Exhibit 2
DEPOSIT AGREEMENT
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STRICTLY CONFIDENTIAL
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October 10, 2003
Xxx Xxxxxx
Dear Xxx:
This letter agreement (the "Agreement") sets out the terms and conditions
upon which Honeywell International Inc. (the "Offeror's Parent") will cause
678669 B.C. Ltd., a direct or indirect wholly-owned subsidiary of the
Offeror's Parent (the "Offeror") to make an offer (the "Offer") on
substantially the terms and conditions set forth in the support agreement
between Silent Witness Enterprises Ltd. (the "Company") and the Offeror and
the Offeror's Parent dated the date hereof (the "Support Agreement"), to
purchase all of the issued and outstanding common shares (the "Shares") of
the Company.
This Agreement also sets out the terms and conditions of the agreement by
you (the "Shareholder") to deposit, or cause to be deposited, under the
Offer: (i) the 274,836 Shares presently owned beneficially by the
Shareholder; (ii) all Shares, if any, issued upon the exercise of certain
stock options or any other rights convertible or exercisable for shares
held by the Shareholder; and (iii) any Shares subsequently acquired by the
Shareholder (the "Shareholder's Shares"), and sets out the obligations and
commitments of the Shareholder in connection therewith. References in this
Agreement to the Shares held or to be acquired by the Shareholder include
the associated rights issued pursuant to the Company's "Rights Plan" (as
defined in the Support Agreement).
ARTICLE 1
THE OFFER
1.1 TIMING OF THE OFFER.
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The Offeror's Parent agrees to cause the Offeror to make the Offer for all
of the Shares within the time and upon the terms as provided for in the
Support Agreement, and subject to the conditions therein contained.
1.2 MODIFICATION OF OFFER.
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The Offeror's Parent agrees that it will not cause or permit the Offeror to
amend, modify or change the Offer without the prior written consent of the
Shareholder, which consent shall not be unreasonably withheld, and to
provide a draft of any proposed amendment, modification or change to the
Offer to the Shareholder and to consult with the Shareholder with respect
to the terms and conditions of such proposed amendment, modification or
change of the Offer. The covenants in the foregoing sentence shall not
apply in respect of any amendments, modifications or changes to the Offer
in accordance with section 1.1(e) of the Support Agreement provided that
the Offeror and the Offeror's Parent shall not, without the consent of the
Shareholder:
(a) increase the number or percentage of Shares required to satisfy
the "Minimum Condition" (as defined in the Support Agreement) or
decrease the number or percentage of Shares required to satisfy
the Minimum Condition below 50% of the outstanding Shares,
decrease the consideration per Share payable under the Offer,
change the form of consideration payable under the Offer (other
than to add additional consideration) or decrease the number of
Shares sought under the Offer;
(b) impose additional material conditions to the Offer;
(c) in the event all of the "Bid Conditions" (as defined in the
Support Agreement) are satisfied or waived, extend the period
during which Shares may be deposited under the Offer without
taking up and paying for Shares validly deposited thereunder and
not withdrawn except as required by applicable law; or
(d) modify or amend the Offer or any terms thereof in a manner
adverse to the Shareholder.
1.3 GENERAL.
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Subject to the terms and conditions of the Support Agreement, the Offeror's
Parent hereby covenants to use, and to cause the Offeror to use, its
reasonable best efforts to successfully complete the Offer and the
transactions contemplated by this Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER.
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The Shareholder hereby represents and warrants to the Offeror's Parent
that:
(a) Authorization. This Agreement has been duly executed and
delivered by the Shareholder and constitutes a legal, valid and
binding agreement enforceable by the Offeror's Parent against the
Shareholder in accordance with its terms subject, however, to
limitations with respect to enforcement imposed by law in
connection with bankruptcy or similar proceedings, the equitable
power of the courts to stay proceedings before them and the
execution of judgements and to the extent that equitable remedies
such as specific performance and injunction are in the discretion
of the court from which they are sought.
(b) Ownership of Shares. The Shareholder: (i) is the sole beneficial
owner of 274,836 Shares which are currently held by the
Shareholder; and (ii) is the holder of 312,500 options (the
"Options") to purchase Shares, if exercised, at exercise prices
ranging from Cdn.$4.79 to Cdn.$12.25 per Share and no share
appreciation rights. Except as stated in this paragraph, the
Shareholder does not own or control, directly or indirectly, any
other Shares or options, rights or other entitlements to acquire
Shares. The Shareholder has the exclusive right to dispose of the
Shareholder's Shares as provided in this Agreement and the
Shareholder is not a party to, bound or affected by or subject
to, any charter or by-law provision, statute, regulation,
judgment, order, decree or law of which a breach would occur as a
result of the execution and delivery of this Agreement or the
consummation of any of the transactions provided for in this
Agreement.
(c) Good Title. All the Shareholder's Shares and Options are now, and
at the time the Offeror directly or indirectly takes up and pays
for the Shareholder's Shares under the Offer will be beneficially
owned by the Shareholder with good and marketable title, free and
clear of any and all mortgages, liens, charges, restrictions,
security interests, adverse claims, pledges, encumbrances and
demands or rights of others of any nature or kind whatsoever.
(d) No Agreements. No person, firm or corporation has any agreement
or option, or any right or privilege (whether by law, pre-emptive
or contractual) capable of becoming an agreement or option, for
the purchase, acquisition or transfer from the Shareholder, or
any registered holder of the Shareholder's Shares, of any of the
Shareholder's Shares, or any interest therein or right thereto,
except pursuant to this Agreement.
(e) Voting. Neither the Shareholder nor any registered holder of the
Shareholder's Shares has previously granted or agreed to grant
any ongoing proxy in respect of the Shareholder's Shares or
entered into any voting trust, vote pooling or other agreement
with respect to the right to vote, call meetings of shareholders
or give consents or approvals of any kind as to the Shareholder's
Shares.
(f) No Proceeding Pending. There is no claim, action, lawsuit,
arbitration, mediation or other proceeding pending or, to the
best of the knowledge, information and belief of the Shareholder,
threatened against the Shareholder, which relates to this
Agreement or otherwise materially impairs the ability of the
Shareholder to consummate the transactions contemplated hereby.
(g) Arm's Length Negotiation. The price payable by the Offeror's
Parent for the Shares pursuant to the Offer (the "Offer Price")
was arrived at through negotiation between the Company and the
Offeror's Parent. The Shareholder has full knowledge of and
access to information concerning the Company such that the
underlying value of the Company was a material factor considered
by the Shareholder in entering into this Agreement and agreeing
to the Offer Price, and there are no non-financial factors or
other factors peculiar to the Shareholder which have been
considered relevant by the Shareholder in assessing such price or
that had the effect of reducing the price that would otherwise
have been considered acceptable to the Shareholder.
(h) Company Public Disclosure Documents. To the best of the knowledge
of the Shareholder: (i) all forms, reports, statements, schedules
and documents required to be filed by the Company with securities
regulatory authority under applicable securities laws
(collectively, the "Reports") did not, at the time filed, contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; (ii) the Company has
not filed any confidential material change report with any
securities regulatory authority or stock exchange which at the
date of this Agreement remains confidential; and (iii) the
Company has publicly disclosed in the Reports any information
regarding any event, circumstances or action taken or failed to
be taken by the Company or its subsidiaries which could
individually or in the aggregate reasonably be expected to be
Materially Adverse to the Company or its subsidiaries, either
individually or in the aggregate.
(i) Company Representations and Warranties. To the best of the
knowledge of the Shareholder, all of the representations and
warranties of the Company set forth in the Support Agreement are
true and correct.
2.2 REPRESENTATIONS AND WARRANTIES OF THE OFFEROR'S PARENT.
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The Offeror's Parent represents and warrants to the Shareholder as follows:
(a) Organization. Each of the Offeror's Parent and the Offeror is a
corporation duly organized and validly existing under the laws of
its jurisdiction of incorporation.
(b) Authority. The Offeror's Parent has all requisite corporate power
and authority to enter into this Agreement, and the Offeror will
have at the date of the Offer all necessary corporate power and
authority to make the Offer and to carry out the transactions
contemplated hereby and by the Offer. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of the Offeror's Parent,
and no other corporate proceedings on the part of the Offeror's
Parent are necessary to authorize this Agreement. The Agreement
has been duly executed and delivered by the Offeror's Parent and
constitutes a legal, valid and binding agreement enforceable by
the Shareholder against the Offeror's Parent in accordance with
its terms, subject, however, to the usual limitations with
respect to enforcement imposed by law in connection with
bankruptcy or similar proceedings and the availability of
equitable remedies.
(c) Non-Contravention. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby nor compliance with any of the provisions hereof will
conflict with or result in any breach of any provision of the
constating documents of the Offeror's Parent or the Offeror.
ARTICLE 3
COVENANTS OF THE SHAREHOLDER
3.1 GENERAL.
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The Shareholder hereby covenants that until the earlier of (i) the date on
which the Offeror has taken up and paid for Shares under the Offer; (ii)
the date on which the Offeror abandons the Offer; (iii) the Offer expires
and the Offerer has not taken up and paid for Shares in accordance with
applicable law; or (iv) the termination of this Agreement in accordance
with this Agreement, the Shareholder will:
(a) except as permitted by this Agreement, not take and shall not
authorize or permit any investment banker, financial advisor,
attorney, accountant or other representative of his to take, any
action of any kind, indirectly or directly, to oppose, frustrate
or delay the take up and payment of Shares deposited under the
Offer or the completion of the Offer, including but not limited
to any action to solicit, initiate, knowingly assist or knowingly
encourage inquiries, submissions, proposals or offers from any
other person, entity or group, and will cease immediately and not
continue in any discussions or negotiations the Shareholder is
carrying on regarding, or furnish to any other person, entity or
group, any confidential, non-public information with respect to
any "Competing Proposal" (as defined in the Support Agreement)
provided that, nothing contained in this section or other
provisions of this Agreement shall:
(i) prevent the Shareholder, in his capacity as a director or
officer of the Company, from engaging in discussions or
negotiations with a third party or providing information
in respect of, or otherwise responding to, or negotiating,
approving and recommending to holders of Shares, an
unsolicited bona fide Competing Proposal if the Board of
Directors of the Company has determined in good faith,
after consultation with and receiving advice from legal
counsel and the Company's financial advisors, that such
proposal may constitute or lead to a Superior Proposal or
that such action is otherwise required by reason of the
fiduciary duties of the directors of the Company under
applicable law; or
(ii) preclude the Shareholder, in his capacity as a director or
Officer of the Company, from responding, within the time
and manner required by the applicable laws, to any take
over bid or any business combination or similar
transaction involving the Company or any of its
subsidiaries or assets or tender or exchange offer made
for the Shares;
and nothing in this Agreement shall be interpreted to extend to
acts or omissions of the Shareholder acting in his capacity as a
director or officer of the Company or otherwise to xxxxxx the
proper exercise of discretion by the Shareholder acting in that
capacity;
(b) if the Shareholder receives any Competing Proposal the
Shareholder will notify the Offeror within 24 hours of becoming
aware of a proposal which, if made in writing, could constitute a
Competing Proposal (as such term is defined in the Support
Agreement) including the identity of any prospective offeror and
the person making the Competing Proposal;
(c) not option, sell, transfer, pledge, encumber, grant a security
interest in, hypothecate or otherwise convey the Shareholder's
Shares, or any right or interest therein (legal or equitable), to
any person, entity or group or agree to do any of the foregoing;
(d) not grant or agree to grant any proxy or other right to vote the
Shareholder's Shares, or enter into any voting trust, vote
pooling or other agreement with respect to the right to vote,
call meetings of shareholders or give consents or approvals of
any kind as to the Shareholder's Shares;
(e) not do indirectly that which the Shareholder may not do directly
in respect of the restrictions on the Shareholder's rights with
respect to the Shareholder's Shares pursuant to this section 3.1,
including, but not limited to, the granting of a proxy on the
Shares of any direct or indirect holding company of the
Shareholder which would have, indirectly, the effect prohibited
by this section 3.1, and not to take any action which would make
any representation or warranty of the Shareholder contained
herein untrue or incorrect or have the effect of preventing or
disabling the Shareholder from performing the Shareholder's
obligations under this Agreement;
(f) exercise the voting rights attaching to the Shareholder's Shares
and otherwise use his best efforts to cause the Company to comply
with its obligations under the Support Agreement, including its
agreement, subject to the terms and conditions of the Support
Agreement, to use all reasonable commercial efforts to take, or
cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make
effective the transactions contemplated by the Offer and the
Support Agreement;
(g) agree to use his best efforts to cause the Company to comply with
its notification obligations pursuant to section 3.2(b) of the
Support Agreement;
(h) not purchase or obtain or enter into any agreement or right to
purchase any additional Shares (other than pursuant to the
exercise of Options by the Shareholder);
(i) either exercise all of the Options held by the Shareholder to
acquire Shares and deposit the Shares thereby acquired under the
Offer in accordance with the terms of this Agreement or surrender
to the Company for cancellation all of the Options not so
exercised, provided, that such exercise of Options and surrender
for cancellation of Options may be made subject to the condition
that, and become effective only upon, the Offeror having taken up
and paid for any Shares under the Offer or becoming bound to do
so;
(j) use all reasonable efforts to preserve intact the goodwill of the
Company and its subsidiaries, keep available the services of
their respective present officers and key employees, and preserve
their business relationships with customers and others having
business relationships with them and not engage in any action
directly or indirectly, with the intent to adversely impact the
Company's obligations under the Support Agreement; and
(k) if applicable, resign as a director of the Company effective at
the time and in the manner requested by the Offeror's Parent,
after the Offeror takes up and pays for the Shareholder's Shares.
3.2 OFFER LETTER
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The Shareholder hereby covenants that immediately upon the Offeror first
taking up and paying for Shares under the Offer, the Shareholder shall
execute an offer letter substantially in the form initialled by the
Shareholder and Offeror's Parent concurrently with the execution of this
Agreement (except as the terms of such offer letter may be modified to
receive all regulatory approval necessary under applicable Canadian
securities laws (as approved by each of the Shareholder and the Offeror's
Parent, acting reasonably) to approve the terms thereof).
3.3 NON-COMPETITION AND NON-SOLICITATION.
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The Shareholder hereby covenants that such shareholder will fully comply
with the covenants and agreements set forth in Schedule 1 attached hereto.
ARTICLE 4
DEPOSIT AND PAYMENT
4.1 DEPOSIT.
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Subject to section 4.2, the Shareholder hereby irrevocably and
unconditionally, subject to the terms of this Agreement, agrees that if the
Offeror makes the Offer on the terms and conditions and conditions set out
in the Support Agreement the Shareholder shall deposit or cause to be
deposited all of the Shareholder's Shares (including for greater certainty
all Shares issued or which may be issued to the Shareholder upon the
exercise of Options or any other rights to acquire Shares), together with a
duly completed and executed letter of transmittal, under the Offer as soon
as practicable following the Offeror making the Offer and in any event
prior to the expiry of the Offer. In the event that the Shareholder
subsequently obtains any additional Shares as contemplated by section
3.1(f) hereof or otherwise, such Shares shall likewise be deposited under
the Offer as soon as practicable thereafter and in any event prior to the
expiry of the Offer.
4.2 NO WITHDRAWAL.
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The Shareholder hereby irrevocably and unconditionally, subject to the
terms of the Agreement, agrees that neither it nor any person on its behalf
will withdraw or take any action to withdraw any of the Shareholder's
Shares deposited under the Offer, notwithstanding any statutory rights or
other rights under the terms of the Offer or otherwise which the
Shareholder might have, unless this Agreement is terminated in accordance
with its terms prior to the taking up of the Shareholder's Shares under the
Offer or unless:
(a) in the event that the Offer is not extended in accordance with
the Support Agreement, the Offeror does not take up and pay for
the Shares on or before January 31, 2003;
(b) in the event that the Offer is extended in accordance with the
Support Agreement, the Offeror does not take up and pay for the
Shares under the Offer on or before the end of the tenth day
following the expiry of the Offer;
(c) a "Superior Proposal" (as defined in the Support Agreement) is
made, the board of directors of the Company has either withdrawn
its recommendation of the Offer or recommended acceptance of the
Superior Proposal, and (i) the Offeror has not amended the Offer
to increase the consideration to be paid to holders of Shares
pursuant to the Offer within the time periods specified by
Section 4.2 of the Support Agreement to an amount having a value
at least equal to the value of the consideration offered under
the Superior Proposal and (ii) the fee specified in Section 4.5
of the Support Agreement has been paid to the Offeror's Parent as
specified therein; or
(d) the Shareholder receives the consent of the Offeror's Parent or
the Offeror to so withdraw the Shareholder's Shares.
4.3 APPOINTMENT OF PROXY
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The Shareholder hereby grants to, and appoints, the Offerors' Parent and
the Secretary of the Offerer's Parent and the Chief Financial Officer of
the Offeror's Parent, in their respective capacities as officers of the
Offeror's Parent, and any other designee of the Offeror's Parent, each of
them individually, the Shareholder's irrevocable proxy and attorney in fact
(with full power of substitution) to vote the Shareholder's irrevocable
proxy and attorney in fact (with full power of substitution) to vote the
Shareholder's Shares with respect thereto, in order to give effect to the
covenants of the shareholder contained in this Agreement and in furtherance
of the obligations of the Company contained in the Suport Agreement. The
Shareholder agrees that proxy is irrevocable until this Agreement is
terminated in accordance with Article 5 hereof and coupled with an interest
and will take such further action or execute such other instruments as may
be necessary to effectuate the intent of this proxy and hereby revokes any
proxy previously granted by him with respect to the Shares.
4.4 STOP TRANSFER ORDER
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Subject to the termination rights set forth in Article V of this Agreement,
in furtherance of the transactions contemplated by this Agreement and the
Support Agreement, the Shareholder hereby authorizes the Offeror's Parent
to instruct the Company to direct its transfer agent to place a stop
transfer order on the Shareholder's Shares and not to amend, terminate or
waive any of the terms of such stop transfer order (other than to permit
the transfer of the Shareholder's Shares to the Offeror) during the term of
this Agreement.
ARTICLE 5
TERMINATION BY THE SHAREHOLDER AND BY THE PURCHASER
5.1 TERMINATION BY THE SHAREHOLDER.
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The Shareholder, when not in material default in performance of his
obligations under this Agreement, may, without prejudice to any other
rights, terminate this Agreement by notice to the Offeror's Parent if:
(a) the Offer has not been made as provided in section 1.1 hereof,
(b) the Offer does not substantially conform with, or subject to
section 1.2 hereof is modified in a manner so as not to conform
with, the description in the Support Agreement or the provisions
of this Agreement;
(c) Shares deposited under the Offer (including the Shareholder's
Shares) have not, for any reason whatsoever, been taken up and
paid for on or before the end of the tenth day following the
expiry of the Offer;
(d) the Offer is abandoned by the Offeror (which shall be
conclusively evidenced by the Offeror issuing a press release or
otherwise publicly disclosing or announcing that the Offer is
withdrawn);
(e) after January 31, 2004 if the Offeror has not purchased any
Shares pursuant to the Offer, otherwise than as a result of the
material breach by the Shareholder of any material covenant or
obligation under this Agreement or as a result of any
representation or warranty of the Shareholder in this Agreement
being untrue or incorrect in any material respect; provided,
however, that if the Offeror's take up and payment for Shares
deposited under the Offer is delayed by (i) an injunction or
order made by a court or regulatory authority of competent
jurisdiction, or (ii) the Offeror not having obtained any
regulatory waiver consent or approval which is necessary to
permit the Offeror to take up and pay for the Shares deposited
under the Offer, then, provided that such injunction or order is
being contested or appealed or such regulatory waiver, consent or
approval is being actively sought, as applicable, this Agreement
shall not be terminated by the Shareholder pursuant to this
section until the earlier of (i) March 31, 2004 and (ii) the
fifth business day following the date on which such injunction or
order ceases to be in effect or such waiver, consent or approval
is obtained, as applicable; and
(f) the Support Agreement is terminated in accordance with its terms.
5.2 TERMINATION BY THE OFFEROR'S PARENT.
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The Offeror's Parent, when not in material default in performance of its
obligations under this Agreement, may, without prejudice to any other
rights, terminate this Agreement by notice to the Shareholder if:
(a) the Shareholder has not complied in all material respects with
its covenants to the Offeror's Parent contained herein;
(b) any of the representations and warranties of the Shareholder
contained herein is untrue or inaccurate;
(c) the Company has not complied in all material respects with its
covenants to the Offeror's Parent under the Support Agreement;
(d) the conditions in Exhibit II of the Support Agreement are not
satisfied or waived by the Offeror on or prior to the expiry of
the Offer; or
(e) in the event of the termination of the Support Agreement.
5.3 EFFECT OF TERMINATION.
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In the case of any termination of this Agreement pursuant to this Article
5, this Agreement shall be of no further force and effect. Such termination
shall not relieve any party from liability for any breach of this Agreement
prior to such termination. Upon termination of this Agreement in accordance
with its terms, the Shareholder shall be entitled to withdraw the
Shareholder's Shares from the Offer.
ARTICLE 6
GENERAL
6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
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The representations and warranties shall not survive the consummation of
the Offer, provided that the representations and warranties of the
Shareholder in section 2.1(a) through (e) of this Agreement shall survive
indefinitely and the other representations and warranties of the
Shareholder in section 2.l of this Agreement shall terminate upon the
expiry of the Offer. No investigations made by or on behalf of the
Offeror's Parent, the Offeror or any of their authorized agents at any time
shall have the effect of waiving, diminishing the scope of or otherwise
affecting any representation or warranty or covenant made by the
Shareholder in or pursuant to this Agreement.
6.2 DISCLOSURE.
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Except as may otherwise be required by law or by regulatory authorities
having discretion over such matters, each party hereto agrees that it will
not make any public disclosure with respect to this Agreement or the
negotiations related to this Agreement in each case without the prior
approval of the other party, which approval will not be unreasonably
withheld. If any party deems that it is required by law or such regulatory
authority to make any public announcement or release concerning this
Agreement, such party agrees to provide a written copy thereof to the other
party in advance of any such announcement or release and to reasonably
consider any suggested modifications, which will be provided by the other
party in a timely matter. The parties acknowledge that the terms of this
Agreement will be summarized in the Offer and in the Directors' Circular
relating to the Offer.
6.3 ASSIGNMENT.
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This Agreement shall not be assigned by operation of law or otherwise,
except that the Offeror's Parent may assign all or any of its rights and
obligations hereunder to any direct or indirect wholly-owned subsidiary of
the Offeror's Parent, provided that no such assignment shall relieve the
Offeror's Parent of its obligations hereunder if such assignee does not
perform such obligations.
6.4 TIME.
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Time shall be of the essence of this Agreement.
6.5 CURRENCY.
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All sums of money referred to in this Agreement shall mean Canadian funds.
6.6 GOVERNING LAW.
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This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia and the laws of Canada applicable
therein. The parties hereto submit to the non-exclusive jurisdiction of the
courts of the Province of Ontario and British Columbia in respect of the
interpretation and enforcement of this Agreement.
6.7 ENTIRE AGREEMENT.
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This Agreement and the other agreements referenced herein constitute and
comprise the entire agreement and understanding between the parties hereto
with regard to the subject matter hereof and supersedes all prior
agreements and undertakings, both written and oral, between the parties
with respect to the subject matter hereof.
6.8 AMENDMENTS.
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This Agreement may not be modified, amended, altered or supplemented except
upon the execution and delivery of a written agreement executed by each of
the parties hereto. Either party hereto may (a) extend the time for the
performance of any of the obligations or other acts of the other party
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions contained herein. Any
such extension or waiver shall be valid if set forth in an instrument in
writing signed by the party or parties to be bound thereby.
6.9 DEFINITIONS.
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For the purposes of this Agreement the term:
(a) "affiliates" and "associates" means the persons, companies and
other entities included in the definitions of such terms under
the Securities Act (British Columbia);
(b) "business day" means any day, other than a Saturday or Sunday, on
which chartered banks in the City of Vancouver, British Columbia
and the City of Toronto, Ontario are open for business;
(c) "Effective Date" means any date upon which the Offeror takes up
and pays for Shares under the Offer;
(d) "Materially Adverse" has the meaning ascribed to such term in the
Support Agreement;
(e) "material fact", "material change" and "misrepresentation" are
used as defined under the Securities Act (British Columbia); and
(f) "Shares" shall include any shares into which the Shares may be
reclassified, subdivided, consolidated or converted and any
rights and benefits arising therefrom including any extraordinary
distributions of securities which may be declared in respect of
the Shares.
or the purposes of this Agreement, if the last day of a period of days is
not a business day, the period shall be extended to the next following day
which is a business day.
6.10 SPECIFIC PERFORMANCE AND OTHER EQUITABLE RIGHTS.
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Each of the parties recognizes and acknowledges that this Agreement is an
integral part of the transactions contemplated in the Offer, that the
Offeror's Parent would not contemplate causing the Offer to be made and the
Shareholder would not agree to its covenants to the Offeror's Parent herein
and to irrevocably deposit the Shareholder's Shares to the Offer unless
this Agreement was executed and that a breach by a party of any covenants
or other commitments contained in this Agreement will cause the other party
to sustain injury for which it would not have an adequate remedy at law for
money damages. Therefore, each of the parties agrees that in the event of
any such breach, the aggrieved party shall be entitled to the remedy of
specific performance of such covenants or commitments and preliminary and
permanent injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity, and the parties
further agree to waive any requirement for the securing or posting of any
bond in connection with the obtaining of any injunctive or other equitable
relief.
6.11 NOTICES.
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Any notice required or permitted to be given hereunder shall be written,
and shall be either (i) personally delivered, (ii) sent by a reputable
common carrier guaranteeing next business day delivery, or (iii) sent by
facsimile, to the respective addresses of the parties set forth below, or
to such other place as any party hereto may by notice given as provided
herein designate for receipt of notices hereunder. Any such notice shall be
deemed given and effective upon receipt or refusal of receipt thereof by
the primary party to whom it is to be sent.
(a) If to the Offeror's Parent or the Offeror, addressed as follows:
Honeywell International Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Senior Vice President and General Counsel
Facsimile: (000) 000-0000
with a copy to:
Honeywell International Inc.
0000 Xxxxx Xxxxxx X
Xxxxx 000
Xx. Xxxxx Xxxx, XX 00000
Attention: Vice President and General Counsel -
Automation and Control Solutions
Facsimile: (000) 000-0000
with a further copy to:
Osler, Xxxxxx & Xxxxxxxx XXX
Xxx 00, 0 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX X0X 0X0
Attention: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
(b) to the Shareholder, addressed as follows:
Xxx Xxxxxx
0000 000xx Xx
Xxxxxx, XX X0X 0X0
with a copy to:
Xxxx Xxxx
0000 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Attention: Xxxxx Xxxxxx
Facsimile: (000) 000-0000
and, solely for information purposes, to:
XxXxxxxx Xxxxxxxx LLP
0000 - 000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Attention: Xxx XxXxxxxxxx
Facsimile: (000) 000-0000
6.12 EXPENSES.
--------
Each of the parties shall pay all of its own legal, financial advisory and
accounting costs and expenses incurred in connection with the preparation,
execution and delivery of this Agreement and all documents and instruments
executed or prepared pursuant hereto and any other costs and expenses
whatsoever and howsoever incurred.
6.13 SEVERABILITY.
------------
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of 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.
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6.14 COUNTERPARTS.
------------
This Agreement may be executed by facsimile signature, or otherwise, in two
or more counterparts, all of which taken together will constitute one
binding agreement.
HONEYWELL INTERNATIONAL INC.
By: /s/ Xxxx X. Xxxxxx
--------------------
Xxxx X. Xxxxxx,
Vice President-Corporate Planning
and Development
Agreed and accepted as of this 10th day of October, 2003.
/s/ Xxx Xxxxxx
--------------------
Xxx Xxxxxx
SCHEDULE 1
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SHAREHOLDERS NON-COMPETITION AND NON-SOLICITATION COVENANTS
1. ACKNOWLEDGEMENT.
---------------
The Offeror's Parent is a leading global manufacturer of security systems
and products for home, business and specialty applications and the Offeror
has agreed to acquire all of the outstanding common shares of the Company
for an amount that is substantially in excess of the current share price.
By virtue of his position with the Company the Shareholder has maintained
close working relationships with the customers, clients, suppliers,
distributors, consultants, agents and employees of the Company, and is in a
position to irreparably harm the Company and the Offeror's Parent should he
make use of the specialised knowledge, contacts and connections that were
obtained because of his position with the Company or the specialised
knowledge, contacts and connections that will be obtained because of his
future position with the Offeror's Parent.
The Shareholder acknowledges and agrees that because he and others will be
receiving an amount that is substantially in excess of the current share
price the following covenants and restrictions are reasonable and valid in
terms of time, scope of activities and geographical limitations and
understands and agrees that they are vital consideration for the purposes
of the Offeror acquiring the shares of the Company.
2. NON-COMPETITION AND NON-SOLICITATION.
------------------------------------
The Shareholder will not for a period of thirty months from the date on
which such Shareholder's employment with the Offeror's Parent or its
Affiliates is terminated (such date, the "Termination Date") without the
Offeror's express written consent, either as an individual, or in
conjunction with any other person, firm, corporation, or other entity,
whether acting as a principal, agent, employee, consultant, or in any
capacity whatsoever:
(a) engage in or in any way be concerned with any business or enterprise
relating to the manufacture, sales or installation of video or
DVR/digital CCTV security systems and security products for home or
business (the "CCTV Business") in any of the provinces and territories
of Canada, and the states and territories of the United States of
America; provided, however, the foregoing shall not be deemed to
prohibit the Shareholder from being employed by a corporation or other
entity in a position wholly unrelated to the manufacture, sales or
installation of security systems and security products for home or
business merely because such corporation or other entity is engaged in
the CCTV Business.
(b) solicit, attempt to solicit, call upon, or accept the business of any
firm, person or company who is or, during a 30 month period prior to
the Termination Date, was a customer, client, supplier or distributor
of the Company or, with respect to the CCTV Business, the Offeror's
Parent (or any of its Affiliates);
(c) take advantage of, derive a benefit or otherwise profit from any
business opportunities that the Shareholder became aware of in the
course of employment with the Company or the Offeror's Parent or any
of its Affiliates even if the Offeror does not take advantage of or
exploit such opportunities;
(d) take any action as a result of which relations between the Company or
the Offeror's Parent (or any of its Affiliates), on the one hand, and
its consultants, customers, clients, suppliers, distributors,
employees or others, on the other hand, may be impaired or which might
otherwise be detrimental to the business interests or reputation of
the Company or the Offeror's Parent (or any of its Affiliates);
(e) solicit, attempt to solicit, or communicate in any way with any
employees or consultants of the Company or the Offeror's Parent (or
any of its Affiliates) for the purpose of having such employees
employed or in any way engaged by another person, firm, corporation,
or other entity; or
(f) hire, whether as an employee, consultant or otherwise, any person who
as of the date on which the Shareholder's employment with the
Offeror's Parent or its Affiliates is terminated was employed by the
Company or the Offeror's Parent (or any of its Affiliates), or who at
any time was employed or engaged by the Company or the Offeror's
Parent (or any of its Affiliates) in the 12 months preceding the
Termination Date.
