SHAREHOLDERS AGREEMENT
Exhibit
11
SHAREHOLDERS
AGREEMENT
THIS
AGREEMENT dated as of this 16th day of August, 2007.
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AMONG:
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MITEL
NETWORKS CORPORATION, a corporation incorporated under the laws
of Canada (the “Corporation”)
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and
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EDGESTONE
CAPITAL EQUITY FUND II-B GP, INC., as agent for EdgeStone Capital
Equity Fund II-A, L.P. and its parallel investors, and EDGESTONE
CAPITAL EQUITY FUND II NOMINEE, INC., as nominee for EdgeStone
Capital Equity Fund II-A, L.P. and its parallel investors
(“EdgeStone”)
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and
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POWER
TECHNOLOGY INVESTMENT CORPORATION, a corporation incorporated
under the laws of Canada (“PTIC”)
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and
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XXXXXXX
X. XXXXXXXX, an individual residing in the City of Ottawa,
Province of Ontario (“Xxxxxxxx”)
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and
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XXXXXX
XXXXXX CORPORATION, a corporation incorporated under the laws of
Newfoundland and Labrador (“WCC”)
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and
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CELTIC
TECH JET LIMITED, a corporation incorporated under the laws of
Canada (“CTJL”, and together with EdgeStone, PTIC,
Xxxxxxxx and WCC, the “Existing
Shareholders”)
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and
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ARSENAL
HOLDCO I, S.A.R.L. and ARSENAL HOLDCO II, S.A.R.L.
(“Francisco Partners”), and the other Francisco Partners
investors identified in Schedule D (collectively the “FP
Investors”)
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and
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XXXXXX
XXXXXXX PRINCIPAL INVESTMENTS, INC. (“Xxxxxx
Xxxxxxx”) and the other Xxxxxx Xxxxxxx investors identified
in Schedule D (collectively the “MS Investors” and
together with the FP Investors, the “Investors”, and
together with the FP Investors and the Existing Shareholders, the
“Shareholders”).
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RECITALS:
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A.
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Prior
to the execution and delivery of this Agreement, the Corporation
and the
Investors have entered into a subscription agreement (the
“Subscription Agreement”) in connection with the issuance
and sale to the Investors of Class 1 Shares (as defined
herein).
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B.
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The
Class 1 Shares referred to above are being issued by the Corporation
prior
to or contemporaneously with the Merger (as defined in the Subscription
Agreement) such that the capitalization of the Corporation immediately
after consummation of the Merger will be as described in Schedule
A.
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C.
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The
parties to this Agreement wish to provide for certain rights of the
Shareholders of the Corporation upon, among other things, the issuance
of
the Class 1 Shares by the Corporation and any proposed transfer of
securities by such Shareholders to another person or
entity.
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NOW
THEREFORE the parties hereto agree as follows:
ARTICLE
1
DEFINITIONS,
PRINCIPLES OF INTERPRETATION AND REPRESENTATIONS AND
WARRANTIES
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1.1
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Definitions
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Whenever
used in this Agreement, the words and terms defined in Appendix 1 shall have
the
meanings set out therein.
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1.2
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Certain
Rules of Interpretation In this
Agreement:
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(a)
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Currency–
Unless otherwise specified, all references to money amounts are to
lawful
currency of the United States of America. Any U.S. dollar
amounts in this Agreement required to be converted into Canadian
dollars
shall be converted using the 10:00 a.m. spot rate of the Federal
Reserve
Bank of New York on the Business Day prior to the required translation
date.
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(b)
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Governing
Law– This Agreement is a contract made under and shall be
construed, interpreted and enforced in accordance with the laws of
the
Province of Ontario and the federal laws of Canada applicable in
the
Province of Ontario (excluding any conflict of law rule or principle
of
such laws that might refer such interpretation or enforcement to
the laws
of another jurisdiction). Subject to the provisions of Section
11.7, any action, suit or proceeding arising out of or relating to
this
Agreement shall be brought in the courts of the Province of Ontario
and
each
of the Parties hereby irrevocably submits to the non-exclusive
jurisdiction of such courts.
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(c)
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Headings—
Headings of Articles and Sections are inserted for convenience of
reference only and shall not affect the construction or interpretation
of
this Agreement.
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(d)
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Number
and Gender— Unless the context otherwise requires, words
importing the singular include the plural and vice versa and words
importing gender include all
genders.
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(e)
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Statutory
references— A reference to a statute includes all regulations
made pursuant to such statute and, unless otherwise specified, the
provisions of any statute or regulation which amends, supplements
or
supersedes any such statute or any such
regulation.
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(f)
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Time
Periods— Unless otherwise specified, time periods within or
following which any payment is to be made or act is to be done shall
be
calculated by excluding the day on which the period commences and
including the day on which the period ends and by extending the period
to
the next Business Day following if the last day of the period is
not a
Business Day.
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(g)
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Business
Days— If any payment is required to be made or other action is
required to be taken pursuant to this Agreement on a day which is
not a
Business Day, then such payment or action shall be made or taken
on the
next Business Day.
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(h)
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Including—
Where the word “including” or “includes” is used in this Agreement, it
means “including (or includes) without
limitation”.
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(i)
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No
Strict Construction— The language used in this Agreement is the
language chosen by the Parties to express their mutual intent, and
no rule
of strict construction shall be applied against any
Party.
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(j)
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Severability—
If, in any jurisdiction, any provision of this Agreement or its
application to any Party or circumstance is restricted, prohibited
or
unenforceable, such provision shall, as to such jurisdiction, be
ineffective only to the extent of such restriction, prohibition or
unenforceability without invalidating the remaining provisions of
this
Agreement and without affecting the validity or enforceability of
such
provision in any other jurisdiction or without affecting its application
to other Parties or circumstances.
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1.3
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Entire
Agreement
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This
Agreement, including the schedules annexed hereto, and the Other Agreements
constitute the entire agreement between the Parties and set out all the
covenants, promises, warranties, representations, conditions, understandings
and
agreements between the Parties with respect to the subject matter of this
Agreement and the Other Agreements and supersede all prior understandings,
agreements, negotiations and discussions, whether oral or written,
including,
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without
limitation, those contained in any term sheet between the Corporation and the
Investors. There are no covenants, promises, representations, warranties, terms,
conditions, undertakings, understandings or other agreements, oral or written,
express, implied or collateral, between the Parties in connection with the
subject matter of this Agreement and the Other Agreements other than as
expressly set forth or referred to in this Agreement or the Other
Agreements.
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1.4
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Scope
of the Agreement
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The
Shareholders agree that in the event of any inconsistency or conflict between
the terms of this Agreement and the articles, by-laws or resolutions of the
Corporation or any Subsidiary, the provisions of this Agreement shall prevail.
In this regard, the Shareholders agree more particularly to vote their shares
to
ensure that the constating documents of the Corporation and any Subsidiaries
are
not amended to include provisions that are or could be inconsistent with the
provisions hereof.
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1.5
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Covenant
by Controlling
Shareholders
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Each
Controlling Shareholder hereby agrees to take such actions as may be necessary
to cause each of his or its Controlled Shareholders to fully and faithfully
perform and discharge its obligations under this Agreement and to comply with
the terms and conditions of this Agreement; provided that the foregoing shall
not constitute a guarantee of payment of any amount payable
hereunder.
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1.6
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Dissent
and Other Rights
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With
respect to any matter provided for in Section 6.4 of this Agreement, each of
the
Shareholders hereby expressly waives and agrees that it shall not exercise
any
applicable rights to dissent, appraisal, any oppression remedy, or other similar
rights.
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1.7
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Representations
and Warranties of
Shareholders
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Each
of the Shareholders hereby severally, but not jointly, represents and warrants
with respect to itself that, as at the date hereof:
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(a)
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unless
otherwise indicated on Schedule A, it is the beneficial owner of
the
securities in the capital of the Corporation referred to in Schedule
A as
being held by it;
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(b)
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except
as may be contemplated in this Agreement or in any of the Other
Agreements, such securities are free and clear of all
Liens;
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(c)
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it
has the full power, authority and legal right to execute and deliver
this
Agreement and to perform the terms and provisions
hereof;
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(d)
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if
other than an individual, it has taken all necessary corporate action
to
authorize the execution, delivery and performance of this
Agreement;
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(e)
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this
Agreement has been duly executed and delivered by it, and constitutes
a
legal, valid and binding obligation of it, enforceable against it
in
accordance with the terms hereof, subject to the effect
of:
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(i)
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any
applicable bankruptcy, insolvency, reorganization, moratorium or
similar
laws affecting creditors’ rights generally;
and
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(ii)
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general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at
law);
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(f)
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the
execution and delivery by it of this Agreement and the performance
by it
of its obligations hereunder and compliance by it with the terms,
conditions and provisions hereof, will not, as applicable, conflict
with
or result in a breach of any of the terms, conditions or provisions
of (i)
its charter documents or by-laws; (ii) any law, rule or regulation
having
the force of law; (iii) any indenture, mortgage, lease, agreement
or
instrument binding or affecting it or its properties; or (iv) any
judgment, injunction, determination or award which is binding on
it or its
properties;
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(g)
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no
authorization, consent, approval, license or exemption from any
Governmental Body is required by it which has not been obtained in
connection with the execution and delivery by it of, and the performance
by it of its obligations under, this Agreement;
and
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(h)
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it
is not a party to any agreement which is inconsistent with its rights
and
obligations hereunder or otherwise conflicts with the provisions
of this
Agreement.
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1.8
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Schedules
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The
Appendices and Schedules to this Agreement, as listed below, are an integral
part of this Agreement:
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Appendix
1
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Definitions
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Appendix
2
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Certain
Matters Requiring Investors Majority Approval
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Schedule
A
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Capitalization
Table
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Schedule
B
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Articles
of Amendment
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Schedule
C
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Assumption
Agreement
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Schedule
D
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Investors
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ARTICLE
2
MANAGEMENT
OF CORPORATION
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2.1
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Agreement
Respecting Voting/Credit Agreement
Debt
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For
so long as this Agreement remains in effect, each Shareholder agrees to vote
any
and all Shares held by it from time to time so as to elect and maintain in
office the Francisco Partners Nominees (as defined in Section 2.2) and the
Xxxxxxxx Nominees (as defined in Section 2.2) as members of the Board of
Directors, and to cause the Corporation to act in compliance with all
of
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the
provisions of this Agreement and in particular to vote to approve any Transfer
which is permitted and otherwise made in compliance with this Agreement;
provided, however, that no Shareholder shall be subject to the voting agreements
in this Section 2.1 or elsewhere in this Agreement if such Shareholder is PTIC
or if such Shareholder, together with its Affiliates, holds less than 3% of
the
Common Shares (calculated on an as-if converted to Common Shares basis). It
is
acknowledged and agreed that no Shareholder shall be bound to vote in respect
of
any matter in the same manner as its nominee director voted in respect of such
matter in his or her capacity as a director on the Board of
Directors. The Shareholders agree that the Credit Agreement Debt
constitutes “Designated Debt” as defined in the Articles of
Amendment.
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2.2
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Francisco
Partners Nominees and Xxxxxxxx Nominees on the Board of
Directors
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The
Board of Directors will be composed of nine members unless a change to the
number of directors is approved by Francisco Partners II (Cayman), L.P. as
the
Controlling Shareholder of Arsenal Holdco I, S.a.r.l. The number of
directors to be nominated by Francisco Partners II (Cayman), L.P. (each, a
“Francisco Partners Nominee”) shall be equal to the product of
the number of directors the Board of Directors is composed of and the number
of
Common Shares owned by the holders of Class 1 Shares (calculated on an as-if
converted to Common Shares basis) divided by the number of outstanding Common
Shares (calculated on an as-if converted into Common Shares basis) and rounded
up to the nearest whole number; provided, however, that Francisco Partners
II
(Cayman), L.P. shall be entitled to nominate at least one director so long
as
the Francisco Partners Group holds at least 5% of the Common Shares (calculated
on as-if converted to Common Shares basis); and provided, further, however,
that
Francisco Partners II (Cayman), L.P. shall not be entitled to nominate more
than
four directors unless the Francisco Partners Group holds at least 55% of the
Common Shares (calculated on as-if converted to Common Shares
basis). The number of directors to be nominated by Xxxxxxxx (each, a
“Xxxxxxxx Nominee”) shall be equal to the product of the number
of directors the Board of Directors is composed of and the number of Common
Shares owned by the Xxxxxxxx Group (calculated on an as-if converted to Common
Shares basis) divided by the number of outstanding Common Shares (calculated
on
an as-if converted into Common Shares basis) and rounded up to the nearest
whole
number. Accordingly, each of the Shareholders agrees to act and vote
from time to time so that on any election of directors by the shareholders
of
the Corporation, the Francisco Partners Nominees and the Xxxxxxxx Nominees
to
the Board of Directors are elected in accordance with this Section
2.2. The remaining directors of the Board of Directors shall be
independent directors nominated by the Board of Directors. For the
avoidance of doubt, as of the date of this Agreement, Francisco Partners II
(Cayman), L.P. shall initially nominate four directors and Xxxxxxxx shall
initially nominate three directors. In the event that Francisco
Partners II (Cayman), L.P. requests that a Francisco Partners Nominee be removed
or replaced as a director of the Corporation or that Xxxxxxxx requests that
a
Xxxxxxxx Nominee be removed or replaced as a director of the Corporation, then
each of the Shareholders agrees to act and vote for such removal in accordance
with this Section 2.2. Each Shareholder hereby grants Francisco
Partners II (Cayman), L.P. and Xxxxxxxx a proxy, which shall be irrevocable
to
the fullest extent permissible by law and is coupled with an interest, to vote
such Shareholder’s Shares in accordance with this Section
2.2. Notwithstanding the foregoing, no Shareholder shall be subject
to the voting agreements in this Section 2.2 or elsewhere in this Agreement
and
the grant of proxy pursuant to this Section 2.2 shall become void if such
Shareholder is PTIC or if such Shareholder, together with its Affiliates, holds
less than 3% of the Common Shares (calculated on an as-if converted to Common
Shares basis).
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Each
of the Francisco Partners Nominees and the Xxxxxxxx Nominees shall be an
individual who is not disqualified under applicable law from acting as a
director.
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2.3
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Notice
of Directors Meetings
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Notice
of directors meetings shall be given, in writing, in accordance with the by-laws
of the Corporation, and such notice shall also contain a statement as to the
nature of the business proposed to be transacted at such meeting. Such notice
shall be accompanied by all relevant documentation or information required
for
directors to make an informed decision regarding the business to be
transacted.
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2.4
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Expenses
of Directors
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The
Corporation shall reimburse all directors for all reasonable out-of-pocket
expenses incurred in attending meetings of the Board of Directors or of any
committee of the Board of Directors.
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2.5
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Board
of Directors Committees
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The
Board of Directors shall maintain a standing committee to be known as the
“Audit Committee” and a standing committee to be known as the
“Compensation Committee”. At the option of Francisco Partners
so long as the Francisco Partners Group is entitled to nominate at least one
director to the Board of Directors pursuant to Section 2, at least one of the
members of the Audit Committee, at least one of the members of the Compensation
Committee, and at least one member of any other standing or ad hoc committee
of
the Board of Directors, shall be a Francisco Partners Nominee so long as the
Francisco Partners Group holds 1/8th or more
of the
Shares subject to this Agreement.
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2.6
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Directors’
Liability Insurance
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The
Corporation will maintain directors’ liability insurance for each of the
directors of the Corporation with coverage acceptable to the Board of Directors.
The Corporation will not assign, transfer, dispose of, surrender, borrow upon
or
in any way encumber such insurance.
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2.7
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Board
of Directors Observer
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Each
of Francisco Partners, Xxxxxxxx, Xxxxxx Xxxxxxx and EdgeStone, as the case
may
be, shall have the option at its sole discretion, at any time and from time
to
time, to designate an observer representative to receive notice of and attend
meetings of the Board of Directors and meetings of any committee of the Board
of
Directors (the “Observer”), provided the Observer agrees to be
bound by the confidentiality obligations set forth in Section 10.1. The Observer
shall have no right to vote as a director of the Corporation with respect to
any
matter and shall not be included in any determination as to whether a quorum
for
any particular meeting exists. The minutes of each meeting of the Board of
Directors or any such committee at which the Observer is present shall record
that the Observer was present and acting in the capacity as an observer and
not
as a director. The Corporation shall pay the Observer’s
reasonable out of pocket expenses incurred to attend any meeting of the Board
of
Directors or any committee of the Board of Directors. The rights of
Francisco Partners in this Section 2.7 shall terminate once Francisco Partners
is no longer entitled to nominate a director under Section 2.2, and the rights
of
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Xxxxxxxx
in this Section 2.7 shall terminate once Xxxxxxxx is no longer entitled to
nominate a director under Section 2.2. The rights of EdgeStone in
this Section 2.7 shall terminate once the EdgeStone Group no longer holds at
least 50% of the Common Shares (calculated on an as-if converted to Common
Shares basis) held by the EdgeStone Group on the date hereof and reflected
on
Schedule D. The rights of Xxxxxx Xxxxxxx in this Section 2.7 shall
terminate once the MS Investors no longer hold at least 25% of the Common Shares
(calculated on an as-if converted to Common Shares basis) held by them on the
date hereof and reflected on Schedule D.
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2.8
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Certain
Matters Requiring Investors Majority
Approval
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Provided
that members of the Francisco Partners Group hold, in the aggregate, at least
5%
of the Common Shares (calculated on an as-if converted to Common Shares basis),
notwithstanding any other provision of this Agreement, in addition to any other
approvals that may be required by law or pursuant to the articles, by-laws
or
other organizational documents of the Corporation or any of the Subsidiaries,
without the prior written consent of an Investors Majority, neither the
Corporation shall nor shall it cause or permit any of the Subsidiaries to at
any
time take or agree or commit to take any action referred to in Appendix 2.
It is
acknowledged by the Parties that the provisions referenced in Appendix 2 are
for
the benefit of the Investors and may be amended or waived by the mutual
agreement of the Corporation and an Investors Majority at any time.
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2.9
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Annual
Budget
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At
least 30 days prior to the Corporation’s fiscal year-end, the Corporation shall
submit the annual budget and business plan of the Corporation, including a
detailed operating budget and a capital budget and the sources of financing
thereof, with detailed supporting assumptions, to the Board of Directors for
approval and thereafter from time to time as appropriate, any restatements
or
updates or deviations thereto to the extent they contain items or amounts not
consistent with the normal course operations of the Business and previously
approved budgets.
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2.10
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Reporting
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(a)
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Monthly.
An internally-prepared summary of monthly consolidated financial
results
of the Corporation shall be prepared and delivered to the Investors
and
EdgeStone within 15 Business Days after the end of each fiscal
month.
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(b)
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Additional
Information Provided to Senior Lenders. The Corporation shall
provide to the Investors and EdgeStone simultaneously with furnishing
such
information to any Person as required under the Debt Obligations
of the
Corporation and the Subsidiaries: (i) copies of all other financial
statements, reports or projections with respect to the Corporation
or any
of the Subsidiaries required to be delivered to the lenders on a
periodic
basis; and (ii) copies of all material information, documents, studies,
reviews, reports or assessments relating to the Business or the assets
of
the Corporation or any Subsidiary provided by the Corporation or
any
Subsidiary from time to time to any Person pursuant to or as required
under the Debt Obligations, if, in the case of (i) or (ii) above,
such
documentation is broader in scope or delivered on a more frequent
basis
than the Corporation provides to the Board of Directors or is required
to
provide under Section 2.10(a).
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(c)
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The
rights of the Investors and EdgeStone in this Section 2.10 shall
terminate
after a Qualified IPO. In addition, and if earlier, the
rights of EdgeStone in this Section 2.10 shall terminate in the event
that
the EdgeStone Group no longer holds at least 50% of the Common Shares
(calculated on an as-if converted to Common Shares basis) held by
the
EdgeStone Group on the date hereof and reflected on Schedule
A.
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2.11
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Access
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The
Corporation shall, and the Corporation shall cause each of the Subsidiaries
to,
at any and all reasonable times on reasonable notice and during business hours
on any Business Day and in such manner as is not reasonably likely to adversely
affect the operation of the Business, permit the Investors, EdgeStone and each
of their authorized representatives to examine all of the books of account,
records, reports, documents, papers and data of the Corporation and any of
the
Subsidiaries, whether in ordinary or machine language, and to make copies and
take extracts, and to discuss the Business, affairs, finances and accounts
of
the Corporation and the Subsidiaries with the Corporation’s executive officers,
senior financial officers, accountants and other advisors. The Corporation
shall
authorize its accountants and other financial advisors to so discuss the
finances and affairs of the Corporation and the Subsidiaries, and agrees to
furnish the Investors, EdgeStone and each of their authorized representatives
with any information reasonably requested regarding the Business, or the
affairs, finances and accounts of the Corporation or the Subsidiaries. The
Corporation shall bear the costs to the Corporation and any Subsidiary of
compliance with this Section 2.11. In no event shall the Corporation be required
to disclose information that it is prohibited from disclosing by contract
(unless the applicable Investor enters into a confidentiality agreement that
has
the effect of eliminating such prohibition) or otherwise by law. The
rights of the Investors and EdgeStone in this Section 2.11 shall terminate
after
a Qualified IPO. In addition, and if earlier, the rights of EdgeStone
in this Section 2.11 shall terminate in the event that the EdgeStone Group
no
longer holds at least 50% of the Common Shares (calculated on an as-if converted
to Common Shares basis) held by the EdgeStone Group on the date hereof and
reflected on Schedule A.
ARTICLE
3
VOTING
AGREEMENT OF INVESTORS
For
so long as this Agreement remains in effect, each Investor agrees to vote any
and all Shares held by it from time to time in the manner designated by
Francisco Partners so long as the Francisco Partners Group, excluding any Person
to which Francisco Partners shall transfer all or substantially all of its
assets, holds at least 30% of the Class 1 Shares. Each Investor
hereby grants Francisco Partners a proxy, which shall be irrevocable to the
fullest extent permissible by law and is coupled with an interest, to vote
such
Investor’s Shares in accordance with this provision for so long as the Francisco
Partners Group, excluding any Person to which Francisco Partners shall transfer
all or substantially all of its assets, holds at least 30% of the Class 1
Shares. Francisco Partners agrees not to vote such Investor’s Shares
to effect any amendment to the Articles of Amendment that would have an adverse
and disproportionate effect on the MS Investors as compared to the other
Investors.
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ARTICLE
4
PRE-EMPTIVE
RIGHTS
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4.1
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Exercise
of Pre-Emptive Rights
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(a)
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In
the event that the Corporation or any Subsidiary proposes to undertake
an
issuance of New Securities (in a single transaction or a series of
related
transactions), it shall give to each Principal Shareholder (as such
term
is defined below) written notice of its intention to issue New Securities
(the “Pre-Emptive Right Notice”), describing the amount
and the type of New Securities and the price and the proposed closing
date, upon which the Corporation proposes to issue the New Securities.
For
the purposes of this Section 4.1, the term “Principal
Shareholders” means (i) each Shareholder who is a Shareholder on
the date hereof, or any Permitted Transferee of such
Shareholder, and (ii) each other Shareholder who, together with
its Affiliates, holds not less than five percent (5%) of the Common
Shares
then outstanding (calculated on an as-if converted to Common Shares
basis).
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(b)
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Each
Principal Shareholder shall have 15 Business Days from the date of
receipt
of any such Pre-Emptive Right Notice (the “Pre-Emptive Right
Acceptance Period”) to agree in writing (i) to purchase up to its
Pro Rata Share (as nearly as may be determined without division into
fractions) of the New Securities (which for the purpose of this Article
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shall be calculated based on holdings on the day immediately prior
to the
date of delivery by the Corporation of the Pre-Emptive Right Notice)
for
the price and on the other terms specified in the Pre-Emptive Right
Notice
and (ii) to purchase more than its Pro Rata Share (if available)
up to a
maximum number of the New Securities to be specified by such Principal
Shareholder. Such right to purchase its Pro Rata Share of New
Securities and, if desired, more than its Pro Rata Share shall be
exercised by a Principal Shareholder by giving written notice (a
“Pre-Emptive Right Acceptance Notice”) to the Corporation
of such intention and stating therein the maximum number of New Securities
it is willing to purchase (which number may be greater or less than
its
Pro Rata Share). If a Principal Shareholder fails to deliver such
notice
to the Corporation within the Pre-Emptive Right Acceptance Period,
it
shall be deemed to have declined to exercise its right to purchase
any New
Securities. If any Principal Shareholder does not give a Pre-Emptive
Right Acceptance Notice within the Pre-Emptive Right
Acceptance Period or specifies in its Pre-Emptive Right Acceptance
Notice
a number of Shares less than its Pro Rata Share, the resulting unaccepted
New Securities shall be deemed to have been offered by the Corporation
to
such of the Principal Shareholders who specified in their respective
Pre-Emptive Right Acceptance Notices a desire to acquire a number
of the
New Securities greater than their Pro Rata Share, and each such Principal
Shareholder is, subject to the maximum number of the New Securities
specified in its Pre-Emptive Right Acceptance Notice, entitled to
acquire
its Pro Rata Share (calculated relative to each of the Principal
Shareholders wishing to purchase more than its Pro Rata Share) of
the
unaccepted New Securities based upon the number of Shares (calculated
on
an as-if converted to Common Shares basis) owned by such Principal
Shareholders (calculated based on holdings on
the
|
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-
|
|
day
immediately prior to the delivery of the Pre-Emptive Right Notice),
as
between themselves, or in such other proportion as such Principal
Shareholders may agree in writing.
|
|
(c)
|
The
Corporation shall, from time to time, when requested to do so, advise
each
of the Principal Shareholders promptly of the names of the other
Principal
Shareholders who have accepted the Corporation’s offer as contained in a
Pre-Emptive Right Notice and the number of New Securities in respect
of
which each such Principal Shareholder has accepted such
offer.
|
|
(d)
|
Any
New Securities not accepted by the Principal Shareholders pursuant
to
Section 4.1(b) may be offered and sold by the Corporation to third
parties
for a period not to exceed 60 Business Days following the end of
the
Pre-Emptive Right Acceptance Period at the same or higher price and
upon
non-price terms not more favorable to the purchasers thereof than
as
specified in the Pre-Emptive Right Notice. In the event that the
Corporation has not issued and sold such New Securities within such
60
Business Day period, then the Corporation shall not thereafter issue
or
sell any New Securities without again first offering such New Securities
to the Principal Shareholders pursuant to this Article 4. If the
Corporation offers any New Securities not taken up by Principal
Shareholders pursuant to Section 4.1(b), the Corporation shall promptly
notify the Principal Shareholders upon entering into one or more
binding
purchase agreement(s) during the 60 Business Day period referred
to
herein, including as to (i) the number of New Securities, if any,
that the
Corporation will issue (specifying respective numbers to be purchased
by
the Principal Shareholders on the one hand (if any) and by other
Person(s)
on the other hand), (ii) the material terms of such issuance(s) and
(iii)
the name(s) of the purchaser(s) of any New Securities to be issued
(other
than the Principal Shareholders).
|
|
(e)
|
All
sales of New Securities pursuant to this Section 4.1 shall be consummated
contemporaneously at the offices of the Corporation as soon as is
reasonably practicable on such date as the Board of Directors and
the
persons purchasing New Securities pursuant to this Section 4.1 may
reasonably determine, but in no event later than the later of (i)
60
Business Days following the end of the Pre-Emptive Right Acceptance
Period; or (ii) the fifth Business Day following the expiration or
termination of all waiting periods under any competition or anti-combines
legislation applicable to such issuance. The delivery of certificates
or
other instruments evidencing such New Securities shall be made by
the
Corporation on such date against payment of the purchase price
therefor.
|
|
(f)
|
The
Corporation may issue New Securities without complying with the provisions
of this Section 4.1 if the New Securities are Permitted Additional
Securities.
|
|
4.2
|
Future
Shares
|
The
Corporation agrees that, as a condition precedent to the grant or issuance
of
any securities (including Convertible Securities) to a Person that, giving
effect to such grant or issuance, would hold in excess of 2.5% of the
outstanding Common Shares (calculated on as-if converted to Common Shares
basis), whether now authorized or not, it will require that the
-
12 -
holder
of such securities sign an Assumption Agreement and if the purchaser is a
corporate entity, such agreement will also be signed by any Person who Controls
such corporation; provided, however, that if any such grant or issuance is
pursuant to the exercise or conversion of any Convertible Security granted
or
issued prior to the date of this Agreement, the Corporation shall only be
required to use its commercially reasonable efforts to comply with the foregoing
covenant.
ARTICLE
5
RESTRICTIONS
ON TRANSFER OF SHARES
|
5.1
|
General
Prohibition on Transfer
|
No
Shares or Convertible Securities now or in the future held by a Shareholder
or
any interest therein may be dealt with or Transferred except as contemplated
in
this Agreement. A purported Transfer of any Shares or Convertible Securities
in
violation of this Agreement shall not be valid. Any Shareholder that purports
to
Transfer any Shares or Convertible Securities in violation of this Agreement
agrees to donate and hereby donates to the Corporation all dividends and
distributions paid or made on any Shares or Convertible Securities so
Transferred during the period of the prohibited Transfer. The provisions of
the
immediately preceding sentence are in addition to, and not in lieu of, any
other
remedies to enforce the provisions of this Agreement.
Any
permitted Transfer made in compliance with this Agreement, other than to a
Permitted Transferee or pursuant to Section 5.2(b) or 5.2(c),
shall require the approval of the Board of Directors which shall be provided
in
accordance with the provisions of Section 2.1.
|
5.2
|
Permitted
Transfers
|
Each
Shareholder may Transfer any Shares or Convertible Securities held by it or
any
rights to acquire any Shares or Convertible Securities, pursuant to and in
accordance with Article 5 or Article 6 and in the case of the following
Transfers, without being subject to the requirements of Sections 6.1, 6.2 and
6.3:
|
(a)
|
to
a Permitted Transferee;
|
|
(b)
|
in
the case of Shares or Convertible Securities held by a Permitted
Transferee of the Shareholder, back to such
Shareholder;
|
|
(c)
|
to
an Investor from another Investor;
or
|
|
(d)
|
to
the Corporation pursuant to the redemption rights under the Articles
of
Amendment.
|
|
5.3
|
No
Registration Unless Transferee is
Bound
|
Other
than Transfers pursuant to Section 5.4, if a Shareholder purports to Transfer
any Shares or Convertible Securities, no Transfer shall be made or be effective,
no application shall be made to the Corporation or to the Corporation’s transfer
agent to register the Transfer, and the Corporation shall not register the
Transfer on its securities register, until the proposed transferee (and, in
the
case of a transferee that is not a natural person, other than a public
corporation and other than in the case of a Transfer by an Investor, the Persons
who Control the proposed
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-
transferee)
enters into, or in the case of Convertible Securities, agrees upon the
acquisition of any Shares or Convertible Securities to enter into, an Assumption
Agreement.
|
5.4
|
Transfers
to an Affiliate
|
If
a Shareholder purports to Transfer Shares or Convertible Securities to a
Permitted Transferee or pursuant to Section 5.2(b), no Transfer shall be made
or
effective, no application shall be made to the Corporation or the Corporation’s
transfer agent to register the Transfer, and the Corporation shall not register
the Transfer on its securities register until, the Shareholder and the
transferee have executed and delivered an Assumption Agreement and such other
documents as may be reasonably requested by the Corporation, in which the
Shareholder and the transferee: (i) represent and warrant that the transferee
qualifies as a Permitted Transferee or otherwise qualifies as a recipient of
a
Transfer pursuant to 5.2(b); (ii) agree that each shall ensure that the
transferee shall continue to so qualify at all times and that, other than in
the
case of a Transfer by an Investor or EdgeStone to a Person listed in the
definitions of “Francisco Partners Group”, “MS Affiliate” or “EdgeStone Group”
if the transferee is a corporation, the shareholder(s) of that transferee and
the shareholder(s) of each of its direct and indirect shareholders who are
not
natural persons agree that no shares in that transferee shall be Transferred,
without first Transferring (or causing to be Transferred) the Shares held back
to the original Shareholder; and (iii) agree that the transferring Shareholder
shall continue to be bound by all the provisions of this Agreement.
|
5.5
|
Continuing
Obligations of Transferor
|
In
the event of any Transfer of Shares or Convertible Securities to a Permitted
Transferee or pursuant to Section 5.2(b), the transferor shall, at all times
after such Transfer: (i) be jointly and severally liable with the transferee
for
the observance and performance of the covenants and obligations of the
transferee under this Agreement; and (ii) indemnify the other Parties against
any loss, damage or expense incurred as a result of the failure of the
transferee to comply with the provisions of this Agreement.
|
5.6
|
Shareholders
to Facilitate Permitted
Transfers
|
Each
Party to this Agreement shall facilitate any Transfer of Shares or Convertible
Securities in accordance with this Agreement on a timely basis, including by
promptly providing any required consents.
|
5.7
|
Corporation
to Facilitate Permitted
Transfers
|
The
Corporation shall facilitate any Transfer of Shares or Convertible Securities
in
accordance with this Agreement on a timely basis, including by promptly
providing such assistance as the transferring Shareholder may reasonably request
to facilitate such Transfer, subject to the provisions of Section 10.1. In
no
event shall the Corporation be required to disclose information that it is
prohibited from disclosing by contract or otherwise by law.
|
5.8
|
Pledge
of Shares
|
No
Shareholder shall, directly or indirectly, pledge or otherwise grant or allow
a
Lien to exist in respect of any Shares held by that Shareholder, without the
prior written consent of the
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-
Corporation
and Francisco Partners, such consent not to be unreasonably withheld or delayed,
provided that, notwithstanding the foregoing, nothing herein shall prohibit
a
Shareholder from granting a Lien by way of a general security interest over
all
or substantially all of its assets and undertaking, inclusive of Shares in
favor
of a bona fide lender in the ordinary course of business, provided that in
such
event any realization by such secured party in respect of such Shares shall
be
deemed a Transfer subject to Article 6 of this Agreement.
|
5.9
|
Sales
to a Direct Competitor
|
Notwithstanding
any provision to the contrary, no Shareholder may Transfer any Shares to a
direct competitor of the Business, unless such Transfer is approved by the
Corporation.
This
Section 5.9 shall not apply to a Transfer of Shares pursuant to a transaction
to
which Section 6.4 applies.
ARTICLE
6
RIGHTS
OF FIRST REFUSAL, TAG-ALONG, AND DRAG-ALONG RIGHTS
|
6.1
|
Transfer
Notice
|
In
the event that any Shareholder (the “Transferring Shareholder”)
receives from any Person, acting as principal and dealing at arm’s length with
such Shareholder (the “Third Party Offeror”), a bona fide
written offer to purchase (other than pursuant to a Transfer permitted by
Section 5.2) Shares or Convertible Securities or other equity securities held
by
the Transferring Shareholder (the “Third Party Offer”), which
the Transferring Shareholder wishes to accept (subject to compliance with
Section 6.2 and 6.3), the Transferring Shareholder will give notice (the
“Transfer Notice”) to the Corporation and to each of the
Shareholders (other than any Shareholder that is also a Transferring
Shareholder) (the “Other Shareholders”) setting
forth:
|
(a)
|
the
identity of the Third Party
Offeror;
|
|
(b)
|
if
the Third Party Offeror is a corporation, the names of the principal
shareholders, directors and officers of the Third Party
Offeror;
|
|
(c)
|
the
number and classes of Shares or Convertible Securities or other equity
securities proposed to be sold by the Transferring Shareholder (the
“Offeror’s
Securities”);
|
|
(d)
|
the
price of and terms of payment for the Offeror’s Securities;
and
|
|
(e)
|
a
summary of any other material terms for such sale including the proposed
closing date.
|
The
Transfer Notice shall contain an offer to sell all of the Offeror’s Securities
to the Corporation first and then the Other Shareholders (as set out in Section
6.2) at the price and on the terms set forth in the Transfer Notice. The
Transfer Notice shall include a full and complete copy of the written offer
delivered by the Third Party Offeror. In all circumstances the proposed
consideration for any Offeror’s Securities must be in cash and/or Marketable
Securities. The offer contained in the Transfer Notice shall be irrevocable
except with the consent of Corporation or the Other Shareholders, as applicable,
and shall be open for acceptance for a
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-
period
of 19 Business Days after the date upon which the Transfer Notice was received
by the Corporation and 20 Business Days after the date upon which the Transfer
Notice was received by the Other Shareholders (each, an “Acceptance
Period”).
All
Transfer Notices and Drag-Along Offers (as defined in Section 6.4) given
under this Article 6 must be given concurrently to all Other Shareholders and
the Corporation.
|
6.2
|
Rights
of First Refusal
|
Upon
receipt of a Transfer Notice and subject to all of the provisions of this
Section 6.2, the Corporation and the Other Shareholders shall have the following
rights and options:
|
(a)
|
The
Corporation shall have the first right to purchase any or all of
the
Offeror’s Securities if it gives a notice in writing (an
“Acceptance Notice”) accepting the offer contained in the
Transfer Notice and specifying the number of the Offeror’s Securities it
wishes to acquire.
|
|
(b)
|
If
the Corporation does not give an Acceptance Notice to purchase any
or all
of the Offeror’s Securities at least one Business Day prior to the
expiration of the Acceptance Period, each of the Other Shareholders
shall
have the right to purchase up to its Pro Rata Share of the Offeror’s
Securities not to be purchased by the Corporation at
the price and on the terms and conditions contained in the Transfer
Notice.
|
|
(c)
|
Subject
to Sections 6.2(a) and (b), within the Acceptance Period, each of
the
Other Shareholders may give to the Transferring Shareholder an Acceptance
Notice accepting the offer contained in the Transfer Notice and specifying
the maximum number of the Offeror’s Securities not to be purchased by the
Corporation that it wishes to acquire (which number may be greater
than or
less than its Pro Rata Share). Each of the Other Shareholders shall
have
the right to purchase up to its Pro Rata Share of the Offeror’s Securities
not to be purchased by the Corporation (which for purposes of this
Section
6.2 shall be calculated based on holdings on the day immediately
prior to
the delivery of the Transfer Notice), as nearly as may be determined
without division into fractions and, if available, a number of the
Offeror’s Securities not to be purchased by the Corporation greater than
its Pro Rata Share up to a stated maximum. Any Other Shareholder
who does
not give an Acceptance Notice within the Acceptance Period shall
be deemed
to have declined to purchase any of the Offeror’s Securities. If any Other
Shareholder does not give an Acceptance Notice within the Acceptance
Period or specifies in its Acceptance Notice a number of Shares less
than
its Pro Rata Share, the resulting unaccepted Offeror’s Securities shall be
deemed to have been offered by the Transferring Shareholder to such
of the
Other Shareholders who specified in their respective Acceptance Notices
a
desire to acquire a number of the Offeror’s Securities not to be purchased
by the Corporation greater than their Pro Rata Share, and each such
Other
Shareholder is, subject to the maximum number of the Offeror’s Securities
specified in its Acceptance Notice, entitled to acquire its Pro Rata
Share
(calculated relative to each of the other Shareholders wishing to
purchase
more than its Pro Rata Share) of the unaccepted Offeror’s Securities based
upon the number of Shares (calculated on an as-if converted to Common
Shares basis) owned by such Other Shareholders (calculated based
on
holdings on the day immediately prior to the delivery of the Transfer
Notice), as between themselves, or in such other proportion as such
Other
Shareholders may agree in writing. If (i) the Corporation gives notice
pursuant to Section 6.2(a) to purchase all of the Offeror’s Securities or
(ii) the Other Shareholders, or any of them, give Acceptance Notices
within the Acceptance Period confirming their agreement to purchase
all of
the Offeror’s Securities not to be purchased by the Corporation, the sale
of the Offeror’s Securities to the Corporation and/or such Other
Shareholders shall be completed within 15 Business Days of the expiry
of
the Acceptance Period.
|
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-
|
|
(calculated
on an as-if converted to Common Shares basis) owned by such Other
Shareholders (calculated based on holdings on the day immediately
prior to
the delivery of the Transfer Notice), as between themselves, or in
such
other proportion as such Other Shareholders may agree in writing.
If (i)
the Corporation gives notice pursuant to Section 6.2(a) to purchase
all of
the Offeror’s Securities or (ii) the Other Shareholders, or any of them,
give Acceptance Notices within the Acceptance Period confirming their
agreement to purchase all of the Offeror’s Securities not to be purchased
by the Corporation, the sale of the Offeror’s Securities to the
Corporation and/or such Other Shareholders shall be completed within
15
Business Days of the expiry of the Acceptance
Period.
|
|
(d)
|
If
both (i) the Corporation does not give an Acceptance Notice to purchase
all of the Shares at least one Business Day prior to the expiry of
the
Acceptance Period and (ii) the Other Shareholders do not give notice
of
acceptance prior to the expiry of the Acceptance Period which would
result
in the purchase of all, but not less than all, of the Offeror’s Securities
not to be purchased by the Corporation, the Transferring Shareholder
will,
notwithstanding any notices of acceptance of the Offeror’s Securities by
the Corporation or any Other Shareholders, subject to the provisions
of
Section 6.3, have the right to sell the Offeror’s Securities to the Third
Party Offeror for a period of 60 Business Days from the expiration
of the
Acceptance Period for a price not less than that provided for in
the
Transfer Notice and on terms and conditions not materially more favorable
to the Third Party Offeror than those set out in the Transfer Notice,
provided that such Third Party Offeror first executes and delivers
to the
Corporation an Assumption Agreement. If such Transfer is not consummated
within such 60 Business Day period, the Transferring Shareholder
will not
Transfer any of the Offeror’s Securities without again complying with all
of the provisions of Section 6.1 and Section
6.2.
|
|
(e)
|
Any
Transfer entered into in connection with this Section 6.2 shall not
provide a Collateral Benefit to any Shareholder or any Affiliate
or
Related Party thereof.
|
|
(f)
|
For
greater certainty, no rights shall arise under this Article 6 in
respect
of any purchases by Other Shareholders pursuant to the exercise of
rights
under this section.
|
|
(g)
|
The
provisions of Section 6.1 and 6.2 shall not apply to the Transfer
of any
Shares or Convertible Securities pursuant to the provisions of Section
6.3
or 6.4 and which are exercised in accordance with the terms
thereof.
|
|
(h)
|
Each
Other Shareholder may assign its right to exercise its right of first
refusal under this 6.2, in whole or in part, to any of its Affiliates,
or,
in the case of the Francisco Partners Group, the MS Investors, the
Xxxxxxxx Group or the EdgeStone Group to any member or members of
the
Francisco Partners Group or the MS Investors or any MS Affiliate
or the
Xxxxxxxx Group or the EdgeStone Group, as applicable, provided such
member
or members (and Controlling Persons in the case of the Xxxxxxxx Group)
have first entered into an Assumption
Agreement.
|
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-
|
6.3
|
Tag-Along
Rights
|
Upon
receipt of a Transfer Notice, any Other Shareholder(s) may elect to participate
in the proposed Transfer by delivering written notice to the Corporation and
Transferring Shareholder within the Acceptance Period. Each of the Other
Shareholders so electing will be entitled to sell in the contemplated Transfer,
the same proportion (calculated on an as-if-converted to Common Shares basis)
of
the Shares and Convertible Securities held by each such Other Shareholder,
respectively, as the proportion of the Transferring Shareholder’s total holdings
which the Transferring Shareholder proposes to sell pursuant to the Transfer
Notice (calculated on an as-if-converted to Common Shares basis), on the same
terms (other than price) set forth in the Transfer Notice, and at a price
determined as follows:
|
(a)
|
if
the Transferring Shareholder is proposing to sell Common
Shares:
|
|
(i)
|
any
Common Shares to be sold by an Other Shareholder shall be sold at
the same
price per share as the Common Shares proposed to be sold by the
Transferring Shareholder, as set forth in the Transfer
Notice;
|
|
(ii)
|
any
Class 1 Shares to be sold by an Other Shareholder shall be sold at
a price
per share equal to the TR Value calculated based on a value per share
equal to the price per Common Share proposed by the Transferring
Shareholder;
|
|
(iii)
|
any
Convertible Securities to be sold by an Other Shareholder shall be
sold at
a price per Convertible Security equal to: (A) the value of the Common
Shares underlying such Convertible Security, where such Common Shares
are
valued at the same price per share as the Common Shares proposed
to be
sold by the Transferring Shareholder, as set forth in the Transfer
Notice,
less (B) any amount payable by the holder of the Convertible Securities
on
the exercise, exchange or conversion
thereof;
|
|
(b)
|
if
the Transferring Shareholder is proposing to sell Class 1
Shares:
|
|
(i)
|
any
Common Shares to be sold by an Other Shareholder shall be valued
at a
price per share equal to the price per Class 1 Share proposed to
be sold
by the Transferring Shareholder, as set forth in the Transfer Notice,
divided by the number of Common Shares into which a Class 1 Share
could
convert at the Conversion Value for the Class 1 Shares then in effect
(the
“Notional Common Share
Value”);
|
|
(ii)
|
any
Class 1 Shares to be sold by an Other Shareholder shall be sold at
the
same price per share as the Class 1 Shares proposed to be sold by
the
Transferring Shareholder, as set forth in the Transfer Notice;
and
|
|
(iii)
|
any
Convertible Securities to be sold by an Other Shareholder shall be
sold at
a price per Convertible Security equal to: (A) the Notional Common
Share
Value multiplied by the number of Common Shares underlying such
Convertible Security, less (B) any amount payable by the holder
of the Convertible Securities on the exercise, exchange or conversion
thereof.
|
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-
|
(c)
|
if
the Transferring Shareholder is proposing to sell Convertible Securities
(other than Class 1 Shares), only Shareholders holding the same type
of
Convertible Securities with identical provisions (other than the
number of
underlying securities in respect of which the Convertible Securities
are
exercisable, exchangeable or convertible) as the Convertible Securities
which are the subject of the Transfer Notice may exercise tag-along
rights
pursuant to this Section 6.3, and any such Convertible Securities
shall be
sold at the same price for each of the Convertible Securities (based
on a
unit basis) proposed to be sold by the Transferring Shareholder,
as set
forth in the Transfer Notice. The Shareholders shall have no right
to
exercise tag-along rights pursuant to this Section 6.3(c) in respect
of
Common Shares, Class 1 Shares or other Convertible Securities which
are
not identical to the Convertible Securities which are the subject
of the
Transfer Notice.
|
For
greater certainty, no rights shall arise under this Section 6.3 as a result
of
any purchases in accordance with the exercise of rights of first refusal under
Section 6.2 nor shall the provisions of Sections 6.1 and 6.3 apply to the
Transfer of any Shares or Convertible Securities to which the provisions of
Section 6.4 apply and which are exercised in accordance with the terms
thereof.
Notwithstanding
the foregoing, if any transaction or series of transactions contemplated by
this
Section 6.3 would result in a Change of Control Event, the Shareholders shall
not complete the proposed transaction unless the aggregate consideration payable
by the Third Party Offeror pursuant to this Section 6.3 is allocated in
accordance with the Articles of Amendment as if it were a “Change of
Control Event” thereunder.
Any
purchase and sale agreement entered into in conjunction with this Section 6.3
shall:
|
(a)
|
contain
only several (not joint and several) representations, warranties
and
covenants from any holder of Shares or Convertible Securities with
recourse limited to that Shareholder’s pro rata portion of the aggregate
purchase price to all Shareholders;
|
|
(b)
|
contain
a limitation on the liability each Shareholder assumes, with respect
to
all indemnities, if any, provided to the Third Party Offeror, to
that
Shareholder’s pro rata portion of the aggregate purchase price to all
Shareholders;
|
|
(c)
|
not
require the Shareholders that participate in the transaction pursuant
to
this Section 6.3 to provide representations or warranties or covenants
related to the Corporation but shall require them to provide typical
title, ownership and authority to sell
representations;
|
|
(d)
|
not
provide a Collateral Benefit to any Shareholder or any Affiliate
or
Related Party thereof (other than the right to receive the purchase
price
calculated in accordance with the provisions above);
and
|
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-
|
(e)
|
be
conditional upon completion of the purchase by the Third Party Offeror
of
the Shares or Convertible Securities held by the Transferring Shareholder
which are subject to the Transfer
Notice.
|
Any
Shareholder not giving notice within the Acceptance Period under this Section
6.3 shall be deemed to have declined to exercise its tag-along rights under
this
Section 6.3
If
any of the Other Shareholders exercises its rights hereunder, the purchase
and
sale of the Shares and Convertible Securities of the Corporation to the Third
Party Offeror pursuant to the Transfer Notice shall be completed at the same
time as the purchase and sale of the Offeror’s Securities and as part of the
same closing.
To
the extent that the Other Shareholders do not exercise their rights hereunder,
the Transferring Shareholder shall be entitled to sell the Shares specified
in
the Transfer Notice in accordance with the terms thereof for a period of 60
Business Days after the expiry of the Acceptance Period. If the sale is not
completed within such 60 Business Day period, the provisions of Article 6 shall
again apply to any proposed sale of Shares and so on from time to
time.
|
6.4
|
Drag-Along
Rights
|
|
(a)
|
If
any Shareholder receives from a third party (the “Third
Party”) acting as principal and dealing at arm’s length with the
Transferring Shareholder, a bona fide written offer (the “Third
Party Offer”) to purchase all (but not less than all) of the
Shares and Convertible Securities (which transaction may include,
without
limitation, an offer pursuant to a merger, amalgamation, arrangement,
capital reorganization, consolidation or similar transaction), and
the
Third Party Offer is accepted by either (i) Shareholders holding
at least
50% of the votes attached to the outstanding Shares and Convertible
Securities held by parties to this Agreement (including votes that
attach
to securities issuable upon exercise of Convertible Securities) so
long as
the Third Party Offer is a Qualifying Offer (as defined hereinafter),
or
(ii) an Investors Majority (the “Accepting
Shareholders”), the Accepting Shareholders shall be entitled to
obtain from the Third Party an offer (a “Drag-Along
Offer”) to purchase all of the Shares and Convertible Securities
of the Corporation held by the Shareholders other than the Accepting
Shareholders (the “Forced Shareholders”) on the same
terms and conditions as contained in the Third Party Offer, subject
to the
provisions of Section 6.4(b). Notwithstanding the foregoing,
Xxxxxxxx shall not be required to accept a Drag Along Offer prior
to the
date one year from the date of this Agreement. If the
consideration to be received by the Forced Shareholders in the Drag-Along
Offer includes consideration other than cash or cash equivalents,
the
Drag-Along Offer shall, if necessary, include a valuation prepared
in
accordance with Section 6.5. The Drag-Along Offer shall be irrevocable.
For the purposes of this Agreement, a “Qualifying Offer”
means a Third Party Offer: (i) received within two years from the
date
hereof, and (ii) pursuant to which the holders of the Class 1 Shares
purchased by the Investors pursuant to the Subscription Agreement
would be
entitled to receive aggregate proceeds, payable in cash, equal to
not less
than $2,000 for each Class 1 Share held by such
Persons.
|
-
20 -
|
(b)
|
The
Drag-Along Offer shall:
|
|
(i)
|
not
provide a Collateral Benefit to any Shareholder or any Affiliate
or
Related Party thereof (other than, to the extent that proceeds are
distributed in accordance with the Articles of Amendment, in the
case of
any holder of Class 1 Shares, the right of such holder to receive
the TR
Value)
|
|
(ii)
|
require
each of the Shareholders to provide such representations, warranties
and
indemnities as are customary and reasonably requested by the Third
Party;
and
|
|
(iii)
|
provide
that each such Shareholder’s liability for representations, warranties and
indemnities provided to the Third Party shall be, in any event, limited
to
such Shareholder’s pro rata share of the proceeds received from the
transaction.
|
|
(c)
|
The
Forced Shareholders shall be obliged to accept the Drag-Along Offer
(or
otherwise take all necessary action to cause the Corporation to consummate
the proposed transaction, as applicable) within 3 Business Days of
receipt
or such other period agreeable to the Accepting Shareholders. The
acceptance of the Drag-Along Offer shall be made in writing and a
copy of
the acceptance (or of the accepted Drag-Along Offer) shall be delivered
to
the Accepting Shareholders within such 3 Business Day
period.
|
|
(d)
|
If
any of the Forced Shareholders do not deliver an acceptance of the
Drag-Along Offer within the 3 Business Day period referred to above,
the
Secretary of the Corporation (the “Drag-Along Offer
Attorney”) shall be entitled to, and the Shareholders
acknowledge, agree and authorize the Drag-Along Offer Attorney to,
accept
the Drag-Along Offer on behalf of such Forced Shareholders and to
deliver
the acceptance to the Third Party and, for such purpose, each of
the
Forced Shareholders hereby appoints the Drag-Along Offer Attorney
as its
attorney, on the terms set forth in Section 11.2, with full power
of
substitution, in the name of the Forced Shareholder to accept the
Drag-Along Offer and to execute and deliver all documents and instruments
to give effect to such acceptance and to establish a binding contract
of
purchase and sale between the Forced Shareholder and the Third Party
with
respect to all of the Shares and other securities held by the Forced
Shareholder and to execute and deliver all deeds, transfers, assignments
and assurances necessary to effectively Transfer such Shares to the
Third
Party. Each of the Shareholders agrees that it will perform the agreement
resulting from acceptance of the Drag-Along Offer in accordance with
its
terms and will ratify and confirm all that the Drag-Along Offer Attorney
may do or cause to be done pursuant to the foregoing. Notwithstanding
that
certificates or instruments evidencing the Shares or Convertible
Securities may not have been delivered by any Forced Shareholder
to the
Third Party, upon completion of the Third Party’s obligations under the
Third Party Offer:
|
-
21 -
|
(i)
|
the
purchase of Shares or Convertible Securities from the Forced Shareholder
shall be deemed to have been fully completed and the records of the
Corporation may be amended
accordingly;
|
|
(ii)
|
all
right, title, benefit and interest, both at law and in equity, in
and to
the Shares or Convertible Securities shall be conclusively deemed
to have
been transferred and assigned to and become vested in the Third Party;
and
|
|
(iii)
|
all
right, title, benefit and interest of such Forced Shareholder and
of any
other Person (other than the Third Party) having an interest in such
Shares, legal or equitable, in any capacity whatsoever shall
cease.
|
|
(e)
|
The
purchase and sale of Shares and Convertible Securities in accordance
with
the provisions of the Drag-Along Offer shall be completed at the
same time
and on the same terms as the completion of the purchase and sale
of Shares
and Convertible Securities and/or other securities between the Accepting
Shareholders and the Third Party in accordance with the Third Party
Offer
and as part of the same closing within 60 Business Days after expiry
of
the 3 Business Day period referred to in Section
6.4(c).
|
|
(f)
|
In
the event that a Drag-Along Offer is made in connection with a Third
Party
Offer and the Shares held by the Accepting Shareholders and the Forced
Shareholders constitute less than all of the Shares of the Corporation,
the Corporation agrees to take all steps necessary to facilitate
the Third
Party’s compulsory acquisition pursuant to Part XVII of the CBCA, if
applicable, of all Shares of the Corporation not already purchased
by the
Third Party.
|
|
6.5
|
Valuation
of Non-Cash Consideration
|
Any
valuation of non-cash consideration included in a Third Party Offer will be,
in
the case of: (i) Marketable Securities, calculated based on the weighted average
closing price of those securities on the exchange or market on which the
securities are primarily traded for the twenty trading days ended at the close
of business on the day prior to delivery of the applicable notice, and (ii)
other non-cash consideration, the fair market value thereof as determined in
good faith by the Board of Directors, provided, that, if any Shareholder objects
to any such determination within ten (10) days of receiving notice thereof,
such
fair market value will be determined by an independent investment banking or
business valuation firm mutually agreeable to the Board of Directors and an
Investors Majority (the costs of which shall be borne by the
Corporation).
ARTICLE
7
TERMINATION
|
7.1
|
Term
|
Except
as otherwise expressly provided in this Agreement, this Agreement shall come
into force and effect as of the date of this Agreement and shall continue in
force in accordance with the terms hereof. Articles 4, 5 and 6 of
this Agreement shall terminate upon the completion
-
22 -
of
a Qualified IPO. Subject to Section 7.2, this Agreement shall
terminate upon the written agreement of the Corporation and an Investors
Majority. Except as contemplated by Section 5.5, the rights and
obligations of a Shareholder under this Agreement shall cease on the date that
such Shareholder ceases to own any Shares or securities in the capital of the
Corporation.
|
7.2
|
Termination
Not to Effect Rights or
Obligations
|
A
termination of this Agreement or any provision of this Agreement shall not
affect or prejudice any rights or obligations which have accrued or arisen
under
this Agreement prior to the time of termination, and such rights and obligations
shall survive the termination of this Agreement.
ARTICLE
8
CLOSING
PROCEDURES
If
a purchase and sale of any Shares, Convertible Securities and/or other
securities of the Corporation is made pursuant to this Agreement, the following
shall apply:
|
8.1
|
Payment
of Purchase Price and Delivery of
Certificates
|
Payments
on account of the purchase price shall be made by negotiable check, certified
by
a chartered bank or trust company or by wire transfer of funds to an account
of
a chartered bank or by official bank draft drawn on a chartered bank against
receipt by the purchaser of the share certificate or certificates representing
the Shares, Convertible Securities or other securities being purchased, duly
endorsed for transfer in blank.
|
8.2
|
Title
|
The
acceptance by the vendor of payment (including an agreement to pay) for the
Shares, Convertible Securities and/or other securities being purchased and
sold
shall constitute a representation and warranty by the vendor that the vendor
has
good and marketable title to the Shares, Convertible Securities and/or other
securities, free and clear of any Lien. In addition, the vendor shall deliver
to
the purchaser all documents, instruments and do all acts and things as the
purchaser may reasonably request, whether before or after completion of the
transaction, to vest title in the purchaser.
|
8.3
|
Failure
to Complete Sale
|
If,
at the time of closing, the vendor does not complete the sale for any reason,
other than due to the breach of the purchasing party, the purchaser shall have
the right to deposit (including by post-dated check) the purchase price for
the
Shares, Convertible Securities and/or other securities to be purchased and
sold
for the account of the vendor in an account with the bankers of the Corporation
and that deposit shall constitute valid and effective payment of the purchase
price to the vendor. Thereafter, the purchaser shall have the right to execute
and deliver any deeds, stock transfers, assignments, releases and other
documents as may, in the reasonable opinion of the purchaser, be necessary
or
desirable to complete the transaction. If payment of the purchase price is
so
deposited, then from and after the date of deposit, notwithstanding that
certificates or instruments evidencing the Shares, Convertible Securities and/or
other securities may not have been delivered to the purchaser:
-
23 -
|
(a)
|
the
purchase shall be deemed to have been fully completed and the records
of
the Corporation may be amended
accordingly;
|
|
(b)
|
all
right, title, benefit and interest, both at law and in equity, in
and to
the subject Shares, Convertible Securities and/or other securities
shall
be conclusively deemed to have been transferred and assigned to and
become
vested in the purchaser; and
|
|
(c)
|
all
right, title, benefit and interest of the vendor and of any other
Person
(other than the purchaser) having any interest in the subject Shares,
Convertible Securities and/or other securities, legal or equitable,
in any
capacity whatsoever, shall cease.
|
|
8.4
|
Purchaser
Appointed as Attorney
|
Each
Shareholder hereby appoints, on the terms set forth in Section 11.2, in case
the
Shareholder is a vendor of Shares, Convertible Securities and/or other
securities under this Agreement who fails to do anything duly required in
connection with a sale by that vendor, each other Shareholder who may from
time
to time be a purchaser of any such Shares, Convertible Securities and/or other
securities, as the vendor’s attorney, with full power of substitution, in the
name of the vendor but on behalf of and at the expense of the purchaser, to
execute and deliver all deeds, transfers, assignments and assurances necessary
to effectively Transfer the interest being sold to the purchaser or its
nominees.
|
8.5
|
Taxes
|
At
the time of the sale, the vendor shall provide to the purchaser
either:
|
(a)
|
a
statutory declaration that the vendor is not a non-resident of Canada
for
purposes of the Income Tax Act (Canada);
or
|
|
(b)
|
a
certificate from Canada Revenue Agency under Section 116 of the Income
Tax
Act (Canada) with a certificate limit at least equal to the proceeds
payable to such vendor,
|
provided
that if the vendor delivers no declaration or certificate, the purchaser shall
be entitled to deduct from the purchase price payable to the vendor an amount
equal to the amount of tax for which the purchaser may be liable under the
Income Tax Act (Canada) (or any applicable comparable legislation).
|
8.6
|
Deliveries
on Closing
|
If,
after completion of the transaction of purchase and sale, the vendor will not
own any Shares or other securities of the Corporation, the vendor shall deliver
or cause its nominees to deliver, at the time of completion of the sale, a
written resignation from all positions on the Board of Directors and from any
offices and employment with the Corporation, as reasonably requested by the
Corporation.
-
24 -
|
8.7
|
Governmental
Approvals
|
If
any Governmental Approval is required in respect of a purchase of Shares,
Convertible Securities and/or other securities of the Corporation by a Third
Party under any provision of this Agreement, then, notwithstanding anything
contained in this Agreement, the time period specified in this Agreement for
the
closing of such transaction shall be extended for an additional 30 Business
Days
to permit such Third Party to obtain the necessary Governmental
Approval. Any such application for Governmental Approval shall be the
sole responsibility of such Third Party who shall also be responsible for all
costs and expenses incurred in connection therewith. The Other Shareholders
and
the Corporation shall use reasonable efforts to cooperate with such Third Party
in any application for Governmental Approval and Francisco Partners shall be
provided with the opportunity to provide input into and shall be consulted
in
respect of any submission made in respect of any such Governmental
Approval.
ARTICLE
9
SHARE
CERTIFICATES
|
9.1
|
Restrictive
Legends
|
In
addition to any other legend otherwise prescribed by law or contract, for so
long as this Agreement remains in effect, the certificates representing any
shares of capital stock or other securities of the Corporation held by any
Shareholder will bear restrictive legends in substantially the following
form:
“The
securities represented by this share certificate are subject to certain
restrictions with respect to the voting and the transfer of such securities
set
forth in a Shareholders Agreement dated as of August 16, 2007 by and among
the
issuer of such securities and the registered holder of this share certificate
(or such holder’s predecessor-in-interest) and certain others. A copy of such
Shareholders Agreement is on file and may be inspected by the registered holder
of this certificate at the registered office of the issuer.”
ARTICLE
10
CONFIDENTIALITY
COVENANTS
|
10.1
|
Confidentiality
|
|
(a)
|
No
Party will, at any time or under any circumstances, without the consent
of
the Board of Directors, directly or indirectly communicate or disclose
to
any Person (other than the other Parties and employees, agents, advisors
and representatives of such Party or Parties) or make use of (except
in
connection with its interest in the Corporation) any confidential
knowledge or information howsoever acquired by such Party relating
to or
concerning (A) the customers, products, technology, trade secrets,
systems
or operations, or other confidential information regarding the property,
business and affairs, of the Corporation, (B) the identity of the
Shareholders party to this Agreement, and (C) this Agreement and
the Other
Agreements, except:
|
-
25 -
|
(i)
|
information
that is or becomes generally available to the public (other than
by
disclosure by such Party or its employees, agents, advisors or
representatives contrary to this
Section);
|
|
(ii)
|
information
that is reasonably required to be disclosed by a Party to protect
its
interests in connection with any valuation or legal proceeding under
this
Agreement;
|
|
(iii)
|
information
that is required to be disclosed by law or by the applicable regulations
or policies of any Governmental Body, regulatory agency of competent
jurisdiction or any stock exchange;
and
|
|
(iv)
|
in
connection with its right to sell Shares in accordance with the provisions
of this Agreement, any Party may disclose confidential information
to the
potential purchaser in respect of such proposed sale or transaction,
provided the potential purchaser agrees to be bound by the confidentiality
obligations set out in this Section 10.1, as well as a covenant of
the
potential purchaser not to use or allow the use for any purpose of
the
confidential information or notes, summaries or other material derived
from the review of the confidential information, except to determine
whether to purchase Shares from such Shareholder or otherwise acquire
the
Corporation.
|
|
(b)
|
Notwithstanding
Section 10.1(a), Francisco Partners and any member of the Francisco
Partners Group may:
|
|
(i)
|
disclose
confidential information to members of the Francisco Partners Group
provided such members have agreed to maintain the confidentiality
of such
information;
|
|
(ii)
|
disclose
confidential information to Francisco Partners’s advisory committee or
investment committee;
|
|
(iii)
|
report
confidential information regarding the Francisco Partners Group’s
investment in the Corporation, regarding the Corporation’s financial
statements, other financial information regarding the Corporation
that the
Corporation has provided to non-shareholder parties, that the Francisco
Partners Group is otherwise required to report to members of the
Francisco
Partners Group in connection with its investment in the Corporation
and as
otherwise agreed between the Corporation and Francisco Partners (save
and
except where such use or disclosure would have a Material Adverse
Effect
on the Business of the Corporation);
and
|
|
(iv)
|
any
nominee of Francisco Partners on the Board of Directors or any Observer
may discuss the Business of the Corporation and any Subsidiary, including
confidential information, with the investment committee, officers,
directors, partners, employees and advisors of the Francisco Partners
Group.
|
-
26 -
|
(c)
|
Notwithstanding
Section 10.1(a), Xxxxxx Xxxxxxx and any member of the MS Investors
may:
|
|
(i)
|
disclose
confidential information to MS Affiliates provided such MS Affiliates
have
agreed to maintain the confidentiality of such
information;
|
|
(ii)
|
disclose
confidential information to Xxxxxx Xxxxxxx’x advisory committee or
investment committee; and
|
|
(iii)
|
report
confidential information regarding the MS Investors’ investment in the
Corporation, regarding the Corporation’s financial statements, other
financial information regarding the Corporation that the Corporation
has
provided to non-shareholder parties, that the MS Investors are otherwise
required to report to members of the MS Investors in connection with
their
investment in the Corporation and as otherwise agreed between the
Corporation and the MS Investors (save and except where such use
or
disclosure would have a Material Adverse Effect on the Business of
the
Corporation);
|
|
(d)
|
Notwithstanding
Section 10.1(a), EdgeStone and any member of the EdgeStone Group
may:
|
|
(i)
|
disclose
confidential information to members of the EdgeStone Group provided
such
members have agreed to maintain the confidentiality of such
information;
|
|
(ii)
|
disclose
confidential information to EdgeStone’s advisory committee or investment
committee;
|
|
(iii)
|
report
confidential information regarding EdgeStone’s investment in the
Corporation, regarding the Corporation’s financial statements, other
financial information regarding the Corporation that the Corporation
has
provided to non-shareholder parties, that EdgeStone is otherwise
required
to report to members of the EdgeStone Group in connection with its
investment in the Corporation and as otherwise agreed between the
Corporation and EdgeStone (save and except where such use or disclosure
would have a Material Adverse Effect on the Business of the Corporation);
and
|
|
(iv)
|
any
nominee of EdgeStone on the Board of Directors or any Observer may
discuss
the Business of the Corporation and any Subsidiary, including confidential
information, with the investment committee, officers, directors,
partners,
employees and advisors of the EdgeStone
Group.
|
|
(e)
|
Each
of the Parties acknowledges that disclosure of any confidential
information regarding the Corporation in contravention of this
Section 10.1 may cause significant harm to the Corporation and the
Subsidiaries and that remedies at law may be inadequate to protect
against
a breach of this Section. Accordingly, each of the Parties acknowledges
that the Corporation is entitled, in addition to
any
|
-
27 -
|
|
other
relief available to it, to the granting of injunctive relief without
proof
of actual damages or the requirement to establish the inadequacy
of any of
the other remedies available to it. Each of the Parties covenants
not to
assert any defence in proceedings regarding the granting of an injunction
or specific performance based on the availability to the Corporation
of
any other remedy.
|
|
10.2
|
Acknowledgement
|
The
covenants contained in Section 10.1 are given by the Shareholders acknowledging
that each of them has specific knowledge of the affairs of the Corporation
and
the Subsidiaries and that the other Shareholders would not have entered into
or
permitted the Corporation to enter into the transactions contemplated in this
Agreement or in the Other Agreements without the other Shareholders having
provided such covenants.
|
10.3
|
Reasonable
Obligations not Exhaustive
|
Each
Shareholder acknowledges that the obligations contained in this Article 10
are
not in substitution for any obligations which the Shareholder may now or
hereafter owe to the Corporation, any of the Subsidiaries or any other
Shareholder and which exists apart from this Article and do not replace any
rights of the Corporation, any of the Subsidiaries or any Shareholder with
respect to any such obligation.
Each
of the Shareholders hereby agrees that, without in any way derogating from
any
other covenants provided by him or it, all the restrictions in this Article
10
are reasonable and valid and all defenses to the strict enforcement thereof
by
the Corporation and/or the other Shareholders are hereby waived.
|
10.4
|
Survival
|
Notwithstanding
any other term or provision hereof (including, without limitation, Section
7.1),
the provisions of this Article 10 shall survive the termination of this
Agreement.
ARTICLE
11
GENERAL
|
11.1
|
All
Securities Subject to
Agreement
|
Each
of the Shareholders agrees that it shall be bound by the terms of this Agreement
with respect to all Shares and securities in the capital of the Corporation
held
by it from time to time.
|
11.2
|
Terms
of Power of Attorney
|
If
any Shareholder is deemed to appoint an attorney pursuant to Section 6.4(d)
or
8.4 of this Agreement, such appointment, being coupled with an interest, is
irrevocable by the Shareholder and shall not be revoked by the insolvency or
bankruptcy of the Shareholder. Any such Shareholder hereby authorizes its
attorney appointed pursuant to Section 6.4(d) or 8.4 to take any action
necessary or advisable in connection with Section 6.4(d) or 8.4, respectively,
hereby giving such attorney full power and authority to do and perform each
and
every act or thing whatsoever required or advisable to be done in connection
with the foregoing as fully as
-
28 -
such
Shareholder might or could do so personally, and hereby ratifying and confirming
all that such attorney shall lawfully do or cause to be done by virtue thereof.
Any such power of attorney is not intended to be a continuing power of attorney
within the meaning of and governed by the Substitute Decisions Act (Ontario),
or
any similar power of attorney under equivalent legislation in any of the
provinces or territories of Canada (a “CPOA”). The execution of
this Agreement shall not terminate any CPOA granted by a Shareholder previously
and any such power of attorney shall not be terminated by the execution by
a
Shareholder in the future of a CPOA, and each Shareholder hereby agrees not
to
take any action that results in the termination of any such power of
attorney.
|
11.3
|
Time
of the Essence
|
Time
shall be of the essence of this Agreement and of every part hereof, and no
extension or variation of this Agreement shall operate as a waiver of this
provision.
|
11.4
|
Further
Assurances
|
Each
of the Shareholders covenants and agrees to vote (or cause to be voted) its
Shares in the capital of the Corporation, and to take all other necessary or
desirable action within its control and to the extent permitted by law so as
to
give full effect to the provisions of this Agreement; provided that no
Shareholder shall be obligated to waive any of its rights hereunder or in
respect of its Shares or agree to any reduction in the stated capital of its
Shares.
|
11.5
|
Arbitration
|
Subject
to Section 11.11, all disputes arising out of or in connection with this
Agreement, or in respect of any legal relationship associated with or derived
from this Agreement, shall be arbitrated and finally resolved pursuant to the
Arbitration Act, 1991 (Ontario). Such arbitration shall be
conducted by a single arbitrator. The arbitrator shall be appointed
by agreement between the parties or, failing agreement, such arbitrator shall
be
appointed in accordance with Section 10 of the Arbitration Act, 1991
(Ontario). The place of arbitration shall be the City of Ottawa in
the Province of Ontario. The language of the arbitration shall be
English. Any notice or other document, including a notice commencing
arbitration, may be served by sending it to the addressee by facsimile in
accordance with Section 11.6 hereof. The decision arrived at by the
arbitrator, howsoever constituted, shall be final and binding and no appeal
shall lie therefrom.
|
11.6
|
Notices
|
All
notices, requests, payments, instructions or other documents to be given
hereunder will be in writing or by written telecommunication, and will be deemed
to have been duly given if (i) delivered personally (effective upon delivery),
(ii) mailed by certified mail, return receipt requested, postage prepaid
(effective five Business Days after dispatch), (iii) sent by a reputable,
established courier service that guarantees next Business Day delivery
(effective the next Business Day), or sent by air mail or by commercial express
overseas air courier, with receipt acknowledged in writing by the recipient
(effective upon the date of such acknowledgement), or (iv) sent by telecopier
or
electronic mail followed within 24 hours by confirmation by one of the foregoing
methods (effective upon receipt of the telecopy in complete, readable form),
addressed as follows (or to such other address as the recipient party may have
furnished to the sending party for the purpose pursuant to this Section
11.6):
-
29 -
if
to the Corporation to:
Mitel
Networks Corporation
000
Xxxxxx Xxxxx
Xxxxxx,
XX
X0X
0X0
Attention:
Chief Executive Officer
Fax:
(000) 000-0000
With
a copy to:
Mitel
Networks Corporation
000
Xxxxxx Xxxxx
Xxxxxx,
XX
X0X
0X0
Attention:
Chief Financial Officer, and VP Finance
Fax:
(000) 000-0000
And
with a copy to:
Mitel
Networks Corporation
000
Xxxxxx Xxxxx
Xxxxxx,
XX
X0X0X0
Attention:
Senior Corporate Counsel
Fax:
(000) 000-0000
And
with a copy to:
Osler,
Xxxxxx & Harcourt LLP
Suite
1500
50
O’Xxxxxx Xxxxxx
Xxxxxx,
XX
X0X
0X0
Attention:
J. Xxxxx Xxxxxx
Fax:
(000) 000-0000
E-mail:
xxxxxxx@xxxxx.xxx
if
to Francisco Partners:
Arsenal
Holdco I, S.a.r.l. and Arsenal Holdco II, S.a.r.l.
0-00
xxx Xxxxxxx Xxxxx
X-0000
Xxxxxxxxxx
- 30
-
with
copies to:
Francisco
Partners II., L.P., GP,
LLC
0000
Xxxx Xxxx Xxxx, Xxxxx
000
Xxxxx
Xxxx, Xxxxxxxxxx
00000
Attention: Xxx
Xxxx
Facsimile: (000)
000-0000
E-mail:
xxxx@xxxxxxxxxxxxxxxxx.xxx
O’Melveny
&
Xxxxx
LLP
Embarcadero
Center
West
000
Xxxxxxx Xxxxxx, Xxxxx
0000
Xxx
Xxxxxxxxx, Xxxxxxxxxx
00000
Attention: Xxxxxxx
X.
Xxxxxxx
Facsimile: (000)
000-0000
E-mail: xxxxxxxx@xxx.xxx
Stikeman
Elliott LLP
0000
Xxxxxxxx Xxxxx Xxxx
000
Xxx Xxxxxx
Xxxxxxx,
XX, Xxxxxx X0X 0X0
Attention: Xxxxxx
Xxxxxxxx
Facsimile: (000)
000-0000
E-mail: xxxxxxxxx@xxxxxxxx.xxx
if
to any MS Investor:
c/o
Morgan Xxxxxxx Principal Investments, Inc.
0000
Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx
X. Xxxxxx XX
Facsimile: (000)
000-0000
E-mail:
xxx.xxxxxx@xxxxxxxxxxxxx.xxx
with
a copy to:
XxXxxxxxx
Will & Xxxxx LLP
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxxxx X. Older
Xxxx
X. Xxxxxxxx
Facsimile: (000)
000-0000
E-mail: xxxxxx@xxx.xxx
E-Mail: xxxxxxxxx@xxx.xxx
if
to Xxxxxxxx, CTJL or WCC:
c/o
Xxxxxx Xxxxxx Corporation
000
Xxxxxxx Xxxxx
Xxxxx
X, Xxxxx 000
Xxxxxx,
Xxxxxxx X0X 0X0
- 31
-
Attn:
Dr. T.H. Xxxxxxxx and Xxxx Xxxxxxxx
Fax:
(000) 000-0000
And
with a copy to:
Xxxxxx
Xxxxxx Gervais LLP
World
Exchange Plaza
000
Xxxxx Xxxxxx
Xxxxx
0000
Xxxxxx,
XX X0X 0X0
Attention:
Xxxxxx Xxxx
Fax:
(000) 000-0000
E-mail:
xxxxx@xxxxxxxxx.xxx
if
to EdgeStone:
EdgeStone
Capital Equity Fund II Nominee, Inc.
000
Xxxx Xxxxxx Xxxx
Xxxxx
000
Xxxxxxx,
Xxxxxxx
X0X
0X0
Attention: Xxxxxxx
Xxxxxxx and Xxxxxx Xxxxx
Fax: (000)
000-0000
Fax: (000)
000-0000
if
to PTIC:
Power
Technology Investment Corporation
751,
Square Victoria
Xxxxxxxx,
Xxxxxx X0X 0X0
Attn:
Mr. Xxxxx Xxxxx
Fax: (000)
000-0000
|
11.7
|
Waivers,
Amendments
|
Except
as otherwise expressly provided in this Agreement and without limiting the
applicability of the following sentence, no amendment or waiver of this
Agreement shall be binding on a Party unless executed in writing by the Party
to
be bound thereby. Any amendment or waiver of this Agreement or any
provision thereof shall be binding on all Parties, and each Party shall sign
an
instrument evidencing same, if such amendment or waiver has been consented
to in
writing (whether signed in one or more counterparts) by the Corporation and
an
Investors Majority; provided, however, that in the event of an amendment or
waiver affecting any Shareholder in a manner that is materially and adversely
disproportionate from the manner in which such amendment or waiver affects
any
other Shareholder or group of Shareholders, the waiver and amendment shall
require the consent in writing of each such Shareholder who is
disproportionately affected; provided, further, however, that any amendment
or
waiver of this
-
32 -
Section
11.7 shall require the consent in writing of each Shareholder. Except
as otherwise expressly provided in this Agreement, no waiver of any provision
of
this Agreement shall constitute or be deemed to constitute a waiver of any
other
provision nor shall any such waiver constitute a continuing waiver.
|
11.8
|
Counterparts
|
This
agreement may be executed in several counterparts, each of which so executed
shall be deemed to be an original and such counterparts together shall be but
one and the same instrument. Each Party agrees that the delivery of this
Agreement by facsimile shall have the same force and effect as delivery of
original signatures.
|
11.9
|
Successors
and Assigns
|
Except
as otherwise specifically permitted herein, neither this Agreement nor any
of
the rights of any of the Shareholders may be assigned without the prior written
consent of the other parties to this Agreement. Except as otherwise provided
herein, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, other
personal representatives, successors and permitted assigns and transferees
of
Shares or Convertible Securities.
|
11.10
|
Application
of this Agreement
|
The
terms of this Agreement shall apply mutatis mutandis to any securities of the
Corporation resulting from the conversion, reclassification, redesignation,
subdivision or consolidation or other change of the Shares.
|
11.11
|
Equitable
Relief
|
Each
of the parties acknowledges that any breach by such Party of his, her, or its
obligations under this Agreement would cause substantial and irreparable damage
to one or more of the other parties and that money damages would be an
inadequate remedy therefor. Accordingly, each Party agrees that the other
parties or any of them will be entitled to an injunction, specific performance,
and/or other equitable relief to prevent the breach of such
obligations.
The
rest of this page is intentionally left blank.
IN
WITNESS WHEREOF, each of the parties has executed this Shareholders Agreement
on
and as of the date first above written.
|
MITEL
NETWORKS CORPORATION
|
|||
|
By:
|
/s/ Xxxxx Xxxxxxx | ||
|
Name:
Xxxxx Xxxxxxx
|
|||
|
Title:
Chief Financial Officer
|
|||
|
ARSENAL
HOLDCO I, Sarl
|
|||
|
By:
|
/s/ Xxxx Xxxxxxxxxx | ||
|
Name:
Xxxx Xxxxxxxxxx
|
|||
|
Title:
Manager
|
|||
| By: | /s/ Xxxxx X. Xxxxxx | ||
| Name: Xxxxx X. Xxxxxx | |||
|
ARSENAL
HOLDCO II, Sarl
|
|||
|
By:
|
/s/ Xxxx Xxxxxxxxxx | ||
|
Name:
Xxxx Xxxxxxxxxx
|
|||
|
Title:
Manager
|
|||
| By: | /s/ Xxxxx X. Xxxxxx | ||
| Name: Xxxxx X. Xxxxxx | |||
|
XXXXXX
XXXXXXX PRINCIPAL INVESTMENTS, INC.
|
|||
|
By:
|
/s/ Xxxxx Xxxxx | ||
|
Name:
Xxxxx Xxxxx
|
|||
|
Title:
Vice President
|
|||
|
XXXXXX
XXXXXX CORPORATION
|
|||
|
By:
|
/s/ Xxxx Xxxxxxxx | ||
|
Name: Xxxx
Xxxxxxxx
|
|||
|
Title:
President
|
|||
-
34 -
|
CELTIC
TECH JET LIMITED
|
|||
|
By:
|
/s/ Xxxx Xxxxxxxx | ||
|
Name:
Xxxx Xxxxxxxx
|
|||
|
Title:
President
|
|||
|
XXXXXXX
X. XXXXXXXX
|
|||
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxx | ||
|
POWER
TECHNOLOGY INVESTMENT CORPORATION
|
|||
|
By:
|
/s/ Xxxxx Xxxxx | ||
|
Name:
Xxxxx Xxxxx
|
|||
|
Title:
President and CEO
|
|||
|
EDGESTONE
CAPITAL EQUITY FUND II-B GP, INC., as agent for EdgeStone Capital
Equity
Fund II-A, L.P. and its parallel investors
|
|||
|
By:
|
/s/ Xxxxxxx X. Xxxxxx | ||
|
Name:
Xxxxxxx X. Xxxxxx
|
|||
|
Title:
CIO and Managing Partner
|
|||
|
EDGESTONE
CAPITAL EQUITY FUND II NOMINEE, INC., as nominee for EdgeStone Capital
Equity Fund II-A, L.P. and its parallel
investors
|
|||
|
By:
|
/s/ Xxxxxxx X. Xxxxxx | ||
|
Name:
Xxxxxxx X. Xxxxxx
|
|||
|
Title:
CIO and Managing Partner
|
|||
-
35 -
|
FRANCISCO
PARTNERS II (CAYMAN), L.P.,
|
|||||
|
as
Controlling Shareholder for Arsenal Holdco I,
S.a.r.l.
|
|||||
|
By:
|
FRANCISCO
PARTNERS XX XX (CAYMAN), L.P.
|
||||
|
its
General Partner
|
|||||
|
By:
|
FRANCISCO
PARTNERS XX XX
|
||||
|
MANAGEMENT
(CAYMAN) LIMITED
|
|||||
|
its
General Partner
|
|||||
|
By:
|
/s/ Xxxxx X. Xxxxxx | ||||
|
Name:
Xxxxx X. Xxxxxx
|
|||||
|
Title:
Director
|
|||||
APPENDIX
1
DEFINITIONS
“2006
Equity Compensation Plan” means the Corporation’s equity compensation
plan approved by the shareholders on September 7, 2006;
“Acceptance
Notice” has the meaning set out in Section 6.2(a);
“Acceptance
Period” has the meaning set out in Section 6.1;
“Accepting
Shareholders” has the meaning set out in Section 6.4(a);
“Affiliate”
of a Person means any Person that would be deemed to be an “affiliated entity”
of such first-mentioned Person under National Instrument 45-106 promulgated
under the Securities Act (Ontario) as it exists on the date of this
Agreement;
“Agreement”
means this Shareholders Agreement, including all Appendices and Schedules hereto
and any amendments or restatements hereof;
“arm’s
length” has the meaning ascribed to such term for the purposes of the
Income Tax Act (Canada);
“Articles
of Amendment” means the articles of amendment of the Corporation
creating the Class 1 Shares attached as Schedule B hereto;
“as-if
converted to Common Shares basis” means, at any time and from time to
time, assuming the conversion or exchange of all outstanding Class 1 Shares
and
all other securities of the Corporation exercisable, convertible or exchangeable
into Common Shares which are fully-vested and exercisable, convertible or
exchangeable on the date of the calculation at the respective conversion rate
or
conversion prices or exchange rates, as the case may be, applicable at such
time; provided, however, that any warrants to acquire Common Shares held by
Francisco Partners or any member of the FP Group shall not be included in any
calculation of the as if converted to Common Shares basis;
“Associate”
has the meaning ascribed thereto in the Canada Business Corporations
Act;
“Assumption
Agreement” means the assumption agreement substantially in the form
attached hereto as Schedule C;
“Audit
Committee” has the meaning set out in Section 2.5;
“Board
of Directors” means the Board of Directors of the
Corporation;
“Business”
means the business of developing, selling, licensing, distributing, servicing
and maintaining, as applicable, enterprise and customer premises business
communications solutions and services, including advanced voice over internet
protocol, video and data communications platforms, desktop phones, Internet
appliances and client and server software applications and code (including
applications for customer relationship management and mobility, messaging and
multimedia collaboration) and the business of InterTel (Delaware), Incorporated
and its
-
2 -
subsidiaries;
“Business
Day” means any day, other than a Saturday or Sunday, on which chartered
banks in Ottawa, Ontario and San Francisco, California are open for commercial
banking business during normal banking hours;
“Change
of Control Event” shall have the meaning set forth in the Articles of
Amendment.
“Class
1 Shares” means the Class 1 Convertible Preferred Shares in the capital
of the Corporation, including the Class 1 Convertible Preferred Shares currently
issued and any Class 1 Convertible Preferred Shares that may be issued after
the
date hereof;
“Collateral
Benefit” means any agreement, commitment or understanding with a
Shareholder that has the effect of providing to that Shareholder (or anyone
acting not at arm’s length to that Shareholder), directly or indirectly,
consideration of greater value than that offered to other Shareholders,
excluding consideration paid or to be paid to a Shareholder (or anyone not
at
arm’s length with a Shareholder) for goods and/or services rendered or provided
or to be rendered or provided by that Shareholder (or anyone not at arm’s length
with that Shareholder) where the amount of such consideration is not more than
that which would be negotiated between arm’s length parties on market terms,
provided, for greater certainty, that any payment in favor of the holders of
the
Class 1 Shares in accordance with the Articles of Amendment shall be deemed
not
to constitute a Collateral Benefit;
“Common
Shares” means the common shares in the capital of the Corporation,
including the Common Shares currently issued and any Common Shares that may
be
issued after the date hereof;
“Compensation
Committee” has the meaning set out in Section 2.5;
“Control”
means, with respect to any Person at any time,
|
(a)
|
holding,
as owner or other beneficiary, other than solely as the beneficiary
of an
unrealized security interest, directly or indirectly through one
or more
intermediaries: (A) more than 50% of the voting securities of that
Person;
or (B) securities of that Person carrying votes sufficient to elect
or
appoint the majority of individuals who are responsible for the
supervision or management of that Person;
or
|
|
(b)
|
the
exercise of de facto control of that Person whether direct or
indirect and whether through the ownership of securities, by contract
or
trust or otherwise;
|
and
the terms “Controls”, “Controlling” and
“Controlled” have corresponding meanings;
“Controlled
Shareholder” means any Shareholder that is Controlled by a Controlling
Shareholder who is a party to this Agreement;
“Controlling
Shareholder” means any Person who is party to this Agreement and who
Controls a Shareholder (and shall, for greater certainty, include Xxxxxxxx
as
the Controlling Shareholder of the Xxxxxxxx Group);
- 3
-
“Conversion
Value” has the meaning set forth in the Articles of
Amendment;
“Convertible
Security” means any option, warrant, right or other security, other
than the Class 1 Shares, which entitles the holder to acquire from the issuer
thereof another security or to convert, exchange or exercise such security
into
another security in the capital of such issuer;
“Credit
Agreement Debt” has the meaning set out in Appendix 2;
“Debt
Obligations” has the meaning set out in Appendix 2;
“Drag-Along
Offer” has the meaning set out in Section 6.4(a);
“EdgeStone
Group” means
|
|
(a)
|
any
Affiliate of EdgeStone;
|
|
|
(b)
|
any
other Person, provided that EdgeStone or any Affiliate thereof has
the
exclusive right to exercise all rights of EdgeStone transferred hereunder
on behalf of such Person;
|
|
|
(c)
|
any
Person whose funds are managed by EdgeStone or an Affiliate of
EdgeStone;
|
|
|
(d)
|
EdgeStone
Capital Equity Fund II-A, L.P. and /or any Person which agrees to
invest
with it on a parallel or co-investment basis (and the respective
partners
thereof, if any) in the manner contemplated in the constating documents
of
EdgeStone Capital Equity Fund II-A, L.P. or EdgeStone Capital Equity
Fund
II-B, L.P.; and
|
|
|
(e)
|
upon
the termination or dissolution of any limited partnership or other
entity
that is a limited, special or general partner of EdgeStone, the beneficial
holders of interests of such limited, special or general
partner.
|
“Forced
Shareholders” has the meaning set out in Section 6.4(a);
“Francisco
Partners Group” means:
|
|
(a)
|
Francisco
Partners;
|
|
|
(b)
|
limited,
special and general partners of Francisco Partners and Francisco
Partners
II, L.P.,and any Person to which Francisco Partners II, L.P. shall
transfer all or substantially all of its
assets;
|
|
|
(c)
|
all
Affiliates, employees and consultants of Francisco Partners and/or
Francisco Partners II, L.P.;
|
|
|
(d)
|
any
other Person, provided that Francisco Partners or any Affiliate thereof
has the exclusive right to exercise all rights of Francisco Partners
transferred hereunder on behalf of such
Person;
|
- 4
-
|
|
(e)
|
any
Person whose funds are managed by Francisco Partners or an Affiliate
of
Francisco Partners and/or Francisco Partners II, L.P.;
and
|
|
|
(f)
|
upon
the termination or dissolution of any limited partnership or other
entity
that is a Person referred to in clause (b) of this definition, (A)
the
beneficial holders of interests in such Person, and (B) any other
Person
referred to in clause (b) of this definition, whether or not, in
either
case, an Affiliate described in clause (c) of this definition has
the
exclusive right to exercise the rights of Francisco Partners transferred
hereunder on behalf of such beneficial holder or
Persons;
|
“Francisco
Partners Nominees” has the meaning set forth in Section
2.2;
“Governmental
Approval” means the consent of any Governmental Body which may be
required at any time and from time to time to ensure that the purchase of all
or
any part of the Shares and/or other securities of the Corporation held by a
Shareholder is not in contravention of any law, regulation or published policy
of, or administered by, such Governmental Body or which may be required in
order
to ensure that, notwithstanding the purchase of such shares of all or any part
of the Shares or other securities held by the Shareholders, the holding or
continued holding by the Corporation or any Subsidiary of any franchise,
license, permit or other permission or authority required to carry on its
respective business is unaffected;
“Governmental
Body” means any body of a state or government, any international body
or body assembling several states or provinces, any body, board, commission,
office or other authority, instituted or constituted by a state or a government,
by a law or otherwise, any public or private body, board, commission, office
exercising governmental or quasi-governmental functions or regulatory or
autoregulatory functions on behalf of a state or another governmental body
or
otherwise having jurisdiction, as well as any body, office, commission, board,
arbitration or judicial tribunal, quasi-judicial or administrative tribunal,
either national, provincial or governmental, foreign or international, as well
as any court or common law tribunal;
“Initial
Public Offering” shall have the meaning set forth in Article 1 of the
Registration Rights Agreement;
“Investors
Majority” means Francisco Partners (in which such case unanimous
consent provided by the Francisco Partners Nominees shall conclusively be deemed
an Investors Majority); provided, however, if the Francisco Partners Group
holds
less than 30% of the outstanding Class 1 Shares, Investors Majority shall mean
the holders of not less than 50% of the outstanding Class 1 Shares;
“Lien”
means any and all liens, claims, mortgages, hypothecs, security interests,
charges, encumbrances, and restrictions on transfer of any kind, except, in
the
case of references to securities, any of the same arising under applicable
corporate or securities laws solely by reason of the fact that such securities
were issued pursuant to exemptions from registration or prospectus requirements
under such securities laws or otherwise arising pursuant to this Agreement,
the
Subscription Agreement, Articles or the Registration Rights
Agreement;
“Marketable
Securities” means equity securities of an issuer which are listed on an
established nationally recognized exchange in Canada or the United States,
which: (i) do not represent in excess of 10% of the relevant issuer’s
outstanding securities of the same class or a class into
- 5
-
which
such securities are immediately convertible or exchangeable without cost to
the
holder; (ii) have a Public Float of at least US$150 million; (iii) have had
average daily trading volumes for the 10 trading days prior to distribution
of
at least US$5,000,000; and (iv) are not subject to any statutory, regulatory,
contractual or other hold period or resale restriction other than a restriction
requiring the filing of a notice only (without requiring any
approval);
“Material
Adverse Effect” means, with reference to the Corporation or any of the
Subsidiaries, a material adverse effect on the condition (financial or
otherwise), operations, business, assets, or prospects of the Corporation and
the Subsidiaries taken as a whole;
“Xxxxxxxx
Group” means
|
|
(a)
|
Xx.
Xxxxxxx X. Xxxxxxxx, his spouse or former spouse, any lineal descendant
of
Xx. Xxxxxxx X. Xxxxxxxx, any spouse or former spouse of any such
lineal
descendant, and their respective legal personal
representatives;
|
|
|
(b)
|
the
trustee or trustees of any trust (including without limitation a
testamentary trust) for the exclusive benefit of any one or more
members
of the Xxxxxxxx Group;
|
|
|
(c)
|
any
corporation all of the issued and outstanding shares of which are
beneficially owned by any one or more members of the Xxxxxxxx
Group;
|
|
|
(d)
|
any
partnership all of the partnership interests in which are beneficially
owned by any one or more members of the Xxxxxxxx Group;
and
|
|
|
(e)
|
any
charitable foundation Controlled by any one or more members of the
Xxxxxxxx Group,
|
and,
for this purpose, a trustee or trustees referred to in clause (b) above shall
be
deemed to beneficially own any shares or partnership interests held by
them.
“MS
Affiliate” shall mean any affiliate of any MS Investor. For
the purposes of this definition “affiliate” means any Person that would be
deemed an “affiliate” under Rule 405 under the U.S. Securities Act of 1933, as
amended.
“New
Securities” shall mean any Shares or other equity or debt securities of
the Corporation or any Subsidiary, whether now authorized or not, and includes
any Convertible Securities, but excludes (i) any debt or equity securities
of
the Corporation or any Subsidiary issued solely to a wholly-owned Subsidiary,
and (ii) debt securities constituting capitalized leases or purchase money
indebtedness associated with the acquisition of equipment;
“Observer”
has the meaning set out in Section 2.7;
“Offeror’s
Securities” has the meaning set out in Section 6.1(c);
“Other
Agreements” means the Registration Rights Agreement, and with respect
to the Investors, the Subscription Agreement and all of the agreements,
instruments, certificates, and other documents executed and delivered by or
on
behalf of the Corporation or the Investors or any of their respective Affiliates
at the Closing Time (as defined in the Subscription Agreement)
- 6
-
or
otherwise in connection with the Subscription Agreement and the transactions
contemplated herein or therein;
“Party”
or “Parties” means one or more of the Corporation, the
Shareholders and any other Person who becomes a party to this Agreement by
virtue of a Transfer of Shares or Convertible Securities or
otherwise;
“Permitted
Additional Securities” means:
|
(a)
|
any
Common Shares issued or issuable upon conversion of any Class 1 Shares
currently outstanding or that may hereafter be issued and approved
in
accordance with the provisions of Section
2.8;
|
|
(b)
|
any
option to purchase Common Shares granted under the 2006 Equity
Compensation Plan, the Stock Option Plan and/or Common Shares allotted
for
issuance, issued or issuable pursuant to the 2006 Equity Compensation
Plan, the Stock Option Plan, and any Common Shares or Convertible
Securities allotted for issuance, issued or issuable to employees,
officers, directors or consultants of the Corporation in accordance
with
any other stock option plan, stock purchase plan or other stock
compensation program of the Corporation approved by the Board of
Directors; provided, however, that any Common Shares issued upon
the
exercise of any such options, together with any Common Shares or
Convertible Securities allocated for issuance, issued or issuable,
shall
not exceed 12.5% of the Common Shares outstanding (calculated on
an as-if
converted into Common Shares basis) immediately following the Closing
Time
(as defined in the Subscription
Agreement);
|
|
(c)
|
any
equity securities issued pursuant to a Qualified
IPO;
|
|
(d)
|
any
Common Shares or Convertible Securities issued in connection with
an
acquisition of assets or a business; provided, that: (i) the cost
of such
acquisition is less than US$10,000,000; (ii) any such transaction
is
approved by the Board of Directors; (iii) the maximum aggregate number
of
Common Shares (including Common Shares issuable on the conversion
or
exercise of Convertible Securities) that may be issued pursuant to
this
clause (d) shall not exceed one percent (1%) of the aggregate number
of
Common Shares issued and outstanding immediately following the Closing
Time (as defined in the Subscription Agreement), subject to appropriate
adjustments for stock dividends, stock splits, stock consolidations,
capital reorganizations and the like occurring after the date hereof,
all
calculated on an as-if converted to Common Shares basis; and (iv)
the
implied issue price of any such Common Shares or Convertible Securities
shall exceed the Conversion Value of the Class 1 Shares
calculated on an as-if converted to Common Shares basis, in each
case
expressed on a per share basis;
|
|
(e)
|
any
issuance of Common Shares pursuant to the exercise of any warrants
set
forth on Schedule A on the date hereof and in the form as in effect
on the
date hereof;
|
|
(f)
|
any
equity securities issued to bona fide consultants or professional
advisors
of the Corporation as part of the consideration for services received
by
the
|
- 7
-
|
|
Corporation
from such consultants or professional advisors, so long as such issuances
in the aggregate do not exceed 0.25% of the Common Shares issued
and
outstanding at the Closing Time (as defined in the Subscription
Agreement), all calculated on an as-if converted into Common Shares
basis;
and
|
|
(g)
|
any
Common Shares or Convertible Securities issued to or in connection
with
any of the following (i) licensors of technology of the Corporation,
(ii)
lending or leasing institutions in connection with obtaining debt
financing, or (iii) any other technology licensing, equipment leasing
or
other non equity interim financing transaction; provided that: (A)
any
such transaction or transactions approved by the Board of Directors;
and
(B) the maximum aggregate number of Common Shares (including Common
Shares
issuable on the conversion or exercise of Convertible Securities)
that may
be issued pursuant to all transactions contemplated by this clause
(i)
shall not exceed 1% of the aggregate number of Common Shares issued
and
outstanding on the date hereof, all calculated on an as-if-converted
to
Common Shares basis.
|
|
(h)
|
any
equity securities issued in respect of subdivisions, consolidations,
stock
dividends or capital reorganizations approved in accordance with
Section
2.8;
|
“Permitted
Transferee” of any Person means:
|
(a)
|
in
the case of a Person who is a natural person: (A) the spouse of such
Person; (B) any lineal descendant of such Person or a spouse of any
such descendant; (C) a trust (including, without limitation, a
testamentary trust) solely for the benefit of one or more of such
Person,
the spouse of such Person or any lineal descendant of such Person
or a
spouse of any such descendant; (D) any self-directed registered retirement
savings plan controlled by such Person; or (E) a corporation of which
all
of the outstanding shares of each class of shares of such corporation
are
beneficially owned, or in the case of Xxxxxxxx (if Xxxxxxxx hereafter
becomes a direct Shareholder) Controlled, directly or indirectly,
in any
manner (including, without limitation, through intermediary corporations
or trusts), by one or more of such Person, the spouse of such Person,
any
lineal descendant of such Person or a spouse of any such descendant
or
such trust; and includes the legal personal representative(s) of
such
Person or any Person referred to in
(A);
|
|
(b)
|
in
the case of a corporation or a limited liability company: (A) any
shareholder of such corporation or member of such limited liability
company, as applicable, if such shareholder or member either alone
or
together with one or more Permitted Transferees of such shareholder
or
member beneficially owns, or in the case of Xxxxxxxx (if Xxxxxxxx
hereafter becomes a direct Shareholder) Controlled, directly or
indirectly, in any manner (including, without limitation, through
intermediary corporations or trusts), all of the outstanding shares
of
each class of shares in the capital of such corporation or membership
interests of such limited liability company; (B) any Permitted Transferee
of such shareholder or member; or (C) an Affiliate, all of the shares
of
which are owned by such corporation and/or any Permitted Transferee
(other
than under this subclause (b)) of such
corporation;
|
- 8
-
|
(c)
|
in
the case of a Person which is a trustee: (A) any beneficiary of such
trust; (B) another trustee, provided that the class of beneficiaries
is
limited to Permitted Transferees of the beneficiaries of the original
trust; or (C) any Permitted Transferee of such
beneficiary;
|
|
(d)
|
in
the case of a Person which is an estate of a deceased Person, a Permitted
Transferee of such deceased person determined pursuant to this definition
as if such Person were not deceased or a legal personal representative
of
such Person holding on behalf of such Permitted
Transferees;
|
|
(e)
|
in
the case of a partnership, any partner of the partnership if all
of the
partnership interests are beneficially held by such partner either
alone
or together with one or more Permitted Transferees of such
partner;
|
|
(f)
|
in
the case of any member of the Xxxxxxxx Group, includes any other
member of
the Xxxxxxxx Group and (i) up to 3,000,000 common shares to Xxxxxx
Xxxxx,
(ii) up to 1,000,000 common shares to Xxxx Xxxxxxx, (iii) up to 900,000
common shares to Xxxxx Xxxxxxxxxxx and (iv) up to 200,000 common
shares to
Xxxx Xxxxx;
|
|
(g)
|
in
the case of Francisco Partners, any member of the Francisco Partners
Group;
|
|
(h)
|
in
the case of the MS Investors, any MS Affiliate;
and
|
|
(i)
|
in
the case of EdgeStone, any member of the EdgeStone
Group.
|
“Person”
includes any individual, corporation, limited liability company, Governmental
Body, sole proprietorship, partnership, unincorporated association,
unincorporated syndicate, unincorporated organization, trust, body corporate,
and a natural Person in his capacity as trustee, executor, administrator, or
other legal representative;
“Pre-Emptive
Right Acceptance Notice” has the meaning set out in Section
4.1(b).
“Pre-Emptive
Right Notice” has the meaning set out in Section 4.1(a);
“Pro
Rata Share” in respect of a given Shareholder, means that Shareholder’s
or other Person’s proportionate share of all outstanding Shares held by all
Shareholders or other Persons (calculated on an as-if converted to Common Shares
basis);
“Public
Float” means, in respect of a class of securities, the market value of
the securities of such class, excluding securities that are beneficially owned,
directly or indirectly, or over which control or direction is exercised by
persons or companies that alone or together with their respective Associates
and
Affiliates, beneficially own or exercise control or direction over more than
10%
of the issued and outstanding securities of such class, provided that securities
that would be excluded because a portfolio manager of a pension fund, mutual
fund or non-redeemable investment fund exercises control or direction over
them
need only be excluded if the portfolio manager is an Affiliate of the issuer
of
those securities;
“Qualified
IPO” has the meaning set forth in the Articles of
Amendment;
- 9
-
“Qualifying
Offer” has the meaning set forth in Section 6.4(a);
“Registration
Rights Agreement” means the registration rights agreement entered into
between the Corporation, the Investors and the Existing Shareholders on the
date
hereof;
“Shares”
means, collectively, the Common Shares and the Class 1 Shares;
“Shareholders”
has the meaning set out in the recital and includes such other Persons who
may
becomes a party to this Agreement as a shareholder of the Corporation, and
“Shareholder” means each of such Persons
individually;
“Stock
Option Plan” means the stock option plan or plans of the Corporation,
as amended from time to time in accordance with the provisions of this
Agreement;
“Subscription
Agreement” has the meaning set out in the Recitals to this
Agreement;
“Subsidiary”
means: (i) any corporation, at least a majority of whose outstanding Voting
Shares is owned, directly or indirectly, by the Corporation or by one or more
of
its subsidiaries, or by the Corporation and by one or more of its subsidiaries;
(ii) any general partnership, at least a majority of whose outstanding
partnership interests shall at the time be owned by the Corporation, or by
one
or more of its subsidiaries, or by the Corporation and one or more of its
subsidiaries; (iii) any limited partnership of which the Corporation or any
of
its subsidiaries is a general partner; and (iv) any limited liability company
of
which the Corporation or any of its subsidiaries is a managing
member;
“Third
Party” has the meaning set out in Section 6.4(a);
“Third
Party Offer” has the meaning set out in Section 6.4;
“Third
Party Offeror” has the meaning as set out in Section 6.1;
“TR
Value” has the meaning set out in the Articles of
Amendment;
“Transfer”
(whether used as a noun or a verb) refers to any sale, pledge, assignment,
encumbrance, gift, or other disposition or transfer of Shares or Convertible
Securities, or any legal or beneficial interest therein, including any tender
or
transfer in connection with any merger, recapitalization, reclassification,
or
tender or exchange offer (for all or any part of the Corporation’s equity
securities), whether or not the Person making any such Transfer votes for or
against any transaction involving any such Transfer, and includes any agreement
to effect any such transaction;
“Transfer
Notice” has the meaning set out in Section 6.1;
“Transferring
Shareholder” has the meaning set out in Section 6.1; and
“Voting
Shares” means shares, interests, participations or other equivalents in
the equity interests (however designated), including Class 1 Shares, of a Person
having ordinary voting power for the election of the majority of the directors
(or the equivalent) of such Person, other than shares, interests, participations
or other equivalents having such power only by reason of
contingency.
APPENDIX
2
MATTERS
REQUIRING INVESTORS MAJORITY APPROVAL
|
(a)
|
amend
the Corporation’s articles, by-laws or other constating documents or make,
amend, revoke, replace or supersede or repeal any by-law, including,
without limitation, altering or changing the rights, privileges or
preferences of the Class 1 Shares in the capital of the Corporation
or
creating any class or series of preferred shares ranking in priority
to or
pari passu with the Class 1 Shares in the capital of the
Corporation;
|
|
(b)
|
issue
any New Securities or any equity securities or rights, options or
warrants
to purchase equity securities of any Subsidiary, other than Permitted
Additional Securities and other than equity securities of a Subsidiary
issued to the Corporation;
|
|
(c)
|
grant,
or acquiesce to the assertion of, any price protection, anti-dilution
or
similar rights with respect to any outstanding securities of the
Corporation or any Subsidiary or any securities of the Corporation
or any
Subsidiary that may hereafter be issued (except for such rights as
are
applicable to the Class 1 Shares in accordance with the respective
terms
thereof set forth in the Articles of
Amendment);
|
|
(d)
|
redeem,
purchase for cancellation or otherwise retire or pay off any Shares
or
other equity securities of the Corporation, other than: (i) in accordance
with the Articles of Amendment; (ii) upon the termination of a
shareholder’s employment or service to the Corporation or its affiliates,
in accordance with pre-existing contractual arrangements; or (iii)
pursuant to this Agreement;
|
|
(e)
|
declare
or pay any dividends or make any distribution or return of capital
other
than pursuant to clause (d) above, whether in cash, in stock or in
specie,
on any Shares or other equity
securities;
|
|
(f)
|
incur,
create, assume, guarantee, become liable for or have outstanding
any
borrowing or funded indebtedness (collectively, “Debt Obligations”), other
than obligations under (i) the First and Second Lien Credit Agreements
by
and between the Corporation, Mitel Networks, Inc., Mitel US Holdings,
Inc., Arsenal Acquisition Corporation, Inter-Tel, the various lenders
from
time to time party thereto, Xxxxxx Xxxxxxx Senior Funding, Inc.,
and
Xxxxxx Xxxxxxx Senior Funding (Nova Scotia) Co., dated as
of August 16, 2007 (the “Credit Agreement
Debt”), (ii) the Corporation’s capital leases in effect on the
date hereof, (iii) InterTel (Delaware), Incorporated and its subsidiaries’
recourse guarantee program for the leasing business of InterTel
(Delaware), Incorporated and its subsidiaries made in the ordinary
course
of business, and (iv) other Debt Obligations (subject to compliance
with
the provisions of the Credit Agreements referred to in subclause
(i)
above) in an aggregate principal amount not in excess of
$30,000,000;
|
-
2 -
|
(g)
|
make
any material change in the Business (including, without limitation,
the
purchase, establishment or acquisition in any manner of a material
new
business undertaking), cause the cessation of the Business, or conduct
any
business unrelated to the Business;
|
|
(h)
|
create
or acquire, or dispose of any material interest in or otherwise cease
to
Control, any material Subsidiary, or (i) make any business acquisition,
acquisition of assets or any investment, or (ii) enter into any joint
venture, co-tenancy, partnership or similar arrangement in the case
of (i)
or (ii) above involving more than US$10,000,000.00 (inclusive of
any
assumed indebtedness or other liabilities or
obligations);
|
|
(i)
|
approve
any changes in the size of the Board of
Directors;
|
|
(j)
|
make
a loan to or enter into or amend any transaction with a director
or
officer or their affiliates and Associates or any Shareholders or
Controlling Shareholder or their affiliates and Associates of the
Corporation not in the ordinary course of
business;
|
|
(k)
|
agree
to: (i) a Change of Control Event in which the Corporation is a party,
or
(ii) amalgamate, merge or effect an arrangement or other corporate
reorganization with or into any other corporation, except, in the
case of
either (i) or (ii), pursuant to either a Qualifying Offer or a short-form
amalgamation with a wholly-owned
subsidiary;
|
|
(l)
|
take
or institute any proceedings for its winding-up, reorganization or
dissolution or any other transaction or scheme out of the ordinary
course
of the Business including any proceedings under the Bankruptcy and
Insolvency Act (Canada), the Companies Creditors Arrangement
Act (Canada) or any analogous legislation, or otherwise distribute
the assets of the Corporation to its
shareholders.
|
SCHEDULE
A
CAPITALIZATION
TABLE
Schedule
A
|
Pro
Forma Capitalization
|
||||||
|
Common
Equivalents
|
Own
%
|
|||||
|
THM
Class 1 Preferred
|
10,257,579
|
2.09%
|
||||
|
PTIC
Class 1 Preferred
|
8,737,938
|
1.78%
|
||||
|
MSPI
Class 1 Preferred
|
32,930,628
|
6.71%
|
||||
|
FP
Group Class 1 Preferred
|
166,968,315
|
34.02%
|
||||
|
Edgestone
Class 1 Preferred
|
14,436,593
|
2.94%
|
||||
|
Common
Shares outstanding (7/31/07)
|
213,272,401
|
43.45%
|
||||
|
Edgestone
warrants
|
737,467
|
0.15%
|
||||
|
TPC
warrants
|
37,174,877
|
7.57%
|
||||
|
Other
warrants
|
317,995
|
0.06%
|
||||
|
Treasury
method dilutive options
|
5,990,017
|
1.22%
|
||||
|
New
Class 1 Preferred Warrants
|
0
|
0.00%
|
||||
|
490,823,810
|
100.00%
|
|||||
|
Class
1 Convertible Preferred Share Terms
|
||||||
|
Class
1 Preferred Conversion Price
|
$1.3161
|
|||||
|
Conversion
Ratio
|
759.8207x
|
|||||
|
THM
Class 1 Preferred value
|
$13,500,000
|
|||||
|
PTIC
Class 1 Preferred value
|
$11,500,000
|
|||||
|
MSPI
Class 1 Preferred value
|
$43,340,000
|
|||||
|
FP
Group Class 1 Preferred value
|
$219,747,000
|
|||||
|
Edgestone
Class 1 Preferred value
|
$19,000,000
|
|||||
|
Total
Class 1 Preferred value
|
$307,087,000
|
|||||
|
New
Class 1 Preferred Warrant
|
||||||
|
Tranche
|
Gross
|
x
USD
|
Net
Dilutive
|
|||
|
THM
|
1,022,996
|
$1
.3200
|
0
|
|||
|
PTIC
|
871,441
|
$1
.3200
|
0
|
|||
|
MSPI
|
3,284,196
|
$1
.3200
|
0
|
|||
|
FP
Group
|
16,651,875
|
$1
.3200
|
0
|
|||
|
Total
|
21,830,508
|
0
|
||||
|
Treasury
Method Schedules
|
||||||
|
Tranche
|
Gross
|
x
CDN
|
Net
Dilutive
|
|||
|
Tranche
A
|
546,305
|
$1.24
|
84,302
|
|||
|
Tranche
B
|
702,821
|
$1.16
|
146,801
|
|||
|
Tranche
C
|
536,250
|
$2.75
|
0
|
|||
|
Tranche
D
|
128,000
|
$2.00
|
0
|
|||
|
Tranche
E
|
1,042,247
|
$1.55
|
0
|
|||
|
Tranche
F
|
4,019,650
|
$1.18
|
784,771
|
|||
|
Tranche
G
|
211,383
|
$1.16
|
44,152
|
|||
|
Tranche
H
|
62,987
|
$1.13
|
14,445
|
|||
|
Tranche
I
|
15,457,948
|
$1.00
|
4,915,545
|
|||
|
Total
options
|
22,707,591
|
5,990,017
|
||||
|
x
CDN
|
||||||
|
Edgestone
warrants
|
5,000,000
|
$1.25
|
737,467
|
|||
|
TPC
warrants
|
37,174,877
|
$0.00
|
37,174,877
|
|||
|
Other
warrants
|
1,000,000
|
$1.00
|
317,995
|
|||
|
x
USD
|
||||||
|
Convertible
Noteholder Warrants
|
16,500,000
|
$1.28
|
0
|
|||
|
Total
warrants
|
59,674,877
|
38,230,339
|
||||
|
FP
Group
|
Investment
|
Dilutive
Shares
|
Own
%
|
|||
|
Arsenal
HoldCo I S.a.r.l.
|
$205,819,000
|
156,385,533
|
31
.86%
|
|||
|
Arsenal
HoldCo II S.a.r.l.
|
$13,928,000
|
10,582,782
|
2.16%
|
|||
|
Total
|
$219,747,000
|
166,968,315
|
34.02%
|
SCHEDULE
B
ARTICLES
OF AMENDMENT
TO
ARTICLES OF AMENDMENT
MITEL
NETWORKS CORPORATION
CORPORATION
MITEL NETWORKS
3. The
articles of the above-named corporation are amended as follows:
|
(a)
|
to
create the following classes of
shares:
|
|
(i)
|
an
unlimited number of Class 1 Convertible Preferred Shares,
and
|
|
(ii)
|
an
unlimited number of Class 2 Preferred Shares, issuable in
series;
|
|
(b)
|
to
provide that the Class 1 Convertible Preferred Shares and the Class
2
Preferred Shares created hereby shall have the rights, privileges,
restrictions and conditions as set out in Schedules A and B attached,
and
|
|
(c)
|
to
remove Article 5.1 of Schedule A of the existing articles relating
to the
rights, privileges, restrictions and conditions of the existing
authorized
Class A Convertible Preferred Shares and substitute the
following:
|
|
“5.1
Optional Conversion Rights
|
||
|
Each
Series A share is convertible, at any time and from time to time
at the
option of the Series A Holder into 0.2679946 of a Common Share
and
0.000871 of a Class 1 Convertible Preferred Share, without payment
of
additional consideration.”
|
SCHEDULE
“A”
ARTICLES
OF AMENDMENT
MITEL
NETWORKS CORPORATION
(the
“Corporation”)
The
Class 1 Convertible Preferred Shares of the Corporation shall consist of
an
unlimited number of shares which shall be designated as the Class 1 Convertible
Preferred Shares (the “Class 1 Shares”) and
which shall have attached thereto the rights, privileges, restrictions and
conditions set forth herein.
ARTICLE
1.
INTERPRETATION
|
1.1
|
Definitions
|
For
purposes of these Class 1 Share provisions:
|
(a)
|
“AC
Value” per Class 1 Share means US$1,000.00 plus an amount equal
to 8% per annum thereon from the Original Issuance Date of such
Class 1
Share to the date of determination (utilizing a year of 360 days)
and
compounded annually. For example, the AC Value of a Class 1
Share would be US$1,040.00 on the six-month anniversary of its
Original
Issuance Date, US$1,123.20 on the 18-month anniversary of its Original
Issuance Date and US$1,181.95 on the 26-month anniversary of its
Original
Issuance Date, subject to adjustment as provided
herein.
|
|
(b)
|
“Act”
means the Canada Business Corporations Act, as
amended.
|
|
(c)
|
“Affiliate”
of a Person means any Person that would be considered to be an
“affiliated
entity” of such first-mentioned Person under National Instrument 45-106
–
Prospectus and Registration Exemptions, as in effect on the Original
Issuance Date.
|
|
(d)
|
“Available
Funds” has the meaning set out in Section
7.1(a)(i).
|
|
(e)
|
“Board
of Directors” means the board of directors of the
Corporation.
|
|
(f)
|
“Business
Day” means any day, other than a Saturday or Sunday, on which
chartered banks in Ottawa, Ontario or San Francisco, California
are open
for commercial banking business during normal banking
hours.
|
|
(g)
|
“Change
of Control Event” means:
|
|
(i)
|
the
sale, lease, exclusive and irrevocable license, abandonment, transfer
or
other disposition of all or substantially all of the assets of
the
Corporation to a Person or “group” of Persons unless the shareholders of
the Corporation immediately prior to the transaction own more than
50% of
|
|
|
the
voting power represented by issued and outstanding shares of capital
stock
of such Persons following the transaction;
or
|
|
(ii)
|
(A)
a merger, amalgamation, business combination or similar transaction,
however structured, of the Corporation with another corporation
(other
than with a Subsidiary of the Corporation where the shareholders
of the
Corporation immediately prior thereto own the same percentage of
the
Person surviving such merger as they did of the Corporation immediately
prior thereto), (B) a statutory arrangement involving the Corporation
or
(C) any other transaction involving the Corporation, whether by
a single
transaction or series of transactions, pursuant to which, in the
case of
(A), (B) or (C) above, any Person or “group” of Persons (as defined under
the U.S. Securities Exchange Act), together with his or its Affiliates
hereafter acquires the direct or indirect “beneficial ownership” (as
defined in the Act) of 50% of the voting power represented by
issued and outstanding shares in the capital of the Corporation
unless the
shareholders of the Corporation immediately prior to such single
transaction or series of transactions own more than 50% of the
voting
power represented by issued and outstanding shares in the capital
of the
Corporation following such single transaction or series of
transactions;
|
provided,
however, that the Class 1 Majority Holders shall have the right, on behalf
of
all Class 1 Holders, to waive the treatment of any of such event as a
“Change of Control Event” (provided that any such waiver must
be in writing signed by the Class 1 Majority Holders and shall only be effective
as to the particular event in respect of which the waiver is
executed).
|
(h)
|
“Class
1 Holders” means the holders of Class 1 Shares and “Class
1 Holder” means any one of
them.
|
|
(i)
|
“Class
1 Majority Holders” means, as of the relevant time of reference,
one or more Class 1 Holders of record who hold collectively more
than 50%
of the outstanding Class 1 Shares.
|
|
(j)
|
“Class
1 Redemption Amount” means, with respect to a Class 1 Share, an
amount in cash equal to (i) in the case of a redemption at the
election of
the Class 1 Majority Holders pursuant to Section 7.1(a) after the
Redemption Trigger Date but before the seventh anniversary from
the
Original Issuance Date, the NA Value, or (ii) in the case of a
redemption
at the election of the Corporation pursuant to Section 7.1(a) after
the
Redemption Trigger Date but before the seventh anniversary from
the
Original Issuance Date or a mandatory redemption on
or after the seventh anniversary of the Original Issuance Date
pursuant to
Section 7.1(b), the TR Value.
|
|
(k)
|
“Class
1 Shares” means the Class 1 Convertible Preferred Shares in the
capital of the Corporation.
|
|
(l)
|
“Common
Shares” means the common shares in the capital of the
Corporation.
|
|
(m)
|
“Consideration
Per Share” means:
|
|
(i)
|
in
respect of the issuance of Common Shares, an amount equal
to:
|
|
(A)
|
the
total consideration received by the Corporation for the issuance
of such
Common Shares, divided by
|
|
(B)
|
the
number of such Common Shares
issued;
|
|
(ii)
|
in
respect of the issuance of Derivative Securities, an amount equal
to:
|
|
(A)
|
the
total consideration received by the Corporation for the issuance
of such
Derivative Securities plus the minimum amount of any additional
consideration payable to the Corporation upon exercise, conversion
or
exchange of such Derivative Securities; divided
by
|
|
(B)
|
the
maximum number of Common Shares that would be issued if all such
Derivative Securities were exercised, converted or exchanged in
accordance
with their terms on the effective date of the relevant
calculation,
|
provided,
however, that if the amount determined in accordance with this clause (ii)
equals zero in respect of any particular issuance of Derivative Securities,
then
the “Consideration Per Share” in respect of such issuance shall
be the amount as may be determined by the agreement in writing of the
Corporation and the Class 1 Majority Holders. In the event that the
Corporation and the Class 1 Majority Holders do not agree on such amount,
the
Corporation shall not issue such Derivative Securities.
|
(n)
|
“Control”
means, with respect to any Person at any
time:
|
|
(i)
|
holding,
as owner or other beneficiary, other than solely as the beneficiary
of an
unrealized security interest, directly or indirectly through one
or more
intermediaries (A) more than fifty percent (50%) of the voting
securities
of that Person, or (B) securities of that Person carrying votes
sufficient
to elect or appoint the majority of individuals who are responsible
for
the supervision or management of that Person;
or
|
|
(ii)
|
the
exercise of de facto control of that Person whether direct or indirect
and
whether through the ownership of securities, by contract or trust
or
otherwise,
|
and
the term “Controlled” has a corresponding meaning.
|
(o)
|
“Conversion
Date” means the date on which the documentation set out in
Section 5.6(a) is received by the
Corporation.
|
|
(p)
|
“Conversion
Value” means the number determined in accordance with Article
6.
|
|
(q)
|
“Corporation”
means Mitel Networks Corporation.
|
|
(r)
|
“day”
or “days” means calendar day or calendar days, unless
otherwise noted.
|
|
(s)
|
“Derivative
Securities” means:
|
|
(i)
|
all
shares and other securities that are convertible into or exercisable
or
exchangeable for Common Shares (including the Class 1 Shares);
and
|
|
(ii)
|
all
options, warrants and other rights to acquire Common Shares or
securities
directly or indirectly convertible into or exercisable or exchangeable
for
Common Shares.
|
|
(t)
|
“Designated
Debt” means indebtedness of the Corporation which both (i)
precludes the payment of all or a portion of the Class 1 Redemption
Amount
when due and (ii) with respect to which the Class 1 Majority Holders
have
agreed in writing constitutes “Designated Debt” for the purposes of these
Articles.
|
|
(u)
|
“Excluded
Issuances” has the meaning set out in Section
6.4.
|
|
(v)
|
“Fair
Market Value” means:
|
|
(i)
|
in
respect of assets other than securities, the fair market value
thereof as
determined in good faith by the Board of Directors, provided, however,
that if the Class 1 Majority Holders object in writing to any such
determination within 10 days of receiving notice of such determination,
the fair market value will be determined by an independent and
qualified
investment banking or business valuation firm mutually agreeable
to the
Board of Directors and the Class 1 Majority Holders, whose decision
is
final and binding on all Persons (the costs of which shall be borne
by the
Corporation);
|
|
(ii)
|
in
respect of Common Shares, the fair market value thereof, as determined
in
accordance with Exhibit “1” attached to these Class 1 Share provisions;
and
|
|
(iii)
|
in
respect of securities other than Common
Shares:
|
|
(A)
|
if
such securities are not subject to any statutory hold periods or
contractual restrictions on
transfer:
|
|
(1)
|
if
traded on one or more securities exchanges or markets, the weighted
average of the closing prices of such securities on the exchange
or market
on which the securities are primarily traded over the 20 day period
ending
three days prior to the relevant
date;
|
|
(2)
|
if
actively traded over-the-counter, the weighted average of the closing
bid
or sale prices (whichever are applicable) over the 20 day period
ending
three days prior to the relevant date;
or
|
|
(3)
|
if
there is no active public market, the fair market value of such
securities
as determined in good faith by the Board of Directors, but no discount
or
premium is to be applied to their valuation on the basis of the
securities
constituting a minority block or a majority block of securities,
or
|
|
(B)
|
if
such securities are subject to statutory hold periods or contractual
restrictions on transfer, or both, the fair market value of such
securities as determined by applying an appropriate discount, as
determined in good faith by the Board of Directors, to the value
as
calculated in accordance with clause (A)
above,
|
provided,
however, that if the Class 1 Majority Holders object in writing to any
determination of the Board of Directors made under clause (A) or (B) above
within 10 days of receiving notice of such determination, the applicable
fair
market value and/or discount, as the case may be, will be determined by an
independent investment banking or business valuation firm mutually agreeable
to
the Board of Directors and the Class 1 Majority Holders, as the case may
be,
whose decision is final and binding on all Persons (the costs of which shall
be
borne by the Corporation).
|
(w)
|
“Junior
Shares” has the meaning set out in Section
4.1(a)(i).
|
|
(x)
|
“Liquidation
Event” means a liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or any other distribution
of the assets of the Corporation among its shareholders for the
purpose of
winding up its affairs.
|
|
(y)
|
“NA
Value” per Class 1 Share means US$970.35 plus an amount equal
to
8% per annum thereon from the Original Issuance Date of such Class
1 Share
to the date of determination (utilizing a year of 360 days) and
compounded
annually. For example, the NA Value of a Class 1 Share would be
US $1,009.16 on the six-month anniversary of its Original Issuance
Date,
US $1,089.90 on the 18-month anniversary of its Original Issuance
Date and
US $1,146.91 on the 26-month anniversary of its Original Issuance
Date,
subject to adjustment as provided
herein.
|
|
(z)
|
“Original
Issuance Date” means, in respect of Class 1 Shares, the date on
which the first Class 1 Shares are first
issued.
|
|
(aa)
|
“Person”
includes any individual, sole proprietorship, partnership, limited
partnership, firm, joint venture, entity, unincorporated association,
unincorporated syndicate, unincorporated organization, trust, body
corporate, corporation, government, government regulatory authority,
governmental department, agency, commission, board, tribunal, dispute
settlement panel or body, bureau or court, and where the context
requires
any of the foregoing when they are acting as trustee, executor,
administrator, or other legal
representative.
|
|
(bb)
|
“Qualified
IPO” means a public offering of Common Shares at a Qualified
IPO
Price Per Share in which:
|
|
(i)
|
the
aggregate cash proceeds to the Corporation are not less than
US$100,000,000 (before deducting expenses, underwriting discounts
and
commissions); and
|
|
(ii)
|
immediately
following the closing of the public offering, the Common Shares
are listed
and posted for trading, traded or quoted on the Toronto Stock Exchange,
the New York Stock Exchange or the NASDAQ Stock Market,
LLC.
|
|
(cc)
|
“Qualified
IPO Price Per Share” means the value per Class 1 Share on an
as-if-converted to Common Shares basis is greater than or equal
to (i)
150% of the NA Value if the initial public offering is completed
on or
prior to the one year anniversary of the Original Issuance Date,
(ii) 175%
of the NA Value if the initial public offering is completed after
the
first anniversary of the Original Issuance Date, but on or before
the
second anniversary of the Original Issuance Date, and (iii) 200%
of the NA
Value if the initial public offering is completed after the second
anniversary of the Original Issuance
Date.
|
|
(dd)
|
“Redemption
Trigger Date” means that date which is five years plus one day
after the Original Issuance Date; or such later date as the Corporation
and the Class 1 Majority Holders may agree in
writing.
|
|
(ee)
|
“Stock
Split” means:
|
|
(i)
|
the
issuance of Common Shares as a dividend or other distribution on
outstanding Common Shares;
|
|
(ii)
|
the
subdivision of outstanding Common Shares into a greater number
of Common
Shares; or
|
|
(iii)
|
the
combination of outstanding Common Shares into a smaller number
of Common
Shares.
|
|
(ff)
|
“Subsidiary”
has the meaning ascribed thereto in the Act on the Original Issuance
Date.
|
|
(gg)
|
“TR
Value” for a Class 1 Share means the greater of (i) the NA Value
and (ii) the value of the Common Shares into which such Class 1
Share is
convertible immediately prior to the relevant date of determination,
plus,
in each case, any declared but unpaid dividends owing under Section
3.1.
|
|
1.2
|
“As-if-converted
to Common Shares Basis”
|
For
purposes of these Class 1 Share provisions, where a calculation is required
to
be made on an “as-if-converted to Common Shares basis”, such
calculation will be made by determining (in each case as of the applicable
date
for the determination):
|
(a)
|
in
respect of a Class 1 Share, the number of whole Common Shares into
which
such Class 1 Share is then convertible pursuant to these Class
1 Share
provisions; and
|
|
(b)
|
in
respect of any other Derivative Securities, the number of whole
Common
Shares into which such securities are then convertible, exchangeable
or
exercisable.
|
ARTICLE
2.
VOTING
RIGHTS
|
2.1
|
Entitlement
to Vote and Receive
Materials
|
|
(a)
|
Except
as otherwise expressly provided in these Class 1 Share provisions,
or as
provided by applicable law, each Class 1 Holder is entitled to
vote on all
matters submitted to a vote or consent of shareholders of the
Corporation.
|
|
(b)
|
Each
Class 1 Holder is entitled to receive copies of all notices and
other
materials sent by the Corporation to its shareholders relating
to meetings
and written actions to be taken by shareholders in lieu of a meeting.
All
such notices and other materials shall be sent to the Class 1 Holders
concurrently with delivery to the other
shareholders.
|
|
2.2
|
Number
of Votes
|
|
(a)
|
Each
Class 1 Share entitles the Class 1 Holder to the number of votes
per share
equal to the quotient obtained by dividing the AC Value by the
Conversion
Value, as adjusted from time to time in accordance with Article
6.
|
|
(b)
|
For
purposes of determining the number of votes for each Class 1 Share
calculated in accordance with Section 2.2(a), the determination
shall be
made as of the record date for the determination of shareholders
entitled
to vote on such matter, or if no record date is established, the
date such
vote is taken or any written consent of shareholders is solicited,
and
shall be calculated based on the Conversion Value in effect on
that
date.
|
|
2.3
|
Single
Class
|
Except
as otherwise provided herein, or except as provided by applicable law, the
Class
1 Holders will vote together with the holders of Common Shares and any other
series or class of shares entitled to vote on such matters as a single class
on
all matters submitted to a vote of shareholders of the Corporation.
|
2.4
|
Exception
to Single Class
|
In
addition to any other approvals required by applicable law, any addition
to,
change to or removal of any right, privilege, restriction or condition attaching
to the Class 1 Shares as a class requires the affirmative vote or written
approval of the Class 1 Majority Holders.
ARTICLE
3.
DIVIDENDS
|
3.1
|
Dividends
|
The
Class 1 Holders shall be entitled to receive, in respect of the Class 1 Shares,
dividends if, as, and when declared by the Board of Directors out of the
monies
of the Corporation properly applicable to payment of dividends in the amount
of
any dividends that the Class 1 Holders would have received by way of dividends
paid on the Common Shares on an as-if-converted to Common Shares basis, such
payment to be made concurrently with the payment of any dividends on the
Common
Shares.
|
3.2
|
Priority
of Dividends
|
|
(a)
|
No
dividend or other distribution (other than a stock dividend giving
rise to
an adjustment under Section 6.5) will be paid or set apart for
payment in
respect of any share of any other class or series unless a dividend
is
concurrently paid (or set apart for future payment thereof) in
respect of
each outstanding Class 1 Share in an amount at least equal to the
product
of:
|
|
(i)
|
the
amount of the dividend per share paid in respect of the shares
of such
other class or series (calculated on an as-if-converted to Common
Shares
basis); and
|
|
(ii)
|
the
number of Common Shares into which each Class 1 Share is then
convertible.
|
ARTICLE
4.
LIQUIDATION
PREFERENCE
|
4.1
|
Payment
of Liquidation Preference
|
|
(a)
|
Subject
to the limitation in Section 4.1(b), upon the occurrence of a Liquidation
Event or Change of Control Event the Class 1 Holders are entitled
to
receive the following amounts:
|
|
(i)
|
Preference
on a Liquidation Event. Upon the occurrence of a Liquidation Event,
the Class 1 Holders are entitled to be paid out of the assets of
the
Corporation available for distribution to its shareholders, before
any
payment shall be made to the holders of any Common Shares or any
other
class or series of shares ranking on liquidation, dissolution or
winding-up of the Corporation junior to the Class 1 Shares (collectively,
the “Junior Shares”), an amount per Class 1 Share equal
to the TR Value. If, upon such a Liquidation Event, the assets
of the
Corporation available for distribution to the Corporation’s shareholders
shall be insufficient to pay the Class 1 Holders the full amount
to which
they are entitled as set out above, the holders of Class 1 Shares
shall
share rateably in any amount remaining available for distribution
in
proportion to the respective amounts which would otherwise have
been
payable on or in respect of the
|
|
|
Class
1 Shares held by them if all amounts payable on or in respect of
such
Class 1 Shares were paid in full.
|
|
(ii)
|
Preference
on a Change of Control Event. Upon the occurrence of a Change of
Control Event, the Class 1 Holders are entitled to receive an amount
of
cash, securities or other property per Class 1 Share, before any
payment
shall be made to the holders of Junior Shares, equal to the TR
Value. If
upon the occurrence of a Change of Control Event, the cash, securities
or
other property available for payment to the Corporation’s shareholders
shall be insufficient to pay the Class 1 Holders the full amount
to which
they are entitled as set out above, the holders of Class 1 Shares
shall
share rateably in any such payment in proportion to the respective
amounts
which would otherwise have been payable on or in respect of the
Class 1
Shares held by them if all amounts payable on or in respect of
such Class
1 Shares were paid in full
|
|
(b)
|
In
the event of any Liquidation Event or Change of Control
Event:
|
|
(i)
|
the
Corporation will not permit such Liquidation Event or Change of
Control
Event to occur unless the transaction (or series of transactions)
provides
for a payment to the Class 1 Holders in connection therewith of
their full
entitlements pursuant to Section 4.1(a);
or
|
|
(ii)
|
if
the Corporation cannot prevent such Liquidation Event or Change
of Control
Event from occurring, the Corporation shall, subject to applicable
laws,
pay to the Class 1 Holders the full amount of their entitlements
pursuant
to Section 4.1(a) or, if the Corporation cannot legally pay such
amount in
full, the amount it is legally able to pay shall be paid and the
balance
shall increase at the rate of 15% per annum, compounded annually
until
such amount is paid, and the Corporation shall not pay any amounts
or make
any other distributions in respect of any other class or series
of its
shares until such entitlements are fully
paid.
|
|
(c)
|
The
Corporation will not permit any transaction (or series of transactions)
that would constitute, a “Change of Control Event”, to
occur unless the transaction (or series of transactions) provides
for a
payment to the Class 1 Holders in connection therewith of the their
full
entitlements pursuant to Section
4.1(a)(ii).
|
|
4.2
|
Distribution
Other than Cash
|
In
the case of a Liquidation Event or Change of Control Event that involves
a
distribution other than in cash, the Class 1 Holders may in any event elect
to
receive any distribution or payment to which they are entitled in cash, to
the
extent available. The value of the securities or other property for this
purpose
shall be their Fair Market Value.
|
4.3
|
Notice
and Right to Convert Prior to Liquidation Event or Change of Control
Event
|
The
Corporation shall provide notice in accordance with the provisions of Section
8.2 to each Class 1 Holder, at the earliest practicable time, of the date
on
which a proposed or reasonably
anticipated
Liquidation Event or Change of Control Event shall take place. Such notice
shall
also specify the estimated payment date, the amount to which the Class 1
Holders
would be entitled and the place where such payments are to be
made. The Class 1 Holders shall have the right to convert into Common
Shares immediately prior to a Liquidation Event or Change of Control
Event.
ARTICLE
5.
CONVERSION
|
5.1
|
Optional
Conversion Rights
|
Each
Class 1 Share is convertible, at any time and from time to time at the option
of
the Class 1 Holder and without payment of additional consideration, into
Common
Shares.
|
5.2
|
Automatic
Conversion
|
The
Class 1 Shares shall automatically convert into Common Shares:
|
(a)
|
immediately
prior to, and conditional upon, the closing of a Qualified IPO;
or
|
|
(b)
|
with
the affirmative vote or written consent of the Class 1 Majority
Holders.
|
|
5.3
|
Conversion
Rate
|
The
number of Common Shares into which each Class 1 Share is convertible is equal
to
the quotient obtained by dividing the AC Value by the Conversion Value, as
adjusted from time to time in accordance with Article 6. On the
Original Issuance Date, each Class 1 Share will initially be convertible
into
759.8207 Common Shares, but the number of Common Shares into which a Class
1
Share will convert will adjust in accordance with increases in the AC Value
and,
pursuant to adjustment from time to time in accordance with Article
6.
|
5.4
|
Effective
Date and Time of Conversion
|
Conversion
is deemed to be effected:
|
(a)
|
in
the case of an optional conversion pursuant to Section 5.1, immediately
prior to the close of business on the Conversion
Date;
|
|
(b)
|
in
the case of automatic conversion pursuant to Section 5.2(a), immediately
prior to the closing of the Qualified
IPO;
|
|
(c)
|
in
the case of automatic conversion pursuant to Section 5.2(b), at
the time
and on the date specified by the Class 1 Majority Holders;
and
|
|
(d)
|
notwithstanding
any delay in the delivery of certificates representing the Common
Shares
into which the Class 1 Shares have been
converted.
|
|
5.5
|
Effect
of Conversion
|
Upon
the conversion of the Class 1 Shares:
|
(a)
|
the
rights of a Class 1 Holder as a holder of the Class 1 Shares shall
cease;
and
|
|
(b)
|
each
Person in whose name any certificate for Common Shares is issuable
upon
such conversion is deemed to have become the holder of record of
such
Common Shares.
|
|
5.6
|
Mechanics
of Optional Conversion
|
|
(a)
|
To
exercise optional conversion rights under Section 5.1, a Class
1 Holder
must:
|
|
(i)
|
give
written notice to the Corporation at its principal office or the
office of
any transfer agent for the Common
Shares:
|
|
(A)
|
stating
that the Class 1 Holder elects to convert such shares;
and
|
|
(B)
|
providing
the name or names (with address or addresses) in which the certificate
or
certificates for Common Shares issuable upon such conversion are
to be
issued;
|
|
(ii)
|
surrender
the certificate or certificates representing the shares being converted
to
the Corporation at its principal office or the office of any transfer
agent for the Common Shares; and
|
|
(iii)
|
where
the Common Shares are to be registered in the name of a Person
other than
the Class 1 Holder, provide evidence to the Corporation of proper
assignment and transfer of the surrendered certificates to the
Corporation, including evidence of compliance with applicable Canadian
and
United States securities laws and any applicable shareholders
agreement.
|
|
(b)
|
As
soon as reasonably practicable, but in any event within 10 days
after the
Conversion Date, the Corporation will issue and deliver to the
Class 1
Holder a certificate or certificates in such denominations as such
Class 1
Holder requests for the number of full Common Shares issuable upon
the
conversion of such Class 1 Shares, together with cash in respect
of any
fractional Common Shares issuable upon such conversion in accordance
with
Section 5.8.
|
|
5.7
|
Mechanics
of Automatic Conversion
|
|
(a)
|
Upon
the automatic conversion of any Class 1 Shares into Common Shares,
each
Class 1 Holder must surrender the certificate or certificates formerly
representing that Class 1 Holder’s Class 1 Shares at the principal office
of the Corporation or the office of any transfer agent for the
Common
Shares.
|
|
(b)
|
Upon
receipt by the Corporation of the certificate or certificates,
the
Corporation will issue and deliver to such Class 1 Holder, promptly
at the
office and in the name shown on the surrendered certificate or
certificates, a certificate or certificates for the number of Common
Shares into which such Class 1 Shares are converted, together with
cash in
respect of any fractional Common Shares issuable upon such conversion
in
accordance with Section 5.8.
|
|
(c)
|
The
Corporation is not required to issue certificates evidencing the
Common
Shares issuable upon conversion until certificates formerly evidencing
the
converted Class 1 Shares are either delivered to the Corporation
or its
transfer agent, or the Class 1 Holder notifies the Corporation
or such
transfer agent that such certificates have been lost, stolen or
destroyed,
and executes and delivers an agreement to indemnify the Corporation
from
any loss incurred by the Corporation in connection with the loss,
theft or
destruction.
|
|
(d)
|
If
the Board of Directors expects, acting reasonably, that the Class
1 Shares
will automatically convert, the Corporation will, at least 20 days
before
the date it reasonably believes will be the date of the automatic
conversion, send by prepaid priority overnight courier or deliver
to each
Person who at the date of mailing or delivery is a registered Class
1
Holder, a notice in writing of the intention of the Corporation
to
automatically convert such shares. That notice shall be sent or
delivered
to each Class 1 Holder at the last address of that Class 1 Holder
as it
appears on the securities register of the Corporation, or in the
event the
address of any such Class 1 Holder does not so appear, then to
the last
address of that Class 1 Holder known to the Corporation. Accidental
failure or omission to give that notice to one or more Class 1
Holder(s)
will not affect the validity of such conversion, but if that failure
or
omission is discovered, notice shall be given promptly to any Class
1
Holder that was not given notice. That notice will have the same
force and
effect as if given in due time. The notice will set out the basis
under
Section 5.2 for such automatic conversion, the number of Class
1 Shares
held by the Person to whom it is addressed which are to be converted
(if
known), the number of Common Shares into which those Class 1 Shares
will
be converted, the expected date of closing of the Qualified IPO,
if
applicable, and the place or places in Canada at which Class 1
Holders may
present and surrender the certificate or certificates representing
its
Class 1 Shares for conversion.
|
|
5.8
|
Fractional
Shares
|
No
fractional Common Shares will be issued upon conversion of Class 1 Shares.
Instead of any fractional Common Shares that would otherwise be issuable
upon
conversion of Class 1 Shares, the Corporation will pay to the Class 1 Holder
a
cash adjustment in respect of such fraction in an amount equal to the same
fraction of the Fair Market Value per Common Share (as determined in good
faith
by the Board of Directors) on the effective date of the conversion. For greater
certainty, all of a Class 1 Holder’s Class 1 Shares will be aggregated for
purposes of calculating any fractional Common Share resulting from a
conversion.
|
5.9
|
Partial
Conversion
|
If
some but not all of the Class 1 Shares represented by a certificate or
certificates surrendered by a Class 1 Holder are converted, the Corporation
will
execute and deliver to or on the order of the Class 1 Holder, at the expense
of
the Corporation, a new certificate representing the number of Class 1 Shares
that were not converted.
ARTICLE
6.
CONVERSION
VALUE
|
6.1
|
Initial
Conversion Value
|
The
initial Conversion Value is equal to US$1.3161 and remains in effect until
the
Conversion Value is adjusted in accordance with the provisions of this Article
6.
|
6.2
|
Adjustments
for Dilution
|
If,
following the Original Issuance Date, the Corporation issues any additional
Common Shares or Derivative Securities (other than Excluded Issuances or
in
connection with an event to which Section 6.5, 6.6 or 6.7 applies) for a
Consideration Per Share that is less than the Conversion Value in effect
immediately prior to such issuance, then the Conversion Value in effect
immediately prior to such issuance shall be adjusted in accordance with the
following formula:
|
CV2
|
=
|
CV1
(A+B) / (A+C), where:
|
|
CV2
|
=
|
New
Conversion Value after giving effect to issuance of additional
Common
Shares or Derivative Securities (“New
Issue”)
|
|
CV1
|
=
|
Conversion
Value in effect immediately prior to the New Issue
|
|
A
|
=
|
Number
of Common Shares deemed to be outstanding immediately prior to
New Issue
on an as-if-converted to Common Shares basis
|
|
B
|
=
|
Aggregate
consideration received by the Corporation with respect to the
New Issue
divided by CV1
|
|
C
|
=
|
Number
of shares of stock issued in the New Issue
|
|
6.3
|
Additional
Provisions Regarding Dilution
|
For
purposes of Section 6.2:
|
(a)
|
if
a part or all of the consideration received by the Corporation
in
connection with the issuance of additional Common Shares or Derivative
Securities consists of property other than cash, such consideration
is
deemed to have a value equal to its Fair Market
Value;
|
|
(b)
|
no
adjustment of the Conversion Value is to be made upon the issuance
of any
Derivative Securities or additional Common Shares that are issued
upon the
exercise, conversion or exchange of any Derivative
Securities;
|
|
(c)
|
any
adjustment of the Conversion Value is to be disregarded if, and
to the
extent that, all of the Derivative Securities that gave rise to
such
adjustment expire or are cancelled without having been exercised
or
converted, so that the Conversion Value effective immediately upon
such
cancellation or expiration is equal to the Conversion Value that
otherwise
would have been in effect immediately prior to the time of the
issuance of
the expired or cancelled Derivative Securities, with
any
|
|
|
additional
adjustments as subsequently would have been made to that Conversion
Value
had the expired or cancelled Derivative Securities not been
issued;
|
|
(d)
|
if
the terms of any Derivative Securities previously issued by the
Corporation are changed (whether by their terms or for any other
reason)
so as to raise or lower the Consideration Per Share payable with
respect
to such Derivative Securities (whether or not the issuance of such
Derivative Securities originally gave rise to an adjustment of
the
Conversion Value), the Conversion Value is adjusted as of the date
of such
change;
|
|
(e)
|
the
Consideration Per Share received by the Corporation in respect
of
Derivative Securities is determined in each instance as
follows:
|
|
(i)
|
the
Consideration Per Share is determined as of the date of issuance
of
Derivative Securities without giving effect to any possible future
price
adjustments or rate adjustments that might be applicable with respect
to
such Derivative Securities and that are contingent upon future
events;
and
|
|
(ii)
|
in
the case of an adjustment to the Conversion Value to be made as
a result
of a change in terms of any Derivative Securities, the Consideration
Per
Share for purposes of calculating the adjustment to the Conversion
Value
is determined as of the date of such change and, for greater certainty,
not as of the date of the issuance of the Derivative Securities;
and
|
|
(f)
|
notwithstanding
any other provisions contained in these Class 1 Share provisions,
but
except as provided in Sections 6.3(d) or 6.5, no adjustment to
the
Conversion Value is to be made in respect of the issuance of additional
Common Shares or Derivative Securities in any case in which such
adjustment would otherwise result in the Conversion Value being
greater
than the Conversion Value in effect immediately prior to the issuance
of
such additional Common Shares or Derivative
Securities.
|
|
6.4
|
Excluded
Transactions
|
Notwithstanding
Section 6.2, no adjustment to the Conversion Value is to be made in connection
with the following issuances (“Excluded
Issuances”):
|
(a)
|
any
option to purchase Common Shares or other Derivative Securities
granted
under any stock option plan, stock purchase plan or other stock
compensation program of the Corporation approved by the Board of
Directors
and/or Common Shares or other Derivative Securities allotted for
issuance,
issued or issuable pursuant to any such plan or arrangement, or
the
issuance of any Common Shares upon the exercise of any such options
or
other Derivative Securities; provided, however, that any Common
Shares
issued upon the exercise of any such options, together with any
Common
Shares or Derivative Securities allocated for issuance, issued
or
issuable, shall not exceed 12.5% of the Common Shares outstanding
on the
Original Issuance Date (calculated on an as-if-converted into Common
Shares basis);
|
|
(b)
|
any
equity securities issued pursuant to a Qualified
IPO;
|
|
(c)
|
except
as contemplated in Section 6.5, any equity securities issued in
respect of
subdivisions, stock dividends or capital reorganizations affecting
the
share capital of the Corporation;
|
|
(d)
|
any
issuance of Common Shares pursuant to the exercise of any warrants
outstanding as of the Original Issuance Date to acquire Common
Shares
issued to each of (i) the Canadian Imperial Bank of Commerce (ii)
EdgeStone Capital Equity Fund II-B GP, Inc., as agent for EdgeStone
Capital Equity Fund II-A, L.P. and its parallel investors, and
EdgeStone
Capital Equity Fund II Nominee, Inc., as nominee for EdgeStone
Capital
fund II-A, L.P. and its parallel investors, (iii) Highbridge International
LLC, Marathon Special Opportunity Special Fund, Ltd., Fore Convertible
Master Fund, Ltd. and Fore Multistrategy Master Fund, Ltd. and
(iv)
Technology Partnerships Canada, or any of their permitted assignees
(pursuant to contracts in existence on the Original Issuance
Date);
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|
(e)
|
any
equity securities issued to bona fide consultants or professional
advisors
of the Corporation as part of the consideration for services received
by
the Corporation from such consultants or professional advisors;
provided
that such issuances in the aggregate do not exceed 0.25% of the
Common
Shares issued and outstanding on the Original Issuance Date, all
calculated on an as-if-converted into Common Shares basis;
and
|
|
(f)
|
any
Common Shares or Derivative Securities issued to or in connection
with any
of the following (i) licensors of technology of the Corporation,
(ii)
lending or leasing institutions in connection with obtaining debt
financing, or (iii) any other technology licensing, equipment leasing
or
other non equity interim financing transaction; provided that:
(A) any
such transaction or transactions approved by the Board of Directors;
and
(B) the maximum aggregate number of Common Shares (including Common
Shares
issuable on the conversion or exercise of Derivative Securities)
that may
be issued pursuant to all transactions contemplated by this clause
(i)
shall not exceed 1% of the aggregate number of Common Shares issued
and
outstanding on the Original Issuance Date (subject to appropriate
adjustments for stock dividends, stock splits, stock consolidations,
capital reorganizations and the like occurring after the Original
Issuance
Date), all calculated on an as-if-converted to Common Shares
basis.
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|
6.5
|
Adjustments
for Stock Splits
|
After
the Original Issuance Date, the Conversion Value shall be adjusted on the
record
date in respect of each Stock Split, such that the Conversion Value is equal
to
the product obtained by multiplying the Conversion Value immediately before
the
Stock Split by a fraction:
|
(a)
|
the
numerator of which is the number of Common Shares issued and outstanding
immediately before the Stock Split;
and
|
|
(b)
|
the
denominator of which is the number of Common Shares issued and
outstanding
immediately after the Stock Split.
|
|
6.6
|
Adjustments
for Capital
Reorganizations
|
If,
following the Original Issuance Date, the Common Shares are changed into
the
same or a different number of shares of any other class or series, whether
by
capital reorganization, reclassification or otherwise, the Corporation will
provide each Class 1 Holder with the right to convert each Class 1 Share
into
the kind and amount of shares, other securities and property receivable upon
such change that a holder of a number of Common Shares equal to the number
of
Common Shares into which such Class 1 Share was convertible immediately prior
to
the change would be entitled to receive upon such change (subject to any
necessary further adjustments after the date of such change).
|
6.7
|
Other
Distributions
|
In
the event the Corporation declares a distribution payable in securities (other
than securities of the Corporation), evidences of indebtedness issued by
the
Corporation or other Persons or assets (including cash dividends) then, in
each
such case for the purpose of this Section 6.7, Class 1 Holders shall be entitled
upon conversion of their Class 1 Shares to a proportionate share of any such
distribution as though they were the holders of the number of Common Shares
into
which their Class 1 Shares were convertible as of the record date fixed for
the
determination of the holders of Common Shares of the Corporation entitled
to
receive such distribution, unless previously paid under Section
3.1.
|
6.8
|
No
Impairment
|
The
Corporation will not, by amendment of its articles or through any
reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid
or
seek to avoid the observance or performance of any of the terms to be observed
or performed under this Article 6, but will at all times in good faith assist
in
the carrying out of all the provisions of Article 5 and 6 and in the taking
of
any action necessary or appropriate in order to protect the conversion rights
of
the Class 1 Holders against impairment.
|
6.9
|
Reservation
of Common Shares
|
The
Corporation shall at all times reserve and keep available out of its authorized
but unissued Common Shares, solely for the purpose of effecting the conversion
of Class 1 Shares, such number of Common Shares as from time to time is
sufficient to effect the conversion of all outstanding Class 1 Shares, and
if at
any time the number of authorized but unissued Common Shares is not sufficient
to effect the conversion of all of the then outstanding Class 1 Shares, then
the
Corporation will take such corporate action as may, in the opinion of its
legal
counsel, be necessary to increase its authorized but unissued Common Shares
to
such number of shares as is sufficient for such purpose.
|
6.10
|
Disputes
|
If
a dispute shall at any time arise with respect to adjustments in the Conversion
Value, such dispute shall be determined by the Corporation’s auditors, or if
they are unable or unwilling to act, by such other firm of independent chartered
accountants as may be selected by the Board of Directors and any such
determination shall (absent manifest error) be binding upon the
Corporation,
the Class 1 Holders and all other shareholders of the Corporation. Such auditors
or accountants shall be provided access to all necessary records of the
Corporation. If any such determination is made, the Corporation shall deliver
a
certificate to the Class 1 Holders describing such determination.
|
6.11
|
Certificate
as to Adjustments
|
In
each case of an adjustment or readjustment of the Conversion Value, the
Corporation will promptly furnish each Class 1 Holder with a certificate,
prepared by the Corporation’s accountants, showing such adjustment or
readjustment, and stating in reasonable detail the facts upon which such
adjustment or readjustment is based.
|
6.12
|
Further
Adjustment Provisions
|
If,
at any time as a result of an adjustment made pursuant to Section 6.6, a
Class 1
Holder becomes entitled to receive any shares or other securities of the
Corporation other than Common Shares upon surrendering Class 1 Shares for
conversion, the Conversion Value in respect of such other shares or securities
(if such other shares or securities are by their terms convertible securities)
will be adjusted after that time, and will be subject to further adjustment
from
time to time, in a manner and on terms as nearly equivalent as practicable
to
the provisions with respect to Class 1 Shares contained in this Article 6,
and
the remaining provisions of these Class 1 Share provisions will apply mutatis
mutandis to any such other shares or securities.
|
6.13
|
Waiver
of Adjustments
|
Notwithstanding
any other provisions of this Article 6, with the written consent of the
Corporation, the Class 1 Majority Holders shall be entitled, on behalf of
all
Class 1 Holders, to waive any entitlement to an adjustment to the Conversion
Value under this Article 6. Any such waiver by the Class 1 Majority Holders
must
be in writing and shall only be effective as to the particular adjustment
being
waived. In such event, notice of such waiver shall be sent to all Class 1
Holders in accordance with Section 8.2.
ARTICLE
7.
REDEMPTION
|
7.1
|
Redemption
Following the Redemption Trigger Date and Mandatory Redemption
|
|
(a)
|
On
or after the Redemption Trigger Date, the Corporation shall have
the right
to redeem, and the Class 1 Majority Holders shall have the right
to have
the Corporation redeem, all of the Class 1 Shares. If the Corporation
elects to redeem the Class 1 Shares, or upon receipt of a redemption
request in writing from the Class 1 Majority Holders, the Corporation
will:
|
|
(i)
|
deliver
to each Class 1 Holder (within 15 days following the date the written
request is received by the Corporation or at any time the Corporation
elects to redeem after the Redemption Trigger Date) a notice specifying
the total funds legally available to the Corporation for redemption
of all
of the Class 1 Shares outstanding at that time (the “Available
Funds”) and the date scheduled for redemption (which
shall
|
|
|
be
at least 30 days after the date of the notice given by the Corporation);
and
|
|
(ii)
|
within
60 days, but not before the expiry of 30 days, following (x) the
date the
written request from the Class 1 Majority Holders is received by
the
Corporation to redeem all Class 1 Shares or (y) the date that the
Corporation has notified the Class 1 Holders of its election to
redeem all
the Class 1 Shares, to the extent the Corporation has Available
Funds,
redeem all of the Class 1 Shares, subject to Section 7.1(c), by
paying to
each Class 1 Holder, an amount equal to the Class 1 Redemption
Amount
multiplied by the number of Class 1 Shares held by such Class 1
Holder.
|
|
(b)
|
On
the seventh anniversary of the Original Issuance Date for the Class
1
Shares, the Company shall redeem each outstanding Class 1 Share
for an
amount in cash equal to the Class 1 Redemption Amount. The
Corporation shall provide each Class 1 Holder 30 days notice of
such
seventh anniversary.
|
|
(c)
|
Notwithstanding
any provision of this Section 7.1, each Class 1 Holder shall be
entitled
and given the opportunity to convert the Class 1 Shares into Common
Shares
pursuant to Article 5 prior to the date which is at least 10 days
prior to
the date scheduled for redemption.
|
|
(d)
|
If
the Available Funds are insufficient to pay in full the Class 1
Redemption
Amount with respect to the total number of Class 1 Shares outstanding,
then Available Funds will be used to redeem the maximum possible
number of
whole Class 1 Shares rateably among the Class 1 Holders, and in
such case,
the number of Class 1 Shares to be redeemed shall be the number
obtained
by dividing (i) the Available Funds, by (ii) the Class 1 Redemption
Amount. Any redemption notice given with respect to Class 1
Shares not purchased because of the lack of Available Funds shall
be
deemed withdrawn if given by the Corporation, and may be withdrawn
by a
Class 1 Holder with respect to such Class 1 Shares (in which case
subsequent notices may be given under this Article 7 with regard
to
unredeemed Class 1 Shares).
|
|
(e)
|
Designated
Debt. If the Corporation is wholly or partially precluded
by the terms of any Designated Debt from making payment of the
Class 1
Redemption Amount (a “Blockage”) then the Corporation (i)
shall make whatever payment that then can be made under
subsection (d) above without violating such Designated Debt, and
(ii)
shall have no obligation to make any such precluded payment until
the
Blockage has been removed at which point it shall be obligated
to pay to
each Class 1 Holder with respect to each Class 1 Share then outstanding
and with respect to which a redemption request has not been withdrawn
by
the Class 1 Majority Holders the greater of (a) the Class 1 Redemption
Amount calculated in accordance herewith at the time it would have
been
paid but for the Blockage (compounded at the rate specified in
Section
4.1(b)(ii) hereof until the date of payment) and (b) the Class
1
Redemption Amount calculated in accordance herewith at the time
it is
actually paid; provided, however, if the relevant redemption
notice was given by the Class 1 Majority Holders prior to the seventh
anniversary of the Original Issuance Date, then the relevant redemption
payment
|
|
|
shall
be calculated pursuant to subclause (a) of this sentence. The
Corporation shall promptly inform the Class 1 Holders of the expiration
of
any Blockage, and a Class 1 Majority Holder shall be entitled,
prior to
actual payment, to annul any notice of redemption ( wholly or
partially) given by the Corporation, other than a notice of redemption
given by the Corporation as a result of a redemption request from
the
Class 1 Majority Holders under Section 7.1(a) given prior to the
seventh
anniversary of the Original Issuance
Date.
|
|
7.2
|
Surrender
of Certificates
|
If
a redemption of Class 1 Shares pursuant to this Article 7 will occur, each
Class
1 Holder shall surrender to the Corporation the certificates representing
the
Class 1 Shares to be redeemed by the Corporation in accordance with this
Article
7, in the manner and at the place designated by the Corporation, and thereupon
all redemption amounts to be paid for such shares shall be payable to the
order
of the Person whose name appears on such certificates as the owner thereof,
and
each surrendered certificate shall be cancelled and retired. If, in the case
of
the exercise of redemption rights in accordance with Sections 7.1 and 7.2,
less
than all of the Class 1 Shares represented by such certificates are redeemed,
then the Corporation shall promptly issue new certificates representing the
shares not redeemed.
ARTICLE
8.
MISCELLANEOUS
|
8.1
|
Notices
of Record Dates
|
If:
|
(a)
|
the
Corporation establishes a record date to determine the Class 1
Holders who
are entitled to receive any dividend or other distribution;
or
|
|
(b)
|
there
occurs any Stock Split or other capital reorganization of the Corporation,
any reclassification of the capital of the Corporation, any Change
of
Control Event, or any Liquidation
Event,
|
the
Corporation will deliver to each Class 1 Holder, at least 20 days prior to
such
record date or the proposed effective date of the relevant transaction, a
notice
specifying:
|
(i)
|
the
date of such record date for the purpose of such dividend or distribution
and a description of such dividend or
distribution;
|
|
(ii)
|
the
date on which any such Stock Split, reorganization, reclassification,
Change of Control Event or Liquidation Event is expected to become
effective; and
|
|
(iii)
|
the
time, if any, that is to be fixed as to when the holders of record
of
Common Shares (or other securities) are entitled to exchange their
Common
Shares (or other securities) for cash, securities or other property
deliverable upon such reorganization, reclassification, Change
of Control
Event or Liquidation Event.
|
|
8.2
|
Notices
|
All
notices, requests, payments, instructions or other documents to be given
hereunder must be in writing or given by written telecommunication, and will
be
deemed to have been duly given if:
|
(a)
|
delivered
personally (effective upon
delivery);
|
|
(b)
|
mailed
by certified mail, return receipt requested, postage prepaid (effective
five Business Days after dispatch) if the recipient is located
in the
United States or Canada;
|
|
(c)
|
sent
by a reputable, established courier service that guarantees next
Business
Day delivery (effective the next Business Day) if the recipient
is located
in the United States or Canada;
|
|
(d)
|
sent
by air mail or by commercial express overseas air courier, with
receipt
acknowledged in writing by the recipient (effective upon the date
of such
acknowledgement) if the recipient is located outside the United
States or
Canada;
|
|
(e)
|
sent
by fax confirmed within 24 hours through one of the foregoing methods
(effective upon receipt of the fax in complete readable form);
and
|
addressed
as follows (or to such other address as the recipient party furnishes by
notice
to the sending party for these purposes: (i) if to any Class 1 Holder, to
the
last address of that Class 1 Holder as it appears on the securities register
of
the Corporation, or in the event the address of any such Class 1 Holder does
not
so appear, then to the last address of that Class 1 Holder known to the
Corporation; and (ii) if to the Corporation, to the address of its principal
office.
|
8.3
|
Negative
Covenants
|
So
long as any Class 1 Shares are outstanding, the Corporation will not, without
the prior written approval of the Class 1 Majority Holders:
|
(a)
|
designate,
or authorize the designation of, any further series of Class 1
Preferred
Shares or create or issue (by merger, reclassification or otherwise)
any
new class or series of shares having rights, preferences or privileges
senior to or on parity with the Class 1 Preferred
Shares;
|
|
(b)
|
issue
additional Class 1 Shares (other than additional Class 1 Shares
issuable
in respect of any stock dividends declared by the Corporation to
holders
of Class 1 Shares in a pro rata
distribution);
|
|
(c)
|
amend
the articles of the Corporation or otherwise take any action (by
merger,
reclassification or otherwise) to add, change or remove any rights,
privileges, restrictions or conditions attached to the Class 1
Shares or
otherwise change the Class 1
Shares;
|
|
(d)
|
increase
or decrease the authorized number of Common Shares or Class 1
Shares; or
|
|
(e)
|
declare
any dividends on any class of shares of the
Corporation.
|
|
8.4
|
Currency
|
All
references to dollar amounts in these Class 1 Share provisions are to the
lawful
currency of the United States.
|
8.5
|
Transfer
Agents
|
The
Corporation may appoint, and from time to time discharge and change, a transfer
agent for the Class 1 Shares or any other class of shares of the Corporation.
Upon any such appointment, discharge or change of a transfer agent, the
Corporation will send a written notice of such appointment, discharge or
change
to each Class 1 Holder.
|
8.6
|
Transfer
Taxes
|
The
Corporation will pay all share transfer taxes, documentary stamp taxes and
the
like that may be properly payable by the Corporation in respect of any issuance
or delivery of Class 1 Shares or Common Shares or other securities issued
in
respect of Class 1 Shares in accordance with these Class 1 Share provisions
or
certificates representing such shares or securities. The Corporation is not
required to pay any such tax that may be payable in respect of any transfer
involved in the issuance or delivery of Class 1 Shares or Common Shares or
other
securities in a name other than that in which such shares were registered,
or in
respect of any payment to any Person other than the registered Class 1 Holder
of
the shares with respect to any such shares, and is not required to make any
such
issuance, delivery or payment unless and until the Person otherwise entitled
to
such issuance, delivery or payment has paid to the Corporation the amount
of any
such tax or has established, to the reasonable satisfaction of the Corporation,
that such tax has been paid or is not payable.
EXHIBIT
“1” to
SCHEDULE
“A”
DETERMINATION
OF FAIR MARKET VALUE
The
“Fair Market Value” of Common Shares will be determined in
accordance with the following procedures:
|
|
(a)
|
The
Board of Directors and the Class 1 Majority Holders will in good
faith
attempt to agree upon the Fair Market Value of the Common Shares
that are
the subject of the proposed determination under this Exhibit
“1”.
|
|
|
(b)
|
Fair
Market Value of such Common Shares will in all cases (i) be calculated
on
the assumption of an arm’s length sale at open market value on a “going
concern basis” with no minority discount applied, and (ii) take into
account any conversion rights, liquidation preferences and any
other
entitlements attached to any other securities of the
Corporation.
|
|
|
(c)
|
If
the Fair Market Value has not been agreed upon between the Corporation
and
the Class 1 Majority Holders within 10 Business Days after commencing
their good faith attempt to agree upon the Fair Market Value under
clause
(a) above, then within five Business Days after the end of such
10
Business Day period, the Corporation and the Class 1 Majority Holders
shall jointly appoint a U.S. or Canadian nationally recognized
independent
and qualified investment banking or business valuation firm (the
“Valuator”) to determine the Fair Market Value of such
shares which are subject of the proposed determination under this
Exhibit “1”. If the Corporation, the Class 1 Majority Holders
cannot agree on a Valuator within such five Business Day period,
the
Corporation or the Class 1 Majority Holders may thereafter apply
to a
court of competent jurisdiction to have the court appoint such
Valuator
meeting the foregoing criteria to determine the Fair Market Value
of the
subject shares. The determination by the Valuator shall be final
and
binding on the Corporation and the Class 1 Holders absent manifest
error.
|
|
|
(d)
|
The
Corporation shall be responsible for all costs incurred in connection
with
the independent valuation performed by the Valuator (including
the costs
of any court proceeding to appoint the Valuator, if
applicable).
|
|
|
(e)
|
The
Valuator shall be instructed to deliver its determination of Fair
Market
Value as at the applicable valuation date, as soon as practicable
following its appointment and in any event within 30 Business Days
thereafter.
|
|
|
(f)
|
In
the event that the Valuator provides a range of fair market values,
the
middle of such range shall be utilized for purposes of determining
the
Fair Market Value of the subject
shares.
|
|
|
(g)
|
The
Corporation shall immediately provide to the Valuator such information,
including confidential information, and allow such firm to conduct
“due
diligence” and make such investigations and inquiries with respect to the
affairs of the Corporation and its subsidiaries as may be required
by such
Valuator in
|
|
|
|
order
to fulfill its mandate, provided that such firm executes a confidentiality
agreement in favor of the Corporation containing standard terms and
conditions.
|
SCHEDULE
C
ASSUMPTION
AGREEMENT
|
(A)
|
TO: All
of the parties now bound by the shareholders’ agreement (the
“Shareholders’ Agreement”) made ________, 2007 among
Mitel Networks Corporation (the “Corporation”), and
certain of its shareholders.
|
|
|
(A)
All
capitalized terms used in this instrument and defined in the Shareholders’
Agreement are intended to have the meaning ascribed thereto in the
Shareholders’
Agreement.
|
WHEREAS:
A. Pursuant
to the terms of the Shareholders’ Agreement, there can be no Transfer or
issuance of any Shares or securities in the capital of the Corporation except
in
certain circumstances and, in certain of such circumstances, subject to the
requirement that the acquiror of such Shares and/or securities first enters
into
this instrument;
B. l
(the
“Acquiror”) proposes to acquire [particulars of Shares
and/or securities] (the “Acquired Interests”) in the
Corporation (the “Issuer”);
C. The
Acquiror has agreed to observe and be bound by the terms of the Shareholders’
Agreement so that the provisions thereof will govern the rights and obligations
among the Shareholders (including the Acquiror);
NOW
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby irrevocably acknowledged, the Acquiror,
intending to be legally bound hereby, hereby covenants and agrees as
follows:
|
|
The
Acquiror acknowledges receipt of a copy of the Shareholders’
Agreement.
|
|
|
The
Acquiror covenants and agrees that the Acquiror shall be bound by
all of
the provisions of the Shareholders’ Agreement as if the Acquiror had been
an original party thereto [where any of the Acquired Interests are
being acquired by a Transfer, rather than an issuance from treasury,
the
words “to the same extent as the Person(s) transferring the Acquired
Interests” shall be
inserted].
|
|
|
The
Acquiror hereby represents and warrants
that:
|
|
(b)
|
the
Acquired Interests are or will be owned by the Acquiror free and
clear of
all Liens whatsoever and, except as provided in the Shareholders’
Agreement, no Person has or will have any agreement or option or
right
capable of becoming an agreement for the purchase of any such Acquired
Interests;
|
|
(c)
|
the
Acquiror has the capacity to enter into and perform its obligations
under
this instrument and the Shareholders’
Agreement;
|
-
2 -
|
(d)
|
if
the Acquiror is a corporation, it is duly incorporated and validly
existing under the laws of its jurisdiction of incorporation and
has the
corporate power and capacity to own its assets and to enter into
and
perform its obligations under and give full effect to this instrument
and
the Shareholders’ Agreement;
|
|
(e)
|
if
the Acquiror is a trust, partnership or joint venture, it is duly
constituted under the laws which govern it and has the power to own
its
assets and to enter into and perform its obligations under and give
full
effect to this instrument and the Shareholders’
Agreement;
|
|
(f)
|
this
instrument has been duly authorized by the Acquiror and has been
duly
executed and delivered by the Acquiror and constitutes a valid and
binding
obligation enforceable in accordance with its terms, subject to the
qualification that enforcement may be limited by bankruptcy, insolvency
or
other laws generally affecting the rights of creditors and subject
to the
availability of equitable remedies being in the discretion of a court
of
competent jurisdiction; and
|
|
(g)
|
the
execution, delivery and performance of this instrument does not and
will
not contravene the provisions of the articles, by-laws, constating
documents or other organization documents or the documents by which
the
Acquiror was created or established, if the Acquiror is a corporation,
trust, partnership or joint venture, or the provisions of any indenture,
agreement or other instrument to which the Acquiror is a party or
by which
the Acquiror may be bound.
|
|
|
The
Acquiror covenants and agrees to take all such steps, execute all
such
documents and do all such acts and things as may be necessary to
give full
effect to this instrument and to implement to their full extent the
provisions hereof.
|
|
|
This
instrument shall be governed by and construed in accordance with
the laws
of the Province of Ontario and the federal laws of Canada applicable
therein, without reference to conflicts of law
rules.
|
This
instrument shall be binding upon the Acquiror and the heirs, executors,
administrators, successors, permitted assigns and legal representatives of
the
Acquiror.
DATED
this _____ day of _________________,
.
|
[
] – Acquiror
|
||
|
Address
for Notice:
|
||
|
Fax:
|
||
|
E-mail:
|
||
Schedule
C
-
3 -
[In
addition, where the Acquiror is a nominee, holding company or an analogous
Person, the Persons directly or indirectly Controlling the Acquiror shall enter
into the following:]
(A) SUPPLEMENTARY
ASSUMPTION AGREEMENT
|
(B)
|
TO: All
of the parties now bound by the Shareholders’ Agreement (as such term is
defined in the above Assumption
Agreement)
|
|
|
(A)
This
Supplemental Assumption Agreement is intended to form a part of the
above
Assumption Agreement and all capitalized terms used but not defined
in
this instrument are intended to be defined in the same manner as
in the
above Assumption
Agreement.
|
IN
CONSIDERATION of the issuance or approval of Transfer of the Acquired
Interests to the Acquiror, and for other good and valuable consideration (the
receipt and sufficiency of which are being acknowledged), the undersigned,
represent, warrant, covenant and agree as follows:
|
1.
|
[Each
of] the undersigned acknowledges receipt of a copy of the
Shareholders’ Agreement.
|
|
2.
|
[Each
of] the undersigned covenants and agrees that they shall be
bound
by all of the provisions of the Shareholders’ Agreement as if they had
been an original party thereto.
|
|
3.
|
As
of the date hereof, the direct and indirect holders of securities
in the
capital of the Acquiror and each of the undersigned are as set out
below
[particulars to be set out below and, if required, on a
separate
schedule to be attached to this
instrument]:
|
|
4.
|
The
undersigned will not, without the prior written consent of Francisco
Partners and the Corporation, directly or indirectly Transfer or
permit a
Lien over any securities in the capital of the Acquiror or any of
the
undersigned or cause or permit any securities in the capital of the
Acquiror or any of the undersigned to be issued if, as a result thereof,
any Person other than one or more of the undersigned would cease
to
exercise voting control over the Shares or other securities in the
capital
of the Corporation held by the Acquiror; provided that the foregoing
shall
not apply to any Transfer between or issuance of securities to members
of
the Xxxxxxxx Group.
|
|
5.
|
The
undersigned shall cause the Acquiror to comply with each and every
one of
its obligations under the Shareholders’
Agreement.
|
|
6.
|
The
undersigned hereby confirm(s) the accuracy of the representations
and
warranties of the Acquiror in the above Assumption
Agreement.
|
|
7.
|
This
instrument has been duly authorized, executed and delivered by the
undersigned and constitutes a valid and binding obligation enforceable
in
accordance with its terms, subject to the qualification that enforcement
may be limited by bankruptcy, insolvency or other laws generally
affecting
the rights of creditors and subject to the availability of equitable
remedies being in the discretion of a court of competent
jurisdiction.
|
Schedule
C
- 4
-
|
8.
|
The
execution, delivery and performance of this instrument does not and
will
not contravene the provisions of the articles by-laws, constating
documents or other organizational documents or the documents by which
the
undersigned (if other than an individual) was created or established,
or
the provisions of any indenture, agreement or other instrument to
which
the undersigned is a party and by which the undersigned may be
bound.
|
|
9.
|
The
undersigned covenants and agrees to take all such steps, execute
all such
documents and do all such acts and things as may be necessary to
give full
effect to this instrument and to implement to their full extent the
provisions hereof.
|
|
10.
|
This
instrument shall be governed by and construed in accordance with
the laws
of the Province of Ontario and the federal laws of Canada applicable
therein, without reference to conflicts of law
rules.
|
|
11.
|
This
instrument shall be binding upon the undersigned and the heirs, executors,
administrators, successors, permitted assigns and legal representatives
of
the undersigned.
|
Dated
this ______ day of _________________________, _______.
|
[
]
|
||
|
[
]
|
Schedule
C
SCHEDULE
D
|
Name
|
Class
1
|
Common
Shares
|
Warrants
|
|
Arsenal
Holdco I, S.a.r.l.
|
205,819
|
0
|
15,596,446
|
|
Arsenal
Holdco II, S.a.r.l.
|
13,928
|
0
|
1,055,429
|
|
Xxxxxx
Xxxxxxx Principal Investments, Inc.
|
43,340
|
0
|
3,284,196
|
|
Edgestone
Capital Equity Fund II Nominee, Inc. and Edgestone Capital Equity
Fund
II-B GP, Inc., collectively
|
19,000
|
5,359,893
|
5,000,000
|
|
Xxxxxx
Xxxxxx Corporation
|
0
|
158,790,234
|
0
|
|
Celtic
Tech Jet Limited
|
0
|
4,555,169
|
0
|
|
Xxxxxxx
X. Xxxxxxxx
|
13,500
|
0
|
1,022,996
|
|
Power
Technology Investment Corporation
|
11,500
|
13,546,042
|
871,441
|
