights and obligations in respect of the
shares of Holdings and Mentor now or hereafter owned by them, respectively, in
respect of the management and control of each of Holdings and Mentor and in
respect of the other matters set forth in this Agreement;
AND Wi-IEREAS it is the intention of each of the parties that this
agreement constitute a unanimous shareholder agreement with respect to each of
Holdings and Mentor.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
respective covenants and agreements of the parties contained herein and for
other good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged by each of the parties) it is hereby agreed as follows:
ARTICLE 1
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1. I Definitions
Where used in this Agreement, unless there is something in the context
or the subject matter inconsistent therewith, the following terms shall have the
following meanings, respectively:
(a) "Agreement" means this agreement and any instrument supplemental
hereto and the expressions "Article", "section", "subsection" and "clause"
followed by a number and/or a letter mean and refer to the specified Article,
section, subsection or clause of this Agreement;
(b) "Eligible Transferee" means, in respect of any particular
Shareholder:
(i) a corporation of which such Shareholder is the sole
registered and beneficial
shareholder;
(ii) a trust of which such Shareholder is the sole
beneficiary; and
(iii) if the Shareholder is a corporation, any person who is
the sole registered and beneficial shareholder of such Shareholder;
(c) "Holdings Shares" means all of the authorized capital of Holdings
as constituted at the date hereof, any other securities into which these shares
may be converted, exchanged, reclassified, redesignated, subdivided,
consolidated or otherwise changed from time to time;
(d) "Messrs. Rodgers, Austin, Xxxxxxxxx and Xxxxxxxx Employment
Contracts" means the terms and conditions of employment between Mentor and
Rodgers, Austin, Xxxxxxxxx and Xxxxxxxx dated the date hereof and attached as
Schedule A;
(e) "Permanent Incapacity" means, with respect to any person, the
condition that will be deemed to exist where:
(i) such person has been declared bankrupt by a court of final and
competent jurisdiction;
(ii) such person has made an assignment for the benefit of creditors;
(iii) such person has been declared by a court of competent
jurisdiction to be mentally incompetent and such declaration has not, at the
relevant time, been revoked;
(iv) such person becomes unable, by reason of illness, disease, mental
or physical disability or incapacity or otherwise, to perform, his duties for
Mentor or Holdings:
(A) for a period of 180 consecutive days; or
(B) FOR 270 DAYS IN THE AGGREGATE DURING ANY PERIOD OF 365
consecutive days;
provided that in the event a qualified medical doctor certifies that the
person's illness, disease, disability or incapacity is not permanent but merely
temporary and that the person shall be fully recovered and able to perform the
duties of a chief executive officer of a distance learning company within 180
days of the date of the certificate, then such illness, disease, disability or
incapacity shall not be deemed to constitute "Permanent Incapacity";
(f) "person" includes an individual, a firm, a corporation, a
syndicate, a partnership, a trust, an association, a joint venture, an
unincorporated organization and every other legal or business entity whatsoever;
(g) "Related Party" means, in relation to any Shareholder or other
person (the "Subject
Party"), any person who is:
(i) a corporation of which the Subject Party beneficially
owns, directly or indirectly, voting securities carrying more than 10%
of the voting rights attached to all voting securities of the
corporation for the time being outstanding;
(ii) an affiliate of the Subject Party;
(iii) a partner of the Subject Party;
(iv) a trust or estate in which the Subject Party has a
substantial beneficial interest or as to which the Subject Party serves
as trustee or in a similar capacity;
(v) a relative of the Subject Party;
(vi) a person of the opposite sex to whom the Subject Party is
married or with whom the Subject Party is living in a conjugal
relationship outside marriage;
(vii) a relative of a person mentioned in clause (vi) who has
the same home as the Subject Party; or
(viii) a current or former director, officer, shareholder or
employee of any corporation or business in which the Subject Party has
or had substantial beneficial interest;
(h) "shareholders" shall mean Rodgers, Austin, Xxxxxxxxx and Xxxxxxxx;
(i) "transfer" of a Share includes any sale, exchange, transfer,
assignment, gift, pledge, encumbrance, hypothecation, alienation or other
transaction, whether voluntary, involuntary or by operation of law, by which the
legal or beneficial ownership of, or any security interest or other interest in
the Share, passes from one person to another, or to the same person in a
different capacity, whether or not for value, and any change of control of the
legal or beneficial owner of the Share or any person that controls, directly or
indirectly, in any manner whatsoever, such legal or beneficial owner of the
Share, other than in involuntary change of control resulting from the
tansmission of securities from a deceased or incompetent Shareholder to his
estate or legal personal representative for so long as the securities continue
to be held by the estate or such legal personal representative, and "to
transfer", "transferred" and similar expressions shall have corresponding
meanings;
(j) "vend agreement" means the asset sale contract whereby Xxxxxxxxx
and Xxxxxxxx transfer all title and right to the distance learning system
including source code, functional specifications, drawings, prototype,
copyright, patent rights and rights of authorship in consideration of restricted
shares in Mentor as enunciated in this vend agreement which is attached as a
Schedule B and as defined in article 2.7.
1.2 Schedules
Schedule A - Employment Agreements
Schedule B - Vend Agreement
Schedule C - Escrow Agreement
Schedule D - Life Insurance Policies
1.3 Gender/Numbers
Words importing the singular number only shall include the plural and
vice versa and words importing the use of any gender shall include both genders.
1.4 Headings
The Article and section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
1.5 Proper Law
This Agreement and all documents ancillary hereto shall be governed by
and interpreted in accordance with the laws of the Province of Ontario and the
federal laws of Canada applicable therein.
1.6 Business Days
If any act is required hereunder to be done, any notice is required
hereunder to be given or any period of time is to expire hereunder on any day
that is not a Business Day, such act shall be required to be done or notice
shall be required to be given or time shall expire on the next succeeding
Business Day.
1.7 Reclassification of Shares
The provision of this Agreement shall apply, mutatis mutandis, to any
shares or securities of any nature into which the Preference Rights of Mentor or
the common shares of Holdings or any of them may be converted, exchanged,
reclassified, redivided, redesignated, subdivided or consolidated, to any shares
or securities of any nature that are received by a Shareholder as a stock
dividend or distribution payable in shares, securities, warrants, rights or
options of any nature of Mentor or Holdings or any of the above received on an
amalgamation, arrangement, consolidation or merger, statutory or otherwise.
ARTICLE II
DIRECTORS, OFFICERS AND ONGOING AFFAIRS OF THE COMPANIES
2.1 Agreement to Act
Each of the Shareholders, covenant and agree to execute and deliver, or
cause to be executed and delivered, all such instruments and other documents,
and to exercise or cause to be exercised their influence and any and all voting
rights attaching to the Shares held by each of them, respectively, from time to
time and to do or cause to be done all such other acts and things in order that
all provisions of this Agreement, shall be fully and effectively carried out,
implemented and given effect to in accordance with the terms hereof, including,
without limitation, consenting to, approving, or other wise giving effect to all
such changes to the articles, by-laws, resolutions and other documents governing
the Companies as may be necessary or desirable to accurately reflect and give
effect to the provisions of this Agreement.
2.2 Special Approvals
In addition to any other approvals that may be required at law or
pursuant to the articles, bylaws or resolutions of Mentor or Holdings, unless
otherwise expressly agreed in writing by all shareholders, neither Mentor or
Holdings shall take any of the following actions without the prior written
consent of all shareholders hereto:
(a) the issuance of any shares in the capital of Mentor or Holdings or
any securities, warrants, options, or rights convertible into, exchangeable for,
or carrying the right to subscribe for, shares in the capital of Mentor or
Holdings;
(b) the redemption or purchase for cancellation of any shares in the
capital of Mentor or Holdings, other than any purchase of Shares in accordance
with this Agreement;
(c) the transfer by Mentor or Holdings of any right, title or interest
it may now or hereafter have in or to any shares in the capital of any other
company;
(d) the conversion, exchange, reclassification, redesignation,
subdivision, consolidation or other change of or to any shares in the capital of
Mentor or Holdings;
(e) the amalgamation, continuance, merger, consolidation or
reorganization of Mentor or Holdings, or the approval or effecting of any plan
of arrangement, in each case, whether statutory or otherwise;
(f) in the case of Holdings, the acquisition by Holdings in any manner
of any assets other
than its Mentor Preference Rights or converted shares or the incurring by
Holdings of any liabilities, whether or not contingent or of any other nature,
other than any liabilities for taxes or governmental charges or for legal,
accounting or other professional services that may be incurred in the ordinary
course of holding the Mentor Preference Rights or converted shares;
(g) the winding-up dissolution of Holdings or Mentor;
(h) the entering into by Mentor or Holdings of any contract or
transaction, directly or indirectly, with a Related Party of any Shareholder or
a Related Party of any person who controls, directly or indirectly, any
Shareholder;
(i) the amendment of Messrs. Rodgers, Austin, Xxxxxxxxx or Xxxxxxxx'x
Employment Contract;
U) except as otherwise provided in the Agreement and except in the case
of termination for just cause, the termination of the employment of Messrs.
Rodgers, Austin, Xxxxxxxxx or Xxxxxxxx;
(k) any amendment to the articles or by-laws of Mentor or Holdings.
2.3 Board of Directors
As soon as possible after the execution of this Agreement, the
Shareholders shall elect Xxxxxxx and Austin as Directors of Mentor and Holdings.
2.4 Officers
Until changed by vote of the Board of Directors, the officers of Mentor
shall be:
NAME OFFICE OR OFFICES TO BE HELD
---- ----------------------------
Xxxxx X. Xxxxxxx Chief Executive Officer and President
Xxxxx X. Xxxxxx Chief Operating & Chief Financial Officer
Xxxx X. Xxxxxxxxx Senior Vice President Products and Services
Xxxxx X. Xxxxxxxx Vice President Information Technology
2.5 Agreement Binds Mentor and Holdings
Mentor and Holdings, by their execution hereof, acknowledge that they
have actual notice of the terms of this Agreement, consents hereto and hereby
covenant with each of the Shareholders
that they will at all times during the term hereof:
(a) give or cause to be given such notices, execute or cause
to be executed such deeds, transfers and documents as may from time to
time be necessary or conducive to the carrying out of the terms and
intent hereof;
(b) do or cause to b done all such acts, matters and things as
may from time to time be necessary or conducive to the carrying out of
the terms and intent hereof; and
(c) take no action that would constitute a contravention of
any of the terms and provisions thereof
2.6 Employment Contracts
Messrs. Rodgers, Austin, Xxxxxxxxx and Xxxxxxxx Employment Contracts
are attached as Schedule A and contain the following terms and conditions,
hereby agreed to by Mentor:
NAME ANNUAL REMUNERATION DEFERRED AMOUNT TO YEAR 2
---- ------------------- -------------------------
Xxxxxxx U.S. $250,000 U.S. $75,000
Austin U.S. $180,000 U.S. $60,000
Xxxxxxxxx U.S. $120,000 U.S. $25,000
Figueroa U.S. $100,000 U.S. $15,000
Deferred salaries vest when Mentor retains earnings of U.S. $750,000 in
one quarter and are then payable in equal monthly amounts over the ensuing six
month period.
Benefits are in a package valued at a minimum often per cent of salary
and a maximum of fifteen per cent of salary. Fully paid vacation of four weeks
per annum for each of Rodgers, Austin, Xxxxxxxxx and Xxxxxxxx.
Automobile allowance available when Mentor is earning a profit of a
minimum of U.S. $750,000 in any one quarter. Lease allowance will be as follows:
NAME ALLOWANCE
---- ---------
XXXXXXX U.S. $450 per month
Austin U.S. $375 per month
Xxxxxxxxx U.S. $300 per month
Figueroa U.S. $300 per month
A Project Completion Bonus of US $125,000 for each of Rodgers, Austin,
Xxxxxxxxx and Xxxxxxxx is available and payable on completion and acceptance of
the Learning Management System by the Chief Executive Officer of Mentor and by
outside clients and conditional upon receipt of a minimum of U.S. $1,500,000
from licences.
Each Officer will be granted stock options of 250,000 options to each
with a strike price of U.S. $2 exercisable for a period of five years upon
payment of the project completion bonus.
Notice period shall be, other than for cause, six months from month 7
to 12 and 12 months from month 13 and 18 months from month 25. Minimum term of
contract is one year.
2.7 Vend Agreement
The vend agreements attached as Schedule B-I and B-2 enunciate that
Learning Management Corporation and Xxxxxxxx shall assign to Mentor all rights
and ownership to a web enabled Learning Management System, created by Xxxxxxxxx
and Xxxxxxxx, including source code, schematics, functional specifications,
prototype, copyright, patent rights and any rights TO AUTHORSHIP IN
CONSIDERATION OF THEIR 25% undiluted ownership each in Holdings.
Pursuant to this agreement the interest of Xxxxxxxxx and Xxxxxxxx in
Holdings shall not vest until all deliverables are presented and accepted after
successful third party adjudication as follows: Functional Specifications,
Functional Prototype, Proof of Concept, Detailed Design, Development, User
Acceptance, Testing, Implementation plus full User and Technical Documentation
and Source Code.
Pursuant to this agreement the interest of Xxxxxxx and Austin vest
pursuant to past services in creating Mentor On Call, Inc. and its public
market, price per share and financing abilities.
2.8 Assets of Holdings
The sole assets of Holdings shall be the nine million, three hundred
and fifty thousand restricted shares of Mentor.
The assets shall be allocated equally to each shareholder of Holdings
when fully vested pursuant to article 2.7.
ARTICLE 111
RESTRICTIONS ON TRANSFER
3.1 Restrictions on Transfer
Except as specifically provided in this Agreement, no Shareholder shall
transfer any of its right, title or interest in or to any shares of Holdings
owned of record or beneficially by him without the express prior written consent
of all Shareholders first being obtained.
3.2 Transfers to Eligible Transferees
Notwithstanding the provisions of section 3.1 a Holdings shareholder
may at any time or from time to time transfer all of its Holdings shares to an
Eligible Transferee of such shareholder provided that, at or prior to the time
of such transfer:
(a) such Eligible Transferee shall agree with the other parties hereto,
by an agreement in writing in form and substance satisfactory to the other
shareholders, acting reasonably, to be bound by the terms hereof as if such
Eligible Transferee has entered into this Agreement in the place and stead of
the transferring shareholder and to remain an Eligible Transferee of the selling
shareholder as long as such Eligible Transferee is the registered or beneficial
owner of any Holding shares; and
(b) the other shareholders receive evidence satisfactory to them,
acting reasonably, that such Eligible Transferee is an Eligible Transferee of
the selling shareholder and that the agreement referred to in subsection 3.2 (a)
above is a legal, valid and binding obligation of the Eligible Transferee.
The transferring shareholder shall at all times after the transfer of
Holdings shares to the Eligible Transferee be jointly and severally liable with
such Eligible Transferee for the observance and performance of the covenants and
obligations of the Eligible Transferee under this Agreement, and shall cause the
Eligible Transferee to remain an Eligible Transferee of the transferring
shareholder so long as the Eligible Transferee shall have any registered or
beneficial interest in any Holdings shares and the transferring shareholder
shall indemnify the other parties hereto against any loss, damage or expense
incurred as a result of the failure by the Eligible Transferee to comply with
the provisions of this Agreement.
3.3 Legend
All certificates of Holdings shall bear the following legend:
"The shares represented by this certificate are subject to the
provisions of a unanimous shareholder agreement MADE AS OF THE 18TH day of
January, 2000 which contains restrictions on the right to transfer, pledge, vote
and otherwise deal with such shares, a copy of which agreement is
available for inspection from the Secretary of the Company. Notice of such
restrictions and the other provisions of such agreement is hereby given."
3.4 Companies to Enforce
None of the Companies shall accept for registration in its relevant
books of record any transfer of shares not made in accordance with the
provisions of this Agreement.
3.5 Certain Transfers Ineffective
Any transfer of shares attempted to be made other than in accordance
with the provisions of this agreement shall be void and of no effect.
3.6 Pledge of Shares
A Holdings shareholder may pledge the Holdings shares owned by him to
secure financing to be used to exercise a right under this Agreement to acquire
all of the Holdings shares owned by another shareholder, so long as such pledge
takes effect immediately prior to, and conditional upon, or contemporaneously
with, the consummation of such acquisition.
ARTICLE IV
RIGHTS OF FIRST REFUSAL
4.1 Delivery of Sale Notice
In the event that any Holdings shareholder (the "Offeror") desires to
transfer all but not less than all the Holdings shares owned by him, the Offeror
shall first deliver a notice in writing (a "Sale Notice") to the other
shareholders (the "Offerees") whereby the Offeror offers to sell all such
Holdings shares (the "Offered Shares") to the Offerees for the respective price
per Holdings share, payable in cash on closing, set out in the Sale Notice and
on and subject to the other terms and conditions therein set out. The Offerees
shall have the right, exercisable by giving notice (an "Acceptance Notice") to
the Offeror within fifteen Business Days after its receipt of a Sale Notice (the
"Acceptance Period") to purchase all, but not less than all, of the Offered
Shares offered to it in accordance with the Sale Terms. In the event that no
Acceptance Notice is received from an Offeree within the Acceptance Period, the
offer to such Offerees shall be deemed to have been refused.
4.2 Sales Notices Irrevocable
The delivery by an Offeror of a Sales Notice shall be irrevocable and,
upon delivery by an Offeree of an Acceptance Notice, the Offeror shall be bound
to sell, and the Offeree shall be bound to purchase, the relevant Offered Shares
in accordance with the Sale Terms.
4.3 Sales to Third Parties
If, following the completion of the procedure stipulated in section
4.1, the Offered Shares remain unaccepted by the Offeree, the Offeror may sell
the Offered Shares to any person (a "Third Party") at a price not less than the
price set forth in the Sale Notice and on terms no more favourable to the Third
Party than the Sale Terms. If no such sale is completed by the Offeror within 90
days following the expiration of the 15 Business Day period referred to in
section 4.1, the Offeror shall be required, before transferring any Holding
shares, again to offer such shares in the manner provided in section 4.1 and
such process shall be repeated so often as any party to this Agreement desires
to transfer any Holdings shares.
4.4 Tag-Along Rights
In the event that an Offeror proposes to sell the Offered Shares to a
Third Party pursuant to section 4.3, the Offeror shall, within 60 days following
the expiry of the 15 Business Day Period referred to in section 4.1, give
written notice (the "Tag-Along Notice") of the identity of the Third Party and
the price and other material terms of the transaction which shall be consistent
with the requirements of section 4.3, to the Offeree (a "Declining Offeree")
that elected not to exercise its right to purchase such Offered Shares. The
Declining Offeree may, not later than five Business Days after receipt of the
Tag-Along Notice, deliver the Offeror a notice in writing invoking the provision
of this section 4.4 (a "Tag-Along Demand"). The delivery by the Declining
Offeree of a Tag-Along Demand shall be irrevocable and shall bind Declining
Offeree to sell all but not less than all of the Holdings shares (the "Tagging
Shares") owned by the Declining Offeree, in accordance with the provisions of
this section 4.4. If the Declining Offeree delivers a Tag-Along Demand, then,
before completing any sale, the Offeror shall cause the Third Party to deliver
to the Declining Offeree a bona fide offer in writing (the "Tag-Along Offer") to
purchase from such Declining Offeree the Tagging Shares. The Tag-Along Offer
will be binding upon the Third Party and shall contain only such terms and
conditions as are identical to those upon which the Offeror proposes to sell to
the Third Party the Offered Share pursuant to section 4.3, provided that the
offer price per Holdings share, which shall be specified in the Tag Along Offer,
shall be the same consideration as, or the cash equivalent of; the consideration
per Holding share at which the Offeror proposes to sell to the Third Party the
Offered Shares pursuant to section 4.3. The closing date and other closing
arrangements for the purchase and sale transaction between the Declining Offeree
and the Third Party shall be specified in the Tag-Along Offer and shall be the
same, mutatis mutandis, as those specified between the Third Party and the
Offeror.
4.5 Drag-Along Rights
In the event that an Offeror proposes to sell the Offered Shares to a
Third Party pursuant to section 4.3, the Offeror may, by written notice
delivered within 60 days following the expiry of the 15 Business Day period
referred to in section 4.1 to the Declining Offeree, accompanied by an
irrevocable offer (the "Drag-Along Offer") from the Third Party to the Declining
Offeree to purchase, for a consideration that is the same as, or the cash
equivalent of; the consideration per
Holdings share at which the Offeror proposes to sell its Holdings shares owned
by such Declining Offeree (the "Dragged Shares") requiring the Declining Offeree
to sell to the Third Party all such Dragged Shares at the price specified in the
Drag-Along Offer. The delivery by the Offeror of an irrevocable Drag-Along Offer
shall bind the Declining Offeree to sell the Dragged Shares. The date on which
the sale is to close and the other closing arrangements (which shall be the
same, mutatis mutandis, as those for the purchase and sale between the Third
Party and the Offeror) shall be as specified in the Drag-Along Offer. Except as
specifically provided for above, the Drag-Along Offer shall contain only such
terms and conditions, if any, as are identical to those pursuant to whiche th
Offeror proposes to sell to the Third Party the offered Shares.
ARTICLE V
SHOT GUN BUY-SELL ARRANGEMENTS
5.1 Delivery of Initiating Notice
Any Holdings shareholder may at any time give notice in writing (the
"Initiating Notice") to the other Holdings shareholders (the "Notified Party")
specifying a price per Holdings share (the "Designated Price") at which the
Initiating Party would be willing to either:
(a) sell to the Notified Party all but not less than all the Holdings
shares beneficially owned at the time by the Initiating Party; or
(b) purchase all but not less than all the Holdings shares beneficially
owned at that time by the Notified Party.
5.2 Election of Notified Party
Within 20 Business Days after receipt by the Notified Party of an
Initiating Notice, such Notified Party shall, by notice in writing (a
"Responding Notice") to the Initiating Party, elect to either:
(a) sell to the Initiating Party at the Designated Price all but not
less than all the Holdings shares beneficially owned at that time by the
Notified Party; or
(b) purchase from the Initiating Party, at the Designated Price, all bu
not less than all the Holdings shares beneficially owned at that time by the
Initiating Party.
5.3 Notices Binding
IF A NOTIFIED PARTY ELECTS AS DESCRIBED IN SUBSECTION 5.2 (A), THE
INITIATING PARTY SHALL thereupon be conclusively deemed to have made an offer to
purchase all the Holdings shares
beneficially owned at that time by the Notified party at the Designated Price,
and the Notified party shall be conclusively deemed to have accepted such offer.
If a Notified Party does not deliver a Responding Notice within 20 Business Days
after delivery of the Initiating Notice, the Notified Party shall be deemed to
have elected to sell to the Initiating Party all but not less than all the
Holdings shares beneficially owned at that time by the Notified Party at the
Designated Price, and the Initiating party and the Notified Party shall be bound
by the agreement resulting from such DEEMED ELECTION. IF NOTIFIED PARTY ELECTS
AS DESCRIBED IN SUBSECTION 5.3 (b), the Notified Party shall thereupon be
conclusively deemed to have made an offer to purchase all the Holdings shares
beneficially owned at that time by the Initiating Party at the Designated Price,
and the Initiating Party shall be conclusively deemed to have accepted such
offer.
5.4 Participation in Subsequent Transactions
A party (a "Selling Shareholder") whose shares ("Subject Shares") are
acquired by another party hereto (a "Purchasing Shareholder") pursuant to the
rights conferred by this Article V shall, in the event of a subsequent transfer
(a "Subsequent Transfer") to an arm's length third party (a "Subsequent
Transferee") by the Purchasing Shareholder of the Subject Shares in the
circumstances described below, be entitled to a portion of the difference
between the price paid by the Purchasing Shareholder to the Selling Shareholder
for the Subject Shares and the proceeds received by the Purchasing shareholder
from the Subsequent Transferee on the Subsequent Transfer, in accordance with
the following:
(a) if an agreement (whether oral or in writing) between, inter alia,
the Purchasing Shareholder and the Subsequent Transferee (or any person acting
on behalf of or for the benefit of the Subsequent Transferee) providing for the
Subsequent Transfer is entered into prior to or within two months following the
closing of the purchase by the purchasing Shareholder from the Selling
Shareholder of the Subject Shares, seventy per cent;
(b) Two to four months, sixty per cent;
(c) Four to six months; fifty per cent.
ARTICLE VI
CALL RIGHTS ARISING ON DEATH OR PERMANENT INCAPACITY
6.1 Death or Permanent Incapacity
In the event of the death or Permanent Incapacity of a shareholder, the
other shareholders shall have the right but not the obligation, exercisable at
any time during the period of six months following the date on which the
shareholder dies or suffers Permanent Incapacity, to purchase all the Holdings
shares owned, directly or indirectly, by that shareholder or over which that
shareholder
exercises control or direction, by the delivery of notice to that shareholder or
to his estate within a six month period from such occurence, for a purchase
price equal to the fair market value as determined by an independent valuator
agreeable to all parties whose determination shall be binding.
6.2 Presumption of Death
In the event that a shareholder becomes missing for a period of six
months, that shareholder shall be conclusively deemed to be dead for the
purposes of this Agreement.
6.3 Appointment of Personal Represe~itatives
If a shareholder should die and no executor or administrator is
appointed for the estate of that shareholder within 90 days after the date of
death then Holdings shall be considered a creditor of the estate of the deceased
shareholder with all of the rights conferred upon a creditor of a decedent by
the place of his domicile, inchiding the right to cause an executor or
administrator to be appointed.
6.4 Life Insurance
Holdings shall take out Life Insurance on each shareholder with
proceeds payable to the Estate of a Deceased shareholder where a purchase is not
elected pursuant to section 6.1 above. The face value of the policy shall be set
in an amount deemed appropriate by the shareholders, reviewed annually. Policies
attached as Schedule D hereto. If election 6.1 utilized, proceeds as key-man.
ARTICLE VII
DEPOSIT OF SHARE CERTIFICATES
7.1 Shares to be Deposited into Escro'w
All share certificates of Holdings and common shares of Mentor shall be
delivered to an Escrow Holder acceptable to all sharehol~Jers and appointed
pursuant to an Escrow Agreement attached hereto as Schedule C whereby sai~d
Escrow Holder releases securities only on the basis of this Agreement, or on
sale of the common shares of Mentor, when directed by all the shareholders,
releases funds on a pro rata basis to the shareholders of Holdings.
ARTICLE VIFI
MISCELLANEOUS
8.1 Unanimous Shareholder Agreement
Each of the parties hereby acknowledges and agrees that this Agreement
is intended to operate and be construed as a unanimous shareholder agreement
within the meaning of the Ontario Business Corporations Act.
8.2 Acknowledgment by Companies
Each of the Companies by its execution hereof acknowledges that it has
actual notice of the terms of this Agreement, consents to this Agreement and
covenant with each of the other parties that it will at all times during the
continuance of this Agreement have or cause to be given such notices, execute or
cause to be executed such deeds, transfers and documents and cause to be done
all such acts, matters and things as may from time to times be necessary or
conducive to the canying out of the terms and intent of this Agreement.
8.3 Notices
(Put in full addresses, facsimiles, telephone numbers, E-Mails of all
parties)
8.4 Entire Agreement
This Agreement and the other documents herein referred to constitute
the entire agreement between the parties pertaining to the subject matter hereof
and supersede all prior agreements between or among the parties hereto with
respect to their respective rights and obligations in respect of the shares and
management and operation of Holdings and Mentor.
8.5 Accounting Terms
Unless otherwise defined or the context otherwise requires, all
accounting and financial terms used in this AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH CANADIAN GENERALLY ACCEPTED ACCOUNTING principles.
8.6 Governing Law
This Agreement shall be construed in accordance with the laws of the
Province of Ontario and the laws of Canada applicable therein and each of the
parties hereby irrevocably attorns to the non-exclusive jurisdiction of the
court os such province.
8.7 Rules of Interpretation
Words importing the singular number shall include the plural and vice
versa and words importing the use of any gender shall include all gender.
Headings used in this Agreement are for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose including, without
limitation, its interpretation. Expressions such as "hereof', "hereunder" and
"hereby" shall be construed as referring to the entire Agreement and not only to
the particular Article, section, subsection or clause in which they appear. In
determining beneficial ownership by a person such person shall be considered as
having a beneficial ownership interest in the assets of any company controlled,
directly or indirectly, by such person.
8.8 Successor and Assigns
Except as otherwise provided herein, neither this Agreement nor any of
the rights of any Holdings shareholder hereunder may be assigned without the
prior written consent of the other Holdings shareholder. Except as may otherwise
be provided herein, all of the terms and provisions of this agreement shall be
binding upon and shall enure to the benefit of the parties hereto and their
respective heirs, executors, administrator, other personal representatives,
successors and permitted assigns.
8.8 Severability
The invalidity or unenforceability of any provision or part of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision or part thereof; and any such invalid or unenforceable
provision or part thereof shall be deemed to be separate, severable and
distinct, and no provision or part thereof shall be deemed dependent upon any
other provision or part thereof unless expressly provided for herein.
8.9 Counterparts
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which when
taken together shall constitute on and the same agreement. Facsimile signature
are valid and binding.
IN WITNESS WHEREOF THIS AGREEMENT HAS BEEN EXECUTED BY THE PARTIES ON THE 18TH
DAY OF JANUARY, 2000.
SIGNED, SEALED AND DELIVERED
BY:
Xxxxx X. Xxxxxxx XXXXX X. XXXXXX
Xxxx X. Xxxxxxxxx XXXXX X. XXXXXXXX
THE CORPORATE SEAL OF MENTOR ON CALL, INC.
was attached and signed by a duly authorized officer of same:
TILE CORPORATE SEAL OF MENTOR ON CALL HOLDINGS, INC.
was attached and signed by a duly authorized officer of same:
