REFUSAL AGREEMENT
CASCADE CORPORATION (Cascade) and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇) and
COUPHAR LTD. (together referred to as Couphar) agree as follows:
1. Interpretation
(a) Definitions
For purposes of this Agreement:
"business day" means a day other than a Saturday, Sunday or a statutory holiday
in Oregon;
"Common Shares" means shares of common stock of Cascade or any successor
corporation;
"Couphar Common Shares" means at any time the number of Common Shares which
Couphar would hold if all Exchangeable Shares were exchanged for Common Shares
prior to such time;
"Current Market Price" means, in respect of a Common Share on any date, the
average of the closing prices (or, if there is no closing price on such date,
the average of the closing bid and ask prices) of Common Shares on the New York
Stock Exchange (the "NYSE") on each of the ten (10) consecutive trading days
before such date, or, if the Common Shares are not then listed on the NYSE, on
such other stock exchange or automated quotation system on which the Common
Shares are listed or quoted, as the case may be, as may be selected by the Board
of Directors of Cascade for such purpose; provided, however, that if there is no
public distribution or trading activity of Common Shares during such period,
then the Current Market Price of a Common Share shall be determined by the Board
of Directors of Cascade which determination by the Board of Directors of Cascade
shall be conclusive and binding;
"Exchangeable Shares" means at any time the Exchangeable Shares of the Purchaser
held by Couphar at such time;
"Excluded Shares" means shares of a corporation which either:
(a) are excluded from participation in gains and losses (including
distributions) on the Exchangeable Shares and Common Shares arising on
exchange thereof, or
(b) have been issued only for the purpose of enabling a Member of the
Immediate Family to make tax effective charitable donations provided
that such shares are retired reasonably promptly after their issue.
"Member of the Immediate Family" means any one of:
(i) ▇▇▇▇▇▇▇▇ and his personal representatives;
(ii) the spouse of ▇▇▇▇▇▇▇▇;
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(iii) any issue of ▇▇▇▇▇▇▇▇ or a spouse of ▇▇▇▇▇▇▇▇ or the issue
of ▇▇▇▇▇▇▇▇'▇ deceased brother;
(iv) any trust of which all of the beneficiaries are any one or
more of the persons named in (i), (ii) and (iii) above;
(v) any corporation all of the issued shares (except Excluded
Shares) of which at any time and from time to time are
beneficially owned by one or more persons named in clauses
(i), (ii) and (iii) above or held by the person named in
clause (iv) above provided that ▇▇▇▇▇▇▇▇ or his personal
representatives control (as that term is defined in the
Business Corporations Act (Ontario)) such corporation at all
times;
"open market" includes a stock exchange, a dealer quotation system and off-floor
block trading activities;
"Purchaser" means Cascade (Canada) Holdings Inc. and its successors;
"Registration Rights Agreement" means an agreement dated the date hereof between
Cascade and Couphar Ltd. providing for registration rights to Couphar in certain
circumstances; and
"Shareholders Agreement" means an agreement of even date herewith between the
Trustees of the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and Nani ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Revocable Trust and
Couphar.
For purposes of this agreement, Couphar shall be deemed to own all
Exchangeable Shares owned by any Member of the Immediate Family to which Couphar
has transferred such shares and any Common Shares resulting from the exchange of
such Exchangeable Shares.
2. Purpose
Cascade is at this date acquiring all outstanding shares of Kenhar
Corporation. Payment made by Cascade includes issuance to Couphar of 1,100,000
Exchangeable Preferred Shares of Purchaser. Each Exchangeable Share may be
exchanged for one share of Cascade common stock pursuant to the provisions of
such Exchangeable Shares and agreements related thereto. Common Shares are
presently publicly traded and are listed on the New York Stock Exchange. This
Agreement is intended to set forth certain obligations of Couphar with respect
to the sale of Exchangeable Shares and Common Shares received upon exchange of
Exchangeable Shares and certain rights of Cascade with respect to such Common
Shares.
3. Permitted Transfers of Shares
(a) ▇▇▇▇▇▇▇▇ covenants and agrees with Cascade that:
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(i) Couphar will not sell, assign or transfer any of the
Exchangeable Shares except to a Member of the Immediate
Family, Cascade or the Purchaser and except for pledges to
secure bona fide borrowings provided that: (A) the pledgee
is not entitled to take title to the Exchangeable Shares or
exercise any of the rights, except the right of retraction
but including rights under the Registration Rights
Agreement, of Couphar in relation thereto and (B) shares
received on retraction will be subject to all restrictions
which would apply to Couphar under agreements or statute;
(ii) Couphar will always be controlled by ▇▇▇▇▇▇▇▇ or, after his
death, by his personal representatives or Members of the
Immediate Family;
(iii) If Exchangeable Shares are transferred to a Member of the
Immediate Family which is a corporation or a trust, ▇▇▇▇▇▇▇▇
will cause such transferee to continue to be a Member of the
Immediate Family for so long as such transferee holds such
shares or Common Shares arising on exchange thereof; and
(iv) Couphar shall not sell any Common Shares acquired in
exchange for the Exchangeable Shares except for:
(A) shares which have first been offered to, and not
purchased by Cascade, pursuant to clause 3(b) or
3(c)(i) below which are either
(i) sold in the open market through a member firm of the
National Association of Securities Dealers during the
90 days following the effective date of the
registration statement to which the RR Notice referred
to in such clause relates or
(ii) sold to an underwriter during the 90 days following the
effective date of the registration statement to which
the RR Notice referred to in such clause relates
provided that if (I) the underwriter has required that
the price thereunder be at least 25% below the price at
which such shares were offered to Cascade pursuant to
clause 3(b) below and (II) Couphar has decided to
complete such sale at such price, then Cascade
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shall be entitled, within 24 hours of being so notified
in writing, to agree in writing with Couphar to
purchase all such shares at such price as reduced and
to pay all fees and commissions which would have been
payable to such underwriter.
(B) shares which have first been offered to, and not
purchased by, Cascade pursuant to clause 3(c) below
which are sold pursuant to the provisions of paragraph
4 or 5 of the Shareholders Agreement or are sold during
the 90 days following such offer to Cascade either
(i) in the open market through a member firm of the
National Associatioin of Securities Dealers if such
shares are purchasable by Cascade at Current Market
Price or
(ii) to the buyer identified pursuant to clause 3(c) below
with such buyer purchasing all of the shares so offered
at a price not less than the price so identified.
(C) total sales by or for the benefit of Couphar or Members
of the Immediate Family in the open market through a
member of the National Association of Securities
Dealers of not more than 110,000 Common Shares (as
presently constituted) in the aggregate during any
period of 30 consecutive days, provided that this
exception may not be relied on if after giving effect
to sales effected pursuant to clause 3(b) below more
than 110,000 Common Shares (as presently constituted)
in the aggregate would have been sold by such persons
or entities in the immediately preceding 30 days;
(D) sales pursuant to a tender offer made by any person
(except Cascade) for all Common Shares (except those
held by Cascade) or made by Cascade or a consolidation,
merger or reorganization of Cascade or any of its
subsidiaries, which, in each such case, provides to all
holders (assuming exchange of the Exchangeable Shares)
of Common Shares resident in Canada and the U.S.A. the
same terms and conditions and the same consideration
per Common Share; and
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(E) sales pursuant to a tender offer made by a person
(except Cascade) to which clause (D) would apply except
that such offer is for less than all Common Shares
where the Couphar Common Shares to be tendered into
such offer have first been offered to, and not
purchased by, Cascade pursuant to clause 3(c) below.
(b) Couphar agrees that any notice (an "RR Notice") given by Couphar on
its own behalf or on behalf of a Member of the Immediate Family
pursuant to the Registration Rights Agreement shall be deemed to be an
offer (the "Offer") by each such person giving such notice to sell all
but not less than all of the Common Shares referred to in such notice
at a price per share equal to the Current Market Price at the date of
the Offer. Such Offer shall be open for acceptance by Cascade for 5
business days following the date of giving of the RR Notice by Cascade
giving written notice ("Acceptance Notice") to Couphar. The Offer may
only be accepted in respect of all shares referred to in such RR
Notice.
(c) Couphar may at any time by written notice (an "Offer") offer to sell
to Cascade a number of Common Shares set out in such notice ("Offered
Shares") either (i) at a price per share equal to the Current Market
Price at the time of giving of such notice with the provisions of this
clause applying to any sale proposed pursuant to paragraph 4 of the
Shareholders Agreement or (ii) if such Offer identifies a buyer and is
accompanied by a bona fide offer from a person dealing at arms length
from Couphar, at the cash price per share set out in such Offer or
(iii) if such Offer results from a notice given under paragraph 5 of
the Shareholders Agreement and is accompanied by a copy of such
notice, at the proposed selling price in such notice. Cascade may
accept the Offer but only as to all but not less than all of the
Common Shares referred to therein and only by giving written notice
(an "Acceptance") to Couphar within 5 business days (in the case of a
proposed sale to which clause 3(a)(iv)(E) or 3(c)(iii) applies) or 10
days (in any other case) after the making of the Offer.
(d) The contract resulting under clause 3(a)(iv)(A)(ii)(II) or from the
giving of an Acceptance Notice pursuant to clause 3(b) above or an
Acceptance pursuant to clause 3(c) above, as the case may be, shall be
completed at the address for notice of Cascade referred to in
paragraph 4 hereof at 10:00 a.m. local time on the fifth business day
following Cascade's agreement, the giving of the Acceptance Notice or
the Acceptance, as the case may be, by delivery of share certificates
duly endorsed with all signatures guaranteed for the common shares of
Cascade subject thereto against payment by bank draft, bank cashier's
cheque, certified cheque or
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another form of immediately available funds acceptable to the sellers.
If Cascade has failed to cause to be delivered certificates for Common
Shares required to be delivered by it on exchange of Exchangeable
Shares, it shall accept in lieu of certificates for Common Shares,
appropriately endorsed certificates for Exchangeable Shares
representing the right to receive the Common Shares to be purchased
by Cascade.
4. Notices
All notices and other communications between the parties pursuant to this
Agreement shall be in writing and shall be delivered personally or by confirmed
facsimile to the parties at the following addresses (or at such other address
for such party as shall be specified in like notice):
(a) if to Cascade at:
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Executive Vice President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy, which shall not be notice, to:
Newcomb, Sabin, ▇▇▇▇▇▇▇▇ & Landsverk
▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to ▇▇▇▇▇▇▇▇ or Couphar at:
▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇
▇.▇. #▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy, which shall not be notice, to:
▇▇▇▇ & Berlis
Suite 1800, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇. ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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Any notice or other communication delivered personally shall be deemed to
have been given and received upon delivery thereof and if given by facsimile
shall be deemed to have been given and received on the date of confirmed receipt
thereof unless such day is not a business day in which case it shall be deemed
to have been given and received upon the immediately following business day.
5. Cascade Covenant
Cascade shall include Couphar and its permitted transferees in any offer
made generally to all other holders of Common Shares to repurchase any Common
Shares.
6. Choice of Law
This Agreement shall be governed by, and interpreted and applied in
accordance with, the laws of the United States and the State of Oregon.
7. Termination
This Agreement shall terminate and be of no further application after the
first time when Couphar owns less than 250,000 Couphar Common Shares (as
adjusted for stock dividends, splits and similar events affecting all Common
Shares).
8. Integration and Modification
This Agreement represents the parties' entire agreement on the subject
matter covered, and supersedes all prior agreements and understandings.
Provisions of this Agreement may be amended or its observance waived generally
or in particular only by a written instrument duly executed by each of the
parties (or, in the case of a waiver, the waiving party).
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DATED this 11th day of March, 1997.
CASCADE CORPORATION COUPHAR LTD.
By By
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Its Its
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
