SHARE SUBSCRIPTION AGREEMENT SKYLINE CHAMPION CORPORATION – and – ECN CAPITAL CORP. August 14, 2023
Execution Version
SKYLINE CHAMPION CORPORATION
– and –
ECN CAPITAL CORP.
August 14, 2023
TABLE OF CONTENTS
Article 1 INTERPRETATION |
1 |
|
1.1 |
Defined Terms |
1 |
1.2 |
Rules of Construction in this Agreement: |
8 |
1.3 |
Entire Agreement |
9 |
1.4 |
Time of Essence |
9 |
1.5 |
Outside Date |
9 |
1.6 |
Governing Law and Submission to Jurisdiction |
10 |
1.7 |
Severability |
10 |
1.8 |
Accounting Principles |
10 |
1.9 |
Knowledge |
10 |
1.10 |
Exhibits |
10 |
Article 2 PURCHASE OF SHARES |
11 |
|
2.1 |
Purchase of Purchased Shares |
11 |
2.2 |
Payment of Proceeds |
11 |
2.3 |
Use of Proceeds |
11 |
Article 3 REPRESENTATIONS AND WARRANTIES |
11 |
|
3.1 |
Representations and Warranties of the Issuer |
11 |
3.2 |
Representations and Warranties of the Investor |
19 |
3.3 |
Survival of Representations and Warranties |
23 |
Article 4 INDEMNIFICATION |
23 |
|
4.1 |
Indemnity of the Issuer |
23 |
4.2 |
Indemnity of the Investor |
23 |
4.3 |
Limitation |
23 |
4.4 |
Exclusivity |
24 |
Article 5 CLOSING |
24 |
|
5.1 |
Closing |
24 |
5.2 |
Termination |
24 |
5.3 |
Effects of Termination |
25 |
5.4 |
Closing Deliveries of the Issuer |
25 |
5.5 |
Closing Deliveries of the Investor |
26 |
5.6 |
Conditions to the Investor’s Obligations to Purchase the Purchased Shares |
27 |
5.7 |
Conditions to the Issuer’s Obligations to Sell the Purchased Shares |
28 |
Article 6 ADDITIONAL AGREEMENTS |
29 |
|
6.1 |
Additional Share Issuances |
29 |
6.2 |
Formation of Captive FinanceCo; Captive FinanceCo Agreements |
29 |
6.3 |
TSX and Other Regulatory Approvals |
29 |
6.4 |
TSX Listing of Shares; Filing of Form 72-503F |
30 |
6.5 |
Certain Notices |
30 |
6.6 |
Investor Standstill |
31 |
6.7 |
Conduct of the Business Prior to Closing |
31 |
(i)
Article 7 CLOSING ARRANGEMENTS |
31 |
|
7.1 |
Closing Arrangements |
31 |
Article 8 MISCELLANEOUS |
32 |
|
8.1 |
Public Disclosure and Filings |
32 |
8.2 |
Notices |
32 |
8.3 |
Amendments and Waivers |
34 |
8.4 |
Assignment |
34 |
8.5 |
Successors and Assigns |
34 |
8.6 |
Further Assurances |
34 |
8.7 |
Counterparts |
34 |
8.8 |
Expenses |
35 |
8.9 |
No Third Party Beneficiaries |
35 |
8.10 |
Specific Enforcement |
35 |
(ii)
THIS AGREEMENT made the 14th day of August, 2023,
AMONG:
SKYLINE CHAMPION CORPORATION, a corporation existing under the laws of Indiana,
(hereinafter referred to as the “Investor”)
– and –
ECN CAPITAL CORP., a corporation existing under the laws of the Province of Ontario,
(hereinafter referred to as the “Issuer”)
WHEREAS the Issuer has agreed to issue to the Investor, and the Investor has agreed to purchase from the Issuer, the Purchased Shares in accordance with the provisions hereof;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the respective covenants and agreements of the parties hereinafter contained and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each party), the parties agree as follows:
Article 1
INTERPRETATION
1.1 Defined Terms
For the purposes of this Agreement, unless the context otherwise requires, the following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:
“Action” has the meaning given to such term in Section 3.1(s);
“Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified; and for greater certainty the Issuer and its Subsidiaries are not Affiliates of the Investor or its Affiliates. For the purposes of this definition, “control”, when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by Contract, or otherwise;
“Articles” means the restated articles of incorporation of the Issuer dated October 4, 2016, as amended from time to time;
“Audited Financial Statements” means the audited consolidated financial statements of the Issuer as at and for the years ended December 31, 2022 and December 31, 2021, including the notes thereto, together with the auditor’s report thereon;
- 2 -
“Business Day” means any day, other than: (a) a Saturday, Sunday or statutory holiday in Toronto, Ontario or New York City, New York; or (b) a day on which banks are generally closed in Toronto, Ontario or New York City, New York;
“Canadian Securities Regulators” means the securities commissions or similar regulatory authorities in each of the Reporting Jurisdictions;
“Captive FinanceCo” means the captive finance company to be formed by the Investor and the Issuer in connection with the Captive FinanceCo Agreements;
“Captive FinanceCo Agreements” means the following agreements, each substantially in the form agreed by the parties on the date hereof: (i) the Limited Liability Company Agreement of Captive FinanceCo by and among Triad Financial Services, Inc., Skyline Champion Corporation and Captive FinanceCo; and (ii) the Floorplan Servicing Agreement between Triad Financial Services, Inc. and Captive FinanceCo;
“Closing” means the closing of the issuance of the Purchased Shares and the completion of the other transactions contemplated by the Transaction Agreements to be completed at such time;
“Closing Date” has the meaning given to such term in Section 5.1;
“Closing Time” means 8:00 a.m. (Toronto time) on the Closing Date or such other time on the Closing Date as the Issuer and the Investor may agree, each acting reasonably;
“Common Shares” means the common shares of the Issuer having the rights and privileges set out in the Articles;
“Competitor” means any entity primarily engaged, directly or indirectly, in the factory-built housing industry in the United States and who would reasonably be expected to compete with the Investor, provided that the Issuer and its Affiliates will not in any event be deemed a Competitor;
“Contract” means any agreement, indenture, debenture, bond, mortgage contract, lease, sublease, deed of trust, licence, option, instrument, arrangement, understanding or other legally binding commitment, in each case, whether oral or written;
“Encumbrance” means any encumbrance, lien, charge, hypothec, pledge, mortgage, title retention agreement, security interest of any nature, adverse interest, adverse claim, exception, reservation, easement, right of occupation, any matter capable of registration against title, option, warrant, right of pre-emption, right of first offer or refusal, purchase right, transfer restriction servitude, privilege, other third-party interest of any kind or any Contract to create any of the foregoing, in each case, whether based on Law, statute, Contract or otherwise;
“Environmental Laws” means all applicable Laws currently in existence (whether federal, state, provincial or municipal) relating to the protection and preservation of the environment, occupational health and safety, product safety, product liability or hazardous substances;
“Environmental Permits” includes all orders, permits, certificates, approvals, consents, registrations and licences issued by any Governmental Entity under any Environmental Law;
- 3 -
“Equity Securities” means, with respect to a Person, (a) shares of, or other equity or voting interests in, such Person outstanding or reserved for issuance, (b) securities convertible into, or exchangeable or exercisable for, or other rights to acquire from such Person or any of its Affiliates, equity or voting interests of such Person, (c) outstanding obligations, options, warrants, rights, pledges, calls, puts, phantom equity, pre-emptive rights or other rights, commitments, arrangements or agreements of any character to acquire from such Person or any of its Affiliates, or that obligate such Person or any of its Affiliates to issue, any shares of, or other equity or voting interests (or voting debt) in, or any securities convertible into or exchangeable for shares of, or other equity or voting interests in, such Person, or (d) obligations of such Person or any of its Affiliates to grant, extend or enter into any subscription, warrant, right, debt, convertible or exchangeable security or other similar agreement or commitment relating to any shares of, or other equity or voting interests in, such Person;
“Fundamental Representations” has the meaning given to such term in Section 3.3;
“Governmental Entity” means any domestic or foreign federal, provincial, regional, state, municipal, local or other government, governmental department, agency, arbitrator, authority or body (whether administrative, legislative, executive or otherwise), court, tribunal, commission or commissioner, bureau, minister or ministry, board or agency, taxing or other regulatory or self-regulatory authority, including any securities regulatory authorities and stock exchange;
“HSR Act” means the Xxxx‑Xxxxx‑Xxxxxx Antitrust Improvements Act of 1976, as amended;
“HSR Approval” has the meaning given to such term in Section 5.6(a)(iii);
“IFRS” means International Financial Reporting Standards, as adopted by the International Accounting Standards Board;
“Indebtedness” means, with respect to any Person, without duplication, (a) all amounts for borrowed money, in each case excluding any intercompany borrowings and indebtedness; (b) obligations evidenced by bonds, debentures, notes, or other similar instruments; (c) obligations for the deferred purchase price of property or services (excluding trade obligations); (d) obligations under letters of credit; (e) obligations secured by Encumbrances on such Person’s assets, whether or not the obligations have been assumed; (f) all net obligations of such Person under interest rate, commodity, foreign currency and financial markets swaps, options, futures and other hedging obligations; and (g) guarantees of any of the foregoing;
“Intellectual Property” means any registered or unregistered trade-marks and trade-mark applications, trade names, certification marks, patents and patent applications, copyrights, domain names, industrial designs, trade secrets, know-how, formulae, processes, inventions, technical expertise, research data and other similar property, all associated registrations and applications for registration, and all associated rights, including moral rights;
“Interim Financial Statements” means the condensed interim condensed consolidated financial statements of the Issuer for the three months ended March 31, 2023, including the notes thereto;
“Investor” has the meaning given to such term in the recitals hereto;
- 4 -
“Investor Director Designee” shall mean Xxxx Xxxx or such other individual designated by the Investor in accordance with Section 2.1 of the Investor Rights Agreement (as though the Investor Rights Agreement were in effect on the date hereof) to be nominated for election or appointed by the Issuer to the board of directors of the Issuer;
“Investor Indemnitees” has the meaning given to such term in Section 4.1;
“Investor Rights Agreement” means the investor rights agreement, to be entered into by and among the Investor and the Issuer on the Closing Date, substantially in the form of Exhibit A attached to this Agreement and as may be amended from time to time thereafter in accordance with the terms thereof;
“Issuer” has the meaning given to such term in the recitals hereto;
“Issuer 2025 Debentures” means the 6.0% Senior Unsecured Debentures of the Issuer due December 31, 2025;
“Issuer 2026 Debentures” means the 6.0% Senior Unsecured Debentures of the Issuer due December 31, 2026;
“Issuer 2027 Debentures” means the 6.25% Senior Unsecured Debentures of the Issuer due December 31, 2027;
“Issuer Credit Agreement” means the third amended and restated credit agreement made as of December 6, 2021 between, among others, the Issuer and ECN (US) Holdings Corp., as borrowers, Canadian Imperial Bank of Commerce, as administrative agent, Bank of Montreal, as collateral agent and the lenders from time to time party thereto, as amended by a first amendment to third amended and restated credit agreement made as of July 11, 2022, a second amendment to third amended and restated credit agreement made as of October 4, 2022, a third amendment to third amended and restated credit agreement dated as of February 3, 2023, and as further amended, restated, supplemented or otherwise modified or replaced from time to time;
“Issuer Debentures” means the Issuer 2025 Debentures, the Issuer 2026 Debentures and the Issuer 2027 Debentures;
“Issuer DSU Plan” means the deferred share unit plan of the Issuer enacted effective July 21, 2016 and amended and restated effective April 7, 2022;
“Issuer DSUs” means the outstanding deferred share units of the Issuer issued pursuant to the Issuer DSU Plan;
“Issuer Incentive Plans” means the Issuer Share Option Plan, the Issuer Share Unit Plan and the Issuer DSU Plan;
“Issuer Indemnitees” has the meaning given to such term in Section 4.2;
“Issuer Options” means the outstanding options to purchase Common Shares issued pursuant to the Issuer Share Option Plan;
- 5 -
“Issuer PSUs” means the outstanding performance share units of the Issuer issued pursuant to the Issuer Share Unit Plan;
“Issuer RSUs” means the outstanding restricted share units of the Issuer issued pursuant to the Issuer Share Unit Plan;
“Issuer Share Option Plan” means the share option plan of the Issuer enacted July 21, 2016 and amended and restated effective March 26, 2019 and April 7, 2022;
“Issuer Share Unit Plan” means the share unit plan of the Issuer enacted July 21, 2016 and amended and restated effective April 7, 2022;
“Law” means any and all federal, provincial, territorial, state, regional, national, foreign, local, municipal or other laws, statutes, acts, treaties, constitutions, principles of common law, resolutions, ordinances, proclamations, directives, codes, edicts, Orders, rules, regulations, rulings or requirements or other legally binding directives or guidance issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity, including securities laws, policies and notices enacted by to the Securities Regulators and stock exchange rules;
“Legacy Subsidiaries” means the following Subsidiaries of the Issuer: [Redacted];
“Losses” means, in respect of any matter, all judgments, awards, penalties, fines, losses (other than loss of profits, or loss of opportunity or damage to property), diminution of value, damages, liabilities, and reasonable costs and expenses (including any and all reasonable legal fees) arising directly or indirectly out of, resulting from or based on such matter; provided, however, “Losses” excludes any and all punitive or exemplary damages;
“Material Adverse Effect” means any change, effect, event, occurrence, or circumstance that individually or in the aggregate, is or would reasonably be expected to be material and adverse to the business, financial condition, operations, results of operations, capital, property, assets or liabilities of the Issuer and its Subsidiaries on a consolidated basis; provided, however, that no change, effect, event, occurrence, or circumstance arising from or relating to any of the following shall constitute a Material Adverse Effect:
(a) the announcement of the execution of this Agreement or the transactions contemplated herein or in the other Transaction Agreements or the performance of the covenants and obligations herein or therein (other than for purposes of any representation or warranty addressing the effect of the announcement, execution, delivery and performance of this Agreement or the consummation of the transactions contemplated herein or in the Transaction Agreements);
(b) any action or omission taken by the Issuer or any of its Subsidiaries at the prior written request or with the written consent of the Investor;
(c) any matter which has been disclosed by the Issuer in the Public Disclosure Documents (excluding any disclosure in the Public Disclosure Documents that is a risk factor or a statement that is cautionary, predictive or forward-looking in nature);
- 6 -
(d) any change, effect, event or circumstance generally affecting the industries in which the Issuer or any of its Subsidiaries operates;
(e) general political, economic, financial, currency exchange or securities market conditions;
(f) any natural disaster, pandemic, any act of terrorism or outbreak or escalation of hostilities or armed conflict, or any governmental response to the foregoing; or
(g) any adoption, change or prospective change in Laws, or the interpretation or administration thereof, by any Governmental Entity or any changes in IFRS;
except in the case of clause (d), (e), (f) or (g), where such change, effect, event or circumstance has a materially disproportionate effect on the Issuer and its Subsidiaries on a consolidated basis relative to other participants operating in the industries in which the Issuer and its Subsidiaries operate;
“New Preferred Shares” means the Mandatory Convertible Preferred Shares, Series E in the capital of the Issuer to be created upon the filing of articles of amendment and having the rights, privileges, restrictions and conditions set forth in such articles of amendment and substantially in the form attached as Exhibit B;
“Order” means any judgment, decision, decree, determination, injunction, ruling, writ, assessment or order of any Governmental Entity that is binding on any Person or its property under applicable Law;
“Outside Date” means the date that is 45 calendar days after the date of this Agreement or such later date as may be agreed in writing by the parties, each acting reasonably, subject to extension as provided in Section 1.5;
“Permitted Distribution” means quarterly dividends of the Issuer not in excess of $0.01 per Common Share and $0.4960625 per Series C Preferred Share in the capital of the Issuer and dividends on the New Preferred Shares;
“Permitted Encumbrance” means, in respect of the Issuer or any of its Subsidiaries, any one or more of the following:
(i) Encumbrances in favour of Bank of Montreal, as collateral agent, granted in connection with the Issuer Credit Agreement; and
(ii) liens and transfer restrictions imposed by national, federal, provincial or territorial or state securities laws;
“Person” means and includes any individual, corporation, limited partnership, general partnership, limited liability partnership, joint stock company, limited liability company, joint venture, association, company, trust, bank, trust company, pension fund, business trust or other organization, whether or not a legal entity and any Governmental Entity;
- 7 -
“Preferred Shares” means, collectively, the Series C Preferred Shares and the Series D Preferred Shares;
“Proceeds” has the meaning given to such term in Section 2.1;
“Public Disclosure Documents” means, collectively, all of the documents which have been filed by or on behalf of the Issuer on SEDAR at xxx.xxxxx.xxx or on SEDAR+ at xxx.xxxxxxxxx.xx since January 1, 2022 with the Securities Regulators pursuant to applicable Laws; provided that Public Disclosure Documents shall exclude any redacted portions thereof;
“Purchased Common Shares” means 33,550,000 Common Shares subscribed for by the Investor pursuant to this Agreement;
“Purchased Preferred Shares” means 27,450,000 New Preferred Shares subscribed for by the Investor pursuant to this Agreement;
“Purchased Shares” means the Purchased Common Shares and the Purchased Preferred Shares;
“Reporting Jurisdictions” means, collectively, all of the provinces of Canada;
“Restraints” has the meaning given to such term in Section 5.6(a)(ii);
“Securities Regulators” means the Canadian Securities Regulators and the U.S. Securities Exchange Commission, as applicable;
“SEDAR” means the System for Electronic Document Analysis and Retrieval and includes SEDAR+;
“Series C Preferred Shares” means the Cumulative 5-Year Minimum Rate Reset Preferred Shares, Series C in the capital of the Issuer;
“Series D Preferred Shares” means the Cumulative Floating Rate Preferred Shares, Series D in the capital of the Issuer;
“Subsidiary” means, as to any Person, any corporation or other entity of which: (a) such Person or a Subsidiary of such Person is a general partner or, in the case of a limited liability company, the managing member or manager thereof; (b) at least a majority of the outstanding equity interest having by the terms thereof ordinary voting power to elect a majority of the board of directors or similar governing body of such corporation or other entity (irrespective of whether or not at the time any equity interest of any other class or classes of such corporation or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more of its Subsidiaries; or (c) any corporation or other entity as to which such Person consolidates for accounting purposes;
“Tax” or “Taxes” mean all taxes, imposts, levies, duties, deductions, withholdings (including backup withholding), assessments, fees or other like assessments or charges, in each case in the nature of a tax, imposed by a Governmental Entity, together with all interest, penalties and additions imposed with respect to such amounts;
- 8 -
“Tax Return” means any report, return, information return, filing, claim for refund or other information filed or required to be filed with a Governmental Entity in connection with Taxes, including any schedules or attachments thereto, and any amendments to any of the foregoing;
“Transaction Agreements” means this Agreement, the Captive FinanceCo Agreements and the Investor Rights Agreement;
“Triad” means Triad Financial Services, Inc.;
“TSX” means the Toronto Stock Exchange or any successor thereto;
“TSX Approval” means the conditional approval of the TSX for the issuance and sale of the Purchased Shares to the Investor on the terms contemplated by this Agreement, the listing of the Purchased Common Shares and the Underlying Common Shares on the TSX and the other transactions contemplated by this Agreement, subject only to customary listing conditions (which, for greater certainty, do not include the approval of the Issuer’s securityholders in respect of any of the transactions contemplated by the Transaction Agreements);
“Underlying Common Shares” means the Common Shares issuable upon conversion of the Purchased Preferred Shares; and
“U.S. Securities Act” means the United States Securities Act of 1933, as amended.
1.2 Rules of Construction in this Agreement:
(a) the terms “Agreement”, “this Agreement”, “the Agreement”, “hereto”, “hereof”, “herein”, “hereby”, “hereunder” and similar expressions refer to this Agreement in its entirety and not to any particular provision hereof;
(b) references to an “Article”, “Section” or “Exhibit” followed by a number or letter refer to the specified Article or Section of or Exhibit to this Agreement;
(c) the division of this Agreement into articles and sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement;
(d) words importing the singular number only shall include the plural and vice versa and words importing the use of any gender shall include all genders;
(e) the word “including” is deemed to mean “including without limitation”;
(f) the terms “party” and “the parties” refer to a party or the parties to this Agreement;
(g) any reference to this Agreement means this Agreement as amended, modified, replaced or supplemented from time to time;
(h) any reference to a statute, regulation or rule shall be construed to be a reference thereto as the same may from time to time be amended, re-enacted or replaced, and any reference to a statute shall include any regulations or rules made thereunder;
- 9 -
(i) all dollar amounts refer to Canadian currency unless otherwise stated;
(j) any time period within which a payment is to be made or any other action is to be taken hereunder shall be calculated excluding the day on which the period commences and including the day on which the period ends;
(k) whenever any action is required to be taken or period of time is to expire on a day other than a Business Day, such action shall be taken or period shall expire on the next following Business Day; and
(l) the word “day” means calendar day unless Business Day is expressly specified.
1.3 Entire Agreement
The Transaction Agreements constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings, negotiations and discussions, whether written or oral. Unless otherwise agreed upon in writing by the parties, there are no conditions, covenants, agreements, representations, warranties or other provisions, express or implied, collateral, statutory or otherwise, relating to the subject matter hereof except as provided in the Transaction Agreements.
1.4 Time of Essence
Time shall be of the essence of this Agreement.
1.5 Outside Date
(a) If the HSR Approval has not been obtained by the Outside Date, the Issuer and the Investor shall each have the right to extend the Outside Date on one or more occasions (by at least 10 days or an integral multiple thereof, as specified by the extending party) up to a maximum of 90 days. For the avoidance of doubt, if both the Issuer and the Investor elect to extend the Outside Date in accordance with the terms hereof, the later Outside Date shall control.
(b) An extending party shall give written notice to the other party of an extension of the Outside Date pursuant this Section 1.5 by no later than 5:00 p.m. on the date that is not less than two (2) Business Days prior to the Outside Date (as such Outside Date may be been extended pursuant to this Section 1.5), or such later date as may be agreed to in writing by the Parties; provided that, notwithstanding the foregoing, a party shall not be permitted to unilaterally extend the Outside Date (as such Outside Date may have been extended pursuant to this Section 1.5) if (i) the failure to obtain the HSR Approval is a result of the party’s wilful breach of its obligations under this Agreement with respect to obtaining such HSR Approval, or (ii) the aggregate of such postponements would exceed 90 days from the original Outside Date.
- 10 -
1.6 Governing Law and Submission to Jurisdiction
(a) This Agreement and all matters, claims or Actions (whether at Law, in equity, in Contract, in tort or otherwise) based upon, arising out of or relating to this Agreement or the negotiation, execution or performance of this Agreement, shall be interpreted and enforced in accordance with, and the respective rights and obligations of the parties shall be governed by, the laws of the Province of Ontario and the federal laws of Canada applicable therein.
(b) All Actions arising out of or relating to this Agreement shall be heard and determined in the Ontario Superior Court of Justice (Commercial List) and appellate courts therefrom and the parties hereto hereby irrevocably submit to the exclusive jurisdiction and venue of such courts in any such Action and irrevocably waive the defense of an inconvenient forum or lack of jurisdiction to the maintenance of any such Action.
1.7 Severability
If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, all other provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party hereto.
1.8 Accounting Principles
Any reference in this Agreement to generally accepted accounting principles refers to IFRS, applied on a consistent basis, and which are applicable in the circumstances as of the date in question. Accounting principles are applied on a “consistent basis” when the accounting principles applied in a current period are comparable in all material respects to those accounting principles applied in a preceding period.
1.9 Knowledge
For the purposes of this Agreement, with respect to any matter, the knowledge of (i) the Issuer shall mean the knowledge Xxxxxx Xxxxxx and Xxxxxxx Xxxxxx; and (ii) the Investor shall mean the knowledge of Xxxx Xxxx and Xxxxxx Xxxxx, in each case, after making due inquiry concerning the matters in question.
1.10 Exhibits
The following Schedules and Exhibits are attached to and form an integral part of this Agreement:
Schedule 3.1(n) |
|
Financial Statement Disclosure |
Schedule 3.1(u) |
|
Absence of Certain Events |
Schedule 6.7 |
|
Conduct of Business Prior to Closing |
Exhibit A |
- |
Investor Rights Agreement |
- 11 -
Exhibit B |
- |
New Preferred Share Terms |
Article 2
PURCHASE OF SHARES
2.1 Purchase of Purchased Shares
On the terms and subject to the conditions of this Agreement, and subject to the satisfaction (or, to the extent permitted by applicable Law, waiver by the party entitled to the benefit thereof) of the conditions set forth in Section 5.6 and Section 5.7, the Investor hereby agrees to subscribe for and purchase from the Issuer, and the Issuer hereby agrees to issue and sell to the Investor, on the Closing Date, free and clear of all Encumbrances (except restrictions imposed by any applicable securities Law or by the Investor Rights Agreement), the Purchased Shares, for a price per Purchased Share equal to $3.04 and aggregate consideration of $185,440,000 (the “Proceeds”) to be allocated as to $101,992,000 to the Purchased Common Shares (the “Purchased Common Share Proceeds”) and $83,448,000 to the Purchased Preferred Shares (the “Purchased Preferred Share Proceeds”). The issuance of the Purchased Shares shall be evidenced by a copy of one or more DRS Statements representing the Purchased Shares, issued and registered to the account specified by the Investor in writing to the Issuer at least three (3) Business Days prior to the Closing Date. The full amount of the Purchased Common Share Proceeds shall be added to the legal stated capital account for the Purchased Common Shares and the full amount of the Purchased Preferred Share Proceeds shall be added to the legal stated capital account for the Purchased Preferred Shares.
2.2 Payment of Proceeds
On the Closing Date, the Investor shall pay, or cause to be paid (to an account specified to the Investor by the Issuer in writing at least three (3) Business Days prior to the Closing Date), in full satisfaction of the subscription price for the Purchased Shares, the Proceeds by wire transfer in immediately available funds. The Proceeds shall be paid in U.S. dollars based on the Bank of Canada daily exchange rate on the Business Day immediately prior to the Closing Date.
2.3 Use of Proceeds
The Issuer shall use the Proceeds for general corporate purposes and shall not use the Proceeds to (i) set aside, make or pay any dividend or other distribution on or with respect to any of its capital stock or other equity or ownership interest other than Permitted Distributions; or (ii) [Redacted].
Article 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Issuer
The Issuer represents and warrants to the Investor as follows as of the date hereof and as of the Closing (except for representations and warranties that speak as of a specific date which shall be true and correct as of such specified date) and acknowledges that the Investor is relying on such representations and warranties in entering into this Agreement and completing its subscription for the Purchased Shares:
- 12 -
(a) Organization. The Issuer and each of its Subsidiaries has been duly incorporated or formed, as applicable, and is validly existing in good standing under the Laws of the applicable jurisdiction of incorporation or formation, as applicable, with all requisite power and authority to conduct its business as now conducted and to own, lease and operate its material properties and assets (as described in the Public Disclosure Documents), except, in respect of the Issuer’s Subsidiaries where the failure to be in good standing under such Laws or have such requisite power and authority, has not had, and would not, individually or in the aggregate, reasonably be expected to have, a Material Adverse Effect. Neither the Issuer nor any of its Subsidiaries is in violation in any material respects of any of the provisions of their respective articles, by-laws or other constating documents.
(b) Authorization. The Issuer has the requisite corporate power and authority to enter into each of the Transaction Agreements, to perform its obligations thereunder and to consummate the transactions contemplated thereunder, and each of the Transaction Agreements: (i) together with the transactions contemplated thereunder, has been duly authorized by the Issuer; (ii) has been or will be duly executed and delivered by the Issuer; and (iii) is, or once executed will be, a legal, valid and binding agreement of the Issuer, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws affecting creditors’ rights generally and subject to the qualification that equitable remedies may be granted in the discretion of a court of competent jurisdiction.
(c) Authorized and Issued Capital.
(i) The authorized capital of the Issuer consists of an unlimited number of Common Shares of which 245,779,995 Common Shares were issued and outstanding as of close of business on the Business Day immediately preceding the date of this Agreement, and an unlimited number of Preferred Shares issuable in series, of which 3,712,400 Series C Preferred Shares were issued and outstanding, as of close of business on the Business Day immediately preceding the date of this Agreement. As of the Closing Date, the authorized capital will also include 27,450,000 New Preferred Shares of which only the Purchased Preferred Shares to be issued hereunder will be issued and outstanding.
(ii) As of close of business on the Business Day immediately preceding the date of this Agreement, there were 2,538,586 Issuer Options, 5,543,385 Issuer PSUs, 2,804,275 Issuer RSUs and 5,650,185 Issuer DSUs issued and outstanding.
(iii) Except as disclosed above, pursuant to this Agreement or as disclosed in Public Disclosure Documents, there are no issued, outstanding or authorized shares, options, equity-based awards, warrants, convertible or exchangeable securities, calls, conversion, pre-emptive, redemption, repurchase, stock appreciation or other rights, or any other agreements, arrangements, instruments or commitments of any kind that obligate the
- 13 -
Issuer to, directly or indirectly, issue or sell any securities of the Issuer, or give any Person a right to subscribe for or acquire, any securities of the Issuer.
(d) Subsidiaries.
(i) Other than the Issuer’s Subsidiaries, the Issuer has no direct or indirect subsidiaries nor any material investment in any Person.
(ii) The Issuer directly or indirectly owns all of the issued and outstanding shares, interests or partnership interests (however divided), as the case may be, of each of its Subsidiaries, in each case free and clear of any Encumbrances (other than Permitted Encumbrances).
(e) Issuance of Purchased Shares. The Issuer has power and authority to issue the Purchased Shares and the Underlying Common Shares. Upon payment of the Proceeds, the Purchased Shares will be validly issued as fully paid and non-assessable Common Shares or New Preferred Shares, as applicable. Upon conversion of the New Preferred Shares in accordance with their terms, the Underlying Common Shares will be validly issued as fully paid and non-assessable Common Shares. On the Closing Date, the Investor will be the legal and beneficial owner of the Purchased Shares and will, upon the issuance of the Purchased Shares, have good title thereto free and clear of all Encumbrances (other than restrictions imposed by any applicable securities Law or by the Investor Rights Agreement).
(f) No Violation. The execution and delivery by the Issuer of each of the Transaction Agreements, and the performance by it of or compliance with its obligations thereunder, will not: (i) conflict with or result in any violation of the provisions of the Articles, by-laws or other constating documents of the Issuer; (ii) conflict with or result in a breach or violation of any of the terms or provisions of, constitute a default (or constitute an event which, with notice or lapse of time or both, would violate or constitute a default), or accelerate the performance required by the Issuer under, any material Contract to which the Issuer is a party or by which the Issuer is bound or to which any of the property or assets of the Issuer is subject, other than consents required under the Issuer Credit Agreement in connection with the execution and performance of the Captive FinanceCo Agreements; or (iii) subject to the receipt of the TSX Approval and satisfaction of the conditions set forth therein, result in any violation of the provisions of any Law or Order applicable to the Issuer in any material respect.
(g) Transfer Agent. Computershare Investor Services Inc. has been duly appointed as the registrar and transfer agent for the Common Shares and Preferred Shares.
(h) Consents and Approvals. No consent, approval, authorization, license, permit, declaration, registration, notice or filing of or with any Governmental Entity or any other Person by the Issuer is required for the issue and sale of the Purchased Shares, or the consummation by the Issuer of the transactions contemplated by the Transaction Agreements, other than: (i) the TSX Approval; (ii) the filings required to be made, prior to or following the Closing under the published rules of the TSX;
- 14 -
(iii) the filing by the Issuer under applicable Securities Laws of Form 72-503F Report of Distributions Outside Canada with the Ontario Securities Commission; (iv) filings under the Business Corporations Act (Ontario) or the rules of the TSX as may be required in connection with the appointment or election of the Investor Director Designee to the board of directors of the Issuer; (v) consents as may be required under the Issuer Credit Agreement in connection with the execution and performance of the Captive FinanceCo Agreements; and (vi) in connection with compliance with the pre-merger notification requirements of the HSR Act.
(i) Compliance with Contracts and Laws. Each Contract to which the Issuer or any of its Subsidiaries is a party or by which the Issuer or any of its Subsidiaries or any of their respective properties or assets is bound is valid, binding and enforceable on the Issuer and any of its Subsidiaries to the extent such Person is a party thereto, as applicable, and to the knowledge of the Issuer, is in full force and effect, except where the failure to be valid, binding or in full force and effect, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Issuer nor any of its Subsidiaries is in default in the performance or observance of any obligation, agreement, covenant or condition contained in any material Contract to which it is a party or by which it or any of its properties or assets may be bound, except where such default which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Issuer and each of its Subsidiaries are and have been in compliance with, in all material respects, and conduct their businesses in conformity in all material respects with all applicable Laws of each jurisdiction in which it carries on its business.
(j) Regulatory Matters. The Issuer is a “reporting issuer” in each of the Reporting Jurisdictions and is not included in a list of defaulting reporting issuers maintained by the Canadian Securities Regulators of any such jurisdictions. The Issuer has not taken any action to cease to be a reporting issuer in any jurisdiction in which it is a reporting issuer and has not received any notification from a Canadian Securities Regulator seeking to revoke the Issuer’s reporting issuer status. The Issuer has filed with the Canadian Securities Regulators, on a timely basis, all required financial statements, annual information forms, proxy solicitation materials, material change reports and other documents required to be filed by it under applicable securities Laws, with the exception of such documents not yet due to be filed by the Issuer. As of their respective filing dates, each of the Public Disclosure Documents complied with the requirements of applicable securities Laws in all material respects, and, at the time of their respective filing date, none of the Public Disclosure Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading. To the knowledge of the Issuer, none of the Public Disclosure Documents as of the date of this Agreement, is the subject of ongoing review by any Canadian Securities Regulator and, as of the date of this Agreement, the Issuer has not received any comments from any Canadian Securities Regulator with respect to any of the Public Disclosure Documents which, to the knowledge of the Issuer, remain unresolved. The Issuer has not filed any confidential material change reports which remain confidential as at the date hereof.
- 15 -
(k) Intellectual Property. The Issuer owns or has the right to use all of the material Intellectual Property owned or used by its business as of the date hereof. All registrations, if any, and filings necessary to preserve the rights of the Issuer in the Intellectual Property have been made and are in good standing, except for such registrations or filings which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Issuer has no pending action or proceeding, nor any threatened action or proceeding, against any Person with respect to the use of the Intellectual Property, and there are no circumstances which cast doubt on the validity or enforceability of the Intellectual Property owned or used by the Issuer, except for circumstances which would not have a Material Adverse Effect. The conduct of the Issuer’s business does not, to the knowledge of the Issuer, infringe upon the intellectual property rights of any other Person. The Issuer has no pending action or proceeding, nor, to the knowledge of the Issuer, is there any threatened action or proceeding against it with respect to the Issuer’s use of the Intellectual Property.
(l) Leased Property. With respect to each premises of the Issuer which is material to its business and which the Issuer occupies as tenant (the “Leased Premises”), the Issuer occupies the Leased Premises and has the exclusive right to occupy and use the Leased Premises and each of the leases pursuant to which the Issuer occupies the Leased Premises is in good standing and in full force and effect in all material respects.
(m) Listing of Common Shares. The Common Shares are listed and posted for trading on the TSX and no Order ceasing or suspending trading in any securities of the Issuer or prohibiting the sale or issuance of the Purchased Shares or the trading of any of the Issuer’s issued securities has been issued and to the knowledge of the Issuer no proceedings for such purpose are pending or contemplated or have been threatened. The Issuer is in compliance in all material respects with the rules and regulations of the TSX, including the applicable listing requirements of the TSX.
(n) Financial Statements. The Audited Financial Statements and Interim Financial Statements present fairly in all material respects the consolidated financial position of the Issuer as of the respective dates of such financial statements and the consolidated results of operations and cash flows of the Issuer for the respective periods covered thereby. The Audited Financial Statements and the Interim Financial Statements have been prepared in accordance with IFRS applied on a consistent basis and, in the case of the Audited Financial Statements solely, as certified by the independent chartered professional accountants named in Section 3.1(o) below. Neither the Issuer nor any of its Subsidiaries has any liabilities of any nature (whether accrued, absolute, contingent or otherwise) that would be required under IFRS to be reflected on a consolidated balance sheet of the Issuer (including the notes thereto) except for: (i) liabilities reflected or reserved against in the Audited Financial Statements and Interim Financial Statements included in the Public Disclosure Documents or as has been disclosed in writing by the Issuer to the Investor in any document listed in Schedule 3.1(n); (ii) liabilities incurred pursuant to the transactions contemplated by the Transaction Agreements; and (iii)
- 16 -
liabilities incurred in the ordinary course since the date of the Interim Financial Statements.
(o) Independence of Auditors. Xxxxx & Young LLP, who have audited the Audited Financial Statements and reviewed the Interim Financial Statements, are, to the knowledge of the Issuer, independent public accountants; and there has not been a “reportable event” (within the meaning of National Instrument 51-102 – Continuous Disclosure Obligations) with Xxxxx & Young LLP within the most recently completed financial year of the Issuer.
(p) Accounting Controls. The Issuer maintains a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or specific authorization; and (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS and to maintain accountability for assets.
(q) Labour Matters. Neither the Issuer nor any of its Subsidiaries is a party to or bound by any collective agreement and nor is it currently conducting negotiations with any labour union or employee association. There has not been in the last two years and there is not currently any labour disruption that would reasonably be expected to have a Material Adverse Effect.
(r) Tax. Except as has not had, and would not, individually or in the aggregate, reasonably be expected to have, a Material Adverse Effect: (i) the Issuer and each of its Subsidiaries has prepared (or caused to be prepared) and timely filed (taking into account valid extensions of time within which to file), all Tax Returns required to be filed by it, and all such filed Tax Returns (taking into account all amendments thereto) are true, complete and accurate; (ii) all Taxes owed by the Issuer and each of its Subsidiaries that are due (whether or not shown on any Tax Return) have been timely paid, except for Taxes that are being contested in good faith by appropriate proceedings and that have been adequately reserved against in accordance with IFRS; (iii) all amounts of Taxes required to be withheld by the Issuer or any of its Subsidiaries have been duly withheld and remitted to the appropriate taxing authority as required by applicable Law; and (iv) no deficiency for any Tax has been asserted or assessed by any Governmental Entity in writing against the Issuer or any of its Subsidiaries, except for deficiencies that have been satisfied by payment in full, settled or withdrawn or that have been specifically identified in the Audited Financial Statements and adequately reserved against in accordance with IFRS. Except as would not, individually or in the aggregate, result in a Material Adverse Effect, there is no claim, audit, action, suit, proceeding or investigation now pending against or with respect to the Issuer or any of its Subsidiaries in respect of any material Taxes. None of the Common Shares or Purchased Preferred Shares derives, and no such share has at any time within the 60-month period prior to the Closing Date derived, more than 50% of its fair market value directly or indirectly from one or any combination of (i) real or immovable property situated in Canada, (ii) Canadian resource properties (as defined in the Income Tax Act (Canada) ("ITA")), (iii) timber resource properties (as defined in the ITA) and (iv) options
- 17 -
in respect of, or interests in, or for civil law, rights in, property described in any of the immediately preceding clauses (i) to (iii), whether or not the property exists.
(s) Legal Proceedings. Except as would not, individually or in the aggregate reasonably be expected to have a Material Adverse Effect, there is no (a) pending or, to the knowledge of the Issuer, threatened, legal, regulatory or administrative proceeding, suit, investigation, arbitration or action (an “Action”) against the Issuer or any of its Subsidiaries or (b) Order that is outstanding which is imposed upon the Issuer or any of its Subsidiaries, in each case, by or before any Governmental Entity.
(t) Environmental. (i) the Issuer and its Subsidiaries and the operation of their respective businesses have been and are, to the knowledge of the Issuer, in compliance in all material respects with all Environmental Laws; (ii) the Issuer and its Subsidiaries have complied in all material respects with all reporting and monitoring requirements under all Environmental Laws; (iii) the Issuer and its Subsidiaries have never received any notice of any material non-compliance in respect of any Environmental Laws and (iv) there are no material Environmental Permits necessary to conduct the Issuer’s or its Subsidiaries respective businesses.
(u) Absence of Certain Changes or Events. Since January 1, 2023, other than the transactions contemplated by the Transaction Agreements or as disclosed in Schedule 3.1(u) or the Public Disclosure Documents, the business of the Issuer and of each of its Subsidiaries has been conducted in the ordinary course, there has not been any sale, issuance, delivery, transfer or disposition of any Equity Securities or material assets of Triad, and no change, event, occurrence, effect, state of facts or circumstances has occurred that would reasonably be expected to have a Material Adverse Effect.
(v) Exempt Sale of Securities. Assuming the accuracy of the representations of the Investor in Section 3.2, the sale of the Purchased Shares pursuant to this Agreement and the issuance of the Underlying Common Shares upon conversion of the New Preferred Shares in accordance with their terms is exempt from the prospectus delivery requirements of the Canadian securities Laws, and no registration under the U.S. Securities Act is required for the sale and delivery of the Purchased Shares or the Underlying Common Shares.
(w) No Rights Agreement. The Issuer is not party to a shareholder rights plan, “poison pill” or similar anti-takeover agreement or plan.
(x) Anti-Terrorism. The operations of the Issuer and its Subsidiaries have for the last five years been conducted at all times in compliance with the applicable federal and state laws relating to terrorism, corruption or money laundering (“Anti-Terrorism Laws”), including the financial recordkeeping and reporting requirements of The Bank Secrecy Act of 1970, as amended, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), the Foreign Corrupt Practices Act of 1977 and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, the Corruption of Foreign Public Officials Act (Canada)
- 18 -
and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), and, none of the Issuer or its Subsidiaries is (i) a person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order, (ii) a person owned or controlled by, or acting for or on behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order, (iii) a person with which the Issuer is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (iv) a person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order or (v) a person that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”) at its official website or any replacement website or other replacement official publication of such list or any other person (including any foreign country and any national of such country) with whom the United States Treasury Department prohibits doing business in accordance with OFAC regulations. No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Issuer or its Subsidiaries with respect to the Anti-Terrorism Laws is pending or, to the knowledge of the Issuer and its Subsidiaries, threatened. None of the Issuer and its Subsidiaries nor, to the knowledge of the Issuer, any director, officer or employee of the Issuer (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any person described above, (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.
(y) No Broker’s Fees. Except for CIBC World Markets Corp. and Xxxxxxx Xxxxx & Co., no investment banker, broker, finder, financial adviser or other intermediary has been retained by or is authorized to act on behalf of the Issuer or any of its Subsidiaries or is entitled to any material fee, commission or other payment from the Issuer or any of its Subsidiaries in connection with this Agreement or any other transaction contemplated by this Agreement.
(z) Transactions with Affiliates. Except as disclosed by the Issuer in the Public Disclosure Documents3.1(n), none of the officers or directors of the Issuer and, to the knowledge of the Issuer, none of the employees of the Issuer is presently a party to any material loan, contract, arrangement or understanding or other material transactions with the Issuer or any of its Subsidiaries (other than as holders of equity compensation and for services as employees, officers and directors).
(aa) No Sales to Competitors. To the knowledge of the Issuer, since January 1, 2023, (i) the Issuer has not issued and sold any Common Shares or securities convertible into Common Shares to a Competitor by way of private placement or other directly negotiated transaction (and is not a party to any contract to so issue or offer to issue any such Common Shares or securities convertible into Common Shares), and (ii) no senior officer of the Issuer has knowingly sold or transferred any Common Shares or securities convertible into Common Shares to a Competitor.
- 19 -
3.2 Representations and Warranties of the Investor
The Investor hereby represents, warrants and acknowledges to the Issuer as follows as of the date hereof and as of the Closing (except for representations and warranties that speak as of a specific date which shall be true and correct as of such specified date) and acknowledges that the Issuer is relying on such representations, warranties and acknowledgements in connection with the entering into of this Agreement and the performance of its obligations hereunder:
(a) Organization. The Investor is organized and validly existing under the Laws of Indiana, with all requisite power and authority to own or to hold the Purchased Shares and to complete the transactions to be completed by it as contemplated in the Transaction Agreements.
(b) Authorization. The Investor has the requisite power and authority to enter into each of the Transaction Agreements to which it is a party, to perform its obligations thereunder and to consummate the transactions contemplated thereunder. Each of the Transaction Agreements and the transactions contemplated thereunder (i) has been duly authorized by the Investor, (ii) has been or will be duly executed and delivered by the Investor and (iii) is, or once executed will be, a legal, valid and binding agreement of it, enforceable against the Investor in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws affecting creditors’ rights generally and subject to the qualification that equitable remedies may be granted in the discretion of a court of competent jurisdiction. No other action on the part of the Investor is necessary to authorize the execution, delivery and performance by the Investor of the Transaction Agreements and the consummation by the Investor of the transactions contemplated thereunder.
(c) No Violation. The execution and delivery by the Investor of each Transaction Agreement and the performance of and compliance with its obligations thereunder, including the purchase of the Purchased Shares, does not and will not result in any violation of the (i) provisions of its constating documents or (ii) the provisions of any Law or Order applicable to it, or (iii) conflict with or result in a breach or violation of any of the terms or provisions of, constitute a default (or constitute an event which, with notice or lapse of time or both, would violate or constitute a default), or accelerate the performance required by the Investor under, any Contract to which the Investor is a party or by which the Investor is bound or to which any of the property or assets of the Investor is subject, except, in the case of clause (ii) or (iii), as would not, individually or in the aggregate, reasonably be expected to materially delay or hinder, or have a material adverse effect on, the ability of the Investor to consummate the transactions contemplated by the Transaction Agreements and to perform its obligations under the Transaction Agreements.
(d) Consents and Approvals. Other than the TSX Approval, any early warning reporting and insider reporting required under Law, and in connection with compliance with the pre-merger notification requirements of the HSR Act, no consent, approval, authorization or filing of or with any Governmental Entity is required by the Investor to purchase the Purchased Shares or to complete the
- 20 -
transactions contemplated by the Transaction Agreements, other than filings under applicable Law that, if not obtained, made or given, would not, individually or in the aggregate, reasonably be expected to materially delay or hinder, or have a material adverse effect on, the ability of the Investor to consummate the transactions contemplated by the Transaction Agreements and to perform its obligations under the Transaction Agreements. The Investor further represents and warrants that it has no reason to believe that a Personal Information Form filed with the TSX in furtherance of the TSX Approval will not be accepted or cleared by the TSX.
(e) No Offering Document. It has not received or been provided with a prospectus, registration statement or offering memorandum, within the meaning of applicable Law, relating to the Purchased Shares or the Issuer and its Subsidiaries.
(f) Collection of Information. It acknowledges that its name and other specified information, including the number of securities subscribed for hereunder, may be disclosed to authorities pursuant to applicable securities and anti-money laundering Laws, including the policies of the TSX. It consents to the disclosure of all such information. The Investor will execute and deliver within the applicable time periods all documentation as may be required by applicable securities Laws to permit the purchase of the Purchased Shares. The Investor will assist the Issuer in filing any reports and other documents relating to the purchase of the Purchased Shares required by applicable securities Laws.
(g) No Registration. The Investor acknowledges that the Purchased Shares have not been and will not be registered under the U.S. Securities Act, or any applicable state securities Laws, and the Purchased Shares are “restricted securities” within the meaning of Rule 144 under the U.S. Securities Act, and may not be offered or sold unless registered under the U.S. Securities Act and the securities Laws of any applicable state of the United States or in compliance with the requirements of an exemption from such registration requirements.
(h) No Broker’s Fees. Except for Xxxxxxxxx LLC, no investment banker, broker, finder, financial adviser or other intermediary has been retained by or is authorized to act on behalf of the Investor or is entitled to any material fee, commission or other payment from the Investor in connection with this Agreement or any other transaction contemplated by this Agreement.
(i) Private Placement. It is an “accredited investor” within the meaning of Regulation D under the U.S. Securities Act and is purchasing the Purchased Shares as principal, solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution or other disposition thereof. It further represents that:
(i) it understands that the Purchased Shares are being offered on a “private placement” basis (x) exempt from registration under the U.S. Securities Act, and, therefore, may not be transferred or sold except pursuant to the registration requirements of the U.S. Securities Act and any applicable state securities Laws, or in compliance with the requirements of an exemption
- 21 -
from such registration requirements, and (y) exempt from or not subject to prospectus requirements under Canadian securities Laws;
(ii) it understands that no Securities Regulator has reviewed or passed on the merits of the Purchased Shares;
(iii) it understands that there is no government or other insurance covering the Purchased Shares;
(iv) it understands that there are risks associated with the purchase of the Purchased Shares;
(v) it is not purchasing the Purchased Shares as a result of any “general solicitation or general advertising” (as those terms are used in Regulation D under the U.S. Securities Act), including any advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or on the internet or broadcast over radio, television or the internet, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;
(vi) it understands that there may be restrictions on its ability to resell the Purchased Shares under applicable securities Laws, it is its own responsibility to find out what those restrictions are and to comply with them before selling the Purchased Shares and, except as otherwise set out in the Transaction Agreements, the Issuer has not agreed to take any action to facilitate such resale in accordance with applicable securities Laws; and
(vii) it acknowledges that no Person has made any written or oral representations that (A) any Person will resell or repurchase the Purchased Shares, (B) any Person will refund the Proceeds, or (C) as to the future price or value of the Purchased Shares.
(j) Limited Remedies and Rights. The Investor acknowledges that no prospectus or registration statement has been filed by the Issuer with any Securities Regulators or any similar regulatory authority in connection with the issuance of the Purchased Shares, such issuance is exempt from the requirements to provide the Investor with a prospectus or registration statement and to sell securities through a Person registered under applicable securities Laws and that: (i) the Investor is restricted from using most of the civil remedies available under applicable securities Laws to a purchaser under a prospectus or registration statement; (ii) the Investor may not receive information that would otherwise be required to be provided to the Investor under applicable securities Laws in connection with a public offering by way of a prospectus or registration statement; and (iii) the Issuer is relieved from certain obligations that would otherwise apply under applicable securities Laws in connection with a public offering by way of a prospectus or registration statement.
(k) No Previous Ownership of Common Shares. As of the date of this Agreement, and before giving effect to the purchase by the Investor of the Purchased Shares hereunder, the Investor and its Affiliates do not beneficially own, or exercise
- 22 -
control or direction over, any Common Shares or other Equity Securities of the Issuer.
(l) Insider and Registrant Status. The Investor is not an “insider” of the Issuer or a “registrant” (each as defined in applicable Canadian securities Laws).
(m) Control Block Holder. The Investor is not one of a combination of shareholders of the Issuer (including by acting jointly or in concert with any such shareholder or investor) as a consequence of which the issuance of the Purchased Shares to the Investor hereunder (assuming the exercise of any warrants, options or any convertible securities of the Issuer currently held by the Investor, and any such other shareholders or investors) will result in, or be part of a transaction that will result in, the creation of a “control block holder” as defined under applicable Canadian securities Laws.
(n) Legended Shares. It acknowledges that any certificates or DRS Statements representing the Purchased Shares will bear such legend or legends as may, in the opinion of counsel to the Issuer, be reasonably necessary in order to avoid a violation of any applicable securities Laws or to comply with the requirements of the TSX, provided that if, at any time, in the opinion of counsel to the Issuer, such legends are no longer necessary in order to avoid a violation of any such Laws, or the holder of any such legended certificate, or DRS Statements at the holder’s expense, provides the Issuer with evidence reasonably satisfactory in form and substance to the Issuer (which may include an opinion of counsel reasonably satisfactory to the Issuer) to the effect that such holder is entitled to sell or otherwise transfer such Purchased Shares in a transaction in which such legends are not required, such legended certificate or DRS Statements may thereafter be surrendered to the Issuer in exchange for a certificate which does not bear such legend.
(o) Sufficient Funds. The Investor will, at Closing, have sufficient funds available to pay the Proceeds.
(p) Independent Advice. The Investor is a sophisticated investor and has the capacity to protect is own interests in connection with its investment hereunder. It acknowledges and agrees that it is solely responsible for obtaining such tax, investment, legal and other professional advice as it considers appropriate in connection with its investment hereunder (including in respect of its due diligence investigations), has not relied upon the Issuer or any of its legal, financial, tax or other professional advisors in this regard, and has in all cases sought the advice of its own investment advisors, legal counsel and tax and other professional advisers.
3.3 Survival of Representations and Warranties
The representations and warranties of a party herein shall survive until the date that is two (2) years from the Closing Date, if any, unless bona fide notice of a claim shall have been made in writing before such date, in which case the representation and warranty to which such notice applies shall survive in respect of that claim until the final determination or settlement of the claim; provided that the representations and warranties set out in Sections 3.1(a), 3.1(b), 3.1(c), 3.1(d), 3.1(e), and
- 23 -
3.1(y) and Sections 3.2(a), 3.2(b), 3.2(h) and 3.2(i) (collectively, the “Fundamental Representations”) shall survive indefinitely. Notwithstanding the foregoing, a claim for any breach of any of the representations and warranties contained in this Agreement involving fraud, wilful misconduct or gross negligence may be made at any time following the date of this Agreement, subject only to applicable limitation periods imposed by applicable Law.
Article 4
INDEMNIFICATION
4.1 Indemnity of the Issuer
The representations, warranties and covenants of the Issuer contained in this Agreement are made with the intent that they may be relied upon by the Investor in entering into this Agreement, determining whether to purchase the Purchased Shares and consummating the transactions contemplated hereby, and the Issuer covenants and agrees to indemnify and save harmless the Investor (and its Affiliates and their respective officers, directors, employees, agents, members and partners) (collectively, the “Investor Indemnitees”) from and against all Losses, including amounts paid to settle actions (provided that the Issuer has previously consented to such settlement, not to be unreasonably withheld, conditioned or delayed) or satisfy judgements or awards suffered by the Investor Indemnitees, in each case caused by or arising directly or indirectly by reason of any inaccuracy in or breach by the Issuer of any representation, warranty or covenant made by it under this Agreement.
4.2 Indemnity of the Investor
The representations, warranties and covenants of the Investor contained in this Agreement are made with the intent that they may be relied upon by the Issuer in entering into this Agreement, determining whether to issue the Purchased Shares and consummating the transactions contemplated hereby, and the Investor covenants and agrees to indemnify and save harmless the Issuer (and its Affiliates and their respective officers, directors, employees, agents, members and partners) (collectively, the “Issuer Indemnitees”) from and against all Losses, including amounts paid to settle actions (provided the Investor has previously consented to such settlement, not to be unreasonably withheld, conditioned or delayed) or satisfy judgements or awards suffered by the Issuer Indemnitees, in each case caused by or arising directly or indirectly by reason of any inaccuracy in or breach by any Investor of any representation, warranty or covenant made by it under this Agreement.
4.3 Limitation
No claim for indemnification pursuant to Section 4.1 shall be made against the Issuer for any breach of any of the representations and warranties made by the Issuer in this Agreement, and no claim for indemnification pursuant to Section 4.2 shall be made against the Investor for any breach of any of the representations and warranties made by the Investor in this Agreement, in each case, other than with respect to any claim for a breach of a Fundamental Representation, until the aggregate, cumulative amount of the claims asserted against the Issuer, in the aggregate, on the one hand, or the Investor, on the other hand, shall be at least $1,500,000; in which event the Issuer or the Investor, as applicable, may claim indemnification from the other party for all Losses that it has incurred, subject to the immediately following sentence. The maximum aggregate, cumulative
- 24 -
liability of the Issuer, in the aggregate, on the one hand, or the Investor, on the other hand, under Section 4.1 or Section 4.2 shall be 100% of the amount of the Proceeds.
4.4 Exclusivity
Following the Closing, the provisions of this Article 4 shall apply to any claim described in Section 4.1 or Section 4.2, with the intent that, following the Closing, all such claims shall be subject to the limitation contained in this Article 4. This provision is not intended to preclude any proceeding by any party against any other party (a) prior to the Closing or (b) based on fraud, wilful misconduct or gross negligence.
Article 5
CLOSING
5.1 Closing
The Closing for the purchase and sale of the Purchased Shares shall be conducted remotely via the electronic exchange of documents and signatures in accordance with Article 7 on the third (3rd) Business Day after satisfaction (or, to the extent permitted by applicable Law, waiver by the party entitled to the benefit thereof) of the conditions set forth in Section 5.6 and Section 5.7 (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions), or at such other place, time and date as shall be agreed between the Issuer and the Investor, but shall in no event occur earlier than the date that is five (5) days after the date of execution of this Agreement unless otherwise agreed by the parties hereto (the “Closing Date”).
5.2 Termination
Prior to the Closing, this Agreement may only be terminated:
(a) by mutual written agreement of the Issuer and the Investor;
(b) by the Issuer, on the one hand, or the Investor, on the other, upon written notice to the other party, if the Closing has not occurred by the Outside Date; provided, however, that the right to terminate this Agreement pursuant to this Section 5.2(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the principal cause of, or shall have primarily resulted in, the failure of the Closing to occur on or prior to such date;
(c) by the Issuer, on the one hand, or the Investor on the other, upon written notice to the other party, if any Governmental Entity issues an Order, or has taken any Action, permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by any Transaction Agreement, which such Order or Action shall have become final and non-appealable;
(d) by written notice given by the Issuer to the Investor, if there have been one or more inaccuracies in or breaches of one or more representations, warranties, covenants or agreements made by the Investor in this Agreement such that the conditions in Section 5.7(a)(v) would not be satisfied and which are not curable or, if curable,
- 25 -
have not been cured by the Investor by the earlier of (i) ten (10) days after receipt by the Investor of written notice from the Issuer requesting such inaccuracies or breaches to be cured and (ii) the Outside Date; provided, however, that the Issuer is not then in breach of this Agreement so as to prevent the conditions to Closing set forth in Sections 5.6(a)(iv) or 5.6(a)(vi) from being satisfied; or
(e) by written notice given by the Investor to the Issuer, if there have been one or more inaccuracies in or breaches of one or more representations, warranties, covenants or agreements made by the Issuer in this Agreement such that the conditions in Sections 5.6(a)(iv) or 5.6(a)(vi) would not be satisfied and which are not curable or, if curable, have not been cured by the Issuer, as applicable by the earlier of (i) ten (10) days after receipt by the Issuer of written notice from the Investor requesting such inaccuracies or breaches to be cured and (ii) the Outside Date; provided, however, that the Investor is not then in breach of this Agreement so as to prevent the conditions to Closing set forth in Section 5.7(a)(v) from being satisfied.
5.3 Effects of Termination
In the event of any termination of this Agreement in accordance with Section 5.2, this Agreement shall become void and have no effect from the termination date other than as set forth herein, and the transactions contemplated hereby shall be abandoned without further action by the parties hereto, in each case, except that (i) the provisions of, Sections 1.1 to 1.7, this Section 5.3 and Sections 8.1 to 8.9 shall survive the termination of this Agreement and (ii) no such termination shall relieve any party from liability for damages to another party resulting from any willful and material breach of this Agreement or any breach of any of the representations and warranties contained in this Agreement involving fraud, gross negligence or wilful misconduct. For purposes of this Section 5.3, “willful and material breach” means a material breach of this Agreement as a result of an act undertaken by the breaching party with the knowledge that the taking of such act would, or would be reasonably expected to, cause a material breach of this Agreement.
5.4 Closing Deliveries of the Issuer
The Issuer shall deliver or cause to be delivered to the Investor at the Closing, the following:
(a) evidence satisfactory to the Investor of the TSX Approval;
(b) a certificate from a duly authorized officer of the Issuer certifying: (i) accuracy as of the Closing of the Articles of the Issuer, including the articles of amendment creating the New Preferred Shares; and (ii) the accuracy as of the Closing of resolutions of the board of directors of the Issuer approving the issuance of the Purchased Shares, the execution, delivery and performance of the Issuer’s obligations under each of the Transaction Agreements and the consummation of the transactions contemplated hereunder and thereunder, which resolutions shall be in full force and effect, and have not been modified, amended or rescinded;
(c) one or more DRS Statements evidencing the issuance of the Purchased Shares to the Investor;
- 26 -
(d) a certificate from the applicable Governmental Entity, dated as of a recent date, evidencing the good standing of the Issuer in its jurisdiction of incorporation; and
(e) a counterpart to the following agreements, xxxx executed and delivered by the Issuer:
(i) the Investor Rights Agreement; and
(ii) the Captive FinanceCo Agreements (to the extent applicable).
5.5 Closing Deliveries of the Investor
The Investor shall deliver, or cause to be delivered to the Issuer at the Closing, the following:
(a) consent from the Investor Director Designee to be appointed as a director of the Issuer, effective as of the Closing Date;
(b) a certificate from a duly authorized officer of the Investor certifying: (i) accuracy as of the Closing of the constating documents of the Investor; and (ii) the accuracy as of the Closing of resolutions of the board of directors of the Investor approving the execution, delivery and performance of the Investor’s obligations under each of the Transaction Agreements and the consummation of the transactions contemplated hereunder and thereunder, which resolutions shall be in full force and effect, and have not been modified, amended or rescinded;
(c) a certificate from the applicable Governmental Entity, dated as of a recent date, evidencing the good standing of the Investor in its jurisdiction of incorporation;
(d) confirmation of delivery to the TSX of a duly completed personal information form in respect of the Investor (to the extent required by the TSX pursuant to the TSX Approval) and the Investor Director Designee;
(e) payment of the Proceeds in accordance with Section 2.2; and
(f) a counterpart to the following agreements, duly executed and delivered by the Investor:
(i) the Investor Rights Agreement; and
(ii) the Captive FinanceCo Agreements (to the extent applicable).
5.6 Conditions to the Investor’s Obligations to Purchase the Purchased Shares
(a) The obligation of the Investor hereunder to purchase the Purchased Shares is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Investor’s sole benefit and may be waived by the Investor at any time in its sole discretion by providing the Issuer with prior written notice thereof:
(i) the Issuer shall have completed the deliveries set forth in Section 5.4;
- 27 -
(ii) no temporary or permanent Order shall have been enacted, promulgated, issued, entered, amended or enforced by any Governmental Entity nor shall any proceeding brought by a Governmental Entity seeking any of the foregoing be pending, or any applicable Law shall be in effect, in each case which has the effect of restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby (collectively, “Restraints”);
(iii) any waiting period (and any extension thereof) applicable to the consummation of the transactions contemplated by this Agreement under the HSR Act shall have expired or been terminated (the “HSR Approval”);
(iv) (A) (i) except for de minimis inaccuracies, the representations and warranties of the Issuer in Section 3.1(c) shall be true and correct in all respects as of the date of this Agreement and as of the Closing as though made at that time (except for representations and warranties that speak as of a specific date which shall be true and correct as of such specified date), and (ii) all other representations and warranties of the Issuer set forth in Section 3.1 shall be true and correct in all material respects (without giving effect to any qualification as to materiality or Material Adverse Effect set forth therein) as of the date of this Agreement and as of the Closing as though made at that time (except for representations and warranties that speak as of a specific date which shall be true and correct as of such specified date); and (B) the Issuer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Agreements to be performed, satisfied or complied with by the Issuer at or prior to the Closing Date. The Investor shall have received a customary certificate, executed by the Chief Executive Officer or Chief Financial Officer of the Issuer, dated as of the Closing Date, to the foregoing effect and confirming the satisfaction of the condition set forth in Section 5.6(a)(v);
(v) no Material Adverse Effect shall have occurred since the date of this Agreement;
(vi) the Issuer shall have received all approvals, consents and authorizations necessary pursuant to applicable Law for the consummation of the sale of the Purchased Shares, including the TSX Approval, each of which shall be in full force and effect and shall not have been adversely amended, modified, revoked or terminated;
(vii) the Issuer shall have taken all actions necessary and appropriate to cause to be elected or appointed to the board of directors of the Issuer, effective immediately following the Closing, the Investor Director Designee; and
(viii) the Issuer shall have delivered to the Investor such other documents relating to the transactions contemplated by this Agreement as the Investor or its counsel may reasonably request.
- 28 -
5.7 Conditions to the Issuer’s Obligations to Sell the Purchased Shares
(a) The obligation of the Issuer hereunder to sell the Purchased Shares is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Issuer’s sole benefit and may be waived by the Issuer at any time in its sole discretion by providing the Investor with prior written notice thereof:
(i) the Investor shall have completed the deliveries set forth in Section 5.5;
(ii) the Issuer shall have received all approvals, consents and authorizations necessary pursuant to applicable Law for the consummation of the sale of the Purchased Shares, including the TSX Approval, each of which shall be in full force and effect and shall not have been adversely amended, modified, revoked or terminated;
(iii) no Restraints shall then be in effect;
(iv) any waiting period (and any extension thereof) applicable to the consummation of the transactions contemplated by this Agreement under the HSR Act shall have expired or been terminated; and
(v) (A) the representations and warranties of the Investor set forth in Section 3.2 shall be true and correct in all material respects (without giving effect to any qualification as to materiality or material adverse effect set forth therein) as of the date of this Agreement and as of the Closing as though made at that time (except for representations and warranties that speak as of a specific date which shall be true and correct as of such specified date) and (B) the Investor shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Agreements to be performed, satisfied or complied with by the Investor at or prior to the Closing Date. The Issuer shall have received a customary certificate, executed by an executive of the Investor and dated as of the Closing Date, to the foregoing effect.
Article 6
ADDITIONAL AGREEMENTS
6.1 Additional Share Issuances
Until the Closing Date (or such earlier date on which this Agreement may be terminated pursuant to Section 5.2), except with respect to (i) the issue of Common Shares pursuant to the terms of outstanding Issuer Debentures or Equity Securities of the Issuer, and (ii) the grant of equity compensation under the Issuer Incentive Plans in the ordinary course of business and consistent with past practice (including dividend equivalents), without the prior written consent of the Investor, the Issuer shall not, and shall cause its Subsidiaries not to, issue any Equity Securities.
- 29 -
6.2 Formation of Captive FinanceCo; Captive FinanceCo Agreements
(a) On or prior to the Closing Date, the Investor and the Issuer shall execute, deliver and file such documents and instruments that are required to form Captive FinanceCo in accordance with applicable Law.
(b) On the Closing Date, the Investor and the Issuer shall each execute and deliver, or cause to be executed and delivered, each of the Captive FinanceCo Agreements.
6.3 TSX and Other Regulatory Approvals
(a) Subject to the terms and conditions hereof, each of the parties shall perform all obligations required to be performed by it under this Agreement, reasonably co-operate with the other parties in connection therewith, and do all such other commercially reasonable acts and things as may be necessary or desirable in order to consummate and make effective, as soon as reasonably practicable, the transactions contemplated in this Agreement, including using commercially reasonable efforts to (a) effect all necessary registrations, filings and submissions of information in connection with obtaining the TSX Approval, including the filing by the Investor (to the extent required) and the Investor Director Designee of Personal Information Forms with the TSX; (b) obtain all approvals, consents, registrations, waivers, permits, authorizations, and orders from any Governmental Entity reasonably necessary, proper or advisable to consummate the transactions contemplated by this Agreement and (c) execute and deliver any additional instruments reasonably necessary to consummate the transactions contemplated by this Agreement. Each party hereto shall (i) give the other parties prompt notice of the making or commencement of any request, inquiry or Action by or before any Governmental Entity with respect to the transactions contemplated hereby, (ii) keep the other parties informed as to the status of any such request, inquiry or Action and (iii) promptly inform the other parties of (and provide copies of) any communications to or from any Governmental Entity and keep the other parties reasonably informed regarding any substantive communications to or from a third party, in each case regarding the transactions contemplated by this Agreement. Each party hereto will have the opportunity to review in advance, and each party will consult and cooperate with the other parties and will consider in good faith the views of the other parties in connection with any filing, analysis, appearance, presentation, memorandum, brief, argument, opinion or proposal made or submitted to any Governmental Entity in connection with the transactions contemplated by the Transaction Agreements. In addition, except as may be prohibited by any Governmental Entity or by any Law, in connection with any such request, inquiry or Action, each party hereto will permit authorized representatives of the other parties to be present at each meeting or conference relating to such request, inquiry or Action and have access to and be consulted in connection with any material document, opinion or proposal made or submitted in writing to any Governmental Entity in connection with such request, inquiry or Action.
(b) In furtherance and not in limitation of Section 6.3(a), each Party shall (i) file, or cause to be filed, as promptly as reasonably practicable, and in any event within
- 30 -
seven Business Days following the date hereof, all notification and report forms, applications and other Governmental Filings that may be required under the HSR Act, and (ii) use its reasonable best efforts to supply as promptly as reasonably practicable any additional information and documentary material that may be requested by any Governmental Entity pursuant to the HSR Act.
6.4 TSX Listing of Shares; Filing of Form 72-503F
In furtherance but not in limitation of Section 6.3:
(a) Prior to the Closing, the Issuer shall use commercially reasonable efforts to obtain the TSX Approval, including conditional approval for the listing of the Purchased Common Shares and the Underlying Common Shares; and
(b) The Issuer shall file with the Ontario Securities Commission a Form 72-503F Report of Distributions Outside Canada following the Closing Date with respect to the distribution of the Purchased Shares.
6.5 Certain Notices
During the period from the date of this Agreement until the Closing Date (or such earlier date on which this Agreement may be terminated pursuant to Section 5.2), the Issuer shall give prompt notice to the Investor if any of the following occur: (a) receipt of any bona fide notice or other communication in writing from any Person alleging that the consent or approval of, filings with, license from, or authorization of, registration with, or notices to, such Person is or may be required in connection with the transactions contemplated by this Agreement; (b) receipt by the Issuer, any of its Subsidiaries or any of their respective representatives of any material notice or other material communication from any Governmental Entity related to the transactions contemplated by the Transaction Agreements; (c) it becomes aware of any change, development, state of facts, effect, event, occurrence, or circumstance that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; or (d) it becomes aware of any change, development, state of facts, effect, event, occurrence, or circumstance that would reasonably be expected to prevent or delay beyond the Outside Date the consummation of the transactions contemplated by this Agreement or that would reasonably be expected to result in, or has resulted in, any of the conditions to the Closing set forth in Section 5.6 not being satisfied. Any notice pursuant to this Section 6.5 shall not affect, modify or otherwise limit any other covenant, agreement representation or warranty contained in this Agreement.
6.6 Investor Standstill
The Investor and the Issuer shall be subject to the provisions of Article 6 of the Investor Rights Agreement commencing from the date hereof until the earlier of (i) the Closing; and (ii) the termination of this Agreement. For greater certainty, from and after the Closing Time, the terms of this Section 6.6 shall no longer apply and from that time Article 6 of the Investor Rights Agreement shall set out the rights and obligations of the Parties with respect to the matters contemplated by this Section 6.6.
- 31 -
6.7 Conduct of the Business Prior to Closing
Between the date of this Agreement and the Closing, unless the Investor shall otherwise agree in writing, as required by Law or as contemplated by this Agreement or any Transaction Agreement, the Issuer shall, and the Issuer shall cause each of its Subsidiaries to, carry on its business in the ordinary course of business and consistent with past practice. Between the date of this Agreement and the Closing, unless the Investor shall otherwise agree in writing, as required by Law or as contemplated by this Agreement or any Transaction Agreement, the Issuer shall not do or propose to do, directly or indirectly, any of the following without the prior written consent of the Investor:
(a) amend or otherwise change its Articles or bylaws or equivalent constating documents;
(b) declare, set aside, make or pay any dividend or other distribution on or with respect to any of its Equity Securities (other than Permitted Distributions);
(c) except as set out in Schedule 6.7, sell, issue, deliver, transfer or dispose of any Equity Securities, material assets or businesses of any Subsidiary (other than Triad), in each case for less than fair market value;
(d) other than as disclosed in Schedule 6.7, sell, issue, deliver, transfer or dispose of any Equity Securities, material assets or businesses of Triad; or
(e) otherwise take or cause to be taken any action that, had such action or event occurred following the Closing, would require or result in an adjustment to the conversion price of the New Preferred Shares.
Article 7
CLOSING ARRANGEMENTS
7.1 Closing Arrangements
Subject to all conditions set forth in Section 5.6 (other than Section 5.6(a)(i)) and Section 5.7 (other than Section 5.7(a)(i)) having been satisfied or waived on or before the Closing Date, the parties hereby agree that the process of the Closing shall be as follows:
(a) the Closing shall commence at the Closing Time on the Closing Date and shall be irrevocable thereafter until the completion of the closing deliverables in Section 5.6(a)(i) and Section 5.7(a)(i) in accordance with Section 7.1(b); and
(b) the following shall occur consecutively on the Closing Date:
(i) each party shall make the deliveries required of it under Section 5.4 and Section 5.5 (other than the payment of Proceeds pursuant to Section 5.5(e) and delivery of the DRS Statement(s) pursuant to Section 5.4(c));
(ii) the Investor shall make payment of the Proceeds to the Issuer pursuant to Section 5.5(e); and
- 32 -
(iii) the Issuer shall deliver the DRS Statement(s) to the Investor pursuant to Section 5.4(c).
Article 8
MISCELLANEOUS
8.1 Public Disclosure and Filings
The initial press release regarding this Agreement shall be a joint press release mutually acceptable to the Issuer and Investor. Except as required by Law, none of the Issuer or the Investor, or their respective Affiliates, shall issue any press release or make any other public statement or disclosure with respect to this Agreement or the transactions provided for herein without the written consent of the other party (which consent shall not be unreasonably withheld, conditioned or delayed); provided that if a party or its Affiliate is required to make disclosure by Law such party shall, if permitted by Law, use its commercially reasonable efforts to give the other party prior oral or written notice and a reasonable opportunity to review or comment on the disclosure (other than with respect to confidential information contained in such disclosure) and if such prior notice is not possible, shall give such notice immediately following the making of such disclosure. The party making such disclosure shall give reasonable consideration to any comments made by the other party or its counsel. Notwithstanding the foregoing, this Section 8.1 shall not apply to (a) any press release or other public statement by the Issuer or the Investor which substantially reiterates and is not inconsistent with prior disclosure and does not contain any information relating to the transactions contemplated hereby that has not been previously announced or made public in accordance with the terms of this Agreement, or (b) any disclosure made to a party’s auditors, attorneys, accountants, financial advisors or Affiliates. The parties acknowledge that the Issuer will file the Transaction Agreements and a material change report relating thereto on SEDAR. The parties acknowledge that the Investor will file certain of the Transaction Agreements and a Form 8-K related thereto with the U.S. Securities and Exchange Commission.
8.2 Notices
(a) Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered in person, transmitted by e-mail or similar means of recorded electronic communication or sent by registered mail, charges prepaid, addressed as follows:
(i) in the case of the Investor:
Skyline Champion Corporation
000 Xxxx Xxx Xxxxxx Xxxx, Xxxxx 0000
Attention: Xxxxxx Xxxxx
E-mail: [Redacted]
with a copy (which shall not constitute notice) to:
King & Spalding LLP
0000 Xxxxxxxxx Xxxxxx XX
Xxxxxxx, Xxxxxxx 00000
- 33 -
Attention: Xxxx Xxxxxxx
E-mail: xxxxxxxx@xxxxx.xxx
and:
XxXxxxxx Xxxxxxxx LLP
00 Xxxxxxxxxx Xx. X., Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxx Xxxxxx/Xxxxxx Xxxxxx
E-mail: xxxxxxx@xxxxxxxx.xx/xxxxxxx@xxxxxxxx.xx
(ii) in the case of the Issuer:
ECN Capital Corp.
000 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000 Xxxx
West Palm Beach, FL 33401
Attention: Xxxxxxx Xxxxxx
E-mail: [Redacted]
with a copy (which shall not constitute notice) to:
Xxxxx, Xxxxxxx & Xxxxxxx LLP
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx Xxxxxxx, X0X 0X0
Attention: Xxxxx Xxxxxxx / Xxxxxxx Xxxxxx
E-mail: xxxxx.xxxxxxx@xxxxxx.xxx / xxxxxxx.xxxxxx@xxxxxx.xxx
(b) Any such notice or other communication shall be deemed to have been given and received on the day on which it was delivered or transmitted by email or personally by hand (or, if such day is not a Business Day or if delivery or transmission is made on a Business Day after 5:00 p.m. (Toronto time) at the place of receipt, then on the next following Business Day) or, if mailed by internationally recognized overnight courier, on the Business Day following the date of mailing; provided, however, that if at the time of mailing or within two (2) Business Days thereafter there is or occurs a labour dispute or other event which might reasonably be expected to disrupt the delivery of documents by mail, any notice or other communication hereunder shall be delivered or transmitted by means of recorded electronic communication as aforesaid.
(c) Any party may at any time change its address for service from time to time by giving notice to the other parties in accordance with this Section 8.2.
- 34 -
8.3 Amendments and Waivers
No amendment or waiver of any provision of this Agreement shall be binding on any party unless consented to in writing by such party. No waiver of any provision of this Agreement shall constitute a waiver of any other provision, nor shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided.
8.4 Assignment
No party may assign any of its rights or benefits under this Agreement, or delegate any of its duties or obligations, except with the prior written consent of the other parties; provided, however, that, without the prior written consent of any other party, (a) the Investor may assign its rights, interests and obligations under this Agreement, in whole or in part to an Affiliate, and (b) in the event of such assignment, the assignee shall agree in writing to be bound by the provisions of this Agreement, including the rights, interests and obligations so assigned and shall give equivalent representations and warranties in Section 3.2 with respect to itself; provided that no such assignment would reasonably be expected to delay the Closing past the Outside Date; and provided further that no such assignment will relieve the Investor of its obligations hereunder.
8.5 Successors and Assigns
This Agreement shall enure to the benefit of and shall be binding on and enforceable by and against the parties and their respective successors or heirs, executors, administrators and other legal personal representatives, and permitted assigns.
8.6 Further Assurances
Subject to the terms and conditions hereof, each of the parties hereto shall, from time to time hereafter and upon any reasonable request of the other, promptly do, execute, deliver or cause to be done, executed and delivered all further acts, documents and things as may be required or necessary for the purposes of giving effect to this Agreement and the transactions contemplated thereby.
8.7 Counterparts
This Agreement and all documents contemplated by or delivered under or in connection with this Agreement may be executed and delivered in any number of counterparts (including by email or scanned pages), with the same effect as if all parties had signed and delivered the same document, and all counterparts shall be construed together to be an original and will constitute one and the same agreement. Electronic signatures (including by DocuSign) and electronic pdf signatures (including by email or scanned pages) shall be acceptable as a means of executing such documents.
8.8 Expenses
Except as otherwise expressly provided in this Agreement or any other Transaction Agreement, each party will pay for its own costs and expenses incurred in connection with this Agreement and the other Transactions Agreements and the transactions contemplated hereunder and thereunder. The fees and expenses referred to in this Section 8.8 are those which are incurred in connection with the negotiation, preparation, execution and performance of this Agreement and the other
- 35 -
Transaction Agreements, and the transactions contemplated hereby and thereby, including the fees and expenses of legal counsel, accountants and other advisors.
8.9 No Third Party Beneficiaries
Except for the Investor Indemnitees and the Issuer Indemnitees solely with respect to Article 4, nothing contained in this Agreement, expressed or implied, is intended to confer upon any Person other than the parties hereto (and their permitted assigns), any benefit, right or remedies.
8.10 Specific Enforcement
The parties hereto agree that irreparable damage for which monetary relief, even if available, would not be an adequate remedy, would occur in the event that any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached, including if the parties hereto fail to take any action required of them hereunder to cause the Closing to occur. The parties acknowledge and agree that (a) the parties shall be entitled to seek an injunction or injunctions, specific performance or other equitable relief to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions hereof in the courts described in Section 1.6 without proof of damages or otherwise (in each case, subject to the terms and conditions of this Section 8.10), this being in addition to any other remedy to which they are entitled under this Agreement and (b) the right of specific enforcement is an integral part of the this Agreement and the transactions consummated thereby and without that right, neither the Issuer nor the Investor would have entered into this Agreement. The parties hereto agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to applicable Law or inequitable for any reason, and agree not to assert that a remedy of monetary damages would provide an adequate remedy or that the parties otherwise have an adequate remedy at Law.
[Remainder of page left intentionally blank.]
IN WITNESS WHEREOF this Agreement has been executed by the parties on the date first written above.
|
|
SKYLINE CHAMPION CORPORATION |
|
Per: |
(signed) “Xxxx Xxxx” |
||
|
Name: Xxxx Xxxx |
||
|
Title: President & Chief Executive Officer |
|
|
ECN CAPITAL CORP. |
|
Per: |
(signed) “Xxxxxx Xxxxxx” |
||
|
Name: Xxxxxx Xxxxxx |
||
|
Title: Chief Executive Officer |
SCHEDULE 3.1(N)
FINANCIAL STATEMENT DISCLOSURE
[Redacted]
SCHEDULE 3.1(U)
ABSENCE OF CERTAIN EVENTS
[Redacted]
SCHEDULE 6.7
CONDUCT OF BUSINESS PRIOR TO CLOSING
[Redacted]
Exhibit A
ECN CAPITAL CORP.
– and –
SKYLINE CHAMPION CORPORATION
INVESTOR RIGHTS AGREEMENT
[●], 2023
Article 1 DEFINITIONS AND INTERPRETATION1
1.1 Definitions1
1.2 Rules of Construction9
1.3 Accounting Principles10
Article 2BOARD of directors10
2.1 Board of Directors Nominee10
2.2 Board Nomination Procedure11
2.3 Resignation, Death, Incapacity or Disqualification of Director12
2.4 Director Compensation12
2.5 Governance Policies13
2.6 Directors’ and Officers’ Liability Insurance and Indemnification13
2.7 Board Committees13
2.8 Investor Support13
2.9 Matters Requiring Unanimous Board Approval13
Article 3PRE-EMPTIVE RIGHT and Top-Up Right14
3.1 Pre-Emptive Right14
3.2 Top-Up Right16
3.3 Limitation on Pre-Emptive Right and Top-Up Right.18
Article 4REGISTRATION RIGHTS18
4.1 Piggy-Back Registration Rights18
4.2 Registration Expenses19
4.3 Rights and Obligations of the Investor19
4.4 Indemnification20
4.5 Defence of Action by Indemnifying Parties21
4.6 Contribution22
4.7 Survival22
4.8 Conflict22
4.9 Acting as Trustee22
Article 5TRANSFER OF SECURITIES23
5.1 Restrictions on Transfer23
5.2 Permitted Transfers24
Article 6STANDSTILL25
6.1 Standstill25
Article 7ADDITIONAL COVENANTS26
7.1 Right to Match26
7.2 Restriction on Private Placements to Competitors28
7.3 Confidentiality Obligations28
7.4 Tax Cooperation30
Article 8AMENDMENTS30
8.1 Amendments and Modifications30
8.2 Changes in Capital of the Company31
Article 9General31
9.1 Authority; Effect.31
9.2 Termination31
9.3 Assignment32
9.4 Co-operation32
9.5 Further Assurances32
9.6 Time32
9.7 Enurement32
9.8 Public Filing32
9.9 Notices to Parties32
9.10 Entire Agreement34
9.11 Waiver34
9.12 Consent34
9.13 Governing Law34
9.14 Severability34
9.15 No Third Party Rights35
9.16 Independent Legal Advice35
9.17 Specific Performance35
9.18 Counterparts35
THIS INVESTOR RIGHTS AGREEMENT is made as of the [●] day of [●], 2023.
AMONG:
ECN CAPITAL CORP., a corporation incorporated under the laws of the Province of Ontario (the “Company”);
-and-
SKYLINE CHAMPION CORPORATION, a corporation incorporated under the laws of Indiana (the “Investor”);
WHEREAS the Company and the Investor have entered into a share subscription agreement dated August 14, 2023 (the “Subscription Agreement”) pursuant to which the Company has agreed to issue, and the Investor has agreed to purchase, 33,550,000 Shares and 27,450,000 New Preferred Shares (the “Purchased Shares”);
AND WHEREAS following the issuance and sale of the Purchased Shares to the Investor pursuant to the terms and conditions of the Subscription Agreement, the Investor will own 33,550,000 Shares and 27,450,000 New Preferred Shares, representing approximately 19.9% of the issued and outstanding Shares on a non-diluted basis (and assuming the conversion of all New Preferred Shares into Shares);
AND WHEREAS in consideration of the Investor’s agreement to complete the subscription pursuant to the Subscription Agreement, the Company has agreed to grant certain rights set out herein to the Investor on the terms and subject to the conditions set out herein;
NOW THEREFORE, in consideration of the foregoing and the mutual promises, covenants and agreements of the Parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:
DEFINITIONS AND INTERPRETATION
In this Agreement, the following terms have the following meanings:
“Acquisition Proposal” means any bona fide written offer or proposal from an arm’s length Person or group of Persons made to the Company after the date hereof (i) relating to any direct or indirect sale or disposition (or any joint venture, alliance, lease, license, long-term supply agreement or other arrangement having the same economic effect as a sale or disposition), in a
single transaction or a series of related transactions, including by way of a take-over bid, plan of arrangement, merger, amalgamation, consolidation, security exchange, business combination, reorganization, recapitalization, liquidation, dissolution, winding-up or similar transaction, of (A) more than 50% of the voting or equity securities of the Company or Triad (including securities convertible into or exercisable or exchangeable for voting or equity securities); or (B) more than 50% of the consolidated assets of the Company or Triad; (ii) that is not subject to a due diligence condition; (iii) that the Board determines in good faith, after receiving the advice of outside legal counsel, is reasonably capable of completion in accordance with its terms, taking into account all financial, legal, regulatory and other aspects of such proposal and the Person(s) making such proposal; and (iv) in respect of which the Board determines in good faith, after receiving the advice of outside legal counsel and after taking into account all the terms and conditions of the Acquisition Proposal as set forth in the proposed definitive agreement with respect thereto, including all legal, financial, regulatory and other aspects of such Acquisition Proposal would, if consummated in accordance with its terms, be in the best interests of the Company;
“Acquisition Proposal Notice” has the meaning set out in Section 7.1(a)(i) hereto;
“Act” means the Business Corporations Act (Ontario);
“Affiliate” means, with respect to any specified Person, any other Person which, directly or indirectly, through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise); provided that, for purposes of this Agreement, the Company and its Subsidiaries shall not be considered Affiliates of the Investor and its Affiliates and the Investor and its Affiliates shall not be considered Affiliates of the Company and its Subsidiaries;
“Affiliated Transferee” means any Affiliate of the Investor or any successor entity to an Investor or its Affiliates that hold Shares or New Preferred Shares by virtue of a Transfer of Shares or New Preferred Shares from the Investor in compliance with the terms of this Agreement;
“Applicable Securities Laws” means Canadian Securities Laws and U.S. Securities Laws;
“At-the-Market Distribution” means a distribution of Shares pursuant to an at-the-market program implemented by the Company pursuant to National Instrument 44-102 – Shelf Distributions;
“Board” means the board of directors of the Company, as may be constituted from time to time;
“Bought Deal” means an Underwritten Offering made on a “bought deal” basis in one or more of the Qualifying Jurisdictions pursuant to which an underwriter has committed to purchase securities of the Company in a “bought deal” letter prior to the filing of a Prospectus in respect of the Distribution under Canadian Securities Laws;
“Business Day” means any day, other than: (a) a Saturday, Sunday or statutory holiday in Toronto, Ontario or New York City, New York; or (b) a day on which banks are generally closed in Toronto, Ontario or New York City, New York;
“Canadian Registration” means the qualification under Canadian Securities Laws of the Distribution of Registrable Shares, as a secondary offering, to the public in any or all of the provinces of Canada pursuant to a Canadian Prospectus;
“Canadian Securities Laws” means the securities legislation in each of the provinces of Canada, including all rules, regulations, instruments, policies, notices, published policy statements and blanket orders thereunder or issued by one or more of the Canadian Securities Regulatory Authorities;
“Canadian Securities Regulatory Authorities” means, collectively, the securities regulatory authorities in each of the Qualifying Jurisdictions;
“Captive FinanceCo” means [●], the captive finance company formed by the Company and the Investor concurrent with the execution of this Agreement;
“Company” has the meaning set out in the preamble to this Agreement;
“Competitor” means any entity primarily engaged, directly or indirectly, in the factory-built housing industry in the United States and who would reasonably be expected to compete with the Investor, provided that the Company and its Affiliates will not in any event be deemed a Competitor;
“Conditions” has the meaning set out in Section 2.1(a) hereto;
“Confidential Information” means:
provided that “Confidential Information” does not include any information that:
(w) is developed independently by the Investor or its Representatives without reference to any Confidential Information;
(x) is at the time of disclosure to the Investor or thereafter becomes generally available to the public, other than as a result of a disclosure by the Investor or any of its Representatives in breach of Section 7.3;
(y) is or was received by the Investor on a non-confidential basis from a source other than the Company if such source is not, to the Investor’s knowledge, prohibited from disclosing the information to the Investor by a confidentiality agreement with, or a contractual, fiduciary or other legal obligation to, the Company or its Subsidiaries; or
(z) was known by the Investor prior to disclosure under this Agreement if the Investor was not subject to any contractual, fiduciary or other legal confidentiality obligation in respect of such information;
“control” or “controlled” has the meaning set out in the definition of “Affiliate” hereunder;
“Convertible Securities” means securities convertible into or exercisable or exchangeable for Shares or giving the right to acquire Shares or receive Shares in connection with the settlement thereof;
“Director” means a director on the Board and “Directors” means all of the directors on the Board;
“Directors Election Meeting” means any annual meeting or special meeting of shareholders of the Company at which, or any solicitation of shareholders of the Company to approve a shareholder resolution in connection with which, Directors are to be elected to the Board;
“Distribution” means any distribution or issuance by the Company or its Subsidiaries of Shares and/or Convertible Securities pursuant to a public offering or a private placement, other than any Exempt Distribution;
“Distribution Expenses” means, other than Selling Expenses and any fees and expenses of the Investor’s external legal counsel, all expenses incurred in connection with a Piggy-Back Registration, including: (i) applicable registration listing and filing fees; (ii) fees and expenses of compliance with applicable securities laws; (iii) printing and copying expenses; (iv) messenger and delivery expenses; (v) expenses incurred in connection with any road show and marketing activities; (vi) fees and disbursements of counsel to the Company; (vii) fees and disbursements of all independent public accountants (including the expenses of any audit and/or “comfort” letter) and fees and expenses of any other special experts retained by the Company; (viii) translation expenses; and (ix) any other fees and disbursements of underwriters customarily paid by issuers or sellers of securities;
“Exempt Distribution” means the issuance of Shares or Convertible Securities in any of the following circumstances: (i) in respect of the issuance or exercise of Convertible Securities issued to directors or employees of the Company under the Company’s ordinary course security-based compensation arrangements; (ii) in respect of the exercise, conversion, settlement, exchange of, or satisfaction of obligations in connection with, any issued and outstanding Convertible Securities on the date hereof in accordance with the terms thereof; (iii) in connection with a subdivision of then-outstanding Shares into a greater number of Shares, on a proportionate basis to all Shareholders; (iv) upon the exercise, conversion, settlement or exchange of, or satisfaction of obligations in connection with, any Convertible Securities in respect of which the applicable Investor did not exercise, failed to exercise, or waived its rights under Section 3.1(a) or which was issued in a transaction that would otherwise constitute an Exempt Distribution, in each case in accordance with the terms thereof; (v) in connection with the exercise, conversion, settlement or exchange of, or satisfaction of obligations in connection with, the New Preferred Shares and any other Convertible Security held by the Investor in accordance with the terms thereof where such Convertible Securities were issued pursuant to the Pre-Emptive Right in accordance with Section 3.1; (vi) pursuant to a shareholders’ rights plan of the Company, if any; (vii) in respect of issuances to participants in a distribution reinvestment or similar plan of the Company, if any; (viii) to any wholly owned Subsidiary of the Company; (ix) Shares or Convertible Securities issued in connection with any direct or indirect acquisitions or business combination transactions involving the Company or its Subsidiaries as consideration to the former shareholders or sellers of the acquired business or to the management of the acquired business (but not including any equity financing undertaken for the purpose of funding any cash consideration payable in connection with any such acquisition); and (x) in connection with any At-the-Market Distribution;
“Exercise Notice” has the meaning set out in Section 3.1(d) hereto;
“Exercise Notice Period” has the meaning set out in Section 3.1(d) hereto;
“Indemnified Party” has the meaning set out in Section 4.5(a) hereto;
“Indemnifying Party” has the meaning set out in Section 4.5(a) hereto;
"Investor” has the meaning set out in the preamble to this Agreement;
“Investor Nominee” has the meaning set out in Section 2.1(a) hereto;
“Law” means any and all federal, provincial, territorial, state, regional, national, foreign, local, municipal or other laws, statutes, acts, treaties, constitutions, principles of common law, resolutions, ordinances, proclamations, directives, codes, edicts, Orders, rules, regulations, rulings or requirements or other legally binding directives or guidance issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity, including securities laws, policies and notices enacted by to the Securities Regulators and stock exchange rules;
“Legacy Subsidiaries” means the following Subsidiaries of the Company: [Redacted];
"Market Price" means, in respect of any date, the "market price" of the Shares as determined in respect of such date pursuant to the TSX Company Manual, or if the Shares are not traded on the TSX at the relevant time, the closing price of the Shares on the trading day(s) immediately prior to such date on such other exchange or marketplace as such shares are then traded (or at the "Market Price" otherwise determined pursuant to the rules of such other exchange or marketplace, if different);
“Matching Period” has the meaning set out in Section 7.1(a)(iii) hereto;
“Matching Proposal” means an Acquisition Proposal made by the Investor or any of its Affiliates to the Company in response to a Triggering Proposal that the Board determines, in good faith after receiving advice from outside legal counsel, and after taking into account all of the terms and conditions of the Acquisition Proposal, including all legal, financial, regulatory and other aspects of such Acquisition Proposal, that such Acquisition Proposal would, if consummated in accordance with its terms, result in a transaction that is no less favourable to the Company (including to the holders of Shares) than the Triggering Proposal;
“New Preferred Shares” means the Mandatory Convertible Preferred Shares, Series E in the capital of the Company;
“Nomination Letter” has the meaning set out in Section 2.2(b) hereto;
“Nominee” or “Nominees” means the nominee and nominees that are proposed for election as Directors by the Company and included in a management information circular of the Company relating to the election of Directors at a Directors Election Meeting or any other individual that the Investor is entitled to replace as a Director or has otherwise nominated as a Director in accordance with the terms of this Agreement;
“Notice” has the meaning set out in Section 9.9 hereto;
“Over-Allotment Option” means an over-allotment option or similar option granted to one or more underwriters in connection with an Underwritten Offering;
“Ownership Percentage” means, at any time, the percentage of Shares beneficially owned or over which the Investor and its Affiliates exercise control or direction on a non-diluted basis, which shall be calculated by dividing (y) the number of Shares the Investor and its Affiliates own or exercise control or direction over, by (z) the total number of Shares issued and outstanding at such time (in each case, assuming the conversion of all New Preferred Shares into Shares as of the relevant date for determination);
“Party” or “Parties” means one or more of the parties to this Agreement;
“Permitted Distribution” means quarterly dividends of the Company not in excess of $0.01 per Share and $0.4960625 per Cumulative 5-Year Minimum Rate Reset Preferred Shares, Series C in the capital of the Company and dividends on the New Preferred Shares;
“Person” means and includes any individual, corporation, limited partnership, general partnership, limited liability partnership, joint stock company, limited liability company, joint venture, association, company, trust, bank, trust company, pension fund, business trust or other organization, whether or not a legal entity;
“Piggy-Back Notice” has the meaning set out in Section 4.1(a) hereto;
“Piggy-Back Registration” has the meaning set out in Section 4.1(b) hereto;
“Piggy-Back Request” has the meaning set out in Section 4.1(b) hereto;
“Piggy-Back Shares” has the meaning set out in Section 4.1(b) hereto;
“Plan” has the meaning set out in Section 6.1(a)(iv) hereto;
“Pre-Emptive Right” has the meaning set out in Section 3.1(a) hereto;
“Pre-Emptive Right Securities” means Shares and any Convertible Securities;
“Proposal” has the meaning set out in Section 6.1(c)(ii) hereto;
“Prospectus” means a “preliminary prospectus” and/or a “prospectus” as those terms are used in Canadian Securities Laws (including, for greater certainty, a Shelf Prospectus), including all amendments and supplements thereto;
“Purchased Shares” has the meaning set out in the preamble to this Agreement;
“Qualifying Jurisdictions”means all of the provinces of Canada;
“Registrable Shares” means the Purchased Shares and any other Shares that are issued to the Investor and its Affiliated Transferees by the Company pursuant to Article 3; provided that any such Shares shall cease to be Registrable Shares if (i) they have been registered pursuant to an effective U.S. Registration Statement, (ii) they have been transferred by the Investor to any person that is not an Affiliated Transferee of the Investor, (iii) they may be sold pursuant to Rule 144 under the U.S. Securities Act without limitation thereunder on volume or manner of sale, (iv) they have been sold to the public pursuant to Rule 144 under the U.S. Securities Act, or (v) they have ceased to be outstanding;
“Representatives” means the agents, directors, trustees, officers, employees, representatives, consultants and advisers of the Investor;
“Restricted Period” means the period beginning on the date of this Agreement and ending on and including the day that is two years thereafter;
“Right to Match” has the meaning set out in Section 7.1(a)(iv) hereto;
“SEC” means the United States Securities and Exchange Commission;
“Selling Expenses” means any and all underwriting or agents’ fees, discounts and commissions and transfer taxes, if any, attributable to a sale of Shares in connection with a Piggy-Back Registration;
“Selling Shareholders” has the meaning set out in Schedule B;
“Shareholders” means any Person that is a registered holder or beneficial owner of Shares and, where the context permits, upon the death of a Shareholder who is an individual, means such Shareholder’s personal legal representatives;
“Shareholder Information” has the meaning set out in Section 4.3 hereto;
“Shares” means common shares in the capital of the Company;
“Shelf Prospectus” means a Prospectus used to qualify a Distribution of securities in Canada on a delayed or continuous basis, pursuant to National Instrument 44-102– Shelf Distributions of the Canadian Securities Regulatory Authorities, or any successor to that instrument;
“Subscription Agreement” has the meaning set out in the preamble to this Agreement;
“Subsequent Offering” has the meaning set out in Section 3.1(a) hereto;
“Subsequent Offering Notice” has the meaning set out in Section 3.1(c) hereto;
“Subsidiary” means, as to any Person, any corporation or other entity of which: (a) such Person or a Subsidiary of such Person is a general partner or, in the case of a limited liability company, the managing member or manager thereof; (b) at least a majority of the outstanding equity interest having by the terms thereof ordinary voting power to elect a majority of the board of directors or similar governing body of such corporation or other entity (irrespective of whether or not at the time any equity interest of any other class or classes of such corporation or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more of its Subsidiaries; or (c) any corporation or other entity as to which such Person consolidates for accounting purposes;
“Tax” or “Taxes” mean all taxes, imposts, levies, duties, deductions, withholdings (including backup withholding), assessments, fees or other like assessments or charges, in each case in the nature of a tax, imposed by a Governmental Entity, together with all interest, penalties and additions imposed with respect to such amounts;
“Third Party” means any Person other than the Investor, any Affiliate of the Investor or any Person acting jointly or in concert with them;
“Transfer” has the meaning set out in Section 5.1(a)(i) hereto, and the words “Transferred” and “Transferring” have corresponding meanings;
“Triad” means Triad Financial Services, Inc.
“Triggering Proposal” has the meaning set out in Section 7.1(a) hereto;
“TSX” means the Toronto Stock Exchange;
“U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;
“U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;
“U.S. Prospectus” means (i) the prospectus included in any U.S. Registration Statement (including a prospectus that discloses information previously omitted from a prospectus filed as part of an effective U.S. Registration Statement in reliance upon Rule 430A promulgated under the U.S. Securities Act), as amended or supplemented by any prospectus supplement, relating to Registrable Shares, and all other amendments and supplements to the prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such prospectus; and (ii) any Issuer Free Writing Prospectus;
“U.S. Registration” means a registration under the U.S. Securities Act of the offer and sale to the
public of any Registrable Shares under a U.S. Registration Statement;
“U.S. Registration Statement” means any registration statement of the Company filed with the SEC under the U.S. Securities Act which covers any of the Registrable Shares, including any U.S. Prospectus, U.S. Shelf Registration Statement, amendments and supplements to such U.S. Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such U.S. Registration Statement;
“U.S. Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder;
“U.S. Securities Laws” means all U.S. federal and state securities laws, including the U.S. Exchange Act and the U.S. Securities Act;
“U.S. Shelf Registration Statement” means a U.S. Registration Statement on Form S-3 or Form
F-3 (or any successor form or other appropriate form under the U.S. Securities Act) filed with the SEC for an offering to be made on a continuous or delayed basis pursuant to Rule 415 under the U.S. Securities Act covering Registrable Shares; provided, that to the extent the Company is a WKSI, a “U.S. Shelf Registration Statement” shall be deemed to refer to an automatic shelf registration statement (as defined in Rule 405 under the U.S. Securities Act) on Form S-3 or Form F-3;
“Underwritten Offering” means the sale of securities of the Company to an underwriter in connection with a Distribution; and
“WKSI” means a well-known seasoned issuer as defined in Rule 405 under the U.S. Securities Act.
Unless the context otherwise requires, in this Agreement:
Where the character or amount of any asset or liability or item of revenue or expense is required to be determined, or any consolidation or other accounting computation is required to be made for the purpose of this Agreement, such determination or calculation shall, to the extent applicable and except as otherwise specified herein or as otherwise agreed in writing by the Parties, be made in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, applied on a consistent basis.
BOARD of directors
In the event of the resignation, death or incapacity of an Investor Nominee that is serving on the Board, or any replacement thereof appointed as aDirector pursuant to this Section 2.3, or in the event that such Investor Nominee ceases to satisfy any of the Conditions, the Investor shall be entitled to designate an individual satisfying each of the Conditions to replace such Investor Nominee to serve on the Board by delivery by the Investor of a written notice to the Company within 45 days after such Investor Nominee resigns, dies or becomes incapacitated, or ceases to satisfy any of the Conditions, as applicable, and to the extent permitted by applicable law and the Company’s constating documents or other organizational documents, the Board shall promptly appoint such individual as a Director, or to the extent not so permitted, nominate such individual for election as a Director at the next Directors Election Meeting in accordance with Section 2.2.
The Investor Nominee shall be compensated for his or her service on the Board and any Committees of the Board and reimbursed for expenses related to such service consistent with the Company’s policies for Director compensation and reimbursement.
The Investor acknowledges that the Investor Nominee will be required to comply with all governance policies of the Company that are applicable to members of the Board, including the Company’s majority voting policy and share ownership guidelines.
The Company has obtained from financially sound and reputable insurers, Directors’ and officers’ liability insurance in an amount and on terms and conditions satisfactory to the Board and shall use commercially reasonable efforts to cause such insurance policy to be maintained until such time as the Board determines that such insurance should be discontinued (which, for certainty, shall not be prior to the termination of this Agreement in accordance with its terms). The Investor Nominee shall be entitled to enter into an indemnity agreement with the Company in substantially the form of agreement entered into by current members of the Board, as such form may be amended from time to time.
Subject to applicable law, including applicable stock exchange rules, for so long as an Investor Nominee serves on the Board, the Investor Nominee shall be a member of the Credit and Risk Committee of the Board.
During the Restricted Period, the Investor shall, and shall cause its Affiliated Transferees to (a) vote any Shares and New Preferred Shares beneficially owned, or over which control or direction is exercised, by the Investor or its Affiliated Transferees in favour of or abstain from voting on (i) any resolution seeking the election of the Company’s Nominees at a Directors Election Meeting; (ii) any resolution seeking the appointment of the Company’s independent auditor at a meeting of shareholders of the Company; and (iii) any advisory resolution with respect to the Company’s approach to executive compensation; and (b) vote any Shares and New Preferred Shares beneficially owned, or over which control or direction is exercised by the Investor or its Affiliated Transferees against, abstain from voting or withhold from voting on (i) any nominee for election to the Board who is not a nominee proposed by the Company; or (ii) any resolution to remove any Director from the Board; provided, however, that the Investor shall not be under any obligation to vote in the same manner as recommended by the Board or in any other manner, other than in the Investor’s sole discretion, with respect to any other matter, including without limitation the approval (or non-approval) or adoption (or non-adoption) of, or other proposal directly related to, any arrangement, merger or other business combination transaction involving the Company, the sale of all or substantially all of the assets of the Company or any other change of control transaction involving the Company.
PRE-EMPTIVE RIGHTand Top-Up Right
in each case, for greater certainty, after giving effect to any Pre-Emptive Securities acquired by the Investor or any Affiliate thereof pursuant to the Subsequent Offering, other than pursuant to the exercise of the Pre-Emptive Right, if applicable.
Notwithstanding anything to the contrary in this Agreement, unless the Company has obtained any approval of its shareholders required under applicable law or stock exchange rules, including the rules of the TSX (which the Company shall not under any circumstances be required or obliged to obtain), the Company will not be obligated to issue any portion of Shares or Convertible Securities pursuant to the exercise of the Pre-Emptive Right or Top-Up Right as would result in the Investor, together with any of its Affiliates or other Persons acting jointly or in concert with the Investor, beneficially owning or exercising control or direction over more than 19.9% of the issued and outstanding Shares.
REGISTRATION RIGHTS
The Investor will furnish to the Company such information and execute such documents regarding the Registrable Shares and the intended method of disposition thereof as the Company may reasonably require in order to permit participation by the Investor under a Piggy-Back Registration. If an Underwritten Offering is contemplated, the Investor shall execute an underwriting agreement or agency agreement containing customary representations, warranties and indemnities (and contribution covenants) relating only to written information furnished by or on behalf of the Investor expressly for use in connection with such U.S. Registration Statement or Prospectus (the “Shareholder Information”) for the benefit of the Company and the underwriters; provided that the obligation to indemnify shall be limited to the gross proceeds received by the Investor from the sale of Registrable Shares pursuant to such Piggy-Back Registration and will apply only to any misrepresentations or omissions of material facts in relation to the Shareholder Information, and shall otherwise be in accordance with Section 4.4 hereof. The Investor shall notify the Company immediately upon the discovery of, or the occurrence of any event as a result of which the U.S. Registration Statement or Prospectus includes, an untrue statement of a material fact with respect to the Investor, in its capacity as selling securityholder, or omits to state a material fact with respect to the Investor, in its capacity as selling securityholder, required to be stated therein or necessary to make the statements therein with respect to the Investor, in its capacity as selling securityholder, not misleading in light of the circumstances under which they are made.
If the indemnification provided for in this Article 4 is unavailable to a Party that would have been an Indemnified Party under this Article 4 in respect of any losses, liabilities, claims, damages and expenses referred to herein, then the Party that would have been the Indemnifying Party hereunder will, in lieu of indemnifying such Indemnified Party, contribute to the amount paid or payable by such Indemnified Party as a result of such losses, liabilities, claims, damages and expenses in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and such Indemnified Party on the other hand in connection with the statement or omission that resulted in such losses, liabilities, claims, damages and expenses, as well as any other relevant equitable considerations. The relative fault will be determined by reference to, among other things, whether the untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or such Indemnified Party and the Parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a
Party under this Section 4.6 as a result of the losses, liabilities, claims, damages and expenses referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such Party in connection with any investigation or proceeding. The Company and the Investor agree that it would not be just and equitable if contribution pursuant to this Section 4.6 were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to above in this Section 4.6. With respect to this Section 4.6, the Investor shall not in any event be liable to contribute, in the aggregate, any amount in excess of the gross proceeds actually received by the Investor in connection with the Piggy-Back Registration. Notwithstanding the foregoing, however, no Person guilty of fraud or fraudulent misrepresentation (within the meaning of Section 11(f) of the U.S. Securities Act) will be entitled to contribution from any Person who was not guilty of fraud or fraudulent misrepresentation.
The indemnification provided for under this Article 4 will survive the expiry of this Agreement and will remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Party or any officer, director or controlling Person of such Indemnified Party.
Notwithstanding the foregoing, to the extent that the provisions regarding indemnification and contribution contained in the underwriting agreement or agency agreement entered into in connection with an Underwritten Offering are in conflict with the foregoing provisions, the provisions of the underwriting agreement or agency agreement shall prevail.
TRANSFER OF SECURITIES
The restrictions in Section 5.1 shall not apply in respect of a Transfer by the Investor or any of its Affiliated Transferees of all or any of the Purchased Shares or New Preferred Shares held by the Investor or its Affiliated Transferees:
STANDSTILL
ADDITIONAL COVENANTS
During the Restricted Period, without the prior written consent of the Investor, the Company shall not knowingly issue or offer to issue any Shares or Convertible Securities to a Competitor by way of a private placement or other directly negotiated transaction other than the issuance of Shares upon the exercise or settlement of Convertible Securities outstanding on the date hereof.
AMENDMENTS
This Agreement may not be orally amended, modified, extended or terminated. This Agreement may be amended, modified, extended or terminated only by an agreement in writing signed by each of the Company and the Investor. Each such amendment, modification, extension or termination shall be subject to prior approval by the TSX (for so long as the Company is subject to the rules thereof) and shall binding upon each Party hereto.
The terms of this Agreement shall apply mutatis mutandis to any shares or other securities:
prior to any action referred to in (a) or (b) above being taken the Parties shall give due consideration to any changes that may be required to this Agreement in order to give effect to the intent of this Section 8.2.
General
Each Party hereto represents and warrants to and agrees with each other Party that the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized on behalf of such Party and do not violate any agreement or other instrument applicable to such Party or by which its assets are bound. This Agreement does not, and shall not be construed to, give rise to the creation of a partnership among any of the Parties hereto, or to constitute any of such Parties members of a joint venture or other association.
Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, in whole or in part, by any Party (whether by operation of law or otherwise) without the prior written consent of the other Party; provided that notwithstanding the foregoing, (a) the Company shall be permitted to assign this Agreement and its rights, interests and obligations hereunder without the prior written consent of the Investor to the successor or surviving entity in any amalgamation, merger, arrangement or other business combination or other transaction involving a change of control of the Company, and (b) this Section 9.3 shall not prohibit any Transfer permitted under Article 5; provided, further, that in the event of any such assignment pursuant to clause (b), the Investor will remain liable for all of its obligations under this Agreement.
In respect of all Distributions that occur during the term of this Agreement, the Company, the Investor and each of their respective representatives shall use reasonable commercial efforts to comply with all Applicable Securities Laws and stock exchange requirements, including the execution and filing of all necessary documents and the taking of all such other steps as may be necessary under Applicable Securities Laws and stock exchange requirements.
Each Party shall provide such further documents or instruments required by any other Party as may be reasonably necessary or desirable to effect the purpose of this Agreement and carry out its provisions.
Time is of the essence of this Agreement.
This Agreement is binding upon and enures to the benefit of the Parties and their respective successors and permitted assigns.
The Parties hereby consent to the public filing of this Agreement if any Party is required to do so by law or by applicable regulations or policies of any regulatory agency of competent jurisdiction or any stock exchange.
Any notice, approval, consent, information, payment, request or other communication (in this Section, a “Notice”) to be given under or in connection with this Agreement shall be effective if in writing and (i) delivered personally, (ii) sent by e-mail, or (iii) sent by overnight courier, in each case, addressed as follows:
ECN Capital Corp.
000 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000 Xxxx
Xxxx Xxxx Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
E-mail: [Redacted]
with a copy (which shall not constitute Notice) to:
Xxxxx, Xxxxxxx & Xxxxxxx LLP
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX
X0X 0X0
Attention: Xxxxx Xxxxxxx / Xxxxxxx Xxxxxx
Email: xxxxx.xxxxxxx@xxxxxx.xxx / xxxxxxx.xxxxxx@xxxxxx.xxx
Skyline Champion Corporation
000 Xxxx Xxx Xxxxxx Xxxx, Xxxxx 0000
Troy, Michigan 48084
Attention: Xxxxxx Xxxxx
E-mail: [Redacted]
with a copy (which shall not constitute Notice) to:
King & Spalding LLP
0000 Xxxxxxxxx Xxxxxx XX
Atlanta, Georgia 30309
Attention: Xxxx Xxxxxxx
E-mail: xxxxxxxx@xxxxx.xxx
and
XxXxxxxx Xxxxxxxx
00 Xxxxxxxxxx Xx. X., Xxxxx 0000
Toronto, Ontario M5K 1E6
Attention: Xxxxxx Xxxxxx
E-mail: xxxxxxx@xxxxxxxx.xx
Unless otherwise specified herein, such Notices or other communications shall be deemed effective (i) on the date received, if personally delivered, (ii) on the date received if delivered by e-mail on a Business Day, or if not delivered on a Business Day, on the first Business Day thereafter and (iii) two Business Days after being sent by overnight courier. Each of the Parties hereto shall be entitled to specify a different address by giving Notice as aforesaid to each of the other Parties hereto.
An accidental omission in the giving of, or failure to give, a Notice required by this Agreement will not invalidate or affect in any way the legality of any meeting or other proceeding in respect of which such Notice was or was intended to be given.
This Agreement constitutes the entire agreement between the Parties hereto with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether written or oral agreements between such Parties, in connection with the subject matter hereof. There are no conditions, covenants, agreements, representations, warranties or other provisions, express or implied, relating to the subject matter hereof except as specifically set forth in this Agreement.
Any waiver of, or consent to depart from, the requirements of any provision of this Agreement shall be effective only if it is in writing and signed by the Party giving it, and only in the specific instance and for the specific purpose for which it has been given. No failure on the part of any Party to exercise, and no delay in exercising, any right under this Agreement shall operate as a waiver of such right. No single or partial exercise of any such right shall preclude any other or further exercise of such right or the exercise of any other right.
Where a provision of this Agreement requires an approval or consent by a Party and written notification of such approval or consent is not delivered within the applicable time in accordance with this Agreement, then the Party whose consent or approval is required shall be conclusively deemed to have withheld its approval or consent.
This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein and shall be treated, in all respects, as an Ontario contract. Each Party agrees that any action or proceeding arising out of or relating to this Agreement may be instituted in the courts of the Province of Ontario, waives any objection which it may have now or hereafter to the venue of any such action or proceeding and irrevocably submits to the nonexclusive jurisdiction of such courts in any such action or proceeding.
If any term or other provision of this Agreement shall be determined by a court, administrative agency or arbitrator in any jurisdiction to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not render the entire Agreement invalid and shall not affect the validity, legality or enforceability of such term or other provision in any other jurisdiction. Rather, this Agreement shall be construed as if not containing the particular invalid, illegal or unenforceable provision, and all other provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent permitted under applicable law.
The terms and provisions of this Agreement are intended solely for the benefit of the Parties and their respective successors and permitted assigns, and it is not the intention of the Parties to confer any third party beneficiary rights and this Agreement does not confer any such rights upon any third party (including any holders of securities of the Company) that is not a Party to this Agreement.
The Parties acknowledge that they have entered into this Agreement willingly with full knowledge of the obligations imposed by the terms of this Agreement. Further, the Parties acknowledge that they have been afforded the opportunity to obtain independent legal advice and confirm by the execution of this Agreement that they have either done so or waived their right to do so, and agree that this Agreement constitutes a binding legal obligation and that they are estopped from raising any claim on the basis that they have not obtained such advice.
The Parties agree that irreparable harm would occur, for which money damages would not be an adequate remedy at law, in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties may seek injunctive relief, specific performance and other equitable relief to prevent breaches or threatened breaches of this Agreement, and to enforce compliance with the terms of this Agreement without the proof of actual damages and without any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief, this being in addition to any other remedy to which the Parties may be entitled at law, equity or under this Agreement.
This Agreement may be executed in separate counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same agreement. Delivery of an executed signature page to this Agreement by a Party by facsimile or electronic transmission shall be as effective as delivery of a manually executed copy of this Agreement by such Party.
[Signature page follows]
IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be duly executed as of the date first above written.
ECN CAPITAL CORP. |
|
Per: |
|
|
Name: |
|
Title: |
SKYLINE CHAMPION CORPORATION |
|
Per: |
|
|
Name: |
|
Title: |
SCHEDULE A
[Redacted]
SCHEDULE B
REGISTRATION RIGHTS PROCEDURES
In connection with any Piggy-Back Registration, the Investor and/or its Affiliated Transferees whose Registrable Shares are subject to a Piggy-Back Registration (collectively, the “Selling Shareholders”) shall take the following steps:
(b) If Applicable Securities Laws so require, the Investor shall sign, or cause the applicable Selling Shareholders to sign, any attestation or certificate forming part of a U.S. Registration Statement or Prospectus to be filed with the SEC, Canadian Securities Regulatory Authorities or other regulatory authorities, as applicable;
(c) The Investor shall and shall cause the Selling Shareholders to take all steps and sign all documents and acts required by the Company, acting reasonably, to complete the Piggy-Back Registration, including signing the underwriting agreement entered into among the underwriters, the Company and the Selling Shareholders in such regard, provided it contains the usual terms for this type of agreement, including the Selling Shareholders’ representations and warranties, which shall be limited to the representations regarding the Selling Shareholders’ beneficial ownership regarding their respective Registrable Shares, free of any lien or other charge and the Selling Shareholders’ ability, power, authority and right to enter into such an underwriting agreement and carry out the transactions contemplated therein without breaching any other undertaking by the Selling Shareholders;
(d) No one may participate in an Underwritten Offering hereunder without (i) agreeing to sell their securities according to the terms of any underwriting agreement applying to such Underwritten Offering and completing and signing such underwriting agreement and (ii) completing and signing all questionnaires, powers of attorney, indemnifications and other documents required by such underwriting agreement, insofar as they are prepared in the usual form for such type of document or instrument; and
(e) In connection with any Underwritten Offering, if the underwriter(s) of the Underwritten Offering in question, acting reasonably, so request, the Investor hereby agrees and shall cause the Selling Shareholders to agree to be bound by a lock-up agreement containing the usual terms and conditions found in lock-up agreements relating to secondary offerings, and to sign such an agreement, having the effect of limiting the Selling Shareholders, for a period which may not exceed 90 days from the sale of the Registrable Shares forming the subject of the Piggy-Back Registration, from (i) directly or indirectly assigning Shares or securities which may be converted, exercised or exchanged for Shares or (ii) entering into a swap or any other arrangement having the effect of assigning to another Person one or more of the economic consequences of owning Shares.
Exhibit B
ECN CAPITAL CORP.
MANDATORY CONVERTIBLE PREFERRED SHARES, SERIES E
RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS
The fifth series of preferred shares of the Corporation (“Preferred Shares”) shall consist of 27,450,000 Preferred Shares which shall be designated as “Mandatory Convertible Preferred Shares, Series E” (hereinafter referred to as the “Convertible Preferred Shares” and each a “Convertible Preferred Share”) and which, in addition to the rights, privileges, restrictions and conditions attaching to the Preferred Shares as a class, shall have attached thereto the following rights, privileges, restrictions and conditions. Capitalized terms not defined where used shall have the meanings ascribed to such terms in Section 1.11.
The Holders are entitled to receive notice of, attend and vote (in person or by proxy) at all meetings of the shareholders of the Corporation, except where holders of another class or series are entitled to vote separately as a class or series as provided in the Business Corporations Act (Ontario), applicable securities laws or the rules of any applicable Exchange. Except as otherwise required by law, the holders of the Convertible Preferred Shares and the Common Shares will vote together as a single class on all matters submitted to a vote of the shareholders of the Corporation. The Convertible Preferred Shares shall confer the right to one (1) vote for each Convertible Preferred Share held at all such meetings of shareholders of the Corporation. Each Holder shall be deemed to hold, for the sole purpose of voting at any meeting of shareholders of the Corporation at which such Holder is entitled to vote, the number of Convertible Preferred Shares equal to the number of whole Common Shares into which such Xxxxxx’s registered Convertible Preferred Shares are convertible pursuant to these share provisions as of the record date for the determination of shareholders entitled to vote at such shareholders meeting or, if no such record date is established, the date such vote is taken or any written resolution of shareholders is solicited. The Holders shall not be entitled to vote separately as a class or series upon a proposal to amend the Articles of the Corporation to: (a) increase any maximum number of authorized shares of a class or series having rights or privileges equal to or superior to the Convertible Preferred Shares or (b) create a new class or series of shares equal or superior to the Convertible Preferred Shares.
Holders shall be entitled to receive, and the Corporation shall pay thereon, if, as and when declared by the directors of the Corporation, out of monies of the Corporation properly applicable to the payment of dividends, fixed, cumulative, preferential cash dividends (the “Convertible Preferred Dividends”) payable semi-annually on the last calendar day of June and December in each year (each, a “Dividend Payment Date”) in an annual amount per Convertible Preferred Share equal to 4.0% (the “Convertible Preferred Dividend Rate”) multiplied by the Liquidation Preference, payable in semi-annual amounts on each Dividend Payment Date. The initial Convertible Preferred Dividend will be payable on December 31, 2023 and will be an amount calculated in accordance with Section 1.03(d)(i). The Holders shall not have the right to receive any dividends that are declared only with respect to the Common Shares or any other series of preferred shares of the Corporation.
The Corporation shall pay Convertible Preferred Dividends (less any tax required to be deducted and withheld by the Corporation), except in the case of redemption or conversion in which case payment of Convertible Preferred Dividends shall be made immediately before the redemption or conversion and upon surrender of the certificate or DRS statement representing the Convertible Preferred Shares to be redeemed or converted, by wire or electronic funds transfer or by sending to each Holder a cheque for such Convertible Preferred Dividends payable to the order of such Holder or, in the case of joint Holders, to the order of all such Holders failing written instructions from them to the contrary or in such other manner, not contrary to applicable law, as the Corporation shall reasonably determine. The making of such payment or the posting or delivery of such cheque on or before the date on which such dividend is to be paid to a Holder shall be deemed to be payment and shall satisfy and discharge all liabilities for the payment of such dividends to the extent of the sum represented thereby (plus the amount of any tax required to be and in fact deducted and withheld by the Corporation from the related dividends as aforesaid and remitted to the proper taxing authority) unless such cheque is not honoured when presented for payment. Subject to applicable law, dividends which are represented by a cheque which has not been presented to the Corporation’s bankers for payment or that otherwise remain unclaimed for a period of six years from the date on which they were declared to be payable shall be forfeited to the Corporation.
If on any Dividend Payment Date, the Convertible Preferred Dividends accrued to such date are not paid in full on all of the Convertible Preferred Shares then outstanding, such Convertible Preferred Dividends, or the unpaid part thereof, shall be paid on a subsequent date or dates determined by the directors on which the Corporation shall have sufficient monies properly applicable to the payment of such Convertible Preferred Dividends. The Holders shall not be entitled to any dividends other than or in excess of the Convertible Preferred Dividends.
The Holders shall be entitled to receive, and the Corporation shall pay, if, as and when declared by the directors of the Corporation, out of monies of the Corporation properly applicable to the payment of dividends, Convertible Preferred Dividends for any period which is more or less than a full Dividend Period as follows:
So long as any of the Convertible Preferred Shares are outstanding, the Corporation shall not, without the approval of the Holders:
unless, in each such case, all accrued and unpaid Convertible Preferred Dividends up to and including the Convertible Preferred Dividend payable for the last completed Dividend Period and on all other shares of the Corporation ranking prior to or on a parity with the Convertible Preferred Shares with respect to the payment of dividends have been declared and paid or monies set apart for payment.
Subject to applicable law, the Corporation may at any time or times purchase (if obtainable) for cancellation all or any number of the Convertible Preferred Shares outstanding from time to time in one or more negotiated transactions at such price or prices as are determined by the Board of Directors and as may be agreed to with the relevant holders of the Convertible Preferred Shares. From and after the date of purchase of any Convertible Preferred Shares under the provisions of this Section 1.05, any Convertible Preferred Shares so purchased shall be cancelled.
Each Convertible Preferred Share is convertible into Common Shares as provided in this Section 1.07, subject to the Conversion Cap (unless Requisite Shareholder Approval has been obtained or is not required).
No fractional Common Shares will be issued upon conversion of the Convertible Preferred Shares. In lieu of fractional shares the Corporation shall, subject to the last sentence hereof, round down to the next whole number, the number of Common Shares to be issued upon conversion of the Convertible Preferred Shares. If more than one Convertible Preferred Share is being converted at one time by or for the benefit of the same Holder, then the number of full Common Shares issuable upon conversion will be calculated on the basis of the aggregate number of Convertible Preferred Shares converted by or for the benefit of such Holder at such time, and if all of the Convertible Preferred Shares held by a Holder are being converted at the same time, then the number of full Common Shares issuable upon conversion will be calculated on the basis of the aggregate number of Convertible Preferred Shares converted by or for the benefit of such Holder at such time, with any resulting fractional entitlement being rounded to the nearest whole number.
Where a conversion of Convertible Preferred Shares pursuant to Section 1.07 would result in Requisite Shareholder Approval being required, unless the Corporation has obtained the Requisite Shareholder Approval, which the Corporation shall not be obligated to obtain, no Convertible Preferred Shares may be converted pursuant to Section 1.07 if and to the extent that, as a result of the delivery to the Holder of Common Shares upon such conversion such Holder, together with its Affiliates and other Persons acting together with such Xxxxxx, would beneficially own or exercise control or direction over in excess of 19.9% of the number of Common Shares outstanding immediately after giving effect to such conversion (such limit, the “Conversion Cap”). For purposes of the foregoing sentence, “beneficial ownership” shall be calculated in accordance with NI 62-104 without giving effect to any applicable Conversion Cap. Any purported delivery of Common Shares upon conversion of Convertible Preferred Shares shall be void ab initio and have no effect if such delivery would result in the applicable Holder exceeding the Conversion Cap, and each Holder shall, upon becoming aware of any such Common Shares so delivered, immediately notify the Corporation of same, and thereafter, or otherwise upon written demand from the Corporation, immediately surrender to the Corporation the certificates or DRS statements representing such Common Shares, and the Corporation shall deliver to the applicable Holder the Convertible Preferred Shares in respect thereof (including any certificates or DRS statements representing such shares) or cash in lieu thereof in accordance with the terms of Section 1.07.
CP1 = CP0 x |
OS0 |
OS1 |
where
CP0 = the Conversion Price in effect immediately prior to the opening of business on the Ex-Dividend Date for such dividend or distribution;
CP1 = the Conversion Price in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution;
OS0 = number of Common Shares outstanding at the close of business on the Business Day immediately preceding such Ex-Dividend Date; and
OS1 = the sum of the number of Common Shares outstanding at the close of business on the Business Day immediately preceding the Ex-Dividend Date for such dividend or distribution, plus the total number of Common Shares constituting such dividend or other distribution.
Any adjustment to the Conversion Price made pursuant to this Section 1.09(a) shall become effective immediately after the opening of business on the Ex-Dividend Date for such dividend or distribution. If any dividend or distribution of the type described in this Section 1.09(a) is declared but not so paid or made, the Conversion Price shall again be adjusted to the Conversion Price which would then be in effect if such dividend or distribution had not been declared.
CP1 = CP0 x |
OS0 |
OS1 |
where
CP0 = the Conversion Price in effect immediately prior to the open of business on the effective date of such subdivision, combination or reclassification, as the case may be;
CP1 = the Conversion Price in effect immediately after the open of business on the effective date of such subdivision, combination or reclassification, as the case may be;
OS0 = the number of Common Shares outstanding immediately before giving effect to such subdivision, combination or reclassification; and
OS1 = the number of Common Shares outstanding immediately after giving effect to such subdivision, combination or reclassification.
Any adjustment to the Conversion Price made pursuant to this Section 1.09(b) shall become effective immediately after the open of business on the effective date of such subdivision, combination or reclassification becomes effective.
CP1 = CP0 x |
OS0 + X |
OS1+ Y |
where
CP0 = the Conversion Price in effect immediately prior to the opening of business on the Ex-Dividend Date for such distribution;
CP1 = the Conversion Price in effect immediately after the opening of business on the Ex-Dividend Date for such distribution;
OS0 = the number of Common Shares deemed to be outstanding immediately prior to the open of business on the Ex-Dividend Date for such distribution on a fully diluted basis, including on the conversion, exercise or exchange of any convertible, exercisable or exchangeable securities;
X = the number of Common Shares equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the Closing Prices of the Common Shares over the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of the first public announcement of the distribution of such rights, options or warrants;
Y = the total number of additional Common Shares issuable pursuant to such rights, options or warrants.
Any adjustment to the Conversion Price made pursuant to this Section 1.09(c) shall become effective immediately after the opening of business on the Ex-Dividend Date for such distribution.
To the extent that such rights, options or warrants are not exercised prior to their expiration or Common Shares are otherwise not delivered pursuant to such rights, options or warrants upon the exercise of such rights or warrants, the Conversion Price shall be readjusted to such Conversion Price that would have then been in effect had the adjustment made upon the issuance of such rights, options or warrants been made on the basis of the delivery of only the number of Common Shares actually delivered. If such rights, options or warrants are only exercisable upon the occurrence of certain triggering events, then the Conversion Price shall not be adjusted until such triggering events occur. In determining the aggregate offering price payable for such shares of Common Shares, the Corporation shall take into account the Fair Market Value of any
consideration (if other than cash) received for such rights, options or warrants and the Fair Market Value of any consideration (if other than cash) paid or payable upon the exercise of such rights, options or warrants.
CP1 = CP0 x |
SP0 – C |
SP0 – T |
where:
CP0 = the Conversion Price in effect immediately prior to the opening of business on the Ex-Dividend Date for such dividend;
CP1 = the Conversion Price in effect immediately after the opening of business on the Ex-Dividend Date for such dividend;
SP0 = the Current Market Price of the Common Shares on the Business Day immediately preceding such Ex-Dividend Date;
C = the amount in cash per Common Share the Corporation distributes to all or substantially all holders of the Common Shares; and
T = the Dividend Threshold Amount, provided that if the dividend or distribution is a regular quarterly cash dividend, the Dividend Threshold Amount shall be deemed to be zero.
Any adjustment to the Conversion Price made pursuant to this Section 1.09(d) shall become effective immediately after the opening of business on the Ex-Dividend Date for such dividend.
Notwithstanding the foregoing, if the amount in cash per Common Share the Corporation distributes to all or substantially all holders of the Common Shares is equal to or greater than the Current Market Price of the Common Shares on the Business Day immediately preceding such Ex-Dividend Date, in lieu of the foregoing adjustment each Holder shall receive at the same time and upon the same terms as holders of Common Shares, the amount of cash as a dividend on the Convertible Preferred Shares that such holder would have received if such holder owned a number of Common Shares at the Conversion Price in effect immediately prior to the opening of business on the Ex-Dividend Date for such cash dividend or distribution.
SP0 – FMV |
SP0 |
where
SP0 = the aggregate Current Market Price of the Common Shares issuable upon conversion of one Convertible Preferred Share; and
FMV = the Fair Market Value of the portion of the distribution applicable to one Convertible Preferred Share on such date.
MP0 |
(MP0 + MP1) |
where
MP0 = the Current Market Price of the Common Shares on the Business Day immediately preceding such Ex-Dividend Date for the Spin-Off aggregated for all Common Shares issuable upon conversion of one Convertible Preferred Share; and
MP1 = the Fair Market Value of the portion of the distribution applicable to one Convertible Preferred Share on such date.
then the Corporation shall provide notice to the Holders, at least ten (10) days prior to the record date specified in (A) below or ten (10) days prior to the date specified in (B) below, a notice stating:
For the purposes hereof, the following terms shall have the following meanings, unless the context otherwise requires:
“Affiliate” shall mean a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified; provided, however, that (i) the Corporation and its Subsidiaries shall not be deemed to be Affiliates of any Holder or any of its Affiliates and (ii) a Holder’s Affiliates shall not include any such Holder’s Disaggregated Affiliates. For the purposes of this definition, “control” when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.
“Articles of Amendment” means these articles of amendment of the Corporation.
“Board of Directors” means the board of directors of the Corporation, as constituted from time to time, or, with respect to any action to be taken by the Board of Directors, any committee of the Board of Directors duly authorized to take such action.
“Business Day” means a day other than a Saturday, Sunday or statutory holiday, when banks are generally open in the City of Toronto, Ontario, for the transaction of banking business.
“Change of Control” means a sale of all or substantially all of the assets of the Corporation on a consolidated basis to any Person (other than one or more Subsidiaries of the Corporation) or a transaction or series of related transactions as a result of which the holders of voting and equity interests in the Corporation immediately prior to such transaction or series of related transactions, together with their respective Affiliates, will thereafter cease to beneficially own
within the meaning of applicable securities laws at least a majority of the voting and equity interests in the Corporation or any successor thereto.
“Closing Price” means, with respect to any security on any date, the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the national stock exchange or automated inter-dealer quotation system upon which such security is listed or quoted (or, if such security are not listed and posted for trading on a national stock exchange or automated inter-dealer quotation system, such other over-the-counter market on which such security may be listed or quoted). If such securities are not so listed or quoted, the last reported sale price will be the average of the mid-point of the last bid and ask prices for such security on the relevant date from each of at least two recognized investment banking firms selected by the Corporation for this purpose. For purposes of these Convertible Preferred Share provisions, all references herein to the “Closing Price” and “last reported sale price” of the Common Shares on the Exchange shall be such closing sale price and last reported sale price as reflected on the website of the Exchange. If the date of determination is not a Trading Day, then such determination shall be made as of the last Trading Day prior to such date.
“Common Shares” means the common shares in the capital of the Corporation.
“Conversion Date” means the effective date of a conversion of Convertible Preferred Shares to Common Shares, being (i) in the case of conversion pursuant to Section 1.07(a), the date on which the Corporation shall have received such certificates or DRS statements, together with such transfer instruments, notice and such other information or documents as may be required by the Corporation or its Transfer Agent, (ii) in the case of a conversion pursuant to Section 1.07(b)(i), the closing date of the Change of Control, and (iii) in the case of a conversion pursuant to Section 1.07(c), the five (5) year anniversary of the Original Issuance Date.
“Convertible Preferred Shares” has the meaning attributed to it in the introductory paragraph to these Convertible Preferred Share provisions.
“Current Market Price” of the Common Shares on any date means the average of the Closing Prices per Common Share on the Exchange for each of the 10 consecutive Trading Days ending on the earlier of the day in question and the day before the Ex-Dividend Date with respect to the issuance or distribution requiring such computation.
“Disaggregated Affiliate” means, in respect of any Person, an Affiliate of such Person which may be disaggregated in accordance with the principles in National Instrument 62‑103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues.
“Dividend Payment Date” has the meaning attributed to it in Section 1.03(a).
“Dividend Period” means the period from and including the Original Issuance Date up to, but excluding, December 31, 2023 and, thereafter, each period from and including the last Half-Year Date to but excluding the next succeeding Half-Year Date.
“Ex-Dividend Date” means, with respect to any issuance, dividend or distribution on the Common Shares, the first date on which the Common Shares trade on the applicable Exchange or in the applicable market, regular way, without the right to receive such issuance or distribution.
“Exchange” means any United States or Canadian national stock exchange or automated inter-dealer quotation system upon which the Common Shares are listed or quoted, provided that if the Common Shares are dual listed on both a United States national stock exchange and a Canadian national stock exchange the United States national stock exchange shall be the Exchange; as of the date hereof, the Exchange for the Common Shares is the Toronto Stock Exchange.
“Fair Market Value” of the Common Shares or any other security, property or assets means the fair market value thereof as reasonably determined in good faith by the Board of Directors, which determination must be set forth in a written resolution of the Board of Directors, in accordance with the following rules:
“Half-Year Date” means the last calendar day of each of June and December in each year.
“Holder” has the meaning attributed to it in Section 1.01(c).
“Initial Dividend Period” has the meaning ascribed thereto in Section 1.03(d)(i).
“In priority to”, “on a parity with” and “junior to” have reference to the order of priority in payment of dividends and in the distribution of assets in the event of any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, or other distribution of the assets of the Corporation among its shareholders for the purpose of winding-up its affairs.
“Market Disruption Event” means, with respect to the Common Shares, (i) a failure by the Exchange to open for trading during its regular trading session or (ii) the occurrence or existence for more than one half hour period in the aggregate on any scheduled Trading Day for the Common Shares of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the Exchange, or otherwise) in the Common Shares or in any options, contracts or future contracts relating to the Common Shares, and such suspension or limitation occurs or exists at any time before 1:00 p.m. (Toronto time) on such day.
“NI 62-104” shall mean National Instrument 62-104 Take-Over Bids and Issuer Bids implemented by the members of the Canadian Securities Administrators.
“Original Issuance Date” means [●], 2023.
“Original Purchase Price” means $3.04.
“Person” shall include any individual, corporation, general partnership, limited partnership, limited liability partnership, joint venture, association, trust, limited liability company, unincorporated organization or government or any agency or political subdivision thereof.
“Preferred Shares” has the meaning attributed to it in the introductory paragraph to these Convertible Preferred Share provisions.
“Redemption Price” has the meaning attributed to it in Section 1.06(b).
“Requisite Shareholder Approval” means any approval of shareholders of the Corporation required by the rules or policies of any Exchange on which the Common Shares are listed with respect to the issuance of Common Shares upon the conversion of Convertible Preferred Shares in excess of the Conversion Cap.
“Subsidiary” means, as to any Person, any corporation or other entity of which: (a) such Person or a Subsidiary of such Person is a general partner or, in the case of a limited liability company, the managing member or manager thereof; (b) at least a majority of the outstanding equity interest having by the terms thereof ordinary voting power to elect a majority of the board of directors or similar governing body of such corporation or other entity (irrespective of whether or not at the time any equity interest of any other class or classes of such corporation or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more of its Subsidiaries; or (c) any corporation or other entity as to which such Person consolidates for accounting purposes.
“Trading Day” means any date on which (i) there is no Market Disruption Event and (ii) the Exchange is open for trading or, if the Common Shares are not so listed, admitted for trading or quoted, any Business Day. A Trading Day only includes those days that have a scheduled closing time of 4:00 p.m. (Toronto time) or the then standard closing time for regular trading on the relevant Exchange.
“Transfer Agent” means Computershare Investor Services Inc., a corporation existing under the laws of Canada, or such other Person as from time to time may be the registrar and transfer agent for the Convertible Preferred Shares.
In these Convertible Preferred Share provisions:
Notwithstanding any other provision of these Convertible Preferred Share provisions, the Corporation may deduct or withhold from any payment, distribution, issuance or delivery (whether in cash or in shares) to be made pursuant to these Convertible Preferred Share provisions any amounts required by applicable law to be deducted or withheld from any such payment, distribution, issuance or delivery and the Corporation will timely remit any such amounts to the relevant tax authority as required, and will provide evidence thereof reasonably acceptable to the affected Holder(s). All such remitted amounts shall be treated as having been paid to the relevant Holder(s). If the cash component of any payment, distribution, issuance or delivery to be made pursuant to these Convertible Preferred Share provisions is less than the amount that the Corporation is so required to deduct or withhold, the Corporation shall be permitted to deduct and withhold from any noncash payment, distribution, issuance or delivery to be made pursuant to these Convertible Preferred Share provisions any amounts required by law to be deducted or withheld from any such payment, distribution, issuance or delivery and to dispose of such property in order to remit any amount required to be remitted to any relevant tax authority.
Notwithstanding any other right, privilege, restriction or condition attaching to the Convertible Preferred Shares, the Corporation may, at its option, make any payment due to registered holders of Convertible Preferred Shares by way of a wire or electronic transfer of funds to such Holders. If a payment is made by way of a wire or electronic transfer of funds, the Corporation shall be responsible for any applicable charges or fees relating to the making of such transfer. As soon as practicable following the determination by the Corporation that a payment is to be made by way of a wire or electronic transfer of funds, the Corporation shall provide a notice to the applicable registered Holders. Such notice shall request that each applicable registered Holder provide the particulars of an account of such Holder with a chartered bank in Canada or the United States to which the wire or electronic transfer of funds shall be directed. If the Corporation does not receive account particulars from a registered Holder prior to the date such payment is to be made, the Corporation shall deposit the funds otherwise payable to such Holder in a special account or accounts in trust for such Holder.
These Convertible Preferred Share provisions may be repealed, altered, modified or amended from time to time with such approval as may then be required by the Business Corporations Act(Ontario).
The Convertible Preferred Shares may be in uncertificated, book entry form as permitted by the bylaws of the Corporation and applicable law. Within a reasonable time after the delivery or transfer of uncertificated Convertible Preferred Shares, as applicable, the Corporation shall send to the registered owner thereof a DRS statement or DRS advice in respect of such uncertificated Convertible Preferred Shares.
No Convertible Preferred Share may be transferred, sold, assigned, pledged, hypothecated or exchanged (“Transferred”) by a Holder except (i) while such agreement remains in force and effect, a transfer permitted pursuant to Section 5.2 of that certain Investor Rights Agreement by
and among the Corporation and Skyline Champion Corporation dated as of [●], 2023, as amended, restated or revised from time to time or (ii) with the prior written consent of the Corporation as evidenced by a written resolution of the Board of Directors; provided that, without the prior written consent of the Board of Directors, no Convertible Preferred Share may be Transferred by a Holder if and to the extent that, as a result of the Transfer, the transferee, together with its Affiliates and other Persons acting together with such transferee, would beneficially own or exercise control or direction over in excess of 19.9% of the issued and outstanding Common Shares (such limit, the “Beneficial Ownership Cap”). For purposes of this Section 1.16, “beneficial ownership” shall be calculated in accordance with NI 62-104 without giving effect to any applicable Conversion Cap. Any purported Transfer of Convertible Preferred Shares shall be void ab initio and have no effect, if such Transfer would result in the transferee, together with its Affiliates and other Persons acting together with such transferee, becoming the beneficial owner of or exercising control or direction over more than the Beneficial Ownership Cap and the Corporation shall not recognize or be bound by any such purported Transfer nor shall it recognize the transferee as a Holder hereunder.
Unless otherwise stated, all references herein to sums of money are expressed in lawful money of Canada.
The amount specified in respect of each Convertible Preferred Share for the purposes of subsection 191(4) of the Income Tax Act (Canada) is an amount equal to $3.04.