EXHIBIT 10.6
THIS PUT AND CALL OPTION AGREEMENT (the "Agreement") is made this
13/th/ day of May, 1998 by and among THE DERBY CYCLE CORPORATION (dba Raleigh
USA Bicycle Company), a corporation organized and existing under the laws of
Delaware, having its principal office at 00000 00xx Xxxxxx Xxxxx, Xxxx,
Xxxxxxxxxx 00000 (the "Company"), DERBY INTERNATIONAL CORPORATION S.A., a
corporation (societe anonyme) organized and existing under the laws of the Grand
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Duchy of Luxembourg, having its registered office at 0 Xxxxxxxxx xx xx Xxxxx, X-
0000 Xxxxxxxxxx, Grand Duchy of Luxembourg ("Derby International"), DERBY
FINANCE S.a.r.l, a corporation (societe a responsibilite limitee) organized and
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existing under the laws of the Grand Duchy of Luxembourg, having its registered
office at 00, xxx xx xx Xxxxxxxx, X-0000 Xxxxxxxxxx, Grand Duchy of Luxembourg
("DFS"), DC CYCLE, L.L.C., a limited liability company organized and existing
under the laws of Delaware, having its registered office at 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx ("LLC"), PERSEUS CYCLE, L.L.C., a limited liability company
organized and existing under the laws of Delaware, having its principal office
at Xxxxx 000, 0000 0 Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 ("Perseus") and
RALEIGH INDUSTRIES OF CANADA LIMITED, a corporation organized and existing under
the laws of Canada, having its registered office at 0000 Xxxxxx Xxxx, Xxxxxxxx,
Xxxxxxx, X0X 0X0 Xxxxxx ("RIC").
WHEREAS, the Company, Derby International, DFS, LLC. and Perseus are
also parties to a certain Recapitalization Agreement dated as of March 11, 1998,
as amended (the "Recapitalization Agreement");
WHEREAS, DFS, LLC. and Perseus hold all of the issued and outstanding
Class A Common Shares of the Company and, in their capacity as shareholders of
the Company, wish to agree to, and to agree to cause the Company to perform its
obligations under this Agreement;
WHEREAS, in connection with the Recapitalization Agreement and the
transactions contemplated therein, the Company and RIC desire to agree to grant
and receive the options described in this Agreement and to take such other steps
as may be required to give effect thereto;
WHEREAS, pursuant to a reorganization of the capital structure of RIC
(the "Reorganization"), RIC issued to Derby International fifteen thousand
(15,000) non-voting, cumulative, exchangeable and retractable preferred shares
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(the "Exchangeable Shares") having attached thereto certain rights, privileges,
restrictions and conditions contained in the Articles of Continuance of the
Company, as amended by Articles of Amendment dated May 13, 1998 attached hereto
as Exhibit A, and as they may otherwise be amended from time to time
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(collectively, the "Exchangeable Share Provisions");
NOW, THEREFORE, in consideration of the mutual premises contained in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS. Capitalized terms not otherwise defined herein shall have
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the same meanings contained in the Exchangeable Share Provisions, the
Recapitalization Agreement and the Shareholders' Agreement (as defined in the
Recapitalization Agreement).
2. EXCHANGEABLE SHARES. It is the intention of all of the parties that
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the RIC Exchangeable Shares shall have a Fair Market Value at least equal to the
Fair Market Value of all of the issued and outstanding common shares of the
capital stock of RIC immediately before the Effective Time. Fair Market Value
means, for these purposes, the amount determined by an independent evaluator
chosen by agreement between RIC and Derby International (the "Appraised
Value"), as may be approved or adjusted by the board of directors of RIC acting
in good faith in accordance with the Articles of Continuance of RIC, provided
that the Fair Market Value determined as hereinabove provided for shall also be
subject to revision (a "Tax Adjustment Event") in accordance with a final
determination resulting from a binding agreement with, or decision by, the
appropriate Canadian taxation authorities, or any judgement of a Canadian court
of competent jurisdiction. Such final determination shall reflect any assessment
by the Minister of National Revenue or other Canadian taxing authority from
which no appeal is taken or any agreement reached by RIC or the Company or Derby
International and a said taxing authority in settlement of a dispute regarding
such assessment or proposed assessment, or any decision by a Canadian court or
tribunal of competent jurisdiction, in regard thereto from which no appeal may
be taken or the period during which an appeal may be taken has expired.
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3. RIGHT AND PRIORITY OF EXCHANGEABLE SHARES. The parties agree to take
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all actions to ensure, and shall cause RIC to ensure, that the Exchangeable
Shares remain senior in right and priority to any other class of the capital
stock of RIC throughout the period during which any Exchangeable Shares remain
issued and outstanding and are held by any party to this Agreement other than
RIC or until such earlier time as the Exchangeable Shares are transferred in
consideration of the issue of shares of Class B Common Shares and Class A Common
Shares of the Company pursuant to this Agreement.
4. OPTIONS.
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(a) At any time following the issue of the Exchangeable Shares, the
holder of such Exchangeable Shares shall have the right (the "Put Option") to
require the Company to acquire the Exchangeable Shares in consideration of the
following (the "Put Entitlement"):
(i) the issue by the Company to such holder of such number of Class B
Common Shares and Class A Common Shares as is equal to the Equivalent
Number of ParentCo Common Shares (as defined in the Exchangeable Share
Provisions) in respect of such Exchangeable Shares; and
(ii) payment or transfer by the Company to such holder of all
distributions, dividends and other payments (other than any such
distributions, dividends or payments which effect a return of capital to
the holders of the Class A Common Shares or the Class B Common Shares of
the Company, as the case may be, which return would be included in the
definition of the Equivalent Number of ParentCo Common Shares) whether in
cash or in kind, accrued, declared or made on or before the Put Date that
the holder of the Equivalent Number of ParentCo Common Shares would have
received had such shares been issued to and held by such holder at all
times from the Effective Time to the Put Date;
(b) At any time after January 31, 2001, the Company may require (the
"Call Option") such holder of Exchangeable Shares, to transfer to the Company
the Exchangeable Shares in consideration of the following (the "Call
Entitlement"):
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(i) the issue by the Company to such holder of such number of Class B
Common Shares and Class A Common Shares as is equal to the Equivalent
Number of ParentCo Common Shares (as defined in the Exchangeable Share
Provisions) in respect of such Exchangeable Shares; and
(ii) payment or transfer by the Company to such holder of all
distributions, dividends and other payments (other than any such
distributions, dividends or payments which effect a return of capital to
the holders of the Class A Common Shares of the Class B Common Shares of
the Company,as the case may be which included in the definition of the
Equivalent Number of ParentCo Common Shares) whether in cash or in kind,
accrued, declared or made on or before the Call Date that a holder of the
Equivalent Number of the ParentCo Common Shares would have received had
such shares been issued to and held by such holder at all times from the
Effective Time to the Call Date;
(c) The holders of the Exchangeable Shares shall give notice to the
Company that they wish to effect the Put Option by delivering written notice
thereof, stating the date on which such Put Option shall become effective (the
"Put Date"), which notice shall be accompanied by the original share
certificate(s) representing the Exchangeable Shares, duly endorsed for transfer
to the Company. Upon receipt of such share certificate(s), the Company shall
deliver the Put Entitlement to the holders of the Exchangeable Shares, and the
Exchangeable Shares shall be cancelled and the holders thereof shall have no
further rights against the Company except to receive the Put Entitlement
described in this Section 4.
(d) The Company shall give notice to the holders of the Exchangeable
Shares that it wishes to effect the Call Option by delivering written notice
thereof, stating the date on which such Call Option shall become effective (the
"Call Date"), and on the Call Date, the Call Option shall be deemed to occur
notwithstanding any failure by the holders of the Exchangeable Shares to
surrender the certificate(s) thereof. Following delivery of such notice, and
immediately upon delivery by the Company of the Call Entitlement to the holders
of the Exchangeable Shares, the Exchangeable Shares shall be cancelled and the
holders thereof shall have no further right against the Company except to
receive the Call Entitlement described in this Section 4.
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(e) If the Class A Common Shares or the Class B Common Shares of the
Company which are included in the Equivalent Number of ParentCo Common Shares
had been issued and outstanding at the Effective Time and (i) would have been
coverted or exchanged before the Call Date or the Put Date, as the case may be,
for Class A Common Shares of the Company or any other securities or property
(including, without limitation, cash) as a result of a corporate reorganization,
a change in the capital structure of the Company or otherwise (the "Change"),
which Change occurs before the Put Date or the Call Date, as the case may, or
(ii) would have been transferred, redeemed, sold or otherwise disposed of as a
result of an Approved Sale or a transaction described in Section 10(b) of the
Shareholders' Agreement (the "Disposition"), which Disposition occurs before the
Put Date or the Call Date, as the case may be (property described in (i) and
(ii) above being together referred to herein as the "Substitute Property"), the
holders of the Exchangeable Shares shall receive, in consideration of such
Exchangeable Shares, such Substitute Property as was or would have been remitted
in exchange for the number of Class A Common Shares or Class B Common Shares of
the Company as would have otherwise been included in the Equivalent Number of
ParentCo Common Shares. Interest shall be paid on any cash included in such
property at an annual rate equal to the Base Rate for dollars of Citibank N.A.
in effect from time to time from the date on which such conversion, redemption,
exchange or other event with respect to such Class A Common Shares or Class B
Common Shares of the Company had or would have taken place up to the Call Date
or the Put Date, as the case may be. In the event that the Substitute Property
would itself have been converted or exchanged by reason of a Change or redeemed,
transferred, sold or otherwise disposed of on a Disposition which Change or
Disposition would have occured prior to the Call Date or the Put Date, as the
case may be, then the provisions of this paragraph 4 shall apply mutatis
mutandis to any such Substitute Property. For purposes of clarification, it is
the intention of clarification, it is the intention of the parties that upon the
full exercise of the Put Option or the Call Option hereunder a holder of the
Exchangeable Shares would be in the same economic and legal position as it would
have been in had it held the Equivalent Number of ParentCo Common Shares at the
Effective Time and at all other times up to the Call or the Put Date, as the
case may be.
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5. PREEMPTIVE RIGHTS OF THE COMPANY
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(a) RIC shall inform the Company and any holder of Exchangeable
Shares of each of the following events at the time set forth below:
(1) in the event of any determination by the Board of Directors of the RIC in
accordance with the constating documents of the RIC to institute voluntary
liquidation, dissolution or winding-up proceedings with respect to the RIC
or to effect any other distribution of the assets of the RIC among its
shareholders for the purpose of winding-up its affairs, at least sixty (60)
days prior to the proposed effective date of such liquidation, dissolution,
winding-up or other distribution;
(2) immediately, upon the earlier of (i) receipt by the RIC of notice of, and
(ii) the RIC otherwise becoming aware of, any threatened or instituted
claim, suit, petition or other proceedings with respect to the involuntary
liquidation, dissolution or winding-up of the RIC or to effect any other
distribution of the assets of the RIC among its shareholders for the
purposes of winding-up its affairs;
(3) immediately, in the event of any adjustment by the Board of Directors of
RIC to the Equivalent Number of the ParentCo Common Shares or the maximum
number of such shares referred to in Section 2.1 of the Exchangeable Share
Provisions pursuant to the Exchangeable Share Provisions or otherwise
pursuant to the Articles of Continuance of RIC as they may be from time to
time amended varied or replaced; and
(4) immediately, upon receipt by the RIC of a Retraction Notice (as defined in
the Exchangeable Share Provisions).
(b) On receipt of the notice provided for in 5(a)(1), (2) or (4)
above, the Company shall, if it is otherwise entitled to do so, give notice to
the holders of the Exchangeable Shares that it wishes to effect the Call Option
in accordance with section 4 hereof. If, at the time that it receives such a
notice, the Company is not entitled to give notice in accordance with Section 4,
then Derby International, if is the holder of the Exchangeable Shares at the
time that the notice is given, shall give notice to the Company that it wishes
effect the Put
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Option in accordance with Section 4 hereof and if it does not give such a notice
within ten (10) days of receipt of the notice described in (a) above, it shall
be deemed to have given the notice to the Company that it wishes to effect the
Put Option.
(c) The Company shall, upon giving the notice that it wishes to
effect the Call Option or upon receipt or deemed receipt of the notice from the
holder effecting the Put Option, and in any event not later than fifty (50) days
after receipt of the notice referred to in Section 5(a), give notice in writing
(the "ParentCo Notice") to RIC that it intends to purchase the Exchangeable
Shares in exercise of its Liquidation Purchase Right or its Retraction Purchase
Right (as such rights are defined in the Exchangeable Share Provisions), as the
case may be.
6. RESERVE. The Company shall, and LLC, Perseus and DFS shall cause the
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Company to, maintain sufficient Class B Common Shares and Class A Common Shares
as are required to perform its obligations under the Put Option or the Call
Option, together with sufficient funds or other property as is required to fund
the payment or make delivery to the holder of the Exchangeable Shares of Put
Entitlement or the Call Entitlement in accordance with Section 4.
7. FURTHER ACTION. In case at any times any further action is necessary
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to carry out the purposes of this Agreement, each of the parties will take such
further action (including the execution and delivery of additional instruments
and documents) as any other party reasonably may request, all at the cost and
expense of the Company or RIC, as appropriate.
8. AMENDMENTS. This Agreement may not be waived, changed, modified or
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discharged orally, unless an agreement in writing is signed by all parties to
this agreement.
9. ASSIGNMENT. Except as otherwise specifically provided herein, no party
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may assign any of its rights, interest or obligations hereunder without the
prior written consent of the other parties, which consent shall not be
unreasonably withheld; provided, however, that the holder may collaterally
assign its rights hereunder to any Person providing financing to the holder.
10. COUNTERPARTS. This Agreement may be executed in any number of
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counterparts, all of which shall constitute one agreement, and each such
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counterpart shall be deemed to have been made, executed and delivered on the
date set out at the head of this Agreement, without regard to the date when any
of such counterparts may actually have been made, executed or delivered.
11. HEADINGS. The descriptive headings contained in this Agreement are
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for reference purposes only and shall not affect the meaning or interpretation
of this Agreement.
12. NOTICES. Any consent, communication or notice required or permitted
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to be given under this Agreement shall be made in writing and shall be deemed
to have been duly and validly given; (i) in the case of notice sent by letter or
cable, upon the receipt of the same; and (ii) in the case of notice sent by
telefax, upon express acknowledgment (also by telefax) of receipt of
transmission by the receiving party, addressed, in each case as follows:
(a) if to LLC and Perseus at the addresses indicated at the head of
this Agreement with copy to:
Xxxxxxxx & Xxxxx
000 00xx Xxxxxx X.X.
Xxxxxxxxxx X.X, 00000
Attention: Xxxx X. Xxxxx, Esquire
Facsimile: 000-000-0000
(b) if to Derby International or DFS, to either or both at:
0 Xxxxxxxxx xx xx Xxxxx
X-0000 Xxxxxxxxxx
Grand Duchy of Luxembourg
Telefax: 352-451-23201
Attention: Chairman
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with a copy to:
Xxxxxxxxx Xxxxx & Partners
0 Xxx Xxxxxx Xxxx
Xxxxxx XX0X 0XX
Telefax: 00-000-000-0000
Attention: Xxxxx X. Park
and a copy to:
Stikeman, Xxxxxxx
0000 Xxxx-Xxxxxxxx Xxxxxxxxx Xxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Telefax: 000-000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx
(c) if to RIC or the Company, at their addresses set out at the
head of this Agreement or at such other address and/or telefax number as either
party may hereafter furnish to the other by written notice, as herein provided.
13. NO WAIVER. The failure to enforce or to require the performance at any
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time of any of the binding provisions of this Agreement shall not be construed
to be a waiver of such provisions and shall not effect either the validity of
this Agreement or any part thereof or the right of either party to this
Agreement thereafter to enforce each and every provision in accordance with this
Agreement.
14. FURTHER ASSISTANCE. Each of the parties to this Agreement shall take
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all actions necessary to effect the actions contemplated in this Agreement,
including without limitation, preparing and filing of Articles of Amendment to
the Articles of Continuance of RIC in respect of the Exchangeable Shares, blue
sky and other securities filings and transfer forms, and to execute and deliver
such further instruments and take such other additional action as the other
parties to the Agreement may reasonably request to effect, consummate and
confirm the transactions contemplated in this Agreement.
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15. GOVERNING LAW AND JURISDICTION. All questions concerning the
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construction, validity and interpretation of this Agreement shall be governed by
and construed in accordance with the domestic laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York. Any legal action or proceeding with respect to any matter arising under or
in connection with this Agreement or the subject matter hereof may be brought in
the courts of the State of New York or of the United States of America for the
Southern District of New York, and, by execution and delivery of this Agreement,
each party hereto hereby accepts for themselves and in respect of their
property, generally and unconditionally, the jurisdiction of the aforesaid
courts.
16. SEVERABILITY. If any provision of this Agreement is held to be invalid
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or unenforceable by any judgement of a tribunal of competent jurisdiction, the
remainder of the provisions of this Agreement shall not be affected by such
judgement, and the understanding of the parties embodied in this Agreement shall
be carried out as nearly as possible according to their original terms and
intent.
EXHIBIT "A"
EXCERPT FROM ARTICLES OF AMENDMENT OF RIC DATED MAY 13, 1998
SETTING OUT THE PROVISIONS ATTACHING
TO THE EXCHANGEABLE SHARE
PROVISIONS ATTACHING TO THE EXCHANGEABLE SHARES
The Exchangeable Shares in the capital of the Corporation shall have the
following rights, privileges, restrictions and conditions:
ARTICLE 1
INTERPRETATION
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For the purposes of these rights, privileges, restrictions and
conditions:
Section 1.1 DEFINITIONS
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"AFFILIATE" has the meaning provided in the Recapitalization
Agreement.
"ACT" means the Canada Business Corporations Act as amended,
consolidated or re-enacted from time to time.
"BOARD OF DIRECTORS" means the Board of Directors of the
Corporation and any committee thereof acting within its authority.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or
a day when banks are not open for business in Toronto, Ontario provided that if
any date on which an action is required to be taken hereunder is not a Business
Day, Business Day for the purpose of the provision requiring such action shall
mean the next succeeding Business Day.
"COMMON SHARES" means the common shares in the capital of the
Corporation.
"CORPORATION" means Raleigh Industries of Canada Limited - Les
Industries Raleigh du Canada Limitee, a corporation continued and existing under
the Act;
"EFFECTIVE TIME" means the earliest time of issuance of any
Exchangeable Shares by the Corporation.
"EQUIVALENT NUMBER OF PARENTCO COMMON SHARES" when used in
respect of the Exchangeable Shares as a whole, has the meaning provided in
Section 2.1 and when used in respect of each Exchangeable Share means the number
of ParentCo Class B Common Shares and ParentCo Class A Common Shares for which
all the Exchangeable Shares issued at the Effective Time are
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exchangeable divided by the number Exchangeable Shares so issued.
"EXCHANGEABLE SHARE CONSIDERATION" means, with respect to each
Exchangeable Share, for any acquisition of, or redemption of, or distribution of
assets of the Corporation in respect of, Exchangeable Shares pursuant to these
share provisions, for that part of the consideration which is:
(a) a ParentCo Common Share, or any fraction thereof, such consideration
shall be fully paid and satisfied by the delivery of such ParentCo
Common Share or such fraction thereof, as evidenced by a certificate
representing such ParentCo Common Share;
(b) the amount of all accumulated and unpaid cash dividends deliverable
in connection with such action, a cheque or cheques payable at par
at any branch of the bankers of the payor; and
(c) all accumulated and unpaid non-cash dividends deliverable in
connection with such action, such consideration shall be fully paid
and satisfied by the delivery of such non-cash items;
provided that (i) any such share shall be duly issued as fully paid and non-
assessable and any such property shall be delivered free and clear of any lien,
claim, encumbrance,security interest or adverse claim or interest and (ii) such
consideration shall be paid after deduction and withholding of any tax required
by applicable law to be deducted and withheld therefrom and without interest.
"EXCHANGEABLE SHARE ISSUANCE CONSIDERATION" means, in respect of
each Exchangeable Share, the amount equal to the Fair Market Value of all of the
issued and outstanding shares of the Corporation immediately before the
Effective Time divided by the number of Exchangeable Shares issued at the
Effective Time.
"EXCHANGEABLE SHARE PRICE" means, for each Exchangeable Share, at
any given date, an amount equal to the aggregate of:
(a) the Fair Market value on such date of the Equivalent Number of
ParentCo Common Shares; plus
(b) an additional amount equal to the full amount of all cash
dividends accumulated and unpaid on such Exchangeable Share;
plus
(c) an additional amount representing the Fair Market Value of the
non-cash dividends accumulated and unpaid on such Exchangeable
Share.
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"EXCHANGEABLE SHARES" means the non-voting cumulative exchangeable
preferred shares of the Corporation having the rights, privileges, restrictions
and conditions set forth herein.
"FAIR MARKET VALUE" means, with respect to any particular property
(including, for greater certainty, all of the issued and outstanding shares of
the Corporation immediately before the Effective Time and the ParentCo Common
Shares) at any particular time, the amount determined from time to time by the
Board of Directors in good faith to be the fair market value thereof; provided,
however, that the fair market value determined as hereinabove provided for shall
be subject to revision (a "Tax Adjustment Event") in accordance with any final
determination resulting from any binding agreement with, or decision by, the
appropriate Canadian taxation authorities, or any judgement of a Canadian court
of competent jurisdiction. Such final determination shall reflect any assesment
by the Minister of National Revenue or other Canadian taxing authority from
which no appeal is taken or any agreement reached by the Corporation or ParentCo
or the Holder and a said taxing authority in settlement of a dispute regarding
such assessment or proposed assessment, or any decision by a Canadian court or
tribunal of competent jurisdiction, in a matter to which the Corporation or
ParentCo or the Holder is a party, regarding the fair market value of such
property from which no appeal may be taken or the period during which an appeal
may be taken has expired.
"FINANCING DOCUMENTS" has the meaning provided in the Recapitalization
Agreement.
"HOLDER" means Derby International Corporation S.A., a corporation
organized under the laws of Luxembourg.
"LIQUIDATION AMOUNT" has the meaning provided in Section 5.1 hereof.
"LIQUIDATION DATE" has the meaning provided in Section 5.1 hereof.
"LIQUIDATION PURCHASE RIGHT" means a purchase by ParentCo of the
Exchangeable Shares pursuant to the exercise of an option under Section 4 of
the Put and Call Option Agreement.
"PARENTCO" means The Derby Cycle Corporation, a corporation organized
and existing under the laws of the State of Delaware and includes any successor
corporation.
"PARENTCO CLASS A COMMON SHARES" means the shares of Class A Common
Stock of ParentCo, with a par value of $0.01 per share, having voting
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rights of one vote per share, and/or any other securities resulting from the
application of Section 10.1 hereof.
"PARENTCO CLASS B COMMON SHARES" means the shares of Class B Common
Stock of ParentCo, with a par value of $0.01 per share, and/or any other
securities resulting from the application of Section 10.1 hereof.
"PARENTCO COMMON SHARES" means the ParentCo Class A Common Shares and
the ParentCo Class B Common Shares.
"PARENTCO NOTICE" mean a notice in writing given by ParentCo pursuant
to Section 5(c) of the Put and Call Option Agreement that it intends to
purchase the Exchangeable Shares.
"PUT AND CALL OPTION AGREEMENT" means the Put and Call Option
Agreement between ParentCo, the Holder, the Corporation, Derby Finance S.a.r.l.,
DC Cycle, L.L.C. and Perseus Capital L.L.C., made as of the Effective Time as
the same may be amended, varied or replaced from time to time.
"RECAPITALIZATION AGREEMENT" means the Recapitalization Agreement
between ParentCo, the Holder, Derby Finance S.a.r.l., DC Cycle, L.L.C., Perseus
Capital L.L.C. and A. Xxxxxx Xxxxxxxxx, Xxxx X. Finden-Xxxxxx, Xxxxx X. Pearl
and Xxxxxx Equity Investors, III L.P., dated March 11, 1998 as the same may be
amended, varied, or replaced from time to time.
"RETRACTED SHARES" has the meaning provided in Section 6.1 hereof.
"RETRACTION PURCHASE RIGHT" means a purchase by ParentCo of the
Exchangeable Shares pursuant to the exercise of an option under Section 4 of the
Put and Call Option Agreement.
"RETRACTION DATE" has the meaning provided in Subsection 6.1(ii)
hereof.
"RETRACTION PRICE" has the meaning provided in Section 6.1 hereof.
"RETRACTION NOTICE" has the meaning provided in Section 6.1 hereof.
"SENIOR FINANCE AGREEMENT" means the credit agreement dated on or
about 12 May 1998 made between ParentCo, certain of its subsidiaries as
obligors, Chase Manhattan International Limited as Facility Agent and Security
Agent, Chase Manhattan plc as Arranger and the financial institutions named
therein as Banks, as the same may be amended, varied, replaced or refinanced
from time to time.
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"SHAREHOLDERS AGREEMENT" means the Shareholders Agreement between
ParentCo, Derby Finance S.a.r.l., DC Cycle, L.L.C. and Perseus Capital L.L.C,
dated on or about May 14, 1998 as the same may be amended, varied or replaced
from time to time.
"SUPPORT AGREEMENT" means the Support Agreement between ParentCo, the
Corporation, the Holder, Derby Finance S.a.r.l., DC Cycle, L.L.C. and Perseus
Capital L.L.C., made as of the Effective Time as the same may be amended, varied
or replaced from time to time.
ARTICLE 2
EXCHANGE RATIO AND RANKING OF EXCHANGEABLE SHARES
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SECTION 2.1 As soon as practicable after the Effective Time, the board
of directors will determine the Fair Market Value immediately prior to the
Effective Time of (a) all of the issued and outstanding shares of the
Corporation; and (b) each ParentCo Common Share and will establish the number
(the "Equivalent Number of ParentCo Common Shares") of ParentCo Class B Common
Shares (up to an aggregate 15,000 such shares) and ParentCo Class A Common
Shares (up to an aggregate 30,000 such shares) for which the Exchangeable Shares
issued at the Effective Time are exchangeable such that the Fair Market Value at
the Effective Time of the Exchangeable Shares then issued having regard to the
Fair Market Value of the ParentCo Common Shares for which they are Exchangeable
is equal to the Fair Market Value, immediately prior to the Effective Time, of
all of the issued and outstanding shares of the Corporation. The Equivalent
Number of ParentCo Common Shares will be adjusted by the Board of Directors if
there is any revision as contemplated hereby in the Fair Market Value of either
the shares of the Corporation or the ParentCo Common Shares as of the Effective
Time.
SECTION 2.2 The Exchangeable Shares shall be entitled to a preference
over the Common Shares, and any other shares ranking junior to the Exchangeable
Shares, with respect to the payment of dividends and to the distribution of
assets in the event of the liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or any other distribution of the
assets of the Corporation among its shareholders for the purpose of winding-up
its affairs.
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ARTICLE 3
DIVIDENDS
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SECTION 3.1 Subject to Section 6.5, a holder of Exchangeable Shares shall
be entitled to cumulative preferential dividends on the Exchangeable Shares
which shall accrue on a daily basis at the rate of twenty percent (20%) per
annum of the sum of the Exchangeable Share Issuance Consideration in respect of
such share plus all accumulated and unpaid dividends thereon from and including
the date of issuance of such share to but not including the date on which such
share ceases to be outstanding. A holder of an Exchangeable Share shall not be
entitled to receive any dividend on such share in excess of the amount
determined in accordance with the first sentence of this Section 3.1. Such
dividends shall be paid out of money, assets or property of the Corporation
properly applicable to the payment of dividends, or out of authorized but
unissued shares of the Corporation.
SECTION 3.2 The issue of a certified cheque of the Corporation payable at
par at any branch of the bankers of the Corporation or payment in immediately
available funds as directed by the holder shall effect payment in respect of any
cash dividends contemplated by Section 3.1 hereof and the sending of such a
cheque or the transfer of such funds to each holder of an Exchangeable Share
(less any tax required to be deducted and withheld from such dividends paid or
credited by the Corporation) shall satisfy the cash dividends represented there
unless the cheque is not paid on presentation. Certificates registered in the
name of the registered holder of Exchangeable Shares shall be issued or
transferred in respect of any share dividends contemplated by Section 3.1 hereof
and the sending of such a certificate to each holder of an Exchangeable Share
shall satisfy the share dividend represented thereby. Such other type and
amount of property in respect of any dividends contemplated by Section 3.1
hereof shall be issued, distributed or transferred by the Corporation in such
manner as it shall determine and the issuance, distribution or transfer thereof
by the Corporation to each holder of an Exchangeable Share shall satisfy the
dividend represented thereby. In all cases any such dividends shall be subject
to any reduction or adjustment for tax required to be deducted and withheld from
such dividends paid or credited by the Corporation. No holder of an
Exchangeable Share shall be entitled to recover by action or other legal process
against the Corporation any dividend which is represented by a cheque that has
not been duly presented to the Corporation's bankers for payment or which
otherwise remains unclaimed for a period of six years from the date on which
such dividend was payable.
SECTION 3.3 To the extent not paid on December 31 of each year, beginning
December 31, 1998 (the "Dividend Reference Date"), all dividends
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which have accrued on each Exchangeable Share outstanding during the 12-month
period (or other period in case of the initial Dividend Reference Date) ending
upon each such Dividend Reference Date shall be accumulated and remain
accumulated dividends with respect to such Exchangeable Share until paid to the
holder thereof.
SECTION 3.4 If on any Dividend Reference Date on which any
dividends are payable on the Exchangeable Shares under Section 3.1 hereof the
dividends are not paid in full on all of the Exchangeable Shares then
outstanding, any such dividends which remain unpaid shall be paid on a
subsequent Dividend Reference Date on which the Corporation shall have
sufficient moneys, assets or property properly applicable to the payment of such
dividends.
SECTION 3.5 The record date for the determination of the holders
of Exchangeable Shares entitled to receive payment of, and the payment date for,
any dividend on the Exchangeable Shares under Section 3.1 hereof shall be the
date determined as the record date and payment date by the Board of
Directors.
ARTICLE 4
CERTAIN RESTRICTIONS
--------------------
SECTION 4.1 So long as any of the Exchangeable Shares are
outstanding, the Corporation shall not without, but may at any time with, the
approval of the holders of the Exchangeable Shares given as specified in Section
9.2 of these share provisions:
(a) at any time amend the constating documents of the Corporation in a
manner which would prejudicially affect the holders of Exchangeable
Shares in any material respect; or
(b) initiate the voluntary liquidation, dissolution or winding-up of the
Corporation nor take any action or omit to take any action that is
designed to result in the liquidation, dissolution or winding-up of
the Corporation.
SECTION 4.2 So long as any of the Exchangeable Shares are
outstanding and there exist any accrued and unpaid dividends on the outstanding
Exchangeable Shares, the Corporation shall not at any time without, but may at
any time with, the approval of the holders of the Exchangeable Shares given as
specified in Section 9.2 of these share provisions:
(a) pay any dividends on the Common Shares, or any other shares ranking
junior to be Exchangeable Shares, other than share
-8-
dividends payable in any such other shares ranking junior to the
Exchangeable Shares;
(b) redeem or purchase or make any capital distribution in respect of
Common Shares or any other shares ranking junior to the Exchangeable
Shares with respect to the payment of dividends or on any
distribution; or
(c) redeem or purchase any other shares of the Corporation ranking equally
with the Exchangeable Shares with respect of the payment of dividends
or on any distribution.
SECTION 4.3 The Corporation shall not at any time after the
Effective Time issue any Exchangeable Shares.
ARTICLE 5
LIQUIDATION, DISSOLUTION OR WINDING-UP
--------------------------------------
SECTION 5.1 In the event of the liquidation, dissolution or winding-up
of the Corporation or any other distribution of the assets of the Corporation
among its shareholders for the purpose of winding-up its affairs, a holder of
Exchangeable Shares shall be entitled, subject to the exercise by ParentCo of
the Liquidation Purchase Right and otherwise upon compliance with the provisions
of this Article 5 and applicable law, to receive from the assets of the
Corporation in respect of each Exchangeable Share held by such holder on the
effective date of such liquidation, dissolution or winding-up (the "Liquidation
Date"), before any distribution of any part of the assets of the Corporation to
the holders of the Common Shares or any other shares ranking junior to the
Exchangeable Shares, an amount equal to the Exchangeable Share Price applicable
on the last Business Day prior to the Liquidation Date (the "Liquidation
Amount"), which as set forth in Section 5.2 shall, subject to the exercise by
ParentCo of the Liquidation Purchase Right, be fully paid and satisfied by the
delivery by or on behalf of the Corporation of the Exchangeable Share
Consideration representing such holder's Liquidation Amount. In connection with
payment of the Exchangeable Share Consideration representing the Liquidation
Amount, the Corporation shall be entitled to liquidate some of the ParentCo
Common Shares which would otherwise be deliverable to the particular holder of
Exchangeable Shares in order to fund any statutory withholding tax obligation.
On or before the Liquidation Date, the holder shall present and surrender at the
chief executive office of the Corporation the certificate or certificates
representing the Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of
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Exchangeable Shares under the Act and the constating documents of the
Corporation and such additional documents and instruments as the Corporation may
reasonable require.
SECTION 5.2 On or promptly after the Liquidation Date, and subject
to the exercise by ParentCo of the Liquidation Purchase Right, the Corporation
shall cause to be delivered to the holders of the Exchangeable Shares the
Exchangeable Share Consideration representing the Liquidation Amount for each
such Exchangeable Share upon presentation and surrender of the certificates
representing such Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares under
the Act and the constating documents of the Corporation and such additional
documents and instruments as the Corporation may reasonably require, at the
chief executive office of the Corporation. The Exchangeable Share Consideration
representing the Liquidation Amount for such Exchangeable Shares shall be
delivered to each holder at the address of the holder recorded in the securities
register of the Corporation for the Exchangeable Shares. On and after the
Liquidation Date, the holders of the Exchangeable Shares shall cease to be
holders of such Exchangeable Shares and shall not be entitled to exercise any of
the rights of holders in respect thereof, other than the right to receive their
proportionate share of the Exchangeable Share Consideration representing the
Liquidation Amount, unless payment of the Exchangeable Share Consideration
representing the Liquidation Amount for such Exchangeable Shares shall not be
made upon presentation and surrender of share certificates in accordance with
the foregoing provisions, in which case the rights of the holders shall remain
unaffected until the Exchangeable Share Consideration representing the
Liquidation Amount has been paid in the manner hereinbefore provided. The
Corporation shall have the right at any time on or after the Liquidation Date to
deposit or cause to be deposited the Exchangeable Share Consideration in respect
of the Exchangeable Shares represented by certificates that have not at the
Liquidation Date been surrendered by the holders thereof in a custodial account
or for safekeeping, in the case of non-cash items, with any chartered bank or
trust company in Canada. Upon such deposit being made, the rights of the holders
of Exchangeable Shares after such deposit shall be limited to receiving their
proportionate share of the Exchangeable Share Consideration representing the
Liquidation Amount for such Exchangeable Shares so deposited, against
presentation and surrender of the said certificates held by them, respectively,
in accordance with the foregoing provisions. Upon such payment or deposit of
such Exchangeable Share Consideration, the holders of the Exchangeable Shares
shall thereafter be considered and deemed for all purposes to be the holders of
the ParentCo Common Shares delivered to them.
SECTION 5.3 The Corporation, upon becoming aware that a liquidation,
dissolution or winding up may occur, shall immediately notify ParentCo thereof.
If ParentCo does not give a ParentCo Notice within fifty (50)
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Business Days of such notification, the Corporation will notify the holder as
soon as possible thereafter that ParentCo will not exercise the Liquidation
Purchase Right. If ParentCo delivers the ParentCo Notice within such fifty (50)
Business Days, ParentCo shall be obliged to purchase the Exchangeable Shares in
accordance with the Put and Call Option Agreement. In such event, the
Corporation shall not make any distribution of the Liquidation Amount to the
holders of the Exchangeable Shares under Section 5.1 and for greater certainty,
the holders of the Exchangeable Shares shall have no right against the
Corporation in respect thereof. In the event that ParentCo does not deliver a
ParentCo Notice within fifty (50) Business Days, the Corporation shall
distribute the Liquidation Amount to the holders of the Exchangeable Shares on
or before the Liquidation Date in the manner otherwise contemplated in this
Article 5.
SECTION 5.4 After the Corporation has satisfied its obligations to
pay the holders of the Exchangeable Shares the Exchangeable Share Consideration
representing the Liquidation Amount per Exchangeable Share, such holders shall
not be entitled to share in any further distribution of the assets of the
Corporation.
ARTICLE 6
RETRACTION OF EXCHANGEABLE SHARES BY HOLDER
-------------------------------------------
SECTION 6.1 Subject to Section 6.5 hereof, a holder of Exchangeable
Shares shall be entitled at any time, on or after April 1, 2001 on giving the
Retraction Notice to the Corporation and subject to the exercise by ParentCo of
the Retraction Purchase Right, and otherwise upon compliance with the provisions
of this Article 6 and applicable law, to require the Corporation to redeem all
but not less than all of the Exchangeable Shares registered in the name of such
holder (the "Retracted Shares") for an amount equal to the Exchangeable Share
Price applicable on the last Business Day prior to the Retraction Date (the
"Retraction Price"), which as set forth in Section 6.4, shall, subject to the
exercise by ParentCo of the Retraction Purchase Right, be fully paid and
satisfied by the delivery by or on behalf of the Corporation of the Retraction
Price. In connection with payment of the Retraction Price, the Corporation
shall be entitled to deduct and withhold such amount as is required by
applicable law in order to fund any statutory withholding tax obligation. To
effect such retraction, the holder shall present and surrender at the chief
executive office of the Corporation the certificate or certificates representing
the Retracted Shares, together with such other documents and instruments as may
be required to effect a transfer of Exchangeable Shares under the Act and the
constating documents of the Corporation and such additional documents and
instruments as the Corporation may reasonably require, and together with a duly
executed statement (the "Retraction Notice") in the form of Schedule A hereto or
in such other form as may be acceptable to the Corporation:
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(i) specifying that the holder desires to have all of the
Exchangeable Shares represented by such certificate or certificates
redeemed by the Corporation;
(ii) specifying the Retraction Date, which must be a Business Day
and which shall be the sixtieth (60/th/) day from the date on which the
Retraction Notice is received by the Corporation pursuant to Section 8.3
hereof (the "Retraction Date"), provided that in the event that no such
Business Day is specified by the holder in the Retraction Notice, the
Retraction Date shall be deemed to be the sixtieth (60/th/) day after the
date on which the Retraction Notice is received by the Corporation pursuant
to Section 8.3 hereof; and
(iii) acknowledging the Retraction Purchase Right - providing
ParentCo with the overriding right to purchase all but not less than all of
the Retracted Shares directly from the holder and that the Retraction
Notice shall be deemed to be a revocable offer by the holder to sell the
Retracted Shares in accordance with the Retraction Purchase Right on the
terms and conditions set out in Section 6.3 below.
SECTION 6.2 Subject to the exercise by ParentCo of the Retraction
Purchase Right, upon receipt by the Corporation in the manner specified in
Section 6.1 hereof of a certificate or certificates representing the Retracted
Shares, together with a Retraction Notice, and provided that the Retraction
Notice is not revoked by the holder in the manner specified in Section 6.6
hereof, the Corporation shall redeem the Retracted Shares effective at the close
of business on the Retraction Date and shall effect payment to the holder by
causing to be delivered to such holder a certified cheque of the Corporation
payable at par at any branch of the bankers of the Corporation or paying in
immediately available funds as directed by the holder in the amount of the
Retraction Price with respect to such shares in accordance with Section 6.4
hereof.
SECTION 6.3 Upon receipt by the Corporation of a Retraction Notice,
the Corporation shall immediately notify ParentCo thereof. If ParentCo does not
give a ParentCo Notice to the Corporation within fifty (50) Business Days of
such notification, the Corporation will notify the holder as soon as possible
thereafter that ParentCo will not exercise the Retraction Purchase Right. If
ParentCo delivers the ParentCo Notice within such fifty (50) Business Days, and
provided that the Retraction Notice is not revoked by the holder in the manner
specified in Section 6.6, ParentCo shall be considered to have agreed to
purchase the Retracted Shares from the holder and shall be obliged to purchase
such shares from the holder on the Retraction Date under the Put and Call Option
Agreement. In such event, the Corporation shall not redeem the Retracted Shares
and, for greater certainty, no redemption by the Corporation of such Retracted
Shares shall
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take place on the Retraction Date. In the event that ParentCo does not deliver
a ParentCo Notice within fifty (50) Business Days, and provided that the
Retraction Notice is not revoked by the holder in the manner specified in
Section 6.6 hereof, the Corporation shall redeem the Retracted Shares on the
Retraction Date and in the manner otherwise contemplated in this Article 6.
SECTION 6.4 On and after the close of business on the Retraction
Date, the holder of the Retracted Shares shall not be entitled to exercise any
of the rights of a holder in respect thereof, other than the right to receive
his proportionate share of the Retraction Price unless upon presentation and
surrender of certificates in accordance with the foregoing provisions, payment
of the Retraction Price shall not be made, in which case the rights of such
holder shall remain unaffected until the Retraction Price has been paid in the
manner hereinbefore provided. On and after the close of business on the
Retraction Date, provided that presentation and surrender of certificates and
payment of the Retraction Price has been made in accordance with the foregoing
provisions, the holder of the Retracted Shares so redeemed by the Corporation
shall thereafter be considered and deemed for all purposes not to be a holder of
the Retracted Shares.
SECTION 6.5 Notwithstanding any other provision of this Article 6
and of Article 3 hereof, the Corporation shall not have any obligation (whether
legal or otherwise) to redeem or to make any payment of dividends or redeem
Exchangeable Shares (or Retracted Shares) and no holder of Exchangeable Shares
(or Retracted Shares) shall be entitled to deliver a Retraction Notice or make
any request in any manner whatsoever for the Corporation to redeem or make any
payment in respect of any or all of the Exchangeable Shares (or Retracted
Shares) if to do so might:
(i) be contrary to liquidity or solvency requirements or other
provisions of applicable law, or
(ii) result in or give rise to a breach or default of any provision
of any contract or agreement relating to the financing of the
Corporation or any Affiliate, including without limitation the
Senior Finance Agreement and the Financing Documents ("the
Restrictive Provisions").
If the Corporation, in its discretion, believes that it would be permitted by
reasons of the Restrictive Provisions to redeem the Exchangeable Shares (or the
Retracted Shares) tendered for redemption, it shall not be required to so redeem
such Exchangeable Shares (or Retracted Shares) or any of them and the
Exchangeable Shares (or Retracted Shares) or any of them and the Retraction
Notice, or such other request, shall be null and void and of no effect
whatsoever.
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As at the date hereof, the Corporation is prohibited, pursuant to the Senior
Finance Agreement, from redeeming all or any of the Exchangeable Shares (or the
Retracted Shares) without the prior written consent to such redemption being
given in accordance with the provisions of the Senior Finance Agreement.
SECTION 6.6 A holder of Retracted Shares may, by notice in writing
given by the holder to the Corporation before the close of business on the
Business Day immediately preceding the Retraction Date, withdraw its Retraction
Notice in which event such Retraction Notice shall be null and void.
ARTICLE 7
REPURCHASE OF EXCHANGEABLE SHARES BY THE CORPORATION
----------------------------------------------------
SECTION 7.1 Subject to the Restrictive Provisions and applicable law,
the Corporation may by agreement with any holder of the Exchangeable Shares
repurchase such shares from time to time at a purchase price and on such terms
and conditions as are mutually agreed between the parties.
ARTICLE 8
VOTING RIGHTS
-------------
SECTION 8.1 Except as required by applicable law and the provisions
hereof, the holders of the Exchangeable Shares shall not be entitled as such to
receive notice of or to attend any meeting of the shareholders of the
Corporation or to vote at any such meeting.
ARTICLE 9
AMENDMENT AND APPROVAL
----------------------
SECTION 9.1 Subject to the Restrictive Provisions, the rights,
privileges, restrictions and conditions attaching to the Exchangeable Shares may
be added to, changed or removed but, except as hereinafter provided, only with
the approval of the holders of the Exchangeable Shares given as hereinafter
specified.
-14-
SECTION 9.2 Subject to the Restrictive Provisions, any approval given
by the holders of the Exchangeable Shares to add to, change or remove any right,
privilege, restriction or condition attaching to the Exchangeable Shares or any
other matter requiring the approval or consent of the holders of the
Exchangeable Shares shall be deemed to have been sufficiently given if it shall
have been given in accordance with applicable law subject to a minimum
requirement that such approval be evidenced by a resolution passed by not less
than 66 2/3% of the votes cast on such resolution by persons represented in
person or by proxy or such other authorized person at a meeting of holders of
Exchangeable Shares duly called and held at which the holders of at least 50% of
the outstanding Exchangeable Shares at that time are present or represented by
proxy or such other authorized person. If at any such meeting the holders of at
least 50% of the outstanding Exchangeable Shares at that time are not present or
represented by proxy or such other authorized person within one-half hour after
the time appointed for such meeting then the meeting shall be adjourned to such
date not less than ten (10) days thereafter and to such time and place as may be
designated by the Chairman of such meeting. At such adjourned meeting the
holders of Exchangeable Shares present or represented by proxy or such other
authorized person thereat may transact the business for which the meeting was
originally called and a resolution passed thereat by the affirmative vote of not
less than 66 2/3% of the votes cast on such resolution by persons represented in
person or by proxy or such other authorized person at such meeting shall
constitute the approval or consent of the holders of the Exchangeable Shares.
For the purposes of this Section 9.2, any spoiled votes, illegible votes,
defective votes and abstinences shall be deemed to be votes not cast.
ARTICLE 10
RECIPROCAL CHANGES, ETC. IN RESPECT OF
PARENTCO COMMON SHARES
----------------------
ARTICLE 10.1 The Equivalent Number of ParentCo Common Shares and the
maximum number of such shares referred to in Section 2.1 hereof shall be
adjusted to fully reflect the effect of any stock split, reverse split, stock
dividend (including any dividend or distribution of securities convertible into
ParentCo Common Shares), conversion, reorganization, recapitalization or other
like change with respect to ParentCo Common Shares occurring after the Effective
Time.
-15-
ARTICLE 11
ACTIONS BY THE CORPORATION UNDER
SUPPORT AGREEMENT
-----------------------------
SECTION 11.1 The Corporation will take all such actions and do all
such things as shall be necessary or advisable to perform and comply with and to
ensure performance and compliance by ParentCo with all provisions of the Support
Agreement applicable to the Corporation and ParentCo, respectively, in
accordance with the terms thereof including, without limitation, taking all such
actions and doing all such things as shall be necessary or advisable to enforce
to the fullest extent possible for the direct benefit of the Corporation all
rights and benefits in favour of the Corporation under or pursuant thereto.
SECTION 11.2 The Corporation shall not propose, agree to or
otherwise give effect to any amendment to, or waiver or forgiveness of its
rights or obligations under, the Support Agreement without the approval of the
holders of Exchangeable Shares given in accordance with Section 9.1 of these
share provisions other than such amendments, waivers and/or forgiveness as may
be necessary or advisable for the purpose of:
(a) adding to the covenants of the other party or parties to such
agreement for the protection of the Corporation or the holders of
Exchangeable Shares; or
(b) making such provisions or modifications not inconsistent with such
agreement as any be necessary or desirable with respect to matters or
questions arising thereunder which, in the opinion of the Board of
Directors, it may be expedient to make, provided that the Board of
Directors shall be of the opinion, after consultation with counsel,
that such provisions and modifications will not be prejudicial to the
interests of the holders of the Exchangeable Shares; or
(c) making such changes in or corrections to such agreement which, on the
advice of counsel to the Corporation, are required for the purpose of
curing or correcting any ambiguity or defect or inconsistent provison
or clerical omission or mistake or manifest error contained therein,
provided that the Board of Directors shall be of the opinion, after
consultation with counsel, that such changes or corrections will not
be prejudicial to the interests of the holders of the Exchangeable
Shares.
-16-
ARTICLE 12
LEGEND
------
SECTION 12.1 The certificate evidencing the Exchangeable Shares shall
contain or have affixed thereto a legend, in form and on terms approved by the
Board of Directors, with respect to or with reference to the Support Agreement,
the Put and Call Option Agreement, the Liquidation Purchase Right and the
Retraction Purchase Right.
ARTICLE 13
MISCELLANEOUS
-------------
SECTION 13.1 Any notice, request or other communication to be given to
the Corporation by a holder of Exchangeable Shares shall be in writing and shall
be valid and effective if given by mail (postage prepaid) or by telecopy or by
delivery to the chief executive office of the Corporation and addressed to the
attention of the President. Any such notice, request or other communication, if
given by mail, telecopy or delivery, shall only be deemed to have been given and
received upon actual receipt thereof by the Corporation.
SECTION 13.2 Any presentation and surrender by a holder of
Exchangeable Shares to the Corporation of certificates representing Exchangeable
Shares in connection with the liquidation, dissolution or winding-up of the
Corporation or the retraction or repurchase of Exchangeable Shares shall be made
by registered mail (postage prepaid) or by delivery to the chief executive
office of the Corporation addressed to the attention of the President of the
Corporation. Any such presentation and surrender of certificates shall only be
deemed to have been made and to be effective upon actual receipt thereof by the
Corporation and the method of any such presentation and surrender of
certificates shall be at the sole risk of the holder.
-17-
SECTION 13.3. Any notice, request or other communication to be given
to a holder of Exchangeable Shares by or on behalf of the Corporation shall be
in writing and shall be valid and effective if given by mail (postage prepaid)
or by delivery to the address of the holder recorded in the securities register
of the Corporation or, in the event of the address of any such holder not being
so recorded, then at the last known address of such holder. Any such notice,
request or other communication, if given my mail, shall be deemed to have been
given and received on the fifth (5th) Business Day following the date of mailing
and, if given by delivery, shall be deemed to have been given and received on
the date of delivery. Accidental failure or omission to give any notice, request
or other communication to one or more holders of Exchangeable Shares shall not
invalidate or otherwise alter or affect any action or proceeding to be or
intended to be taken by the Corporation.
SECTION 13.4 For greater certainty, the Corporation shall not be
required for any purpose under these share provisions to recognize or take
account of persons who are not so recorded in such securities register.
SECTION 13.5 All Exchangeable Shares acquired by the Corporation upon
the redemption or repurchase thereof shall be cancelled.
SECTION 13.6 The Exchangeable Shares may be transferred by a holder
thereof without the approval of the Board of Directors to a "related person" of
such holder as defined in the Income Tax Act (Canada).
SCHEDULE "A"
NOTICE OF RETRACTION
To the Corporation and ParentCo
This notice is given pursuant to Article 6 of the provisions (the
"Share Provisions") attaching to the share(s) represented by this certificate
and all capitalized words and expressions used in this notice which are defined
in the Share Provisions have the meaning attributed to such words and
expressions in such Share Provisions.
The undersigned hereby notifies the Corporation that, subject to the
Retraction Purchase Right referred to below, the undersigned desires to have the
Corporation redeem in accordance with Article 6 of the Share Provisions all
share(s) represented by this certificate.
The undersigned hereby notifies the Corporation that the Retraction
Date shall be _______________.
NOTE: The Retraction Date must be a Business Day and must be the sixtieth
(60/th/) day after the date upon which this notice is received by the
Corporation. In the event that no such Business Day is correctly
specified above, the Retraction Date shall be deemed to be the
sixtieth (60/th/) day being a Business Day after the date on which
this notice is received by the Corporation.
The undersigned acknowledges the Retraction Purchase Right of ParentCo
to purchase all but not less than all the Retracted Shares from the undersigned
and that this notice shall be deemed to be a recoverable offer by the
undersigned to sell the Retracted Shares to ParentCo in accordance with the
Retraction Purchase Right on the Retraction Date for the Retraction Price and on
the other terms and conditions set out in Section 6.3 of the Share Provisions.
If ParentCo determines not to exercise the Retraction Purchase Right, the
Corporation will notify the undersigned of such fact as soon as possible. This
notice of retraction, and offer to sell the Retracted Shares to ParentCo, may be
revoked and withdrawn by the undersigned by notice in writing given to the
Corporation at any time before the close of business on the Business Date
immediately preceding the Retraction Date.
-2-
The undersigned hereby represents and warrants to the Corporation and
ParentCo that the undersigned has good title to, and owns, the share(s)
represented by this certificate to be acquired by the Corporation or ParentCo,
as the case may be, free and clear of all liens, claims, encumbrances, security
interests and adverse claims or interests.
___________________ ___________________________ _____________________________
(Date) (Signature of Shareholder) (Guarantee of Signature)
[_] Please check box if the legal or beneficial owner of the Retracted Shares
is a non-resident of Canada.
__________________________________________ __________________________________
Name of Person in Whose Name Securities or Date
Cheque(s) or Other Non-cash Assets Are To
Be Registered, Issued or Delivered (please
print)
__________________________________________ __________________________________
Street Address or P.O. Box Signature of Shareholder
__________________________________________ _________________________________
City, Province Signature Guaranteed by
-11-
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date set out on the first page hereof.
DERBY INTERNATIONAL DERBY FINANCE S.a.r.l.
CORPORATION S.A.
By:________________ By:___________________
Title: Title:
THE DERBY CYCLE
DC CYCLE, L.L.C CORPORATION
By:________________ By:___________________
Title: Title:
RALEIGH INDUSTRIES OF
CANADA LIMITED PERSEUS CYCLE, L.L.C.
By:________________ By:___________________
Title: Title:
-11-
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date set out on the first page hereof.
DERBY INTERNATIONAL DERBY FINANCES, S.a.r.l
CORPORATION S.A
By:_____________________ By:________________________
Title: Title:
THE DERBY CYCLE
DC CYCLE, LLC CORPORATION
By:_____________________ By:________________________
Title: Title:
RALEIGH INDUSTRIES OF
CANADA LIMITED PERSEUS CYCLE, LLC
By:_____________________ By: /s/[SIGNATURE ILLEGIBLE]^^
-----------------------
Title: Title:
-11-
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date set out on the first page hereof.
DERBY INTERNATIONAL DERBY FINANCIAL S.a.r.l.
CORPORATION S.A.
By:____________________________ By:_______________________
Title: Title:
THE DERBY CYCLE
DC CYCLE, L.L.C. CORPORATION
By: /s/ [SIGNATURE ILLEGIBLE]^^ By:_______________________
----------------------------
Title: Title:
RALEIGH INDUSTRIES OF
CANADA LIMITED PERSEUS CYCLE, L.L.C.
By:____________________________ By:_______________________
Title: Title:
-11-
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date set out on the first page hereof.
DERBY INTERNATIONAL DERBY FINANCE S.a.r.l
CORPORATION S.A
By:/s/ Xxxx X. Finden-Crofts By:/s/ Xxxx X. Finden-Crofts
--------------------------- ---------------------------
Title: Title:
THE DERBY CYCLE
DC CYCLE, L.L.C. CORPORATION
By:/s/ Xxxx X. Finden-Crofts By:/s/ Xxxx X. Finden-Crofts
--------------------------- ---------------------------
Title: Title:
RALEIGH INDUSTRIES OF
CANADA LIMITED PERSEUS CYCLE, L.L.C.
By:/s/ Xxxx X. Finden-Crofts By:/s/ Xxxx X. Finden-Crofts
--------------------------- ---------------------------
Title: Title:
