EXHIBIT 4.8
FORM OF
EXCHANGEABLE SHARE SUPPORT AGREEMENT
MEMORANDUM OF AGREEMENT made as of the day of , 2000.
AMONG:
SMTC CORPORATION,
a corporation existing under the laws of
the State of Delaware
(hereinafter referred to as "SMTC"),
OF THE FIRST PART,
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SMTC NOVA SCOTIA COMPANY,
an unlimited company existing under the laws of
the Province of Nova Scotia
(hereinafter referred to as "SMTC Nova Scotia"),
OF THE SECOND PART,
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SMTC MANUFACTURING CORPORATION OF CANADA, a
corporation existing under the laws of the
Province of Ontario (hereinafter referred to
as "SMTC Canada"),
OF THE THIRD PART.
WHEREAS, pursuant to an underwriting agreement dated as of , 2000
and a prospectus dated , 2000 filed with the securities regulatory
authorities in each of the provinces of Canada (the "Prospectus"), SMTC Canada
has agreed to issue non-voting exchangeable shares of SMTC Canada
("Exchangeable Shares") to the public in an initial public offering (the
"Initial Public Offering") and may, from time to time, issue additional
Exchangeable Shares or securities exchangeable for or convertible into or
carrying rights to acquire Exchangeable Shares;
AND WHEREAS SMTC Canada will, on the date of this agreement,
issue Exchangeable Shares to certain SMTC Canada shareholders on the
conversion of previously issued SMTC Canada Class L exchangeable shares;
AND WHEREAS each Exchangeable Share is exchangeable at the holder's option
at any time, without further payment, for one share of common stock of SMTC (the
"SMTC Common Stock");
AND WHEREAS coincident with and as part of the issue of Exchangeable Shares
pursuant to the Initial Public Offering, SMTC, SMTC Nova Scotia and SMTC Canada
are to execute a support agreement substantially in the form of this agreement;
NOW THEREFORE in consideration of the respective covenants and agreements
provided in this agreement and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties hereto
covenant and agree as follows:
Article 1
DEFINITIONS AND INTERPRETATION
1.1 Definitions
Each term denoted herein by initial capital letters and not otherwise
defined herein shall have the meaning ascribed thereto in the rights,
privileges, restrictions and conditions attaching to the Exchangeable Shares
(collectively, the "Exchangeable Share Provisions"), unless the context requires
otherwise.
1.2 Interpretation Not Affected by Headings
The division of this agreement into Articles, Sections and other portions
and the insertion of headings are for convenience of reference only and shall
not affect the construction or interpretation of this agreement. Unless
otherwise indicated, all references to an "Article" or "Section" followed by a
number and/or letter refer to the specified Article or Section of this
agreement. The terms "this agreement", "hereof", "herein" and "hereunder" and
similar expressions refer to this agreement and not to any particular Article,
Section or other portion hereof, and include any agreement or instrument
supplementary or ancillary hereto.
1.3 Number, Gender
In this agreement, unless the context otherwise requires, words importing
the singular number only shall include the plural and vice versa, and words
importing any gender shall include all genders.
1.4 Date for Any Action
If any date on which any action is required to be taken under this
agreement is not a Business Day, such action shall be required to be taken on
the next succeeding Business Day.
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Article 0
XXXXXXXXX XX XXXX XXX XXXX XXXXXX
2.1 Covenants Regarding Exchangeable Shares
So long as any Exchangeable Shares (other than Exchangeable Shares owned by
SMTC or its Affiliates) remain outstanding, SMTC will:
(a) not declare or pay any dividend on the shares of SMTC Common Stock
unless (i) SMTC Canada shall (w) simultaneously declare or pay, as the
case may be, an equivalent dividend (as provided for in the
Exchangeable Share Provisions) on the Exchangeable Shares (an
"Equivalent Dividend"), and (x) have sufficient money or other assets
or authorized but unissued securities available to enable the due
declaration and the due and punctual payment, in accordance with
applicable law, of any Equivalent Dividend, or (ii) SMTC Canada shall
(y) simultaneously subdivide the Exchangeable Shares in lieu of a
stock dividend thereon (as provided for in the Exchangeable Share
Provisions) (an "Equivalent Stock Subdivision"), and (z) have
sufficient authorized but unissued securities available to enable the
Equivalent Stock Subdivision;
(b) advise SMTC Canada sufficiently in advance of the declaration by SMTC
of any dividend on the shares of SMTC Common Stock and take all such
other actions as are reasonably necessary, in co-operation with SMTC
Canada, to ensure that (i) the respective declaration date, record
date and payment date for an Equivalent Dividend shall be the same as
the declaration date, record date and payment date for the
corresponding dividend on the shares of SMTC Common Stock or, (ii) the
record date and effective date for an Equivalent Stock Subdivision
shall be the same as the record date and payment date for the
corresponding stock dividend on the shares of SMTC Common Stock;
(c) ensure that the record date for any dividend declared on the shares of
SMTC Common Stock is not less than 10 Business Days after the
declaration date of such dividend;
(d) take all such actions and do all such things as are reasonably
necessary or desirable to enable and permit SMTC Canada, in accordance
with applicable law, to pay and otherwise perform its obligations with
respect to the satisfaction of the Company Liquidation Amount, the
Retraction Price or the Redemption Price in respect of each issued and
outstanding Exchangeable Share (other than Exchangeable Shares owned
by SMTC or its Affiliates) upon the liquidation, dissolution or
winding-up of SMTC Canada, the delivery of a Retraction Request by a
holder of Exchangeable Shares or a redemption of Exchangeable Shares
by SMTC Canada, as the case may be, including without limitation all
such actions and all such things as are necessary or desirable to
enable and permit SMTC Canada to cause to be delivered shares of SMTC
Common Stock to the holders of Exchangeable Shares in accordance with
the provisions of Articles 5, 6 or 7, as the case may be, of the
Exchangeable Share Provisions;
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(e) take all such actions and do all such things as are reasonably
necessary or desirable to enable and permit SMTC Nova Scotia, in
accordance with applicable law, to perform its obligations arising
upon the exercise by it of the Liquidation Call Right, the Retraction
Call Right or the Redemption Call Right, including without limitation
all such actions and all such things as are necessary or desirable to
enable and permit SMTC Nova Scotia to cause to be delivered shares of
SMTC Common Stock to the holders of Exchangeable Shares in accordance
with the provisions of the Liquidation Call Right, the Retraction Call
Right or the Redemption Call Right, as the case may be; and
(f) if it becomes a "specified financial institution" (as such term is
defined in the Income Tax Act (Canada)) or does not deal at arm's
length with such a person, take all such actions and do all such
things as are reasonably necessary or desirable to cause SMTC Nova
Scotia to exercise the Retraction Call Right if requested to do so by
a holder of Exchangeable Shares making a Retraction Request.
2.2 Segregation of Funds
SMTC will cause SMTC Canada or SMTC Nova Scotia, as the case may be, to
deposit a sufficient amount of funds in a separate account of SMTC Canada or
SMTC Nova Scotia and segregate a sufficient amount of such other assets and
property as is necessary to enable SMTC Canada to pay dividends when due and to
enable SMTC Canada or SMTC Nova Scotia to pay or otherwise satisfy their
respective obligations under Articles 5, 6 or 7 of the Exchangeable Share
Provisions, as applicable.
2.3 Reservation of SMTC Common Stock
SMTC hereby represents, warrants and covenants in favour of SMTC Canada and
SMTC Nova Scotia that SMTC has reserved for issuance and will, at all times
while any Exchangeable Shares (other than Exchangeable Shares held by SMTC or
its Affiliates) are outstanding, keep available, free from pre-emptive and other
rights, out of its authorized and unissued capital stock such number of shares
of SMTC Common Stock (or other shares or securities into which shares of SMTC
Common Stock may be reclassified or changed as contemplated by Section 2.7) (a)
as is equal to the sum of (i) the number of Exchangeable Shares issued and
outstanding from time to time, and (ii) the number of Exchangeable Shares
issuable upon the exercise of all rights, options or other entitlements to
acquire Exchangeable Shares outstanding from time to time, and (b) as are now
and may hereafter be required to enable and permit SMTC to meet its obligations
under the Voting and Exchange Trust Agreement and under any other security or
commitment pursuant to which SMTC may now or hereafter be required to issue
shares of SMTC Common Stock, to enable and permit SMTC Nova Scotia to meet its
obligations under each of the Liquidation Call Right, the Retraction Call Right
and the Redemption Call Right and to enable and permit SMTC Canada to meet its
obligations hereunder and under the Exchangeable Share Provisions.
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2.4 Notification of Certain Events
In order to assist SMTC in complying with its obligations hereunder and to
permit SMTC Nova Scotia to exercise the Liquidation Call Right, the Retraction
Call Right and the Redemption Call Right, SMTC Canada will notify SMTC and SMTC
Nova Scotia of each of the following events at the time set forth below:
(a) in the event of any determination by the Board of Directors to
institute voluntary liquidation, dissolution or winding-up proceedings
with respect to SMTC Canada or to effect any other distribution of the
assets of SMTC Canada among its shareholders for the purpose of
winding-up its affairs, at least 60 days prior to the proposed
effective date of such liquidation, dissolution, winding-up or other
distribution;
(b) promptly, upon the earlier of receipt by SMTC Canada of notice of and
SMTC Canada 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 SMTC Canada or
to effect any other distribution of the assets of SMTC Canada among
its shareholders for the purpose of winding-up its affairs;
(c) immediately, upon receipt by SMTC Canada of a Retraction Request;
(d) on the same date on which notice of redemption is given to holders of
Exchangeable Shares, upon the determination of a Redemption Date in
accordance with the Exchangeable Share Provisions; and
(e) as soon as practicable upon the issuance by SMTC Canada of any
Exchangeable Shares, rights, options or warrants to acquire
Exchangeable Shares or other securities exchangeable for or
convertible into Exchangeable Shares.
2.5 Delivery of SMTC Common Stock to SMTC Canada and SMTC Nova Scotia
In furtherance of its obligations under Sections 2.1(d) and (e), upon
notice from SMTC Canada or SMTC Nova Scotia of any event that requires SMTC
Canada or SMTC Nova Scotia to cause to be delivered shares of SMTC Common Stock
to any holder of Exchangeable Shares, SMTC shall forthwith issue and deliver or
cause to be delivered to SMTC Canada or SMTC Nova Scotia the requisite number of
shares of SMTC Common Stock to be received by, and issued to or to the order of,
the former holder of the surrendered Exchangeable Shares, as SMTC Canada or SMTC
Nova Scotia shall direct. All such shares of SMTC Common Stock shall be duly
authorized and validly issued as fully paid and non-assessable and shall be free
and clear of any lien, claim or encumbrance. In consideration of the issuance
and delivery of each such share of XXXX Xxxxxx Xxxxx, XXXX Xxxxxx or SMTC Nova
Scotia, as the case may be, shall issue to SMTC, or, as SMTC shall direct,
common shares of SMTC Canada or SMTC Nova Scotia, cash, securities or other
property having equivalent value.
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2.6 Qualification of SMTC Common Stock
If any shares of SMTC Common Stock (or other shares or securities into
which shares of SMTC Common Stock may be reclassified or changed as contemplated
by Section 2.7) to be issued and delivered hereunder require registration or
qualification with or approval of or the filing of any document, including any
prospectus or similar document or the taking of any proceeding with or the
obtaining of any order, ruling or consent from any governmental or regulatory
authority under any Canadian or United States federal, provincial or state
securities or other law or regulation or pursuant to the rules and regulations
of any securities or other regulatory authority or the fulfilment of any other
Canadian or United States legal requirement before such shares (or such other
shares or securities) may be issued by SMTC and delivered by SMTC at the
direction of SMTC Nova Scotia or SMTC Canada, if applicable, to the holder of
surrendered Exchangeable Shares or in order that such shares (or such other
shares or securities) may be freely traded thereafter (other than any
restrictions of general application on transfer of securities of an issuer that
is not a "reporting issuer" or equivalent within the meaning of Canadian
provincial securities laws, or by reason of a holder being a "control person"
for purposes of Canadian provincial securities law or an "affiliate" of SMTC for
purposes of United States federal or state securities law), SMTC will, in good
faith, expeditiously take all such actions and do all such things as are
necessary or desirable to cause such shares of SMTC Common Stock (or such other
shares or securities) to be and remain duly registered, qualified or approved
under Canadian and/or United States law, as the case may be. SMTC will, in good
faith, expeditiously take all such actions and do all such things as are
reasonably necessary or desirable to cause all shares of SMTC Common Stock (or
such other shares or securities) to be delivered hereunder to be listed, quoted
or posted for trading on all stock exchanges and quotation systems on which
outstanding shares of SMTC Common Stock (or such other shares or securities)
have been listed by SMTC and remain listed and are quoted or posted for trading
at such time.
2.7 Economic Equivalence
(a) SMTC will not, without the prior approval of SMTC Canada and the prior
approval of the holders of the Exchangeable Shares given in accordance
with Section 10.2 of the Exchangeable Share Provisions:
(i) issue or distribute shares of SMTC Common Stock (or securities
exchangeable for or convertible into or carrying rights to
acquire shares of SMTC Common Stock) to the holders of all or
substantially all of the then-outstanding shares of SMTC Common
Stock by way of stock dividend or other distribution, other than
an issue of shares of SMTC Common Stock (or securities
exchangeable for or convertible into or carrying rights to
acquire shares of SMTC Common Stock) to holders of shares of SMTC
Common Stock who exercise an option to receive dividends in
shares of SMTC Common Stock (or securities exchangeable for or
convertible into or carrying rights to acquire shares of SMTC
Common Stock) in lieu of receiving cash dividends; or
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(ii) issue or distribute rights, options or warrants to the holders
of all or substantially all of the then-outstanding shares of
SMTC Common Stock entitling them to subscribe for or to purchase
shares of SMTC Common Stock (or securities exchangeable for or
convertible into or carrying rights to acquire shares of SMTC
Common Stock); or
(iii) issue or distribute to the holders of all or substantially all
of the then-outstanding shares of SMTC Common Stock (A) shares
or securities of SMTC of any class other than shares of SMTC
Common Stock (other than shares convertible into or exchangeable
for or carrying rights to acquire shares of SMTC Common Stock),
(B) rights, options or warrants other than those referred to in
Section 2.7(a)(ii), (C) evidences of indebtedness of SMTC or (D)
assets of SMTC;
unless the economic equivalent on a per share basis of such rights,
options, securities, shares, evidences of indebtedness or other assets
is issued or distributed simultaneously to holders of the Exchangeable
Shares, in which case, for greater certainty, no approval of the
holders of Exchangeable Shares is required.
(b) SMTC will not, without the prior approval of SMTC Canada and the prior
approval of the holders of the Exchangeable Shares given in accordance
with Section 10.2 of the Exchangeable Share Provisions:
(i) subdivide, redivide or change the then-outstanding shares of
SMTC Common Stock into a greater number of shares of SMTC Common
Stock; or
(ii) reduce, combine, consolidate or change the then-outstanding
shares of SMTC Common Stock into a lesser number of shares of
SMTC Common Stock; or
(iii) reclassify or otherwise change shares of SMTC Common Stock or
effect an amalgamation, merger, reorganization or other
transaction affecting shares of SMTC Common Stock;
unless the same or an economically equivalent change shall
simultaneously be made to, or in the rights of the holders of, the
Exchangeable Shares, in which case, for greater certainty, no approval
of the holders of Exchangeable Shares is required.
(c) SMTC will ensure that the record date for any event referred to in
Sections 2.7(a) or 2.7(b) above, or (if no record date is applicable
for such event) the effective date for any such event, is not less
than five Business Days after the date on which such event is declared
or announced by SMTC (with contemporaneous notification thereof by
SMTC to SMTC Canada).
(d) The Board of Directors shall determine, in good faith and in its sole
discretion, economic equivalence for the purposes of any event
referred to in Sections 2.7(a)
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or 2.7(b) and each such determination shall be conclusive and binding
on SMTC. In making each such determination, the following factors
shall, without excluding other factors determined by the Board of
Directors to be relevant, be considered by the Board of Directors:
(i) in the case of any stock dividend or other distribution payable
in shares of SMTC Common Stock, the number of such shares issued
in proportion to the number of shares of SMTC Common Stock
previously outstanding;
(ii) in the case of the issuance or distribution of any rights,
options or warrants to subscribe for or purchase shares of SMTC
Common Stock (or securities exchangeable for or convertible into
or carrying rights to acquire shares of SMTC Common Stock), the
relationship between the exercise price of each such right,
option or warrant and the Current Market Price of a share of
SMTC Common Stock;
(iii) in the case of the issuance or distribution of any other form of
property (including, without limitation, any shares or
securities of SMTC of any class other than shares of SMTC Common
Stock, any rights, options or warrants other than those referred
to in Section 2.7(d)(ii), any evidences of indebtedness of SMTC
or any assets of SMTC), the relationship between the fair market
value (as determined by the Board of Directors) of such property
to be issued or distributed with respect to each outstanding
share of SMTC Common Stock and the Current Market Price of a
share of SMTC Common Stock;
(iv) in the case of any subdivision, redivision or change of the
then-outstanding shares of SMTC Common Stock into a greater
number of shares of SMTC Common Stock or the reduction,
combination, consolidation or change of the then-outstanding
shares of SMTC Common Stock into a lesser number of shares of
SMTC Common Stock or any amalgamation, merger, reorganization or
other transaction affecting shares of SMTC Common Stock, the
effect thereof upon the then-outstanding shares of SMTC Common
Stock; and
(v) in all such cases, the general taxation consequences of the
relevant event to holders of Exchangeable Shares to the extent
that such consequences may differ from the taxation consequences
to holders of shares of SMTC Common Stock as a result of
differences between taxation laws of Canada and the United
States (except for any differing consequences arising as a
result of differing marginal taxation rates and without regard
to the individual circumstances of holders of Exchangeable
Shares).
(e) SMTC Canada agrees that, to the extent required, upon due notice from
SMTC, SMTC Canada will use its best efforts to take or cause to be
taken such steps as may be necessary for the purposes of ensuring that
appropriate dividends are paid or other distributions are made by SMTC
Canada, or subdivisions, redivisions or
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changes are made to the Exchangeable Shares, in order to implement the
required economic equivalence with respect to the shares of SMTC
Common Stock and Exchangeable Shares as provided for in this Section
2.7.
2.8 Tender Offers
In the event that a tender offer, share exchange offer, issuer bid,
take-over bid or similar transaction with respect to shares of SMTC Common Stock
(each, an "Offer") is proposed by SMTC or is proposed to SMTC or its
shareholders and is recommended by the board of directors of SMTC, or is
otherwise effected or to be effected with the consent or approval of the board
of directors of SMTC, and the Exchangeable Shares are not redeemed by SMTC
Canada or purchased by SMTC Nova Scotia pursuant to the Redemption Call Right,
SMTC will use its reasonable efforts, expeditiously and in good faith, to take
all such actions and do all such things as are necessary or desirable to enable
and permit holders of Exchangeable Shares to participate in such Offer to the
same extent and on an economically equivalent basis as the holders of shares of
SMTC Common Stock, without discrimination. Without limiting the generality of
the foregoing, SMTC will use its reasonable efforts expeditiously and in good
faith to ensure that holders of Exchangeable Shares may participate in all such
Offers without being required to exercise their right to retract Exchangeable
Shares as against SMTC Canada (or, if so required, to ensure that any such
retraction shall be effective only upon, and shall be conditional upon, the
closing of the Offer and only to the extent necessary to tender to or deposit
under the Offer). Nothing herein shall affect the rights of SMTC Canada to
redeem (or SMTC Nova Scotia to purchase pursuant to the Redemption Call Right)
Exchangeable Shares, as applicable, in the event of an SMTC Control Transaction.
2.9 Ownership of Outstanding Shares
Without the prior approval of SMTC Canada and the prior approval of the
holders of Exchangeable Shares given in accordance with Section 10.2 of the
Exchangeable Share Provisions, SMTC covenants and agrees in favour of SMTC
Canada that, as long as any outstanding Exchangeable Shares are owned by any
person or entity other than SMTC or any of its Affiliates, SMTC will be and
remain the direct or indirect beneficial owner of all issued and outstanding
voting shares in the capital of SMTC Canada and SMTC Nova Scotia.
2.10 SMTC and Affiliates Not to Vote Exchangeable Shares
SMTC covenants and agrees that it will appoint and cause to be appointed
proxyholders with respect to all Exchangeable Shares held by it and its
Affiliates for the sole purpose of attending each meeting of holders of
Exchangeable Shares in order to be counted as part of the quorum for each such
meeting. SMTC further covenants and agrees that it will not, and will cause its
Affiliates not to, exercise any voting rights which may be exercisable by
holders of Exchangeable Shares from time to time pursuant to the Exchangeable
Share Provisions or pursuant to the provisions of the Business Corporations Act
(Ontario) (or any successor or other corporate statute by which SMTC Canada may
in the future be governed) with respect to any Exchangeable Shares held by it or
by its Affiliates in respect of any matter considered at any meeting of holders
of Exchangeable Shares.
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2.11 Rule 10b-18 Purchases
For greater certainty, nothing contained in this agreement, including
without limitation the obligations of SMTC contained in Section 2.8, shall limit
the ability of SMTC or SMTC Canada to make a "Rule x0x-00 Xxxxxxxx" of shares of
SMTC Common Stock pursuant to Rule l0b-18 of the U.S. Securities Exchange Act of
1934, as amended, or any successor provisions thereof.
2.12 Stock Exchange Listing
SMTC covenants and agrees in favour of SMTC Canada that, as long as any
outstanding Exchangeable Shares are owned by any person or entity other than
SMTC or any of its Affiliates, SMTC will use its reasonable best efforts to
maintain a listing for such Exchangeable Shares on a Canadian stock exchange.
Article 3
SMTC SUCCESSORS
3.1 Certain Requirements in Respect of Combination
SMTC shall not consummate any transaction (whether by way of
reconstruction, reorganization, consolidation, merger, transfer, sale, lease or
otherwise) whereby all or substantially all of its undertaking, property and
assets would become the property of any other Person or, in the case of a
merger, of the continuing corporation resulting therefrom unless, but may do so
if:
(a) such other Person or continuing corporation (the "SMTC Successor"), by
operation of law, becomes, without more, bound by the terms and
provisions of this agreement or, if not so bound, executes, prior to
or contemporaneously with the consummation of such transaction, an
agreement supplemental hereto and such other instruments (if any) as
are reasonably necessary or advisable to evidence the assumption by
the SMTC Successor of liability for all moneys payable and property
deliverable hereunder and the covenant of such SMTC Successor to pay
and deliver or cause to be delivered the same and its agreement to
observe and perform all the covenants and obligations of SMTC under
this agreement; and
(b) such transaction shall be upon such terms and conditions as
substantially to preserve and not to impair in any material respect
any of the rights, duties, powers and authorities of the other parties
hereunder or the holders of Exchangeable Shares.
3.2 Vesting of Powers in Successor
Whenever the conditions of Section 3.1 have been duly observed and
performed, the parties, if required by Section 3.1, shall execute and deliver a
supplemental agreement hereto and thereupon the SMTC Successor shall possess and
from time to time may exercise each and every
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right and power and shall be subject to each and every obligation of SMTC under
this agreement in the name of SMTC or otherwise and any act or proceeding under
any provision of this agreement required to be done or performed by the board of
directors of SMTC or any officers of SMTC may be done and performed with like
force and effect by the directors or officers of such SMTC Successor.
3.3 Wholly-Owned Subsidiaries
Nothing herein shall be construed as preventing the amalgamation or merger
of any wholly-owned direct or indirect subsidiary of SMTC with or into SMTC or
the winding-up, liquidation or dissolution of any wholly-owned subsidiary of
SMTC provided that all of the assets of such subsidiary are transferred to SMTC
or another wholly-owned direct or indirect subsidiary of SMTC and any such
transactions are expressly permitted by this Article 3.
Article 4
GENERAL
4.1 Term
This agreement shall come into force and be effective as of the date hereof
and shall terminate and be of no further force and effect at such time as no
Exchangeable Shares (or securities or rights convertible into or exchangeable
for or carrying rights to acquire Exchangeable Shares) are held by any person or
entity other than SMTC and any of its Affiliates.
4.2 Amendments, Modifications
This agreement may not be amended or modified except by an agreement in
writing executed by SMTC Canada, SMTC Nova Scotia and SMTC and approved by the
holders of the Exchangeable Shares in accordance with Section 10.2 of the
Exchangeable Share Provisions.
4.3 Ministerial Amendments
Notwithstanding the provisions of Section 4.2, the parties to this
agreement may in writing, at any time and from time to time, without the
approval of the holders of the Exchangeable Shares, amend or modify this
agreement for the purposes of:
(a) adding to the covenants of any or all parties, provided that the board
of directors of each of SMTC Canada, SMTC Nova Scotia and SMTC shall
be of the good faith opinion that such additions will not be
prejudicial to the rights or interests of the holders of the
Exchangeable Shares;
(b) making such amendments or modifications not inconsistent with this
agreement as may be necessary or desirable with respect to matters or
questions which, in the good faith opinion of the board of directors
of each of SMTC Canada, SMTC Nova Scotia and SMTC, it may be expedient
to make, provided that each such board of directors shall be of the
good faith opinion that such amendments or
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modifications will not be prejudicial to the rights or interests of
the holders of the Exchangeable Shares; or
(c) making such changes or corrections which, on the advice of counsel to
SMTC Canada, SMTC Nova Scotia and SMTC, are required for the purpose
of curing or correcting any ambiguity or defect or inconsistent
provision or clerical omission or mistake or manifest error, provided
that the board of directors of each of SMTC Canada, SMTC Nova Scotia
and SMTC shall be of the good faith opinion that such changes or
corrections will not be prejudicial to the rights or interests of the
holders of the Exchangeable Shares.
4.4 Meeting to Consider Amendments
SMTC Canada, at the request of SMTC or SMTC Nova Scotia, shall call a
meeting or meetings of the holders of the Exchangeable Shares for the purpose of
considering any proposed amendment or modification requiring approval pursuant
to Section 4.2. Any such meeting or meetings shall be called and held in
accordance with the bylaws of SMTC Canada, the Exchangeable Share Provisions and
all applicable laws.
4.5 Changes in Capital of SMTC and SMTC Canada
At all times after the occurrence of any event contemplated pursuant to
Sections 2.7 and 2.8 or otherwise, as a result of which either the shares of
SMTC Common Stock or the Exchangeable Shares or both are in any way changed,
this agreement shall forthwith be amended and modified as necessary in order
that it shall apply with full force and effect, with the appropriate changes, to
all new securities into which shares of SMTC Common Stock or the Exchangeable
Shares or both are so changed and the parties hereto shall execute and deliver
an agreement in writing giving effect to and evidencing such necessary
amendments and modifications.
4.6 Amendments Only in Writing
No amendment to or modification or waiver of any of the provisions of this
agreement otherwise permitted hereunder shall be effective unless made in
writing and signed by all of the parties hereto.
4.7 Assignment
This agreement shall not be assignable by any party hereto.
4.8 Time
Time shall be of the essence of this agreement.
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4.9 Governing Law
This agreement and the rights and obligations of the parties hereto shall
be governed by and construed and interpreted in accordance with the laws of the
Province of Ontario and the federal laws of Canada applicable therein.
4.10 Severability
If any term or other provision of this agreement is invalid, illegal or
incapable of being enforced by any rule or law, or public policy, all other
conditions and provisions of this agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
4.11 Enurement
This agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors and assigns.
4.12 Notices to Parties
All notices and other communications hereunder shall be in writing and
shall be given and shall be deemed to have been duly given at the time of
receipt, if delivered in person or sent by facsimile transmission on a Business
Day at the place of receipt (or, if given on a non-Business Day at the place of
receipt, shall be deemed to have been duly given on the next succeeding Business
Day at such place) to the parties as follows:
(a) if to SMTC:
SMTC Corporation
000 Xxxx Xxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxxxx X. Xxxxx, C.A.
Vice-President, Finance and Administration
Fax: (000) 000-0000
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx
X.X.X. 00000-0000
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Attention: Xxxxxx Xxxx
Fax: (000) 000-0000
(b) if to SMTC Canada or SMTC Nova Scotia:
SMTC Manufacturing Corporation of Canada
000 Xxxx Xxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxxxx X. Xxxxx, C.A.
Vice-President, Finance and Administration
Fax: (000) 000-0000
with a copy to:
XxXxxxxx Xxxxx
Xxxxx 0000, Xxxxx Xxxxx
Xxxxx Bank Plaza
Toronto, Ontario
Canada M5J 2J7
Attention: Xxxx-Xxx Xxxxx
Fax: (000) 000-0000
or to such other address as a party may have furnished to the others in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
4.13 Counterparts
This agreement may be executed in counterparts, each of which shall be
deemed an original, and all of which taken together shall constitute one and the
same document.
4.14 Attornment
Each of SMTC and SMTC Nova Scotia agrees that any action or proceeding
arising out of or relating to this agreement may be instituted in the courts of
Ontario, waives any objection which it may have now or hereafter to the venue of
any such action or proceeding, irrevocably submits to the jurisdiction of the
said courts in any such action or proceeding, agrees to be bound by any judgment
of the said courts and agrees not to seek, and hereby waives, any review of the
merits of any such judgment by the court of any other jurisdiction and hereby
appoints SMTC Canada at its registered office in the Province of Ontario as its
attorney for service of process.
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IN WITNESS WHEREOF the parties hereto have caused this agreement to be duly
executed as of the date first above written.
SMTC CORPORATION
By:
---------------------------------------
Name:
Title:
SMTC NOVA SCOTIA COMPANY
By:
---------------------------------------
Name:
Title:
SMTC MANUFACTURING
CORPORATION OF CANADA
By:
---------------------------------------
Name:
Title:
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