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CUSIP NO. 440506 10 3 13D Page 9 of 14 Pages
EXHIBIT JJ
CERTAIN SECTIONS OF
AMENDMENT NO. 1 TO THE
JOINT VENTURE AGREEMENT
OF NAR GROUP LIMITED
This Agreement, dated June 13, 1997, is Amendment No. 1 to a joint
venture agreement by and among RICHEMONT FINANCE SA, a Luxembourg corporation
("Richemont"), as successor to Richemont Group Limited, as successor to Rupert
Group Limited; EVANSVILLE LIMITED, a British Virgin Islands corporation, as
successor to the interests of both Herbard Ltd. and Pavonis Ltd. ("Evansville");
and ▇▇▇▇ ▇. ▇▇▇▇▇▇, a resident of New York, New York ("▇▇▇▇ ▇▇▇▇▇▇"), and amends
that certain Joint Venture Agreement, effective as of March 31, 1988, by and
among Rupert Group Limited, Herbard Ltd., Pavonis Ltd. and ▇▇▇▇ ▇▇▇▇▇▇ (the
"Original Agreement") which established North American Resources Ltd., a British
Virgin Islands international business company now known as NAR GROUP LIMITED
("NAR"). Evansville and ▇▇▇▇ ▇▇▇▇▇▇ are hereinafter sometimes referred to as the
"Evansville Shareholders." Richemont, Evansville and ▇▇▇▇ ▇▇▇▇▇▇ are hereinafter
sometimes referred to as the "Shareholders."
* * *
4. PUT AND CALL OPTIONS RELATING TO THE HANOVER COMMON STOCK.
A. Subject to Paragraphs 4(E), 4(F) and 4(G) hereof, Evansville and
▇▇▇▇ ▇▇▇▇▇▇ (which, for purposes of this Section 4, may only act jointly as the
Evansville Shareholders) shall have the right (the "Put Option"), exercisable
once only at any time after March 31, 1998, to cause NAR (which for purposes
hereof shall include any affiliate of NAR (other than Richemont and its non-NAR
affiliates) then nominally holding shares of Hanover Common Stock) to sell and
transfer to Richemont such number of the shares of Hanover Common Stock at a
price per share equal to the average of the closing bid price of a share of
Hanover Common Stock for the thirty (30) trading days immediately preceding the
date of the Put Notice (the "Put Price") as shall, in the aggregate, equal the
Value. The Put Option shall be exercised by Evansville and ▇▇▇▇ ▇▇▇▇▇▇
delivering a joint written notice (the "Put Notice") to NAR and Richemont
requesting Richemont to purchase such number of shares of Hanover Common Stock
pursuant to the terms of this Paragraph 4(A). Within thirty (30) days of the
later of: (i) the delivery of the Put Notice, or (ii) the completion of any
applicable waiting periods as set forth in Paragraph 4(D) hereof, the closing
of the Put Option shall occur whereby NAR shall cause such number of shares of
Hanover Common Stock to be transferred to Richemont, and Richemont shall
purchase such shares by tendering to NAR for redemption all shares of Preferred
Stock and agreeing
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CUSIP NO. 440506 10 3 13D Page 10 of 14 Pages
to accept such shares of Hanover Common Stock as full payment for the redemption
of the Preferred Stock. Richemont shall thereafter have no further rights in the
Preferred Stock. All Hanover Common Stock not then sold to Richemont for the
redemption of the Preferred Stock shall thereafter not be subject to the Put
Option and shall immediately be distributed pursuant to the provisions of
Paragraph 4(E) herein.
B. Unless the Put Option shall have previously been exercised,
Richemont shall, subject to Paragraphs 4(E), 4(F) and 4(G) hereof, have the
right (the "Call Option"), exercisable once only at any time after June 30,
1999, to cause NAR to sell and transfer to Richemont such number of the shares
of Hanover Common Stock, at a price per share equal to the average of the
closing bid price of a share of Hanover Common Stock for the thirty (30) trading
days immediately preceding the date of the Call Notice (the "Call Price") as
shall, in the aggregate, equal the Value. The Call Option shall be exercised by
Richemont delivering written notice (the "Call Notice") to NAR and the
Evansville Shareholders requesting the Evansville Shareholders to cause NAR to
sell such number of shares of the Hanover Common Stock pursuant to the terms of
this Paragraph 4(B). Within thirty (30) days of the later of: (i) the delivery
of the Call Notice, or (ii) the completion of any applicable waiting periods as
set forth in Paragraph 4(D) hereof, the closing of the Call Option shall occur
whereby NAR shall cause such number of shares of Hanover Common Stock to be
transferred to Richemont, and Richemont shall purchase such shares by tendering
to NAR for redemption all shares of Preferred Stock and agreeing to accept such
shares of Hanover Common Stock as full payment for the redemption of the
Preferred Stock. Richemont shall thereafter have no further rights in the
Preferred Stock. All Hanover Common Stock not then sold to Richemont for the
redemption of the Preferred Stock shall thereafter not be subject to the Call
Option and shall immediately be distributed pursuant to the provisions of
Paragraph 4(E) herein.
C. In the event the Call Option or the Put Option is exercised pursuant
to the terms of this Agreement, each of Richemont, Evansville and ▇▇▇▇ ▇▇▇▇▇▇
shall join in the execution and filing of any application, consent or other
document that may be necessary in order to obtain the authorization, approval or
consent of any governmental body, federal, state, local or foreign, which may be
reasonably required, in connection with the consummation of the purchase or sale
of such shares of Hanover Common Stock. Each of Richemont, Evansville and ▇▇▇▇
▇▇▇▇▇▇ agrees to use its best efforts to cause the conditions referred to in
Paragraph 4(D) to be met and agrees to take all reasonable steps necessary to
obtain early termination of the waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act
("HSR Act"), if applicable, or any other applicable federal, state, local or
foreign law.
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D. Closing of any transaction contemplated by this Paragraph 4 shall
not occur until all applicable waiting periods under the HSR Act and any other
federal, state, local or foreign law with respect to the consummation of the
purchase or sale of Hanover Common Stock shall have expired or early termination
shall have been granted by, in the case of the HSR Act, both the by Federal
Trade Commission and the United States Department of Justice, and in the case of
any other federal, state, local or foreign law, the applicable agency or
agencies.
E. Each of the Call Option and the Put Option may only be exercised one
time. Following the exercise of the Put Option or the Call Option, as the case
may be, the total number of shares of Hanover Common Stock beneficially owned by
NAR after such exercise shall thereafter promptly be distributed by NAR to
Richemont and (subject to Paragraph 4(H) hereof) to the Evansville Shareholders
in accordance with their respective ownership of the common stock of NAR.
F. In the event that Hanover Common Stock shall no longer be trading in
a public forum such that its trading price is not readily ascertainable by
public quotes, then, within thirty (30) days of the date on which either the
Evansville Shareholders (with regard to the Put Option) or Richemont (with
regard to the Call Option) gives notice to the other and to NAR that it desires,
upon the determination of a Put Price or a Call Price, to consider exercising
its respective Option, the Call Price or the Put Price shall be determined by an
investment banking firm promptly selected by the mutual agreement of Richemont
and the Evansville Shareholders, and whose determination (which shall be paid
for by the party or parties giving such notice) shall be final and binding on
the Shareholders. In the event that Richemont and the Evansville Shareholders
are unable, within ten (10) days of the receipt of such notice, to agree upon an
investment banking firm for this purpose, each entity shall immediately select
its own investment banking firm to determine the Call Price or the Put Price, as
the case may be, and each such firm shall have thirty (30) days from the date of
its respective appointment to make such determination. The actual Call Price or
Put Price shall equal the average of the values determined by each such
investment bank. In making its determination of the Call Price or the Put Price,
as the case may be, each investment banking firm selected pursuant to the
provisions of this Paragraph shall determine such Price by averaging the
following two numbers: (i) the per share valuation of Hanover Common Stock that
would be achievable were HDI to effect an initial public offering at such time,
and (ii) the per share price that would be achievable were a controlling block
of shares of Hanover Common Stock to be sold in a private "block trade"
transaction at such time. The Put Option or Call Option may thereafter be
exercised in the manner stated hereinabove by the giving of the Put Notice or
Call Notice within thirty (30)
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days of the date on which such investment banking firm or firms gives notice to
Richemont and to the Evansville Shareholders of its determination of such Price.
G. Neither the Call Option nor the Put Option may be exercised if (i)
trading in the Hanover Common Stock shall have been suspended by order of the
United States Securities and Exchange Commission or of the American Stock
Exchange or of any other entity, (ii) trading in securities generally on the
American Stock Exchange (or on any other exchange where Hanover Common Stock may
then be traded) shall have been suspended or limited or minimum prices shall
have been established on such exchange, (iii) on any trading day during the
thirty (30) trading days immediately preceding the date of the Put Notice or
Call Notice, the closing bid price of a share of Hanover Common Stock shall be
at least fifteen percent (15%) greater or less than the average of the closing
bid price of a share of Hanover Common Stock for such thirty (30) trading day
period, or (iv) the party or parties exercising such option are then in
possession of material, non-public information concerning Hanover Common Stock
which may reasonably be expected to have a material effect on the per share
price of Hanover Common Stock once such information is publicly disclosed. In
any such situations, the Call Option or the Put Option may be exercised only
after the basis for such prohibition on exercising the Option has expired or
been alleviated.
H. If, immediately following the exercise of either the Put Option or
the Call Option, the beneficial ownership of Hanover Common Stock by Richemont
(after deducting any shares of Hanover Common Stock subject to an option to ▇▇.
▇▇▇▇, as more fully described in Section 1(B) hereof) shall be less than 50.1%
of the number of voting shares then outstanding, the Evansville Shareholders
hereby each agree to grant to Richemont (i) an irrevocable proxy to vote such
number of shares (the "Proxy Shares") then owned by them as shall at all times
equal the difference between (x) the number of voting shares of HDI then owned
by Richemont and its affiliates (other than the Evansville Shareholders) and (y)
the number of voting shares of HDI as shall equal not less than 50.1% of the
aggregate number of voting shares of HDI then outstanding; and (ii) a right of
first offer to purchase the Proxy Shares, as more fully described below. In the
event that the Evansville Shareholders (who agree to act jointly for all
purposes with regard to the Proxy Shares) should decide to sell or otherwise
dispose of any of the Proxy Shares, they shall first give written notice to
Richemont of their intention to sell such shares, together with the price at
which they are willing to sell such shares. Richemont shall then have thirty
(30) days from the date it receives such notice to evaluate such offer. If, at
or prior to the end of such 30-day period, Richemont gives notice to the
Evansville Shareholders that it accepts such offer, then
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the Evansville Shareholders shall, within fifteen (15) days of receipt of such
notice, sell to Richemont, and Richemont shall purchase for cash, all such Proxy
Shares. If, at the end of such 30-day period, Richemont declines such offer or
does not respond to such offer in writing, then the Evansville Shareholders
shall be free to sell such shares at any time during the succeeding ninety (90)
days (starting the day following the end of the previous 30-day period) to a
third party, but only at a price per share equal to or higher than the price per
share at which such shares were first offered to Richemont. Upon the completion
of the sale of such shares by the Evansville Shareholders to a third party
during such 90-day period, the irrevocable proxy described in the first sentence
of this Paragraph 4(H) shall thereupon terminate. If the Evansville Shareholders
do not complete the sale of such shares in such manner during such 90-day
period, then the Right of First Offer described in this Section 4(H) shall again
be applicable, and the irrevocable proxy shall remain in full force and effect.
* * *
6. OTHER MATTERS.
A. Following the Effective Date, ▇▇▇▇ ▇▇▇▇▇▇ shall have no further
responsibility for financial reporting and other information delivery
obligations to Richemont relating to NAR's interest in HDI. ▇▇▇▇ ▇▇▇▇▇▇ shall be
relieved of his duty to continue to provide to Richemont financial reporting and
other information relating to the businesses or assets of NAR, except to provide
the reports prepared by such businesses (other than HDI) or the managers of such
assets, all of which reports ▇▇. ▇▇▇▇▇▇ shall cause to be promptly forwarded to
Richemont. The provisions of this Section 6(A) shall in no way relieve NAR of
its obligation to provide Richemont with such periodic financial reports
concerning NAR's aggregate assets and operations as shall be necessary in order
to enable Richemont to satisfy its financial reporting obligations.
B. In the event that the Evansville Shareholders, on the one hand, and
Richemont, on the other hand, or their respective representatives, are unable to
agree on the terms of any material decision relating to NAR's ownership of
Hanover Common Stock or to the business of HDI (a "Deadlock"), then the parties
agree that the following provisions shall apply and such provisions shall
supersede the provisions of Section 4 hereof:
(1) Richemont shall give notice to the other Shareholders of a
Deadlock. Within ten (10) days of such written notice, Richemont shall provide
to the other Shareholders, in
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writing (the "Notice"), its determination of the price per share at which it is
prepared to purchase all of the shares of Hanover Common Stock then owned by NAR
(the resulting per share valuation, for purposes of this Paragraph 6(B), being
termed the "Auction Value").
(2) Together with the Notice of the Auction Value, Richemont
shall offer to purchase from NAR all, but not less than all, of its shares of
Hanover Common Stock, at a price per share equal to the Auction Value. Such
Notice shall offer to pay for NAR's shares of Hanover Common Stock, in cash or
cash equivalents, within thirty (30) days of the date of the Notice.
(3) Upon receipt of the Notice, the other Shareholders shall
immediately nominate one representative of such Shareholders, and shall agree to
be jointly and severally bound by the determination of such representative as to
all matters relating to this Paragraph 6(B). Such representative shall have
twenty (20) days from the date of the Notice in which to notify Richemont that
it either (a) accepts such Auction Value and agrees to cause NAR to sell to
Richemont all of its Hanover Common Stock at such share price, or (b) desires to
purchase all of NAR's shares of Hanover Common Stock, at a price per share equal
to the Auction Value. In the event the representative of the other Shareholders
shall have responded in accordance with (a) above, or shall have made no
response by such twentieth (20th) day, then the Shareholders hereby agree to
cause NAR to sell its shares of Hanover Common Stock to Richemont at a price per
share equal to the Auction Value, on such terms and at such date as was
specified in the Notice, and Richemont agrees to so purchase such shares. In the
event that the other Shareholders shall have responded in accordance with (b)
above, then the Shareholders shall cause NAR to sell its shares of Hanover
Common Stock to such other Shareholders, on the same terms and at such date as
was specified in the Notice, at a price per share equal to the Auction Value,
and such other Shareholders agree to so purchase such Shares. In either event,
(i) the purchase price shall be paid in cash and (ii) the parties hereto shall,
simultaneously with such sale, cause NAR to redeem the Preferred Stock, at the
Full Redemption Value.
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