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LOCK-UP AGREEMENT
February 20, 1997
PRIVATE AND CONFIDENTIAL
The persons listed on
Schedule "A" hereto
Dear Sirs:
This letter agreement (the "Agreement") sets out the terms and conditions upon
which Volvo Construction Equipment N.V. (the "Purchaser") will cause a direct or
indirect wholly-owned subsidiary of AB Volvo (publ) (such subsidiary being
referred to herein as the "Offeror") to make an offer (the "Offer") on the terms
summarized in Schedule "B" forming part of this Agreement, for all of the issued
and outstanding common shares (the "Common Shares") of Champion Road Machinery
Limited (the "Corporation") including any outstanding Common Shares resulting
from the exercise of the currently outstanding options to acquire an additional
364,200 Common Shares.
This Agreement also sets out the terms and conditions of the agreement by each
of the persons listed on Schedule "A" hereto (each a "Shareholder" and
collectively, the "Shareholders") to deposit irrevocably and unconditionally
under the Offer the 3,805,048 Common Shares presently owned beneficially and of
record by such Shareholders in the aggregate and the 148,000 Common Shares in
the aggregate to be acquired upon the exercise of stock options currently
outstanding in favour of certain of such Shareholders and representing not less
than 34.3% of the outstanding Common Shares on a fully-diluted basis
(collectively, the "Shareholder Securities") and sets out the obligations and
commitments of each such Shareholder in connection therewith.
. THE OFFER
TIMING. The Purchaser agrees to cause the Offeror to make the Offer
for 100% of the Common Shares at a cash price of $15.00 per share on or before
February 27, 1997 (the "Proposed Offer Date"), provided that in the event that
the Offeror shall not have been provided with such of the lists referred to in
paragraph 3.2(b) in order to allow the Offeror to mail the Offer to holders of
Common Shares or any of the conditions in section 1.2 has not been met to the
satisfaction of the Offeror by the Proposed Offer Date, the Proposed Offer Date
shall be extended to the later of: (a) the third business day following the
obtaining of such lists and (b) the third business day following the
satisfaction of such conditions.
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CONDITIONS PRECEDENT. Notwithstanding section 1.1, the Purchaser
shall not be required to cause the Offeror to make the Offer if at the time the
Offeror proposes to make the Offer and on the Proposed Offer Date (or on any
later day on which the Offer is required to be made under section 1.1):
any of the conditions set forth in paragraphs (e) to (g) inclusive and
paragraphs (i), (k) and (l) of section 3 of Schedule "B" hereto have
not been satisfied; or
any representation or warranty of any Shareholder in section 2.1 shall
not be, as of the date made, true and correct in all material
respects, or any Shareholder shall not have performed in all material
respects any covenant or complied in all material respects with any
agreement to be performed or complied with by such Shareholder under
this Agreement on or prior to the Proposed Offer Date.
The foregoing conditions are for the sole benefit of the Purchaser and may be
waived by the Purchaser in whole or in part at any time or from time to time and
shall be deemed to have been waived by the making of the Offer by the Offeror.
. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. Each Shareholder
hereby severally, and not on a joint or a joint and several basis, represents
and warrants (on behalf of such Shareholder and not on behalf of or with respect
to any other Shareholder) to the Purchaser that:
if the Shareholder is a corporation, it is a corporation duly
incorporated and validly existing under the laws of its jurisdiction
of incorporation; has all necessary corporate power, authority,
capacity and right, and has received all requisite regulatory and
other approvals particular to the character or status of the
Shareholder (including any necessary approval of its respective
shareholders), to enter into this Agreement and to complete the
transactions contemplated hereby;
if the Shareholder is a trust, it is a trust duly formed and validly
existing under the laws of its jurisdiction of formation; has all
necessary power, authority, capacity and right, and has received all
requisite regulatory and other approvals particular to the character
or status of the Shareholder to enter into this Agreement, and to
complete the transactions contemplated hereby;
if the Shareholder is a partnership, it is a partnership duly formed
and validly existing under the laws of its jurisdiction of formation;
has all necessary power, authority, capacity and right, and has
received all requisite regulatory and other approvals particular to
the character or status of the Shareholder to enter into this
Agreement, and to complete the transactions contemplated hereby;
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upon the due execution and delivery of this Agreement by the Purchaser
this Agreement shall be a legally valid and binding agreement
enforceable by the Purchaser against the Shareholder 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;
the Shareholder is, and at the time of deposit of the Shareholder
Securities under the Offer will be, the sole beneficial owner of the
Shareholder Securities listed opposite its name in Schedule "C" hereto
and has the unfettered ability, authorization, capacity and the
exclusive right to dispose of all such Shareholder Securities under
the Offer. The Shareholder is not a party to, bound or affected by or
subject to, any agreement, charter or by-law provision, statute,
regulation, judgment, order, decree or law which would be violated,
contravened, breached by, or under which default would occur as a
result of, the execution and delivery or performance of this Agreement
and which default, violation, contravention or breach would materially
impair or would prevent the Shareholder from consummating the
transactions contemplated hereby; the Common Shares listed in Schedule
"C" hereto opposite such Shareholder's name constitute all of the
shares or other securities in the capital of the Corporation owned
beneficially by such Shareholder on the date hereof, apart from stock
options unexercised on the date hereof disclosed in Schedule "C"
hereto and, in the case of Xxxxx & Company Incorporated, apart from
certain shares not disclosed in Schedule "C" which are currently held
in a trading account for Xxxxx & Company Incorporated;
the Shareholder Securities and the Common Shares issuable upon the
exercise of options held by certain of the Shareholders as set forth
in Schedule "C" (the "Option Shares") to be deposited by the
Shareholder under the Offer in accordance with this Agreement are (or,
in the case of the Option Shares, will be) beneficially owned by the
Shareholder with good and marketable title, free and clear of any and
all mortgages, liens, charges, pledges, encumbrances, claims, security
interests, restrictions or rights of others of any nature whatsoever
("Liens"), except any Lien created hereby or by the Purchaser or the
Offeror;
the Shareholder has not previously granted or agreed to grant any
proxy or other right to vote in respect of the Shareholder Securities
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 Securities
except those which are no longer of any force or effect;
there is no claim, action, lawsuit, arbitration, mediation or other
proceeding pending or, to the best of the actual 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
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transactions contemplated hereby; and
if the Shareholder has also executed this Agreement on behalf of
another Shareholder (the "Other Shareholder") pursuant to a power of
attorney granted by the Other Shareholder, such Shareholder has all
necessary power, authority, capacity and right to do so.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser hereby
represents and warrants that:
the Purchaser is, and the Offeror will be at the date of the Offer, a
corporation duly incorporated and validly existing under the laws of
its jurisdiction of incorporation;
the Purchaser has and the Offeror will have at the date of the Offer
all necessary power, authority, capacity and right, and received all
requisite approvals (other than the regulatory approvals referred to
in paragraphs (b) and (c) of section 3 of Schedule "B" hereto) to
complete the transactions contemplated by this Agreement, and in the
case of the Purchaser, to enter into this Agreement;
upon the due execution and delivery of this Agreement by each of the
Shareholders this Agreement shall be a valid and binding agreement
enforceable by the Shareholders against the Purchaser 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;
the Purchaser is not, and the Offeror at the date of the Offer will
not be, a party to, bound or affected by or subject to, any agreement,
charter or by-law provision, statute, regulation, judgment, order,
decree or law which would be violated, contravened, breached by, or
under which default would occur as a result of, the execution and
delivery or performance of this Agreement and which default,
violation, contravention or breach would materially impair or would
prevent the Purchaser or the Offeror from consummating the
transactions contemplated hereby; and
the Offeror will have at the date of the Offer sufficient funds or
financing arrangements in place to provide sufficient funds to
purchase all Common Shares tendered under the Offer.
. COVENANTS OF THE SHAREHOLDERS
GENERAL. Each of the Shareholders hereby covenants that until the
Offeror has
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taken up and paid for the Common Shares under the Offer or terminated, withdrawn
or abandoned the Offer or this Agreement has been terminated pursuant to section
6.1, the Shareholder will:
not sell, transfer, pledge, encumber, grant a security interest in,
hypothecate or otherwise convey, directly or indirectly, the
Shareholder Securities to any person, or agree to any of the
foregoing;
not grant or agree to grant any proxy or other right to vote in
respect of the Shareholder Securities, or enter into any voting trust,
vote pooling or other agreement with respect to the right to vote the
Shareholder Securities, in each case, other than pursuant to the Offer
in accordance with the terms of this Agreement; and
not initiate, solicit or encourage any inquiries, submissions or
offers as to or in connection with the making of, or provide
information to, or respond to any person making, any offer or proposal
with respect to (i) any take-over bid, tender offer (other than the
Offer) or exchange offer, merger, amalgamation, plan of arrangement,
reorganization, consolidation, business combination, reverse
take-over, sale of assets, sale of securities, recapitalization,
liquidation, dissolution, winding-up, or similar transaction involving
the Corporation or any of its subsidiaries (each a "Transaction
Proposal"), or (ii) any acquisition of any Shareholder Securities (an
"Acquisition Proposal"), provided that nothing in this Agreement
shall:
prohibit the board of directors of the Corporation from
considering, negotiating, approving or recommending to
Shareholders, or providing information to a potential acquiror
pursuant to, any bona fide written Transaction Proposal at a
price exceeding $15.00 per Common Share which the Board
determines in good faith would, if consummated in accordance with
its terms, result in a transaction more favourable to all
Shareholders than the consummation of the Offer; or
require the Shareholder, if a director of the Corporation, to act
in his capacity as such a director other than in accordance with
his fiduciary or statutory duties as a director of the
Corporation;
notify the Purchaser and the Offeror within 24 hours of becoming aware
of and being provided with any written enquiry with regard to a
possible Transaction Proposal or a possible Acquisition Proposal and
inform the Offeror of the identity of the person making such written
enquiry and the material terms known to the Shareholder at that time
regarding such possible proposal;
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use its reasonable efforts to cause the Corporation to perform its
obligations under the acquisition agreement between the Purchaser and
the Corporation of even date herewith (the "Acquisition Agreement")
and request the Corporation to co-operate with the Offeror in the
making of all requisite regulatory filings, and to cooperate with the
Offeror in connection with any procedural matters necessary to
complete the purchase of the Common Shares; and
not do indirectly that which it may not do directly in respect of the
restrictions on its rights with respect to the Shareholder Securities
pursuant to this section 3.1 by the sale of any direct or indirect
holding company or the granting of a proxy on the shares of any direct
or indirect holding company and which would have, indirectly, any
effect prohibited by this section 3.1.
ADDITIONAL COVENANTS. Each of the Shareholders hereby covenants with
the Purchaser that until the Offeror has taken up and paid for the Common Shares
under the Offer or terminated, withdrawn or abandoned the Offer or this
Agreement has been terminated pursuant to section 6.1, the Shareholder will:
promptly notify the Offeror orally and in writing of any Material
Adverse Effect known to the Shareholder;
request the Corporation or the transfer agent(s) of the Corporation to
prepare a list of shareholders of the Corporation in accordance with
section 21 of the Canada Business Corporations Act and a list of
holders of stock options and any other rights, warrants or convertible
or exchangeable securities currently outstanding (with full
particulars as to the purchase, exercise or conversion or exercise
price and expiry date), as well as a security position listing from
each depositary, including without limitation The Canadian Depository
for Securities Limited, and deliver same to the Offeror as soon as
practicable after the execution of the Agreement and in as many days
as possible before the expiry of the statutory ten day period provided
under the aforesaid section 21 of the Canada Business Corporations
Act, and to prepare supplemental lists setting out any changes to the
aforesaid lists for each business day thereafter, and deliver same to
the Offeror; all such aforesaid deliveries to be in both printed form
and computer readable form; and
if the Shareholder is a director of the Corporation, or has a nominee
on the board of directors of the Corporation, to resign as a director
or to cause its nominee on the board of directors of the Corporation
to resign, effective at the time and in the manner requested by the
Offeror, after the Offeror takes up and pays for the Shareholder
Securities.
. COVENANTS OF THE PURCHASER
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GENERAL. The Purchaser hereby covenants to:
use, and to cause the Offeror to use, its reasonable best efforts to
successfully complete the transactions contemplated by this Agreement,
including the Offer, and in mailing or otherwise making the Offer to
holders of the Common Shares;
provide each Shareholder and the Corporation with a final copy of the
Offer, the takeover bid circular and the related letter(s) of
transmittal and notice(s) of guaranteed delivery as the same may be
amended from time to time (collectively, the "Offer Documents") to be
mailed to all shareholders. The Offeror shall file the Offer
Documents on a timely basis with the appropriate securities
commissions and other regulatory authorities in Canada and the United
States (the "Securities Authorities"). The Offer Documents, when
filed with the Securities Authorities and mailed to the Shareholders,
shall contain all information which is required to be included therein
in accordance with any applicable law, including, without limiting the
generality of the foregoing, the CANADA BUSINESS CORPORATIONS ACT (the
"CBCA"), provincial securities laws, rules, regulations and policy
statements published thereunder (the "Canadian Securities Laws") and
United States securities laws, rules, regulations and policy
statements published thereunder ("US Securities Laws"), and shall in
all material respects comply with the requirements of applicable law,
including the CBCA, Canadian Securities Laws and US Securities Laws.
The terms of the Offer shall comply with the terms of this Agreement.
In making the Offer, the Offeror shall comply in all material respects
with the provisions of applicable law, including Canadian Securities
Laws and US Securities Laws;
appoint a dealer manager in connection with the Offer and solicit
acceptances of the Offer. The dealer manager will be required to form
a soliciting dealer group comprised of members of the Investment
Dealer Association of Canada and of the stock exchanges in Canada to
solicit acceptance of the Offer in Canada and the United States; and
the Purchaser shall pursue, and shall cause the Offeror to diligently
pursue, all of the regulatory approvals referred to or contemplated by
paragraphs (b) and (c) of section 3 of Schedule "B" hereto which are
required in order to satisfy any conditions to the Offer not waived by
the Offeror.
. ACCEPTANCE OF OFFER
DEPOSIT. Each of the Shareholders hereby irrevocably and
unconditionally agrees to deposit the Shareholder Securities owned by it,
together with duly completed and executed letters of transmittal, under the
Offer as soon as practicable after the Offer has been made and, in any event, on
or before the third business day after the date of the Offer, subject however
with
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respect to the Common Shares issuable upon the exercise of the stock options
noted in Schedule "C" hereto to the receipt of the approval of The Toronto Stock
Exchange, The Montreal Exchange and NASDAQ to the acceleration of the vesting of
such stock options.
NO-WITHDRAWAL. Subject to section 6.1 hereof, each of the
Shareholders hereby irrevocably and unconditionally agrees not to withdraw or
take any action to withdraw any of the Shareholder Securities deposited under
the Offer notwithstanding any statutory rights or other rights under the terms
of the Offer or otherwise which it might have unless this Agreement is
terminated by the Shareholder in accordance with its terms prior to the taking
up of the Shareholder Securities under the Offer.
. TERMINATION
TERMINATION BY SHAREHOLDERS. Any of the Shareholders, when not in
default in performance of its obligations under this Agreement, may, without
prejudice to any other rights, terminate this Agreement by notice to the
Purchaser if:
the Acquisition Agreement has been terminated pursuant to, and in
accordance with, the provisions of paragraph (a) of section 5.1
thereof;
the Offer has not been made by the date required in section 1.1
hereof; the Offer (or any amendment thereto, other than as
specifically contemplated by Schedule "B" hereto) does not conform in
all material respects with the description in Schedule "B"; or
Common Shares deposited under the Offer have not, for any reason
whatsoever been taken up and paid for on or before the earlier of
(a) May 26, 1997 and (b) 90 days after the date of mailing of the Offer
to shareholders of the Corporation.
TERMINATION BY PURCHASER. The Purchaser, when not in default in
performance of its obligations under this Agreement, may, without prejudice to
any other rights, terminate this Agreement by notice to the Shareholders if:
the Acquisition Agreement has been terminated pursuant to, and in
accordance with, the provisions of paragraph (a) of section 5.1
thereof; or
the Offer has been withdrawn or terminated or otherwise expires in
accordance with its terms.
EFFECT OF TERMINATION. In the event of the termination of this
Agreement as provided in section 6.1 or 6.2:
this Agreement shall forthwith become void; and
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there shall be no liability on the part of the Purchaser, the Offeror
or the Shareholders hereunder except that nothing contained in this
section 6.3 shall relieve any party from liability for any breach of
any provision of this Agreement which occurred on or before the date
of such termination.
. GENERAL
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Shareholders and the Purchaser contained herein shall not
survive the consummation of the Offer. No investigations made by or on behalf
of the Purchaser, 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 Shareholders in
or pursuant to this Agreement.
DISCLOSURE. Except as required by any competent governmental or
judicial authority, none of the Shareholders shall make any public disclosure
of, or any announcement or statement with respect to, this Agreement without the
prior written approval of the Purchaser; provided, however, that this section
7.2 shall not restrict any Shareholder who is a director or officer of the
Corporation from authorizing or participating in any disclosure by the
Corporation which is in accordance with the provisions of section 4.4 and 4.6 of
the Acquisition Agreement.
ASSIGNMENT. The Purchaser may assign all or any part of its rights
under this Agreement to a direct or indirect wholly-owned subsidiary of AB Volvo
(publ), but, if such assignment takes place, the Purchaser shall continue to be
liable to the Shareholders for any default in performance by the assignee. This
Agreement shall not otherwise be assignable by any party hereto.
TIME. Time shall be of the essence of this Agreement.
CURRENCY. All sums of money referred to in this Agreement shall mean
Canadian funds.
GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable
therein.
The parties hereto irrevocably submit to the non-exclusive
jurisdiction of the courts of the Province of Ontario solely in
respect of the interpretation and enforcement of the provisions of
this Agreement, and in respect of the transactions contemplated
herein, and hereby waive, and agree not to assert, as a defense in any
action for the interpretation or enforcement hereof or of any such
document, that it is not subject thereto or that such action may not
be brought or is not
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maintainable in said courts or that the venue thereof may not be
appropriate or that this Agreement or any such document may not be
enforced in or by such courts, and the parties hereto irrevocably
agree that final judgment in any suit, action or proceeding brought in
such a court shall be conclusive and binding upon the parties and may
be enforced in any other court to the jurisdiction of which a party is
subject by a suit upon such judgment, provided that service of process
is effected upon the parties in a manner permitted by law; PROVIDED,
HOWEVER, that the parties do not waive, and the foregoing provisions
of this clause shall not constitute or be deemed to constitute a
waiver of, (i) any right to appeal any such judgment, to seek any stay
or otherwise to seek reconsideration or review of any such judgment or
(ii) any stay of execution or levy pending an appeal from, or a suit,
action or proceeding for reconsideration or review of, any such
judgment.
Nothing in this section shall, however, limit the right of any party
to bring proceedings against any party in the courts of any
jurisdiction or jurisdictions.
ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding between and among the parties hereto with respect to the subject
matter hereof and supersedes any prior agreement, representation or
understanding with respect thereto.
AMENDMENTS. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by all of the parties hereto.
DEFINITIONS. For the purposes of this Agreement the terms,
"Acquisition Agreement" means (i) the acquisition agreement of even
date herewith entered into between the Purchaser and the Corporation;
"disclosed to the Purchaser in writing" means (i) disclosure set forth
in this Agreement, or the Corporation's filings (other than any filing
made on a confidential basis) with the Ontario Securities Commission
made, and available generally to the public, on or before the date
hereof and (ii) disclosure set forth in any written disclosure letter
or notice addressed to the Purchaser and received in the period from
January 1, 1997 to February 19, 1997 by any officer or employee of the
Purchaser identified in the letter of even date herewith from the
Purchaser to the Corporation, to the extent such letter or notice on
its face discloses a specific breach of an express representation or
warranty of the Corporation in Article III of the Acquisition
Agreement.
"Material Adverse Effect" means any condition, event or development
which is, or could reasonably be expected to result in or represent, a
material adverse effect or material adverse change (or any condition,
event or development involving a
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prospective material adverse change) individually or in the aggregate
on or in the business, affairs, operations, assets, capitalization,
financial condition, rights, results of operations, or liabilities
(including without limitation any contingent liabilities that may
arise through outstanding, pending or threatened litigation or
otherwise), whether contractual or otherwise, of the Corporation and
its subsidiaries considered as a whole provided that none of the
following shall either alone or in aggregate constitute a Material
Adverse Effect: (i) any change in general economic or grader industry
conditions; (ii) the payment by the Corporation of its regular
dividend of $0.05 per Common Share in Xxxxx, 0000, (xxx) payments of
cash bonuses to participants in the Corporation's employee stock
option and deferred profit sharing plans (the "Plans") in lieu of the
granting of stock options and the making of deferred profit sharing
plan contributions in respect of such Plans for the year ended
December 31, 1996 in an aggregate amount not to exceed $1.2 million,
and (d) any departure from the Corporation of fewer than five of the
executive officers of the Corporation or its subsidiaries;
"subsidiary", "affiliate'' and "associate" shall have the respective
meanings ascribed thereto under the Securities Act (Ontario);
"material fact" and "misrepresentation" shall have the respective
meanings ascribed thereto in the Securities Act (Ontario); and
"Common Shares" includes any shares into which the Common Shares may
be reclassified, sub-divided, consolidated or converted and any rights
and benefits arising therefrom including any extraordinary
distributions of securities which may be declared in respect of the
Common Shares. In the event of any such reclassification, subdivision,
consolidation, conversion or extraordinary distributions, the
Shareholder acknowledges and agrees that the Offer Price shall be
correspondingly adjusted, provided that the Offer Price shall not be
adjusted downward to reflect the payment by the Corporation of its
regular dividend of $0.05 per Common Share in April, 1997.
SPECIFIC PERFORMANCE AND OTHER EQUITABLE RIGHTS. Each of the parties
recognizes and acknowledges that this Agreement is an integral part of the
transactions contemplated in the Offer, that the Purchaser would not contemplate
causing the Offer to be made and the Shareholders would not agree to the deposit
of Common Shares under 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
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posting of any bond in connection with the obtaining of any such injunctive or
other equitable relief.
NOTICES. Any notice or other communication which may or is required
to be given pursuant to this Agreement shall be in writing and shall be
sufficiently given or made if delivered personally or sent by facsimile, in the
case of:
the Purchaser or the Offeror, addressed as follows:
Volvo Construction Equipment N.V.
Coenecoop 55
NL-2741 PH Waddinxveen
The Netherlands
Attention: President
Telephone No.: + 00-000-00-00-00
Telecopy No.: + 00-000-00-00-00
with a copy to each of:
Volvo Construction Equipment X.X.
Xxxxxxxx xx Xx Xxxxx 000
X-0000 Xxxxxxxx, Xxxxxxx
Attention: President
Telephone No.: + 00-0-000-0000
Telecopy No.: + 00-0-000-0000
Osler, Xxxxxx & Harcourt
P.O. Box 50,
First Canadian Place,
Toronto, Ontario.
M5X 1B8
Attention: Xxxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
any of the Shareholders, addressed as follows:
Sequoia Associates
0000 Xxxx Xxxx Xxxx
Xxxxxxxx XX, Xxxxx 000
-00-
Xxxxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Blake, Xxxxxxx & Xxxxxxx
Xxx 00, Xxxxxxxx Xxxxx Xxxx
Xxxxxxx, XX X0X 0X0
Attention: Xxxxxx A.M. Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
or to such other address as the relevant party may from time to time advise by
notice in writing given pursuant to this section. Any notice that is delivered
shall be deemed to be delivered on the date of delivery to such address if
delivered on a business day prior to 5:00 p.m. (local time at the place of
receipt) or on the next business day if delivered after 5:00 p.m. or on a
non-business day. Any notice telecopied shall be deemed to be delivered on the
date of transmission (for which confirmed receipt is provided to the sender) if
delivered on a business day prior to 5:00 p.m. (local time at the place of
receipt) or the next business day if delivered after 5:00 p.m. or on a
non-business day.
SEVERAL LIABILITY. It is understood and agreed that the rights and
obligations of each of the Shareholders under this Agreement shall be several
and not joint or joint and several and in no circumstances shall the action or
omission of one of the Shareholders arising in connection with this Agreement
constitute the action or omission of the other Shareholders or create any
liability whatsoever on the part of the other Shareholders or affect in any
respect the right of the other Shareholders to rely upon and enforce against the
Purchaser the provisions of this Agreement.
EXPENSES. Each of the parties shall pay its 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.
BUSINESS DAY. A business day for the purpose of this Agreement shall
mean any day on which banks in the City of Toronto, Ontario are open for
business.
COUNTERPARTS. This Agreement may be executed in one or more
counterparts which together shall be deemed to constitute one valid and binding
agreement and delivery of the counterparts may be effected by means of a
telecopied transmission. This Agreement may be executed by facsimile signature,
and execution thereby will constitute an original hereof.
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If the terms and conditions of this letter are acceptable to you
please so indicate by executing and returning the enclosed copy hereof to the
undersigned prior to February 21, 1997, failing which this offer shall be null
and void.
Yours truly,
VOLVO CONSTRUCTION
EQUIPMENT N.V.
By:
Agreed and accepted this 20th day of February, 1997.
XXXXX & COMPANY INCORPORATED
by:
Name:
Title:
CAXTON INTERNATIONAL LIMITED
BY CAXTON ASSOCIATES LLC, ATTORNEY IN FACT
by:
Name:
Title:
Witness
XXXXXX X. WIT
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XXXXX FAMILY 1989 TRUST
by:
Name:
Title:
XXXXXX FAMILY 1987 TRUST
by:
Name:
Title:
XXXXX FAMILY 1980 TRUST
by:
Name:
Title:
O'BRIEN FAMILY LIMITED PARTNERSHIP
by:
Name:
Title:
X. X'XXXXX & XXXX XXX X'XXXXX
REVOCABLE TRUST DATED 7/27/84
by:
Name:
Title:
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Witness
XXXXXX X. XXXXXX
Witness
XXXXXX X. VOLLMERSHAUSEN
3018202 CANADA INC.
by:
Name: XXXXXX X. VOLLMERSHAUSEN
Title:
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SCHEDULE "A"
NAMES AND ADDRESSES OF SHAREHOLDERS
Xxxxx & Company Incorporated
Caxton International Limited
Xxxxxx X. Wit
c/x Xxxxx & Company Incorporated
Xxxxx Family 1989 Trust
c/o Xxxxxxx X. Xxxxx Trustee
Xxxxxx Family 1987 Trust
Xxxxxx X. Xxxxxx Trustee
Xxxxx Family 1980 Trust
c/o Xxxxx X. Xxxxx
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O'Brien Family Limited Partnership
c/o X.X. X'Xxxxx
X. X'Xxxxx & Xxxx Xxx X'Xxxxx
Revocable Trust dated 7/27/84
c/o X.X. X'Xxxxx
Xxxxxx X. Xxxxxx
Xxxxxx X. Vollmershausen
Champion Road Machinery Limited
3018202 Canada Inc.
Attn. Xxxxxxx Barracki
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SCHEDULE "B"
TERMS OF THE OFFER
GENERAL TERMS. The Offer shall be made by a circular bid to all
registered shareholders prepared in compliance with the Securities Act (Ontario)
and other applicable provincial securities laws and the securities laws of the
United States and the states thereof and in each case in compliance with the
rules, regulations and policy statements published thereunder. The Offer shall
expire on the 20th business day after the date of mailing of the Offer (and the
Offeror shall not take up and pay prior to such date), subject to such extension
of the expiry date and the deposit period by the Offeror in its discretion and
in accordance with applicable law as may be required to satisfy all of the
conditions set forth in section 3 below.
Upon the terms and subject to the conditions of the Offer, the Purchaser
will cause the Offeror to accept for payment, and to take up and pay for, all
Common Shares of the Corporation deposited and not withdrawn under the Offer
within the time periods prescribed by applicable securities laws.
The Purchaser shall have the right to vary the terms of the Offer solely to
effect one or more of the following:
increase the consideration offered for the Common Shares;
extend the period during which Common Shares may be deposited to the
Offer;
waive any condition of the Offer or reduce the minimum deposit
condition contained in paragraph 3(a) hereof; and
comply with applicable securities laws.
PRICE OF THE OFFER. The Offer Price shall be Cdn. $15.00 per Common
Share in cash.
CONDITIONS OF THE OFFER. The Offer shall not be subject to any
conditions other than the following:
that there are validly deposited under the Offer and not withdrawn at
the expiration thereof not less than 90% (or such lesser percentage of
the Common Shares as the Offeror shall establish in its sole
discretion in the Offer) of the Common Shares (on a fully-diluted
basis assuming that all rights to acquire Common Shares were exercised
in full) including the Common Shares deposited by the Shareholders;
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the Director of Investigation and Research (the "Director")
appointed under the Competition Act (Canada) shall have issued an
advance ruling certificate under section 102 of the said Act in
respect of the transaction (the "Transaction") which will result from
the Offer; or (ii) the applicable waiting period under section 123 of
the said Act shall have expired without the Director having advised
the Offeror in writing that he intends to apply to the Competition
Tribunal for an order under section 92 or section 100 of the Act in
respect of the Transaction or to commence an inquiry under section 10
of the Competition Act and no application under section 9 of the
Competition Act shall have been made in respect of the Transaction;
(i) any applicable waiting periods under the Xxxx-Xxxxx Xxxxxx
Antitrust Improvements Act of 1976, as amended shall have terminated
or expired; and (ii) any applicable waiting periods under any
competition, merger control or similar law, rule, regulation, or
policy or any approval or consent of any governmental authority in
respect of competition or merger control matters having jurisdiction
over any party hereto or the Offer or any other transaction
contemplated herein, shall have terminated or expired or been
obtained, as the case may be, in respect of the Offer and such
transactions, excluding for purposes of clause (ii) hereof only,
however, any such law, rule, regulation or policy, or approval or
consent of a governmental authority, in a jurisdiction in respect of
which the Corporation derived annual revenues, directly or indirectly,
in any of the last three years representing less than 10% of the
Corporation's total revenues in any of such years;
(i) no act, action, suit or proceeding shall have been threatened or
taken before or by any domestic or foreign arbitrator, court or
tribunal or governmental agency or other regulatory authority or
administrative agency or commission by any elected or appointed public
official or private person (including, without limitation, any
individual, corporation, firm, group or other entity) in Canada or
elsewhere, whether or not having the force of law, and (ii) no law,
regulation or policy shall have been proposed, enacted, promulgated or
applied, in either case:
to cease trade, enjoin, prohibit or impose material limitations
or conditions on or make materially more costly the purchase by
or the sale to the Offeror of the Common Shares or the right of
the Offeror to own or exercise full rights of ownership over the
Common Shares or the consummation of any of the transactions
contemplated by the Offer or, solely as to paragraph 3(e)(ii), to
prevent the completion of a compulsory acquisition of the Common
Shares not deposited under the Offer or which could reasonably be
expected to have such an effect;
to prohibit or materially limit the ownership or operation by the
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Corporation or any of its subsidiaries, or by the Offeror or the
Purchaser, directly or indirectly, of all or any material portion
of the business or assets of the Corporation and its
subsidiaries, on a consolidated basis, or the Offeror or the
Purchaser as a result of the transactions contemplated by the
Offer or compel the Offeror or the Purchaser, directly or
indirectly, to dispose of or hold separate all or any material
portion of the business or assets of the Corporation and its
subsidiaries, on a consolidated basis, or the Offeror or the
Purchaser as a result of the transactions contemplated by the
Offer; or
which has had or would have a Material Adverse Effect;
provided, however, that in the case of any act, action, suit or
proceeding taken by a private person, the Offeror shall not be
required to consummate the Offer only if such act, action, suit or
proceeding shall have been instituted and not just threatened and
either resolved in favour of such private person as evidenced by an
order, ruling or decision by any domestic or foreign arbitrator, court
or tribunal or governmental agency or other regulatory authority or
administrative agency or commission in Canada or elsewhere, or if, in
the opinion of the Offeror, in its discretion, there is a reasonable
risk that such act, action, suit or proceeding will be so resolved in
favour of such private person;
there shall not exist any prohibition at law against the Offeror
making the Offer or taking up and paying for 100% of the Common Shares
under the Offer;
other than as has been disclosed to the Purchaser in writing by the
Corporation prior to the date of the Agreement, the Corporation or any
of its subsidiaries shall not, except with the prior written approval
of the Offeror, have authorized or proposed, or announced an intention
to do so, and shall not have entered into any agreement, arrangement
or understanding with respect to:
any action that would, individually or in the aggregate, cause a
Material Adverse Effect:
any acquisition of a material amount of assets or securities,
except in the ordinary course of its respective business;
any disposition of a material amount of assets or securities,
except in the ordinary course of its respective business;
any material change in its debt capitalization (including, but
not limited to, any material increase in the amount of its
borrowings) or any conversion of short term borrowings into long
term borrowings;
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any material capital expenditures, except in the ordinary course
of its respective business;
any material dealings of any nature whatsoever between it, on the
one hand, and any of the Shareholders or any of their respective
affiliates (or any insider of any of the foregoing), on the other
hand, except as specifically contemplated by this Agreement;
entering into, modifying or terminating any agreement or
arrangement with any of its senior officers or employees, except
in the ordinary course of its respective business and except for
the acceleration of the exercise time for currently outstanding
stock options as may be necessary to satisfy the condition in
paragraph (j) hereof;
any release or relinquishment of any material contractual rights,
except in the ordinary course of its respective business;
agreeing or committing to guarantee the payment of indebtedness
of a third party, other than any guarantee of subsidiary
indebtedness in the ordinary course of business;
instituting, cancelling or modifying any pension plan or other
employee benefit arrangement;
declaring or paying any dividend or declaring, authorizing or
making any distribution of or on any of its securities other than
a dividend of $0.05 per common share payable on April 12, 1997 to
shareholders of record on March 12, 1997;
the amendment of its articles or by-laws; or
the issuance or purchase or other acquisition of any shares of
its capital stock of any class or series or of securities
convertible into, or rights, warrants or options to acquire, any
such shares or other convertible securities (other than pursuant
to (A) the exercise in accordance with their current terms of
stock options currently outstanding or (B) the exercise in
accordance with the current terms of currently outstanding stock
options, as such terms may have been amended to accelerate the
exercise time thereunder in order to satisfy the condition in
paragraph (j) hereof);
any take-over bid or tender offer (including without limitation
an issuer bid or self tender offer) or exchange offer, merger,
amalgamation, plan of arrangement, reorganization, consolidation,
business combination, reverse
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take-over, sale of substantially all its assets, sale of
securities, recapitalization, liquidation, dissolution, winding
up or similar transaction involving the Corporation or any of its
subsidiaries or any other transaction the consummation of which
would or could reasonably be expected to impede, interfere with,
prevent or materially delay the consummation of the Offer or
which would or could reasonably be expected to materially dilute
the benefits to the Offeror and the Purchaser of the transactions
contemplated by the Offer or a compulsory acquisition or any
subsequent acquisition transaction;
there shall not have occurred (or if there shall have occurred prior
to the date hereof, there shall not have been generally disclosed or
the Purchaser shall not otherwise discover, if not previously
disclosed to the Purchaser in writing prior to the commencement of the
Offer) any Material Adverse Effect;
the Offeror shall have been provided with true copies of all documents
and shall have been given reasonably commensurate access, in a timely
manner, to all such non-public information relating to the Corporation
or any of its subsidiaries, including without limitation reasonably
commensurate access to such members of senior management of the
Corporation or any of its subsidiaries and to such of the operations
of the Corporation or any of its subsidiaries as may be given,
provided or made available by the Corporation or any of its
subsidiaries:
at any time after the announcement of the Offer, to any other
potential acquiror of the Common Shares or of a significant
portion of the assets of the Corporation or any of its
subsidiaries, or to any person considering (or seeking such
information in order to consider) any Transaction Proposal or any
Acquisition Proposal; or
at any time within 120 days prior to the announcement of the
Offer, to any person who, after the announcement of the Offer,
enters into an agreement relating to any Transaction Proposal or
any Acquisition Proposal or otherwise makes a competing offer;
on substantially the same terms and conditions as may be imposed on
such potential acquiror or person, provided that no such term or
condition shall be imposed on the Offeror that would be inconsistent
with, or render the Offeror unable to complete, the acquisition of the
Common Shares pursuant to the terms of the Offer;
the Offeror shall not become aware of any untrue statement of material
fact, or an omission to state a material fact that is required to be
stated or that is necessary to make a statement not misleading in the
light of the circumstances in which it
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was made and at the date it was made (after giving effect to all
subsequent filings prior to the date of this Agreement in relation to
all matters covered in earlier filings) in any document filed by or on
behalf of the Corporation with any securities commission or similar
securities regulatory authority in any of the provinces of Canada or
with the Securities and Exchange Commission prior to the date hereof,
including without limitation any annual information form, financial
statement, material change report or management proxy circular or in
any document so filed or released by the Corporation to the public on
or following the date hereof, the effect of which untrue statement or
omission constitutes a Material Adverse Effect;
all outstanding rights or entitlements of any type whatsoever to
purchase or otherwise acquire authorized and unissued Common Shares
shall have been exercised in full or irrevocably released, surrendered
and waived by the holders thereof;
(i) all representations and warranties of each of the members of the
Shareholder Group in sections 2.1 of this Agreement and corresponding
agreements with other members of the Shareholder Group (the
"Agreements") shall be, as of the date made, true and correct in all
material respects, and (ii) each member of the Shareholder Group
shall have performed in all material respects any covenant or complied
in all material respects with any agreement to be performed by it
under the Agreements; and
all representations and warranties of the Corporation in the
Acquisition Agreement shall be, as of the date made, true and correct
in all respects provided such representations and warranties shall be
deemed to be true and correct unless the failure to be true and
correct constitutes a Material Adverse Effect, and the Corporation
shall have performed in all respects any covenant or complied in all
respects with any agreement to be performed by it under the
Acquisition Agreement unless the failure to so perform or comply does
not constitute a Material Adverse Effect.
The foregoing conditions are for the exclusive benefit of the Offeror and may be
asserted by the Offeror regardless of the circumstances (including any action or
inaction by the Offeror) giving rise to such assertion or may be waived by the
Offeror in whole or in part at any time and from time to time, in its sole
discretion and shall be exclusive of any other right which the Offeror may have
under the Offer. The failure by the Offeror at any time to exercise or assert
any of the foregoing rights shall not be deemed to constitute a waiver of any
such right, the waiver of any such right with respect to particular facts or
other circumstances shall not be deemed a waiver with respect to any other facts
and circumstances and each such right shall be deemed an on-going right which
may be asserted at any time and from time to time by the Offeror. Any
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determination by the Offeror concerning the foregoing conditions shall be final
and binding upon all parties.
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SCHEDULE "C"
SHAREHOLDER SECURITIES
SHAREHOLDERS NUMBER OF SHARES NUMBER OF OPTIONS
------------ ---------------- -----------------
Xxxxx & Company Incorporated 456,843 -
Caxton International Limited 530,000 -
Xxxxxx X. Wit 221,422 -
Xxxxx Family 1989 Trust 1,235,629 -
Xxxxxx Family 1987 Trust 522,006 -
Xxxxx Family 1980 Trust 103,807 -
O'Brien Family Limited Partnership 32,303 -
X. X'Xxxxx & Xxxx Xxx X'Xxxxx
Revocable Trust dated 7/27/84 10,765 -
Xxxxxx X. Xxxxxx 501,922 45,000
Xxxxxx X. Vollmershausen - 103,000
3018202 Canada Inc.
(Xxxxxx X. Vollmershausen
holding company) 190,351 -
---------- ---------
TOTAL 3,805,048(A) 148,000(B)
