Exhibit 10.41
Execution Copy
--------------
===============================================================================
INVESTOR AGREEMENT
by and among
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
A&P LUXEMBOURG S.a.r.l
and
METRO INC.
Dated as of August 15, 2005
===============================================================================
The term "Confidential" indicates material that has been omitted and for which
confidential treatment has been requested. All such omitted material has been
filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934, as amended.
INVESTOR AGREEMENT
THIS INVESTOR AGREEMENT is made and entered into and
effective as of the 15th day of August, 2005, by and among The Great Atlantic &
Pacific Tea Company, Inc., a Maryland corporation ("A&P"), A&P Luxembourg
S.a.r.l., a Luxembourg societe a responsabilite limitee (the "Investor" and,
together with A&P, the "A&P Parties"), and Metro Inc., a Quebec corporation
(the "Company").
RECITALS
WHEREAS, pursuant to a stock purchase agreement dated as of July 19,
2005 by and among A&P, the Investor, the Company and 4296711 Canada Inc., a
Canadian corporation and a wholly owned subsidiary of the Company, (the "Stock
Purchase Agreement"), the Company has purchased all of the issued and
outstanding shares of The Great Atlantic and Pacific Tea Company, a Nova Scotia
unlimited liability Company from the Investor;
WHEREAS, pursuant to the Stock Purchase Agreement, the Company has
issued to the Investor 18,076,645 Class A Subordinate Shares of the Company
(the "Consideration Shares");
WHEREAS, the Parties wish to enter into this Agreement to provide for
certain mutual rights and obligations in respect of the Investor's investment
in the Company; and
WHEREAS, as a significant shareholder of the Company, the A&P Parties
will have certain rights under this Agreement to participate on the Board of
Directors and the committees thereof, and the Company will value the
significant expertise and management experience that the Investor Designees of
the A&P Parties will bring to these roles.
NOW, THEREFORE, in consideration of the foregoing, the
representations, warranties, covenants and agreements set forth in this
Agreement, and other good and valuable consideration, the adequacy and receipt
of which are hereby acknowledged, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions
Capitalized terms used in this Agreement shall have the meanings set forth in
this Agreement. In addition, for purposes of this Agreement, the following
terms, when used in this Agreement, shall have the meanings assigned to them in
this Section 1.1.
"1933 Act" means the United States Securities Xxx 0000, as amended.
"1934 Act" means the Unites States Securities Exchange Act of 1934, as
amended.
"A&P" shall have the meaning set forth in the first paragraph of this
Agreement.
"A&P Parties" shall have the meaning set forth in the first paragraph
of this Agreement.
"A&P Indemnified Parties" shall have the meaning set forth in Section
7.5.
"Action" mans any action, cause of action, demand, claim, charge,
prosecution, complaint, investigation, suit, litigation, assessment,
reassessment, grievance, arbitration, hearing or other proceeding, whether
civil, criminal or administrative, at Law or in equity, by or before any
Governmental Entity.
"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, a specified Person. A Person shall be deemed to control another Person if
such first Person possesses, directly or indirectly, the power to direct, or
cause the direction of, the management and policies of such other Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agreement" means this Investor Agreement, as the same may be amended
or supplemented.
"Alternative Sale" shall have the meaning set forth in Section 4.18.
"Asserted Liability" shall have the meaning set forth in Section 7.8.
"Board of Directors" means the board of directors of the Company.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banks are required to be closed in New York, New York or Toronto,
Ontario or Montreal, Quebec.
"Canadian Securities Authorities" means the British Columbia
Securities Commission, Alberta Securities Commission, Saskatchewan Financial
Services Commission, Securities Division, The Manitoba Securities Commission,
Ontario Securities Commission, Autorite des marches financiers (Quebec),
Justice Securities Administration (New Brunswick), Nova Scotia Securities
Commission, Registrar of Securities (Xxxxxx Xxxxxx Island), Securities
Commission of Newfoundland and Labrador, and any of their successors.
"Canadian Securities Laws" means the securities legislation of each of
the provinces and territories of Canada, as amended from time to time, and the
rules, regulations, blanket orders and orders having application to the Company
and forms made or promulgated under such legislation and the policies and
instruments of one or more of the Canadian Securities Authorities.
"Claim Notice" shall have the meaning set forth in Section 7.8.
"Company" shall have the meaning set forth in the first paragraph of
this Agreement.
"Company Indemnified Parties" shall have the meaning set forth in
Section 7.6.
"Consideration Shares" shall have the meaning set forth in the
Recitals to this Agreement.
"Contract" means any contract, agreement, commitment, franchise,
indenture, lease, purchase order or license, including amendments thereto.
"Demand Qualification" means the qualification of Qualifiable
Securities by the Company pursuant to Section 4.1.
"GAAP" means generally accepted accounting principles in Canada, as in
effect from time to time.
"Governmental Entity" means any Canadian federal, provincial,
municipal or local government, or any other governmental, regulatory or
administrative authority, or any agency, board, department, commission, court,
tribunal or instrumentality thereof.
"Indemnified Party" shall have the meaning set forth in Section 7.8.
"Indemnifying Party" shall have the meaning set forth in Section 7.8.
"Investor" shall have the meaning set forth in the first paragraph of
this Agreement.
"Investor Designees" shall have the meaning set forth in Section 2.1.
"Law" means any statute, code, rule, regulation, order, ordinance,
judgment, decree or other pronouncement of any Governmental Entity having the
effect of law.
"Losses" shall have the meaning set forth in Section 7.1.
"Material Adverse Effect" means any change or event that, individually
or in the aggregate, has had, or would reasonably be expected to have, a
material adverse effect on the business or results of operations or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a whole,
other than any change or event relating to or arising out of: (i) general
economic conditions (including changes or events in the financial, banking,
currency and capital markets) in the Province of Quebec, Canada; (ii)
conditions generally affecting the industries in which any of the Company and
its Subsidiaries operate, other than any such conditions that have a materially
disproportionate adverse effect on the Company and its Subsidiaries, taken as a
whole; (iii) changes in Law or in GAAP; (iv) any actions taken, or failures to
take action, or such other changes or events, in each case, to which the
Investor has consented in writing; (v) the commencement or material worsening
of a war or armed hostilities or other national or international calamity
involving Canada or the United States whether or not pursuant to the
declaration of a national emergency or war, or the occurrence of any military
or terrorist attack upon Canada or the United States, or any of their
respective territories, possessions or diplomatic or consular offices or upon
any military installation, equipment or personnel of Canada or the United
States or (vi) the announcement of, or the taking of any action contemplated
by, the Share Purchase Agreement and the transactions contemplated thereby,
including by reason of the identity of the A&P Parties.
"Non-Canadian Opportunities" shall have the meaning set forth in
Section 2.6.
"Notice Period" shall have the meaning set forth in Section 7.8.
"Offer" shall have the meaning set forth in Section .
"Offer Period" shall have the meaning set forth in Section 3.2.
"Offered Shares" shall have the meaning set forth in Section 3.2.
"Other Holders" means any party, other than the A&P Parties, to which
the Company grants registration rights or qualification rights.
"Percentage Ownership of the Investor" means, at any applicable time,
the percentage of the issued and outstanding Shares represented by the number
of Shares beneficially held by A&P and its Affiliates (other than any Affiliate
that is directly or indirectly a shareholder of A&P), including the Investor,
in each case on an undiluted basis. The Percentage Ownership of the Investor
will be calculated in accordance with the following:
(a) Subject to clauses (b) and (c), no effect will be given to any changes
in the number of issued and outstanding Shares after the date of this
Agreement that would have the effect of reducing the Percentage
Ownership of the Investor.
(b) If the Percentage Ownership of the Investor would, but for the
application of clause (a), be reduced below ten percent (10%) or five
percent (5%), as the case may be, clause (a) will, subject to clause
(c), continue to have application to such calculation for a period of
five (5) years from the date of such reduction, following which clause
(a) will cease to have such application unless, prior to the
expiration of such five (5) year period, A&P and its Affiliates (other
than any Affiliate that is directly or indirectly a shareholder of
A&P) increase the Percentage Ownership of the Investor (calculated
without the application of clause (a)) to such applicable percentage,
in which case clause (a) will again have application as if it had
never ceased to have application.
(c) If A&P and its Affiliates (other than any Affiliate that is directly
or indirectly a shareholder of A&P) during the five (5) year period
referred to in clause (b) sell more than twenty-five percent (25%) of
the Shares they held at the beginning of that period, clause (a) will
cease to have application.
"Person" means an association, a corporation, an individual, a
partnership, a limited partnership, a limited liability company, an unlimited
liability company, a trust or any other entity or organization, including a
Governmental Entity.
"Piggy-Back Qualification" means the qualification of Qualifiable
Securities by the Company pursuant to Section 4.2.
"Qualifiable Securities" means (i) the Shares held by A&P and its
Affiliates, including the Investor, (ii) any Shares or other securities issued
or issuable pursuant to or with respect to the Shares held by A&P and its
Affiliates, including the Investor, upon any stock split, subdivision,
redivision, reduction, consolidation, stock dividend, recapitalization or other
change, and (iii) any securities issued in reclassification or replacement of
or exchange for any of the securities referred to in clauses (i) or (ii) above.
"Qualifying Jurisdictions" means each of the provinces and territories
of Canada.
"Receipt Date" means the date on which a final receipt or an
equivalent document is issued in respect of a prospectus by or on behalf of one
of the securities authorities in the Qualifying Jurisdictions.
"Sale Period" shall have the meaning set forth in Section 3.2.
"Shares" means the Class A Subordinate Shares in the capital of the
Company.
"Stock Purchase Agreement" shall have the meaning set forth in the
Recitals to this Agreement.
"Underwriter's Cutback" means the right of the underwriters to exclude
Qualifiable Securities in an underwritten offering pursuant to Section 4.9.
"Violation" shall have the meaning set forth in Section 7.1.
ARTICLE 2
GOVERNANCE
2.1 Investor Designees to Board of Directors and Committees
The Investor shall be entitled to designate candidates for election or
appointment to the Board of Directors and for appointment to committees of the
Board of Directors (the "Investor Designees") as follows:
(a) if the Percentage Ownership of the Investor is ten percent (10%) or
more, the Investor shall be entitled to two (2) Investor Designees on
the Board of Directors and one (1) of such Investor Designees shall,
at the discretion of the Investor, serve on each committee of the
Board of Directors.
(b) if the Percentage Ownership of the Investor is less than ten percent
(10%), the Investor shall be entitled to one (1) Investor Designee on
the Board of Directors and such Investor Designee shall, at the
discretion of the Investor, serve on each of two (2) committees of the
Board of Directors selected by the Investor.
2.2 Qualifications of Investor Designees
Each Investor Designee shall be an individual who:
(a) is qualified to act as a director under the Companies Act (Quebec) and
under Canadian Securities Laws;
(b) meets the reasonable competencies and expectations of directors
established from time to time by the Corporate Governance Committee of
the Company; and
(c) with respect to each Investor Designee who will serve on any committee
of the Board of Directors, is considered to be independent under
Canadian Securities Laws where such independence is required under
Canadian Securities Laws.
2.3 Election or Appointment of Investor Designees
The Company shall solicit proxies from its shareholders to vote in favour of,
and shall otherwise use its best efforts to achieve, the election and
re-election from time to time of each of the Investor Designees to the position
of director on the Board of Directors. The initial Investor Designees shall be
appointed or elected to the Board of Directors as soon as possible, provided
that the Company shall not be required to call a special meeting of
shareholders for such purpose, but may first solicit proxies to vote in favour
of the election of such initial Investor Designees at the next annual general
meeting of the Company (to be held in January 2006) or any special meeting of
shareholders otherwise called by the Company prior to the next annual general
meeting. Until such initial Investor Designees are elected to the Board:
(a) such initial Investor Designees shall have the right to attend, as
observers, all in person and telephonic meetings of the Board of
Directors (and participate in all conference calls or informal
meetings of the Board of Directors) and all in person and telephonic
meetings of committees of the Board of Directors, and to receive
copies of all materials distributed to members of the Board of
Directors and such committees, as applicable, provided that such
Investor Designees agree to be subject to the same confidentiality,
loyalty, fiduciary and other similar duties to which members of the
Board of Directors are subject under applicable Law (subject to
Section 2.6) to the extent that they so participate prior to their
election or appointment to the Board of Directors; and
(b) to the extent any vacancies arise on the Board of Directors, the Board
of Directors will appoint up to two (2) Investor Designees to fill
such vacancies.
2.4 Vacancies
In the event of a vacancy among the Investor Designees resulting from the
death, incapacity, resignation or removal of such individual, such vacancy
shall be filled by another Investor Designee as directed by the Investor.
2.5 A&P Obligation to Support Election
Subject to compliance by the Company with its obligations in Section 2.3, A&P
and its Affiliates (other than any Affiliate that is directly or indirectly a
shareholder of A&P), including the Investor, shall from time to time recommend
to shareholders that they vote in favour of, and vote all of the Shares they
own in favour of, the election of the nominees to the Board of Directors listed
in each of the Company's proxy circulars.
2.6 Corporate Opportunities
The Company acknowledges that the Investor Designees may be directors or
officers of A&P and its Affiliates who will owe fiduciary duties to A&P and its
Affiliates. The Company also acknowledges and agrees that any corporate
opportunities that come to the attention of any of the Investor Designees from
time to time shall not be considered corporate opportunities belonging to the
Company, and such Investor Designees shall have no fiduciary or other
obligations to provide or make available such corporate opportunities to or for
the benefit of the Company, to the extent that such corporate opportunities
relate to any geographic area outside of Canada ("Non-Canadian Opportunities").
The A&P Parties acknowledge that the Investor Designees may be asked to be
absent from any portion of a meeting of the Board of Directors or any committee
to the extent that Non-Canadian Opportunities are to be discussed during such
portion of the meeting, and that information relating to Non-Canadian
Opportunities may be omitted from Board of Directors and committee materials
distributed to the Investor Designees.
2.7 Equity Accounting by A&P
The Company will cooperate with A&P and its Affiliates and at the reasonable
request of A&P do such other things and make such further assurances as will
assist A&P and its Affiliates to account for their investment in the Company
using the equity accounting method under United States generally accepted
accounting principles, provided that such requested cooperation would not
impair in any material respect the management of the Company, and it is not the
intention of the parties that such requested cooperation would impair the
powers of the Board of Directors or the rights of other stakeholders of the
Company.
2.8 GAAP Reconciliation
The Company will support the reasonable accounting requirements of the A&P
Parties, including by providing to the A&P Parties audited consolidated
financial information of the Company prepared in a manner consistent with
generally accepted accounting principles in the United States and in Germany,
as in effect from time to time. A&P will reimburse the Company for its
reasonable out-of-pocket costs in complying with this Section 2.8 to the extent
that the Company cannot reasonably carry out the necessary work using its own
personnel.
ARTICLE 3
ACQUISITIONS AND TRANSFERS OF SHARES
3.1 Standstill
For a period of five (5) years from the date of this Agreement, without the
prior written approval of the Company, A&P and its Affiliates (other than any
Affiliate that is directly or indirectly a shareholder of A&P) will not, acting
alone or in concert with each other, increase, directly or indirectly, the
aggregate ownership interest of A&P and such Affiliates in the Shares to twenty
percent (20%) or more of all issued and outstanding Shares. A&P and its
Affiliates shall be deemed not to contravene this Section to the extent that
any increase in such aggregate percentage ownership interest results from or is
affected by any reduction in the number of issued and outstanding Shares.
Without limiting the generality of the preceding sentence and for the avoidance
of doubt, A&P and its Affiliates will contravene this Section only to the
extent that any increase in such aggregate percentage ownership interest
results from A&P and its Affiliates (other than any Affiliate that is directly
or indirectly a shareholder of A&P) acquiring additional Shares other than from
the Company.
3.2 Right of First Opportunity
(a) Except as provided in Section 3.2(h), A&P will not, and will cause the
Investor and its other Affiliates (other than any Affiliate that is
directly or indirectly a shareholder of A&P) not to, transfer,
directly or indirectly, in a single transaction or series of related
transactions, twenty-five percent (25%) or more of the Shares held by
them without first offering to sell to the Company or a third party
designated by the Company, by notice in writing given to the Company,
a specified number of such Shares (the "Offered Shares") at a
specified price and on specified terms and conditions (the "Offer") in
accordance with the procedures set forth in this Section 3.2.
(b) The Offer shall be sent to the Company and shall be open for
acceptance by the Company or a third party designated by the Company
for ten (10) Business Days (the "Offer Period") from the receipt of
the Offer by the Company.
(c) The Company or a third party designated by the Company, as the case
may be, shall be obliged at its sole option to either:
(i) accept the Offer; or
(ii) reject the Offer;
by delivering notice to the Investor within, but not after the
expiration of, the Offer Period. If the Company or a third party
designated by the Company does not accept the Offer, the Company and
such third party shall be deemed to have rejected the Offer.
Notwithstanding the time allowed by the Offer Period, the Company
shall use it reasonable best efforts to deliver such notice to the
Investor as soon as possible.
(d) If the Company or a third party designated by the Company accepts the
Offer prior to the expiration of the Offer Period, the Investor shall
sell to the Company or a third party designated by the Company, as the
case may be, and the Company shall purchase from the Investor, or
cause a third party designated by the Company, as the case may be, to
purchase from the Investor all of the Offered Shares in accordance
with the Offer and this Agreement.
(e) If the Company or a third party designated by the Company, as the case
may be, rejects or is deemed to reject the Offer, the Investor shall
be free for a period of three (3) months from the end of the Offer
Period ( the "Sale Period") to sell all or any portion of the Offered
Shares to any Person or Persons, in one or more transactions, on terms
and conditions no more favourable to the Investor than as provided in
the Offer and at a price that is no less than ninety percent (90%) of
the price specified in the Offer.
(f) Subject to the following sentence, if the Company, or a third party
designated by the Company which deals at non-arm's length with the
Company for the purposes of the Income Tax Act (Canada), is the
purchaser of the Offered Shares, the Company or such third party will
gross up the proceeds of sale so that the Company or such third party,
and not the Investor, bears the burden of any withholding tax, and
otherwise will fully indemnify the Investor to the extent the
after-tax proceeds of such sale to the Investor are less than they
would have been on a notional sale to a third party, dealing at arm's
length with the Investor and the Company, on equivalent terms. The
Investor will provide the Company at least four (4) days prior to the
end of the Offer Period with information sufficient to allow the
Company to evaluate the scope of its potential liability pursuant to
this Section 3.2(f), failing which the Company and any third party
will be relieved of the obligations pursuant to this Section 3.2(f) to
the extent that the Company or such third party is materially
prejudiced by such failure and could not reasonably have been expected
to be aware of the tax that would be covered by the gross-up and
indemnity provided by this Section 3.2(f).
(g) To the extent the Offered Shares remain unsold at the end of the Sale
Period, their transfer will once again become subject to this Section
3.2.
(h) Notwithstanding anything to the contrary in this Section 3.2, A&P and
its Affiliates, including the Investor, may sell, assign, transfer,
encumber, pledge or hypothecate Shares:
(i) to an Affiliate of A&P, provided that such Affiliate agrees
in writing to be bound by the terms and conditions of this
Agreement;
(ii) *[CONFIDENTIAL]*
(iii) as a dividend or other distribution to shareholders of A&P,
provided that such dividend or other distribution will not
subject the Company to any obligations under the 1933 Act or
the 1934 Act; and
(iv) pursuant to any financing agreements or facilities of A&P or
its Affiliates, provided that the creditor(s) under such
agreements or facilities agree(s) in writing to be bound by
the terms and conditions of this Agreement to the extent that
such creditor(s) realize upon their security in such Shares;
provided that, in each case, any such sale, assignment,
transfer, encumbrance, pledge or hypothecation is in
compliance with all applicable securities Laws.
3.3 Covenant of the Company to Maintain Reporting Issuer Status
The Company shall maintain its status as a reporting issuer in good standing
and not in default of any requirement under the Canadian Securities Laws in
each Qualifying Jurisdiction other than the Yukon Territories, the Northwest
Territories and Nunavut.
The term "Confidential" indicates material that has been omitted and for which
confidential treatment has been requested. All such omitted material has been
filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934, as amended.
ARTICLE 4
QUALIFICATION RIGHTS
4.1 Demand Qualification
Subject to the limits set out in Sections 4.3 and 4.4, if the Company receives
a written request from an A&P Party that the Company file a prospectus under
Canadian Securities Laws qualifying for distribution of all or any portion of
the Qualifiable Securities, the Company will, subject to the Underwriter's
Cutback, as soon as practicable and in any event within 90 days following the
date of receipt of the written request referred above, prepare and file in the
Qualifying Jurisdictions a prospectus in order to qualify the distribution of
all of the Qualifiable Securities of the A&P Parties specified in their
respective requests and use its reasonable best efforts to receive a final
receipt or equivalent document in respect of such prospectus. The A&P Parties
will not initiate a request for a Demand Qualification within one hundred and
twenty (120) days of the Receipt Date in respect of a prospectus qualifying an
offering of Shares by the Company, provided that the A&P Parties were provided
with the opportunity to participate in a Piggy-Back Qualification in accordance
with this Agreement in connection with such offering.
4.2 Piggy-Back Qualification
If the Company proposes to file a preliminary prospectus under any Canadian
Securities Laws in connection with the sale of any Shares or other equity
securities (or securities convertible into equity securities) in connection
with the public offering of such securities (including the public sale of
securities held by shareholders other than the A&P Parties), the Company will,
at all such times, give the A&P Parties at least ten (10) Business Days'
written notice of such filing. Upon the written request of an A&P Party, given
within five (5) Business Days after receipt of such notice by the A&P Parties,
the Company will, subject to the Underwriter's Cutback, use its reasonable best
efforts to cause all of the Qualifiable Securities that the A&P Parties have
requested to be included in the filing to be included in and sold pursuant to
the prospectus.
4.3 Number of Demand Qualifications
During the term of this Agreement, the Company is obligated to effect only one
(1) Demand Qualification provided that, notwithstanding the foregoing:
(a) if as a result of an Underwriter's Cutback the A&P Parties are not
allowed to include in any such qualification ninety percent (90%) or
more of the Qualifiable Securities requested by the A&P Parties to be
registered or qualified, then such qualification shall not count as a
Demand Qualification;
(b) if, in response to a request for a Demand Qualification the Company is
not entitled to use a short form prospectus at the time of the request
due to the Company's failure to comply with its filing obligations
under Canadian Securities Laws the A&P Parties shall be entitled to
one (1) additional Demand Qualification for each such failure; and
(c) if, for any reason, the distribution of the Qualifiable Securities
requested by the A&P Parties is not completed except to the extent of
an Underwriter's Cutback (subject to Section 4.3(a) above) or a
receipt in respect of the final prospectus in respect of such
distribution is not obtained, then such qualification shall not count
as a Demand Qualification.
4.4 Exceptions to Qualification Rights
The Company:
(a) may defer a Demand Qualification for a period of not more than 90
days, but only if the Company furnishes to the A&P Parties requesting
the qualification a certificate signed by the Chief Executive Officer
of the Company stating that, in the good faith judgment of the Board
of Directors, effecting the qualification would materially impede the
ability of the Company to consummate a significant transaction,
including a material financing, acquisition, corporate reorganization
or merger or other material transaction involving the Company (the
90-day deferral period shall begin on the date that such certificate
is sent to the A&P Parties); and
(b) may defer a Demand Qualification if the Board of Directors determines
in good faith that such qualification would require the disclosure of
material information that the Company has a bona fide business purpose
for preserving as confidential, until the earlier of:
(i) 10 days following the date upon which such material
information is disclosed to the public or ceases to be
material; and
(ii) 90 days after the date of the request of the A&P Parties,
provided the Company has not deferred a filing in reliance on this Section 4.4
during the previous 12-month period.
4.5 Expenses
(a) Subject to Sections 4.5(b) and (c), the Company will bear all expenses
relating to the qualification of Qualifiable Securities pursuant to
the terms of this Agreement, excluding underwriting commissions, and
all registration, filing, printing, accounting and translation fees,
incurred in connection with all Demand Qualifications and Piggy-Back
Qualifications. The A&P Parties will bear the costs of their own legal
and accounting advisors.
(b) The Company is not required to pay for any expenses pursuant to
Section 4.5(a) of any Demand Qualification if the qualification
request is subsequently withdrawn at any time at the request of the
A&P Parties unless:
(i) the A&P Parties agree to forfeit their right to any further
Demand Qualification;
(ii) at the time of any such withdrawal, the A&P Parties have
learned of a material adverse change in the condition,
business or prospects of the Company (other than a change in
market demand for the Shares or in the market price of the
Shares) from that known to A&P Parties at the time of their
request, that makes the proposed offering unreasonable in the
good faith judgment of the A&P Parties (in which case the
withdrawn qualification is deemed not to be a Demand
Qualification for purposes of Section 4.3); or
(iii) the qualification request is withdrawn at the request of the
A&P Parties in response to an Underwriter's Cutback.
(c) All underwriting discounts and selling commissions relating
to Qualifiable Securities included in any Demand
Qualification or Piggy-Back Qualification pursuant to this
Agreement, will be borne and paid by the A&P Parties.
4.6 Underwriting in Demand Qualification
If the A&P Parties intend to distribute the Qualifiable Securities covered by
their request for a Demand Qualification by means of an underwriting, they will
so advise the Company as part of their request for such qualification. The A&P
Parties will (together with the Company as required under this Agreement) enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the A&P Parties. The Company
will also take all such other actions as the A&P Parties or the underwriters
reasonably request in order to expedite or facilitate the disposition of
Qualifiable Securities (including the participation of senior management in
so-called "road shows" and similar events).
4.7 Underwriting in Piggy-Back Qualification
In connection with any offering pursuant to a Piggy-Back Qualification
involving an underwriting of Shares being issued by the Company, the Company
will include in such underwriting any Qualifiable Securities that the A&P
Parties wish to include, but only if the A&P Parties accept the terms of the
underwriting agreed to by the Company. To the extent the A&P Parties
participate in such underwritten Piggy-Back Qualification offering, the A&P
Parties shall be party to the underwriting agreement relating to such
registration and may, at the A&P Parties' option, require that any or all of
the representations and warranties by, and the other agreements on the part of,
the Company to and for the benefit of the underwriters of such qualification
shall also be made to and for the benefit of each the A&P Parties and that any
or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the obligations of
the A&P Parties.
4.8 Limitations on Representations and Warranties and on Liability
Unless otherwise agreed by the A&P Parties, the A&P Parties shall not be
required, in connection with any underwriting agreement entered into pursuant
to Section 4.6 or Section 4.7, to make any representations or warranties or
provide indemnification except as they relate to the A&P Parties' ownership of
Shares and authority to enter into the underwriting agreement and to the A&P
Parties' intended method of distribution. The liability of the A&P Parties in
connection with such underwriting agreement shall be limited to an amount equal
to the net proceeds received by the A&P Parties from the offering (after
deduction of all underwriters' discounts and commissions paid by the A&P
Parties in connection with the offering).
4.9 Underwriter's Cutback
If the underwriter for the offering in connection with:
(a) a Demand Qualification advises the A&P Parties in writing that
marketing factors require a limitation of the number of Shares to be
underwritten, then the A&P Parties will so advise the Company, and the
Company shall be required to include in the qualification only the
number of Shares that the underwriter believes marketing factors
allow; or
(b) a Piggy-Back Qualification advises the Company in writing that
marketing factors require a limitation of the number of Shares to be
underwritten, the Company shall be required to include in the
qualification only the number of Shares that the underwriter believes
marketing factors allow, provided that in no event will the
Qualifiable Securities held by the A&P Parties be reduced below
twenty-five percent (25%) of the total number of Shares to be sold.
4.10 Allocation of Cutback
(a) If the number of Shares to be included in a Demand Qualification is
subject to an Underwriter's Cutback, the Shares that would otherwise
be included will be reduced in the following order:
(i) first, all Shares held by shareholders other than the A&P
Parties will be excluded from the offering to the extent
necessary; and
(ii) second, if further limitation is required, the Qualifiable
Securities held by the A&P Parties will be excluded to the
extent necessary.
(b) If the number of Shares to be included in a Piggy-Back Qualification
is subject to an Underwriter's Cutback, the Shares that would
otherwise be included will be reduced in the following order:
(i) first, all Shares other than those to be issued by the
Company and the Qualifiable Securities held by the A&P
Parties will be excluded to the extent necessary; and
(ii) second, if further limitation is required, the Shares to be
issued by the Company and, subject to the twenty-five percent
(25%) limitation set forth in Section 4.9(b), the Qualifiable
Securities held by the A&P Parties will be excluded pro rata
from the offering to the extent necessary.
4.11 Holdback Agreements
(a) In connection with a qualification, the A&P Parties agree, if so
requested by the managing underwriter in a written notice this Section
4.11(a), not to effect (except as part of such underwritten offering
in accordance with the provisions of this Agreement or pursuant to an
exempt transaction so long as any purchaser in such exempt transaction
agrees in writing to be bound by any such holdback) any sale,
distribution, short sale, loan, grant of options for the purchase of,
or other disposition of, any Qualifiable Securities for such period as
such managing underwriter reasonably requests, such period in no event
to end more than 90 days after the effective date of such offering. In
addition, the A&P Parties agree to execute and deliver to any managing
underwriter (or, in the case of any offering that is not underwritten,
an investment banker or agent registered under applicable securities
laws) in connection with a qualification of Qualifiable Securities
under Securities Laws in which the A&P Parties participate in any
lock-up letter requested by such managing underwriter of the A&P
Parties and in form and substance reasonably satisfactory to the A&P
Parties. The A&P Parties further agree that the Company may or may
instruct its transfer agent, if applicable, to place stop transfer
notations in its records to enforce the provisions of this Section
4.11(a).
(b) After receipt of notice of a request for a Demand Qualification
pursuant to this Agreement, the Company shall not initiate, without
the consent of the A&P Parties, a qualification of any of its
securities for its own account until one hundred and twenty (120) days
after such Demand Qualification has become effective or such Demand
Qualification has been terminated.
4.12 Obligations of the Company on a Demand Qualification
If the Company is required under this Agreement to effect a Demand
Qualification, the Company will:
(a) as expeditiously as reasonably possible, prepare and file with the
Canadian Securities Authorities in the Qualifying Jurisdictions a
preliminary prospectus and a final prospectus with respect to such
Qualifiable Securities and use, subject to the other provisions of
this Agreement, its reasonable best efforts to obtain a receipt in
respect of the final prospectus and, upon the request of the A&P
Parties, keep such prospectus effective until such time at which the
A&P Parties have informed the Company in writing that the distribution
of their Shares has been completed;
(b) without limiting the generality of the foregoing, use its reasonable
best efforts to resolve any regulatory comments and satisfy any
regulatory deficiencies in respect of the preliminary prospectus and,
as soon as reasonably practicable after such comments or deficiencies
have been resolved or satisfied, prepare and file, and use its
reasonable best efforts to obtain a receipt or similar document in the
Qualifying Jurisdictions for, the final prospectus, and take all other
steps and proceedings necessary in order to qualify the distribution
of the Qualifiable Securities to the public as freely tradable
securities in the Qualifying Jurisdictions;
(c) permit the A&P Parties to participate in the preparation of such
preliminary prospectus and final prospectus (including making
available for inspection by the A&P Parties and any lawyers,
accountants or other agents retained by the A&P Parties, all financial
and other records, pertinent corporate documents and all other
information reasonably requested in connection therewith) and give to
the A&P Parties, the underwriters, if any, and their respective
counsel and accountants, advance draft copies of each such prospectus
filed with the applicable Canadian Securities Authorities at least one
(1) Business Day prior to the filing thereof with the applicable
Canadian Securities Authorities, and any amendments and supplements
thereto, promptly as they become available, and give each of them such
access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be
necessary, in the opinion of the A&P Parties and such underwriters'
respective counsel, to conduct a reasonable investigation within the
meaning of the Canadian Securities Laws;
(d) ensure that the prospectus contains the disclosure required by, and
conforms in all material respects to the requirements of, the
applicable provisions of Canadian Securities Laws and furnish to the
A&P Parties copies of each of the preliminary prospectus and final
prospectus and such other documents as they may reasonably request to
facilitate the disposition of Qualifiable Securities by it;
(e) prepare and file with the securities regulatory authorities in the
Qualifying Jurisdictions any amendments and supplements to the
prospectus that may be necessary to comply with Canadian Securities
Laws with respect to the distribution of all securities qualified by
such prospectus;
(f) in the case of an underwritten public offering, enter into and perform
its obligations under an underwriting agreement, in usual and
customary form, with the lead underwriter of such offering;
(g) furnish, at the request of the A&P Parties, on the date that the
applicable Qualifiable Securities are delivered to the underwriters
for sale in connection with an offering pursuant to this Agreement, if
such securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the Receipt
Date:
(A) an opinion or opinions, dated such date, of counsel
representing the Company for the purposes of such
offering, in form and substance as is customarily given
by company counsel to the underwriters in an underwritten
public offering, addressed to the underwriters, if any,
and to the A&P Parties; and
(B) a letter dated such date, from the auditors of the
Company, in form and substance as is customarily given by
auditors to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to
the A&P Parties, but only if the A&P Parties have made
such representations and furnished such undertakings as
such auditors reasonably require in providing such
letter; and
(h) keep the A&P Parties reasonably advised of the status of such
qualification.
4.13 Furnish Information
The obligations of the Company to take any action pursuant to this Agreement in
respect of Qualifiable Securities is conditional upon the A&P Parties
furnishing to the Company such information regarding themselves, the
Qualifiable Securities and the intended method of disposition of such
securities, as is required to effect the qualification of the Qualifiable
Securities.
4.14 No Obligation to Complete Offering
The Company is under no obligation to complete any offering of its securities
it proposes to make in connection with a Piggy-Back Qualification and will
incur no liability to the A&P Parties for its failure to do so.
4.15 No Prior Registration Rights
The Company represents and warrants to the A&P Parties that no qualification or
registration rights relating to securities of the Company have been granted by
the Company prior to, or are being granted concurrently with, the execution of
this Agreement.
4.16 Limitations on Subsequent Qualifiable Rights
From and after the date of this Agreement, the Company will not, without the
prior written consent of the A&P Parties, enter into any agreement with any
Other Holder of any securities of the Company relating to qualification or
registration rights unless such agreement includes:
(a) to the extent such agreement would allow such Other Holder to include
such securities in any prospectus filed under this Agreement, a
provision that such Other Holder may include such securities in any
such prospectus only to the extent that the inclusion of its
securities will not reduce the amount of the Qualifiable Securities of
the A&P Parties that would otherwise be included;
(b) a provision that permits the A&P Parties to include in any
qualification or registration of the Other Holder and in any
underwriting involved with it, Qualifiable Securities in priority to
the sellers of securities in such qualification or registration based
on the number of Shares and that stipulates that the allocation of the
Underwriter's Cutback shall also give priority to Qualifiable
Securities of the A&P Parties over securities of such Other Holders;
and
(c) a provision requiring that any such qualification or registration of
securities is subject to the underwriting requirements described in
this Agreement.
4.17 Amending or Supplementing Prospectuses
Whenever a distribution under a prospectus qualifying Qualifiable Securities
pursuant to this Agreement has not been completed and the Company determines
that, based upon advice of counsel, such prospectus requires amendment or
supplementing, the Company will notify the A&P Parties of such fact and will
promptly cause such prospectus to be amended or supplemented, as the case may
be, and will notify the A&P Parties when such amendment or supplement has been
filed. The A&P Parties will not sell any Qualifiable Securities until such
latter notice is provided. If the Board of Directors determines in its
reasonable discretion that it would not be in the best interests of the Company
to so amend or supplement the prospectus or registration statement at such
time, the Company is entitled to delay the filing of such amendment or
supplement for a period not to exceed 60 days.
4.18 Consultation with the Company
Notwithstanding any other provision of this Article 4, before exercising their
rights to require a Demand Qualification under this Agreement the A&P Parties
will first consult with the Company and discuss whether there are any other
methods or procedures reasonably available to the A&P Parties at that time that
would enable the A&P Parties to sell the Qualifiable Securities that they wish
to dispose of at that time in compliance with Canadian Securities Laws for net
proceeds comparable to those that the A&P Parties would expect to receive
pursuant to a qualified public offering of such Qualifiable Securities pursuant
to a Demand Qualification (an "Alternative Sale"). If the A&P Parties, acting
on the advice of their financial, legal and other advisors, are satisfied that,
in their reasonable discretion, an Alternative Sale would be at least as
advantageous to the A&P Parties in all respects (including pricing, net
proceeds, terms and timing) as a transaction pursuant to a Demand
Qualification, the A&P Parties will not pursue a Demand Qualification at that
time. For the avoidance of doubt, the pursuit or completion by the A&P Parties
of such an Alternative Sale would not constitute an exercise by the A&P Parties
of its right to require a Demand Qualification.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the A&P Parties as of the date of this
Agreement as follows:
5.1 Corporate Status
The Company is duly incorporated and validly existing under the Laws of its
governing jurisdiction and (a) has all requisite corporate power and authority
to carry on its business as it is now being conducted and (b) is duly qualified
to do business in each of the jurisdictions in which the ownership, operation
or leasing of its properties and assets or the conduct of its business requires
it to be so qualified, except where the failure to be so qualified would not
have a Material Adverse Effect or materially impair the Company's ability to
perform its obligations under this Agreement or consummate the transactions
contemplated hereby.
5.2 Authorization
The Company has all the requisite corporate power and authority to enter into,
and to perform its obligations under, this Agreement. The execution and
delivery of this Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby have been duly and validly authorized
by the Board of Directors and no other corporate proceedings of the Company,
including approval of the shareholders of the Company, are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by the Company, and
(assuming due authorization, execution and delivery by the A&P Parties) this
Agreement constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar Laws relating to or affecting creditors' rights
generally or by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at Law).
5.3 No Conflict
The execution, delivery and performance of this Agreement by the Company and
the consummation by the Company of the transactions contemplated hereby will
not (a) violate any applicable Law to which any of the Company or its
Affiliates are subject, (b) materially conflict with, result in a material
violation or material breach of, or constitute a material default under, result
in the acceleration of, create in any party the right to accelerate, terminate
or cancel any Contract to which the Company or its Affiliates is a party or by
which the Company or its Affiliates is bound or to which the assets of the
Company or its Affiliates are subject, or (c) violate the charter, bylaws or
other organizational documents of any of the Company or its Affiliates, other
than, in the case of clauses (b) and (c) above, any such violations, defaults,
conflicts, breaches, accelerations or rights that would not materially impair
the Company's ability to perform its obligations under this Agreement or
consummate the transactions contemplated hereby.
5.4 Disclaimer of Warranties
Notwithstanding any provision of this Agreement to the contrary, the Company
makes no representations or warranties to the A&P Parties or any other Person
in connection with this Agreement, except as specifically set forth in this
Article 5 and the Share Purchase Agreement. All other representations and
warranties, whether express or implied, are disclaimed by the Company.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE A&P PARTIES
The A&P Parties jointly and severally represent and warrant to the Company as
of the date of this Agreement as follows:
6.1 Corporate Status
A&P is duly incorporated and validly existing under the Laws of the State of
Maryland. The Investor is duly incorporated and validly existing under the Laws
of Luxembourg. Each of the A&P Parties (a) has all requisite corporate power
and authority to carry on its business as it is now being conducted and (b) is
duly qualified to do business in each of the jurisdictions in which the
ownership, operation or leasing of its properties and assets or the conduct of
its business requires it to be so qualified, except where the failure to be so
qualified would not materially impair the A&P Parties' ability to perform their
obligations under this Agreement or consummate the transactions contemplated
hereby.
6.2 Authorization
Each of the A&P Parties has all requisite corporate power and authority to
enter into, and perform its obligations under, this Agreement. The execution
and delivery of this Agreement by the A&P Parties and the consummation by the
A&P Parties of the transactions contemplated hereby have been duly and validly
authorized by the board of directors (or equivalent body) of each of the A&P
Parties and no other corporate proceedings of the A&P Parties, including
approval of the shareholders of A&P, are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by each of the A&P Parties, and (assuming due
authorization, execution and delivery by the Company) this Agreement
constitutes a valid and binding obligation of each of the A&P Parties,
enforceable against it in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar Laws relating to or affecting creditors' rights generally or by general
equitable principles (regardless of whether such enforceability is considered
in a proceeding in equity or at Law).
6.3 No Conflict
The execution, delivery and performance of this Agreement by the A&P Parties
and the consummation by the A&P Parties of the transactions contemplated hereby
will not (a) violate any applicable Law to which either of the A&P Parties is
subject, (b) materially conflict with, result in a material violation or
material breach of, or constitute a material default under, result in the
acceleration of or create in any party the right to accelerate, terminate or
cancel any material Contract to which either of the A&P Parties is a party or
by which either of the A&P Parties is bound or to which the assets of either of
the A&P Parties are subject, or (c) violate the charter, bylaws or other
organizational documents of either of the A&P Parties, other than, in the case
of clauses (b) and (c) above, any such violations, defaults, conflicts,
breaches, accelerations or rights that would not materially impair the A&P
Parties' ability to perform their obligations under this Agreement or
consummate the transactions contemplated hereby.
6.4 Disclaimer of Warranties
Notwithstanding any provision of this Agreement to the contrary, the A&P
Parties make no representations or warranties to the Company or any other
Person in connection with this Agreement, except as specifically set forth in
this Article 6 and the Share Purchase Agreement. All other representations and
warranties, whether express or implied, are disclaimed by the A&P Parties.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification by Company on Demand Qualifications and Piggy-Back
Qualifications
(a) If any Qualifiable Securities are included in a prospectus under this
Agreement, the Company will indemnify and hold harmless the A&P
Parties, the officers, directors, Affiliates, agents and employees of
the A&P Parties, any underwriter (within the meaning of Canadian
Securities Laws) for the A&P Parties and each person, if any, that
controls the A&P Parties or underwriter (within the meaning of
Canadian Securities Laws), against any losses (other than loss of
profit), claims, damages, liabilities (joint or several), actions,
settlements or actions (collectively, "Losses") to which they may
become subject under Canadian Securities Laws or any other laws,
insofar as such Losses arise out of or are based upon any of the
following statements, omissions or violations (each a "Violation"):
(i) any untrue statement or alleged untrue statement of a material
fact contained in such prospectus (including any preliminary
prospectus or final prospectus) or any amendments or supplements
to them;
(ii) the omission or alleged omission to state in such prospectus
(including any preliminary prospectus or final prospectus) a
material fact required to be stated in it or necessary to make
the statements in it, in light of the circumstances in which
they were made, not misleading; or
(iii) any violation or alleged violation by the Company of any
Canadian Securities Laws in connection with any matter relating
to such prospectus.
(b) The Company will reimburse each such A&P Party, officer, director,
Affiliate, agent, employee, underwriter or controlling person for any
legal or other out-of-pocket expenses reasonably incurred by them in
connection with investigating or defending any such Losses.
(c) The Company is not liable under the indemnity contained in this
Section 7.1:
(i) in respect of amounts paid in settlement of any Losses to the
extent such settlement is effected without the consent of the
Company (which consent may not be unreasonably withheld or
delayed);
(ii) to the extent that it arises out of or is based upon a Violation
that occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such
qualification by or on behalf of the A&P Party, underwriter or
controlling person; or
(iii) in the case of a sale effected directly by an A&P Party of
Qualifiable Securities (including a sale of such Qualifiable
Securities through any underwriter retained by such A&P Party to
engage in a distribution solely on behalf of such A&P Party),
where:
(A) such untrue statement or alleged untrue statement or
omission or alleged omission was contained in a
preliminary prospectus and corrected in a final or
amended prospectus; and
(B) an A&P Party failed to deliver a copy of the final or
amended prospectus at or prior to the confirmation of the
sale of the Qualifiable Securities to the Person
asserting any such Losses in any case in which such
delivery is required by Canadian Securities Laws.
7.2 Indemnification by the A&P Parties on Demand Qualifications and Piggy-Back
Qualifications
(a) To the extent that the A&P Parties include any Qualifiable Securities
under any prospectus pursuant to this Agreement, the A&P Parties will
indemnify and hold harmless the Company, each of its directors, each
of its officers who have signed the prospectus, each Person, if any,
who controls the Company within the meaning of Canadian Securities
Laws, each employee, agent, and any underwriter for the Company,
against any Losses to which the Company or any such director, officer,
employee, agent, underwriter or controlling person may become subject,
under Canadian Securities Laws or other laws, insofar as such Losses
arise out of or are based upon any Violation, in each case only to the
extent that such Violation occurs in reliance upon and in conformity
with written information furnished by or on behalf of the A&P Parties
expressly for use in connection with such qualification.
(b) The A&P Parties will reimburse the Company or any such director,
officer, agent, underwriter or controlling person for any legal or
other out-of-pocket expenses reasonably incurred by them in connection
with investigating or defending any such Losses.
(c) The liability of the A&P Parties under this indemnity is limited to
the amount of net proceeds (after deduction of all underwriters'
discounts and commissions paid by the A&P Parties in connection with
the qualification in question) received by the A&P Parties in the
offering giving rise to the Violation.
(d) The A&P Parties are not liable under the indemnity contained in this
Section 7.2:
(i) in respect of amounts paid in settlement of any such Losses to
the extent such settlement is effected without the consent of
the A&P Parties (which consent may not be unreasonably withheld
or delayed);
(ii) in the case of a sale effected directly by the Company of its
Shares (including a sale of such Shares through any underwriter
retained by the Company to engage in a distribution solely on
behalf of the Company), where:
(A) such untrue statement or alleged untrue statement or
omission or alleged omission was contained in a
preliminary prospectus and corrected in a final or
amended prospectus; and
(B) the Company failed to deliver a copy of the final or
amended prospectus at or prior to the confirmation of the
sale of the securities to the Person asserting any such
Losses in any case in which such delivery is required by
Canadian Securities Laws.
7.3 Contribution
If any indemnification provided for in Section 7.1 or 7.2 is held by a court of
competent jurisdiction to be unavailable to an Indemnified Party with respect
to any Losses referred to in this Agreement, then the Indemnifying Party, in
lieu of indemnifying such Indemnified Party under this Agreement, will
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and of the Indemnified Party on
the other in connection with the statements or omissions that resulted in such
Losses, as well as any other relevant equitable considerations. The relative
fault of the Indemnifying Party and of the Indemnified Party is to be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Indemnifying Party
or by the Indemnified Party and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.
7.4 Survival
(a) The representations and warranties contained herein shall survive
indefinitely.
(b) All covenants and agreements contained herein shall survive in
accordance with their terms.
7.5 Indemnification by the Company with Respect to Representations, Warranties
and Covenants
The Company shall indemnify and hold harmless the A&P Parties, their Affiliates
and their respective directors and officers (collectively, the "A&P Indemnified
Parties") from and against any (i) Losses incurred by any A&P Indemnified Party
resulting from any breach of any of the representations or warranties of the
Company, and (ii) Losses incurred by any A&P Indemnified Party resulting from
any breach in any material respect of any of the covenants or agreements of the
Company in this Agreement.
7.6 Indemnification by the A&P Parties with Respect to Representations,
Warranties and Covenants
The A&P Parties shall jointly and severally indemnify and hold harmless the
Company, its Affiliates and their respective directors and officers
(collectively, the "Company Indemnified Parties"), from and against any (i)
Losses incurred by any Company Indemnified Party resulting from any breach of
any of the representations or warranties of the A&P Parties, and (ii) Losses
incurred by any Company Indemnified Party resulting from any breach in any
material respect of any of the covenants or agreements of the A&P Parties in
this Agreement.
7.7 Exclusive Remedy
The rights of indemnity set forth in this Article 7 are the sole and exclusive
remedies of each party in respect of any misrepresentation, incorrectness in or
breach of any representation or warranty, or breach of covenant, by any other
party under this Agreement. The parties agree that if a claim for
indemnification is made by one party in accordance with this Article 7, and
there has been a refusal by the party against which such claim has been made to
make payment or otherwise provide satisfaction in respect of such claim, then a
legal proceeding is the appropriate means to seek a remedy for such refusal.
This Article 7 shall remain in full force and effect in all circumstances and
shall not be terminated by any breach (fundamental, negligent or otherwise) by
any party of its representations, warranties or covenants under this Agreement
or by any termination or rescission of this Agreement by any party.
7.8 Indemnification Procedures
(a) In the event that any Action is commenced by a third party involving a
claim for which a party required to provide indemnification under this
Agreement (an "Indemnifying Party") may be liable to a party entitled
to indemnification (an "Indemnified Party") hereunder (an "Asserted
Liability"), the Indemnified Party shall promptly notify the
Indemnifying Party in writing of such Asserted Liability (the "Claim
Notice"); provided that no delay on the part of the Indemnified Party
in giving any such Claim Notice shall relieve the Indemnifying Party
of any indemnification obligation hereunder except to the extent that
the Indemnifying Party is prejudiced by such delay. The Indemnifying
Party shall have 30 days from its receipt of the Claim Notice (the
"Notice Period") to notify the Indemnified Party whether or not the
Indemnifying Party desires, at the Indemnifying Party's sole cost and
expense and by counsel of its own choosing, to defend against such
Asserted Liability. If the Indemnifying Party undertakes to defend
against such Asserted Liability, (i) the Indemnifying Party shall use
its reasonable best efforts to defend and protect the interests of the
Indemnified Party with respect to such Asserted Liability and (ii) the
Indemnifying Party shall not, without the prior written consent of the
Indemnified Party, consent to any settlement which does not contain an
unconditional release of the Indemnified Party from the subject matter
of the settlement or that contains an admission of liability or
wrongdoing. The Indemnified Party shall have the right to participate
in the defence against any Asserted Liability at its own expense.
Notwithstanding the foregoing, in any event, the Indemnified Party
shall have the right to control, pay or settle any Asserted Liability
which the Indemnifying Party shall have undertaken to defend so long
as the Indemnified Party shall also waive any right to indemnification
therefor by the Indemnifying Party. If the Indemnifying Party
undertakes to defend against such Asserted Liability, the Indemnified
Party shall fully render to the Indemnifying Party and its counsel
such assistance and cooperation as may be required to ensure the
proper and adequate defence and settlement of such claim or demand.
(b) If the Indemnifying Party does not undertake within the Notice Period
to defend against such Asserted Liability, then the Indemnified Party
shall have the right to participate in any such defence and the
Indemnifying Party shall bear the reasonable costs and expenses of the
Indemnified Party of such defence. In such case, the Indemnified Party
shall control the investigation and defence and may settle or take any
other actions the Indemnified Party deems reasonably advisable without
in any way waiving or otherwise affecting the Indemnified Party's
rights to indemnification pursuant to this Agreement. The Indemnified
Party and the Indemnifying Party agree to make available to each
other, their counsel and other representatives, all information and
documents available to them which relate to such claim or demand. The
Indemnified Party and the Indemnifying Party also agree to render to
each other such assistance and cooperation as may reasonably be
required to ensure the proper and adequate defence and settlement of
such claim or demand.
(c) In calculating amounts payable to an Indemnified Party, the amount of
any indemnified Losses shall be determined without duplication of any
other Loss for which an indemnification claim has been made or could
be made under any other representation, warranty, covenant, or
agreement and shall be computed net of (i) payments recoverable by the
Indemnified Party under any insurance policy with respect to such
Losses, (ii) any prior or subsequent recovery by the Indemnified Party
from any Person with respect to such Losses and (iii) any tax benefit
receivable by the Indemnified Party with respect to such Losses.
(d) To the extent that an Indemnifying Party makes any payment pursuant to
this Article 7 in respect of Losses for which an Indemnified Party or
any of its Affiliates have a right to recover against a third party
(including an insurance company), the Indemnifying Party shall be
subrogated to the right of the Indemnified Party or any of its
Affiliates to seek and obtain recovery from such third party;
provided, however, that if the Indemnifying Party shall be prohibited
from such subrogation, Purchaser or its Affiliates, as applicable,
shall seek recovery from such third party on the Indemnifying Party's
behalf and pay any such recovery to Indemnifying Party.
ARTICLE 8
TERMINATION
8.1 Termination of Agreement
This Agreement shall terminate upon:
(a) the written agreement of the parties; or
(b) the Percentage Ownership of the Investor being less than five percent
(5%).
The termination of this Agreement shall have no effect upon any rights of any
party under this Agreement to the extent those rights arose prior to the date
of such termination.
ARTICLE 9
MISCELLANEOUS
9.1 Assignment; Binding Effect
This Agreement and the rights hereunder are not assignable unless such
assignment is consented to in writing by each of the Company and the A&P
Parties, provided, however, that each of the A&P Parties, may without such
consent assign, directly or indirectly, its rights (but not its obligations)
hereunder to any of its Affiliates, provided that no such assignment shall
relieve the A&P Parties of their obligations hereunder. Subject to the
foregoing, this Agreement and all the provisions hereof shall be binding upon
and shall inure to the benefit of the parties and their respective successors
and permitted assigns.
9.2 Merger, Etc.
Upon any merger, amalgamation, consolidation, arrangement or other
reorganization involving the Company in which the A&P Parties receive, in
exchange for their Qualifiable Securities, securities of any other entity, the
rights of the A&P Parties under this Agreement remain in effect except that
such rights relate to the securities received by the A&P Parties upon such
exchange.
9.3 Guarantee
A&P hereby agrees to be jointly and severally liable with the Investor for any
failure of the Investor to discharge its obligations under this Agreement and
for the fulfillment of the representations, warranties and other obligations of
the Investor to the Company under this Agreement.
9.4 Choice of Law
This Agreement shall be governed by and interpreted and enforced in accordance
with the Laws of the Province of Ontario and the laws of Canada applicable
therein without regard to the conflicts of laws rules thereof.
9.5 Dispute Resolution
Any Dispute (as such term is defined in the Stock Purchase Agreement) regarding
the negotiation, existence, validity, interpretation, performance, breach or
termination of this Agreement shall be resolved in accordance with Section 9.3
of the Stock Purchase Agreement.
9.6 Notices
All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given (a) when
received if delivered personally, (b) when sent by cable, telecopy, telegram or
facsimile (which is confirmed by the intended recipient), and (c) when sent by
overnight courier service or when mailed by certified or registered mail,
return receipt requested, with postage prepaid to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
If to the Company, to:
Metro Inc.
00000 Xxxxxxxxx Xxxxxxx-Xxxxxxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Attn: L.G. Xxxxx Xxxxxxx
Fax: (000) 000-0000
with copies, in the case of notice to the Company, to:
Metro Inc.
Place Carillon
7151, Xxxx-Talon Street East
4th Floor
Anjou, Quebec H1M 3N8
Attn: Xxxxx Xxxxx
Fax: (000) 000-0000
- and -
Xxxxxx Xxxxxxx LLP
0000 XxXxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx X0X 0X0
Attn: Xxxx Xxxxxxx
Xxxx Xxxxxxx-Xxxxx
Fax: (000) 000-0000
If to A&P, to:
The Great Atlantic & Pacific Tea Company, Inc.
0 Xxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxxx Xxxxxxxxx
Fax: (000) 000-0000
If to the Investor, to:
A&P Luxembourg S.a.r.l.
0, xxx Xxxxxxxxx Xxxxx
X-0000 Xxxxxxxxxx
Attn: Xxxxxx Xxxxxx
Fax: x(000) 00 00 00 00 00
with a copy, in the case of notice to the Investor, to:
The Great Atlantic & Pacific Tea Company, Inc.
0 Xxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxxx Xxxxxxxxx
Fax: (000) 000-0000
and with copies, in the case of notice to either A&P Party,
to:
Xxxxxxx Xxxx Slate Xxxxxxx and Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx Xxxxx
Fax: (000) 000-0000
and to:
Xxxxx Xxxxxx & Xxxxxxxx XXX
Xxx 00, 0 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX X0X 0X0
Attn: Xxxxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
9.7 Headings
The headings contained in this Agreement are inserted for convenience only and
shall not be considered in interpreting or construing any of the provisions
contained in this Agreement.
9.8 Entire Agreement
This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
9.9 Interpretation
(a) When a reference is made in this Agreement to an Article or Section
such reference shall be to an Article or Section of this Agreement
unless otherwise indicated.
(b) Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words
"without limitation."
(c) When a reference in this Agreement is made to a "party" or "parties,"
such reference shall be to a party or parties to this Agreement unless
otherwise indicated.
(d) Unless the context requires otherwise, the terms "hereof," "herein,"
"hereby," "hereto" and derivative or similar words in this Agreement
refer to this entire Agreement.
(e) Unless the context requires otherwise, words in this Agreement using
the singular or plural number also include the plural or singular
number, respectively, and the use of any gender herein shall be deemed
to include the other genders.
(f) References in this Agreement to "dollars" or "$" are to Canadian
dollars unless otherwise indicated.
(g) Except as otherwise specifically provided herein, where any action is
required to be taken on a particular day and such day is not a
Business Day and, as a result, such action cannot be taken on such
day, then this Agreement shall be deemed to provide that such action
shall be taken on the first Business Day after such day.
(h) This Agreement was prepared jointly by the parties and no rule that it
be construed against the drafter will have any application in its
construction or interpretation.
9.10 Waiver and Amendment
This Agreement may be amended, modified or supplemented only by a written
mutual agreement executed and delivered by each of the A&P Parties and the
Company. Except as otherwise provided in this Agreement, any failure of any
party to comply with any obligation, covenant, agreement or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligations, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
9.11 Counterparts; Facsimile Signatures
This Agreement may be executed in any number of counterparts, each of which
when executed, shall be deemed to be an original and all of which together
shall be deemed to be one and the same instrument binding upon all of the
parties notwithstanding the fact that all of the parties are not signatory to
the original or the same counterpart. For purposes of this Agreement, facsimile
signatures shall be deemed originals.
9.12 Third-Party Beneficiaries
This Agreement is for the sole benefit of the parties and their successors and
permitted assigns and nothing herein express or implied shall give or be
construed to give to any Person, other than the parties and such successors and
permitted assigns, any legal or equitable rights hereunder.
9.13 Specific Performance
The parties agree that if any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached,
irreparable damage would occur, no adequate remedy at Law would exist and
damages would be difficult to determine, and that the parties shall be entitled
to specific performance of the terms hereof, in addition to any other remedy at
Law or in equity.
9.14 Language
The parties confirm that it is their wish that this Agreement, as well as any
other documents relating to this Agreement, including notices, schedules and
authorizations, have been and shall be drawn up in the English language only.
Les signataires confirment leur volonte que la presente convention, de meme que
tous les documents s'y rattachant, y compris tout avis, annexe et autorisation,
soient rediges en anglais seulement.
9.15 Severability
If any provision of this Agreement or the application of any such provision to
any Person or circumstance shall be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality
or unenforceability shall not affect any other provision hereof. The parties
shall engage in good faith negotiations to replace any provision which is
declared invalid, illegal or unenforceable with a valid, legal and enforceable
provision, the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provision which it replaces.
[Remainder of this page intentionally left blank]
WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.
THE GREAT ATLANTIC & PACIFIC TEA
COMPANY, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxxx
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Executive Vice-President and
Chief Financial Officer
A&P LUXEMBOURG S.a x.x.
By: /s/ Xxxxxxxx X. Xxxxxxxxx
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Manager
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Manager
METRO INC.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
By: /s/ Xxxx Xxxxxx La Fleche
Name: Xxxx Xxxxxx La Fleche
Title: Executive Vice-President and
Chief Operating Officer
