This Agreement is made as of February
3, 2006, between
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X. X.
XXXXX CORPORATION,
a corporation existing under the laws of the State of
Delaware,
U.S.A.
(“Parent”), |
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VALLEYDENE
CORPORATION LIMITED,
a corporation existing under the laws of Ontario
(“Valleydene”) |
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XXXXXXXX
GROUP CAPITAL LIMITED,
a corporation existing under the laws of Ontario
(“Xxxxxxxx” and,
together with Valleydene, the “Sellers”) |
RECITALS
| A. |
Parent
and the Sellers entered into a letter agreement dated January 20, 2006
outlining the basis upon which Parent would be prepared to make an offer to
acquire all of the outstanding Shares of GSW Inc. (“Company”). |
| B. |
Parent
intends to cause the Offeror to make the Offer. |
| C. |
The
Sellers beneficially own the Shares listed on Schedule B to this Agreement. |
| D. |
As
a condition to the willingness of Parent to cause the Offeror to make the
Offer, the Sellers have agreed to enter into this Agreement. |
Capitalized terms used but not
defined in this Agreement have the meanings given to them in Schedule A.
FOR VALUE RECEIVED, the parties agree
as follows:
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SECTION 1 –
COVENANTS OF THE SELLERS
(1)
Each Seller irrevocably and unconditionally agrees, on its own behalf and
on behalf of any of its affiliates:
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(a) |
to
accept the Offer by depositing, or causing to be deposited, free and clear of
all Encumbrances, all of the Shares now or hereafter beneficially owned by
such Seller in accordance with Section 1.1(2) and, in any event, not less
than the number of Shares set forth opposite such Seller’s name on
Schedule B hereto; and |
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(b) |
not
to withdraw, permit to be withdrawn or take any action to withdraw, the
Shares of such Seller that are deposited under the Offer (notwithstanding
any statutory or other rights under the terms of the Offer or otherwise
which it may have); and |
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(c) |
not
to exercise any shareholder rights or remedies available at common law or
pursuant to the CBCA or applicable securities Law to delay, hinder,
frustrate or challenge the Offer or any statutory or other right to
dissent and to seek fair value for any Shares. |
(2)
Each Seller also agrees, on its on behalf and on behalf of any of its
affiliates:
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(a) |
within
two business days of the mailing of the Offer Documents, to deposit or
cause to be deposited with the Depositary all of the Shares that such
Seller beneficially owns (or advise Parent in writing of its intention to
make a valid Holdco Election in respect of all the Shares that such Seller
beneficially owns pursuant to section 2.2) in accordance with the terms of
the Offer; |
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(b) |
if
the Seller acquires directly or indirectly beneficial ownership of any
additional Shares after the date on which the Seller deposits its Shares
under subclause (a) above, to deposit or cause to be deposited with the
Depositary, within two business days after the acquisition of those Shares
(but not later than the Expiry Time), the additional Shares in accordance
with the terms of the Offer (or advise Parent in writing of its intention
to make a valid Holdco Election in respect of such Shares); and |
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(c) |
to
permit Parent and the Offeror to publish and disclose the nature and
substance of its commitment under this Agreement in the Offer Documents
and in any other filings required under applicable Law in connection with
the Offer or the transactions contemplated under this Agreement or the
Pre-Acquisition Agreement. |
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| 1.2 |
Additional
Covenants of the Sellers |
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(a) |
it
shall not, and it shall cause its Representatives not to, directly or
indirectly, |
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(i) |
take
any action of any kind that may in any way reduce the likelihood of success of
the Offer, the purchase of any Shares pursuant to the Offer or the completion
of the Offer; |
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(ii) |
solicit,
encourage, facilitate the making of, or respond to (other than to decline) any
inquiries or proposals regarding any Acquisition Proposal; |
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(iii) |
encourage
or participate in any discussions or negotiations regarding any Acquisition
Proposal; |
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(iv) |
make
available any information with respect to Company or any of its subsidiaries in
circumstances in which it knows, or ought reasonably to know, that such
information will be used by the recipient in connection with, or in order to
propose, make or evaluate the making of, any Acquisition Proposal; |
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(v) |
agree
to or enter into any Acquisition Proposal; |
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(vi) |
request
the board of directors or any committee thereof of Company to withdraw or
modify in a manner adverse to Parent or the Offeror the approval and
recommendation by the board of directors of the Offer, the Subsequent
Acquisition Transaction or the Pre-Acquisition Agreement; or |
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(vii) |
enter
into any agreement, letter of intent or similar document contemplating or
otherwise related to any Acquisition Proposal; |
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provided,
however, that the foregoing shall not prevent any officer, director, employee,
shareholder or affiliate of the Seller who is also a director or officer of Company or
any of its subsidiaries from doing any act or thing that he or she properly is obliged to
do in such capacity, so long as (a) he or she is acting as a director or officer of
Company or any of its subsidiaries in accordance with applicable fiduciary duties when
completing such act or thing and (b) doing such act or thing will not cause Company to
violate any of the provisions of the Pre-Acquisition Agreement that apply to Company, its
subsidiaries or affiliates or any of their respective Representatives. |
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For
greater certainty, each Seller acknowledges that the proviso to this section 1.2(a) will
not affect such Seller’s obligation to deposit (and not to withdraw) all of its
Shares to the Offer pursuant to the terms of this Agreement. |
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The
Sellers will immediately terminate, and cause to be terminated, any existing activities,
discussions or negotiations with any persons with respect to any Acquisition Proposal.
The Sellers will, subject to the above proviso, immediately notify Parent of any
Acquisition Proposal, any inquiry or proposal with respect to any Acquisition Proposal,
or any request for information relating to Company or any of its subsidiaries or for
access to the properties, books or records of Company or any subsidiary by any person
that it is considering making, or has made, an Acquisition Proposal. Such notice will
include the terms and conditions of such Acquisition Proposal, inquiry, proposal or
request. Such notice to Parent shall be made orally and in writing and shall indicate
such details of the proposal, inquiry or contact as Parent may reasonably request,
including the identity of the person making such proposal, inquiry or contact and the
terms and conditions of such Acquisition Proposal, inquiry, proposal or request. The
Sellers shall, subject to the above proviso, keep Parent informed of the status and
general progress (including amendments or proposed amendments) of any such request or
Acquisition Proposal and keep Parent fully informed as to the details of any information
requested of the Sellers. |
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The
Sellers will ensure that their respective Representatives are aware of the provisions of
this section 1.2(a) and will be jointly and severally responsible for any breach of this
section 1.2(a) by any of their Representatives. |
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(b) |
it
will use its reasonable efforts to: |
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(i) |
obtain
all necessary consents, approvals and authorizations that are required to be
obtained by such Seller under any contract or agreement or applicable Law with
respect to this Agreement, the Pre-Acquisition Agreement or the Offer; |
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(ii) |
at
Parent’s sole cost and expense, lift or rescind any injunction or
restraining order or other order adversely affecting such Seller’s ability
to consummate the transactions contemplated hereby; and |
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(iii) |
fulfill
all conditions and satisfy all provisions of this Agreement, the
Pre-Acquisition Agreement and the Offer applicable to such Seller; |
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provided,
however, that the foregoing shall not prevent any officer, director, employee,
shareholder or affiliate of the Seller who is also a director or officer of Company or
any of its subsidiaries from doing any act or thing that he or she properly is obliged to
do in such capacity so long as (a) he or she is acting as a director or officer of
Company or any of its subsidiaries in accordance with applicable fiduciary duties when
completing such act or thing and (b) doing such act or thing will not cause Company to
violate any of the provisions of the Pre-Acquisition Agreement that apply to Company, its
subsidiaries or affiliates or any of their respective Representatives; |
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(c) |
it
will exercise the voting rights attaching to all of the Shares that such
Seller beneficially owns and otherwise use its reasonable efforts, in its
capacity as a Shareholder, to act in favor of the execution and delivery
by Company of the Pre-Acquisition Agreement and the approval of the terms
thereof and each of the other actions contemplated by the Pre-Acquisition
Agreement and this Agreement and any actions required in furtherance
thereof and hereof; |
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(d) |
it
will not take any action of any kind that may prevent or delay the take up
and payment of the Shares deposited under the Offer, reduce the likelihood
of success of or prevent or delay the completion of the Offer, and
promptly upon any reasonable request, it shall assist Parent and the
Offeror by providing any information reasonably required for Parent and
the Offeror to secure regulatory approvals, or make filings under
applicable securities Laws, in respect of the completion of the Offer;
provided, however, that the foregoing shall not prevent any officer,
director, employee, shareholder or affiliate of the Seller who is also a
director or officer of Company or any of its subsidiaries from doing any
act or thing that he or she properly is obliged to do in such capacity so
long as (a) he or she is acting as a director or officer of Company or any
of its subsidiaries in accordance with applicable fiduciary duties when
completing such act or thing and (b) doing such act or thing will not
cause Company to violate any of the provisions of the Pre-Acquisition
Agreement that apply to Company, its subsidiaries or affiliates or any of
their respective Representatives; |
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(e) |
it
will not grant or agree to grant any proxy or other right to any Shares or
enter into any voting trust, vote pooling or other agreement, arrangement
or understanding with respect to the right to vote, call meetings of the
Shareholders or give consents or approvals of any kind with respect to any
Shares; |
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(f) |
it
will not sell, transfer, pledge, convey, grant a security interest in,
hypothecate or otherwise encumber in any way any Shares or relinquish or
modify such Seller’s right to vote any Shares or any other securities
of Company or agree to do any of the foregoing other than as contemplated
under this Agreement; |
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(g) |
it
will provide Parent with an opportunity to review in advance and consent
(acting reasonably) to the inclusion of information relating to Parent or
the Offeror that will appear in any filing made by such Seller with, or
written materials submitted by such Seller to, any third party or
Governmental Authority in connection with the Offer; |
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(h) |
it
will promptly advise the Offeror orally and in writing of any actual or
potential event, condition, change or development with respect to Company
or its subsidiaries that becomes known to it and that could reasonably be
expected to cause the conditions to the Offer not to be satisfied;
provided, however, that the foregoing shall not prevent any officer,
director, employee, shareholder or affiliate of the Seller who is also a
director or officer of Company or any of its subsidiaries from doing any
act or thing that he or she properly is obliged to do in such capacity so
long as (a) he or she is acting as a director or officer of Company or any
of its subsidiaries in accordance with applicable fiduciary duties when
completing such act or thing and (b) doing such act or thing will not
cause Company to violate any of the provisions of the Pre-Acquisition
Agreement that apply to Company, its subsidiaries or affiliates or any of
their respective Representatives; |
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(i) |
it
will not grant an option over any of its Shares or any right or interest
therein (legal or equitable) held by it to any person; |
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(j) |
it
will take all steps that are required to ensure that, at the time at which
the Offeror becomes entitled to take up and pay for Shares pursuant to the
Offer, and at the time at which the Offeror so takes up and pays for such
Shares, all Shares held by such Seller will be owned beneficially and of
record by such Seller with a good and marketable title thereto, free and
clear of any and all Encumbrances, subject to such Seller’s right to
make a Holdco Election pursuant to section 2.2; |
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(k) |
it
shall take all such steps as are required to ensure that the representations
and warranties in section 3.1 are true and correct (or, if not already
qualified by a materiality concept, true and correct in all material
respects) at all times; |
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(l) |
it
will deliver a certificate to Parent and the Offeror confirming that the
representations and warranties of the Sellers in this Agreement were, as
of the date made, and are on the date the Offer Documents are mailed
pursuant to the Pre-Acquisition Agreement, true and correct (or, if not
already qualified by a materiality concept, true and correct in all
material respects) and that the Sellers have complied with the covenants
contained in this Agreement; |
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(m) |
it
will deliver a certificate to Parent and the Offeror confirming that the
representations and warranties of the Sellers in this Agreement were, as
of the date made, and are, at the time immediately prior to the Expiry
Time, true and correct (or, if not already qualified by a materiality
concept, true and correct in all material respects) and that the Sellers
have observed and performed their covenants in this Agreement in all
material respects; |
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(n) |
in
the event that the Offeror takes-up and pays for Shares deposited under the
Offer, and if any shareholder, director, officer, employee or agent of any
Seller is a director of Company, then such Seller shall cooperate with
Parent and the Offeror to provide for an orderly transition of control,
which cooperation shall include causing such shareholder, director,
officer, employee or agent to resign as a director of Company and taking
all actions that Parent or the Offeror reasonably determines are necessary
or desirable to facilitate the appointment of the Offeror’s nominees
as directors of Company as contemplated by the Pre-Acquisition Agreement;
provided, however, that the foregoing shall not prevent any officer,
director, employee, shareholder or affiliate of the Seller who is also a
director or officer of Company or any of its subsidiaries from doing any
act or thing that he or she properly is obliged to do in such capacity so
long as (a) he or she is acting as a director or officer of Company or any
of its subsidiaries in accordance with applicable fiduciary duties when
completing such act or thing and (b) doing such act or thing will not
cause Company to violate any of the provisions of the Pre-Acquisition
Agreement that apply to Company, its subsidiaries or affiliates or any of
their respective Representatives; |
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(o) |
it
shall not request, and it shall cause its affiliates not to request, that
Company register the transfer (book-entry or otherwise) of any certificate
or uncertificated interest representing any of the Shares, unless such
transfer is made in compliance with this Agreement; and |
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(p) |
it
shall not do indirectly that which it may not do directly in respect of the
restrictions on its rights with respect to Shares pursuant to this
Agreement by selling any direct or indirect holding company or granting a
proxy on the shares or other equity interests of any direct or indirect
holding company in any way that would have, indirectly, any effect
prohibited by this Agreement. |
SECTION 2 –
COVENANTS OF PARENT
(1) Parent
will cause the Offeror to make the Offer in accordance with the terms and
conditions set forth the Pre-Acquisition Agreement.
(2) Parent
will also comply with its obligations under the Pre-Acquisition Agreement.
Parent
agrees that the Offer will provide that the Shareholders may make a Holdco Election in
accordance with Section 1.2 of the Pre-Acquisition Agreement.
SECTION 3 –
REPRESENTATIONS AND WARRANTIES
| 3.1 |
Representations
and Warranties of Sellers |
Each
Seller represents and warrants to Parent and the Offeror as follows and acknowledges that
Parent and the Offeror are relying upon such representations and warranties in connection
with the entering into of this Agreement and the Pre-Acquisition Agreement, the making of
the Offer and the purchase by the Offeror of the Seller’s Shares:
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(a) |
the
Seller is the beneficial owner of the Shares listed on Schedule B beside the
Seller’s name, and such Shares are the only securities of Company
owned directly or indirectly, beneficially or otherwise, by the Seller; |
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(b) |
other
than as contemplated in this Agreement in connection with the Offer, the
Seller has the sole right to sell, assign, transfer and otherwise dispose
of and vote, the Shares beneficially owned as at the date of this
Agreement or hereafter acquired by it, and such Shares are, and will be at
the time at which the Offeror takes up and pays for such Shares,
beneficially owned by the Seller with good and marketable title thereto,
free and clear of any and all Encumbrances and are and will at such time
be issued and outstanding as fully paid and non-assessable shares in the
capital of Company; |
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(c) |
no
person has any agreement or option, or any right or privilege (whether by
Law, pre-emptive, contractual or otherwise) capable of becoming an
agreement or option, for the purchase, acquisition or transfer from the
Seller of any of the Shares owned by it or any interest therein or right
thereto, except the Offeror pursuant hereto; |
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(d) |
the
execution and delivery of this Agreement by the Seller and the consummation
by the Seller of the transactions contemplated by this Agreement have been
duly authorized by the board of directors of the Seller, and no other
proceedings on the part of the Seller are necessary to authorize this
Agreement; |
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(e) |
none
of the execution and delivery by the Seller of this Agreement or the
completion of the transactions contemplated under the terms of this
Agreement or the compliance by such Seller with its obligations under the
terms of this Agreement will result in a breach of: |
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(i) |
the
constating documents of the Seller; |
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(ii) |
any
agreement or instrument to which such Seller is a party or by which such
Seller or any of its property or assets are bound, including, any investor
rights agreement; |
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(iii) |
any
judgment, decree, order or award of any court, Governmental Authority or
arbitrator; or |
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(f) |
no
consent, approval or exemption from or registration or filing with any
Governmental Authority is required to be obtained or made by such Seller
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated under the terms of this
Agreement except for reports required to be filed under applicable
securities Laws; |
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(g) |
the
Seller is a validly existing corporation and has all necessary corporate
power and authority to execute and deliver this Agreement and to perform
its obligations under the terms of this Agreement; |
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(h) |
this
Agreement has been duly authorized, executed and delivered by such Seller
and constitutes a legal, valid and binding obligation of such Seller
enforceable against it in accordance with its terms; |
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(i) |
the
Seller has no agreement or option, or right or privilege (whether by Law,
pre-emptive, contractual or otherwise) capable of becoming an agreement or
option, for the purchase or acquisition by such Seller or transfer to such
Seller of additional securities of Company, including any stock options or
warrants of Company; |
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(j) |
the
Seller is not a party to any shareholder, pooling, voting trust or other
similar agreement or arrangement relating to the issued and outstanding
Shares or any securities of its subsidiaries; |
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(k) |
the
Seller has no indebtedness, liability or obligation to Company or any claims
against Company, and Company is not indebted or otherwise obligated to
such Seller; and |
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(l) |
the
Seller will not have any claim against Company or any of its subsidiaries by
reason of the entering into of this Agreement. |
| 3.2 |
Representations
and Warranties of Parent |
Parent
represents and warrants to Sellers as follows and acknowledges that the Sellers are
relying upon such representations and warranties in connection with the entering into of
this Agreement:
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(a) |
Parent
is a corporation validly existing under the laws of the State of Delaware; |
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(b) |
the
Offeror will, at the time of the Offer, be a corporation duly incorporated
and organized and validly existing under the CBCA; |
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(c) |
Parent
has the requisite corporate power and authority to enter into this
Agreement and to perform its obligations under the terms of this
Agreement; |
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(d) |
the
Offeror will, at the time of the Offer, have the requisite corporate power
and authority to make the Offer and perform its obligations contemplated
under the Offer and the terms of this Agreement; |
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(e) |
the
execution and delivery of this Agreement by Parent and the consummation by
Parent of the transactions contemplated by this Agreement have been duly
authorized by the board of directors of Parent, and no other proceedings
on the part of Parent are necessary to authorize this Agreement; |
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(f) |
this
Agreement has been duly executed and delivered by Parent and constitutes a
legal, valid and binding obligation of Parent, enforceable against Parent
in accordance with its terms; |
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(g) |
none
of the execution and delivery by Parent of this Agreement or the completion
of the transactions contemplated under the terms of this Agreement or the
compliance by Parent with its obligations under the terms of this
Agreement will result in a breach of: |
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(i) |
the
constating documents of Parent; |
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(ii) |
any
agreement or instrument to which Parent is a party or by which Parent or any
of its property or assets are bound; |
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(iii) |
any
judgment, decree, order or award of any court, Governmental Authority or
arbitrator; or |
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(h) |
no
consent, approval or exemption from or registration or filing with any
Governmental Authority is required to be obtained or made by Parent in
connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated under the terms of this
Agreement except for reports required to be filed under applicable
securities Laws and those relating to the organization of the Offeror; and |
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(i) |
as
at February 23, 2006, Parent and the Offeror shall have provided evidence
satisfactory to Company acting reasonably that Parent has binding
commitments in place to ensure that the required funds are available to
effect payment in full by the Offeror for all of the Shares subject to the
Offer as at that date and continuing to the time the Offer is first
commenced within the meaning of applicable securities Laws, and Parent and
the Offeror have provided to Company on or before this Agreement was
executed and delivered documentation, which Company advised was
satisfactory to it, giving comfort regarding such binding commitments. |
SECTION 4 –
TERMINATION AND AMENDMENT
(1)
This Agreement may be terminated at any time prior to the time that the Offeror
takes up and pays for Shares under the Offer:
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(a) |
by
mutual written consent of Parent and the Sellers; |
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(i) |
the
Offeror has not mailed the Offer Documents on or before the Outside Mailing
Date in accordance with the Pre-Acquisition Agreement; |
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(ii) |
the
Offeror has not taken up Shares deposited under the Offer immediately following
the Expiry Time and has not paid for Shares taken up under the Offer within one
business day following the Expiry Time; provided that, if the take up and
payment by the Offeror for Shares deposited under the Offer is delayed by the
failure to satisfy the condition set out in paragraph (b), as a result of any
decree or order, or paragraph (c) of the conditions of the Offer as set out in
Schedule B-2 of the Pre-Acquisition Agreement, then this Agreement shall not be
terminated by Sellers pursuant to this section 4.1(1)(b)(ii) until the earlier
of: (A) 60days after the Expiry Time and (B) the third business day
following the date on which such condition is satisfied; or |
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(iii) |
all
of the following shall have occurred: (A) Parent shall have breached or failed
to perform in any material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement, (B) such breach or
failure to perform will result or has resulted in a material adverse effect on
Parent’s ability to perform its obligations hereunder and (C) such breach
or failure to perform is incapable of being cured by Parent prior to the Expiry
Time or, if such breach or failure to perform is capable of being cured by
Parent prior to the Expiry Time, Parent shall not have been cured such breach
or failure to perform within fifteen (15) days after the Sellers provide Parent
with written notice thereof (but no later than the Expiry Time); |
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and
provided that the Sellers may not terminate this Agreement on the basis of the foregoing
if the event giving rise to the termination right shall have been caused by the failure
by either Seller to perform any of its obligations under this Agreement or the breach of
any representation or warranty made by either Seller in this Agreement; |
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(i) |
the
Pre-Acquisition Agreement is terminated in accordance with its terms; |
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(ii) |
the
conditions to making the Offer as set out in Schedule B-1 of the
Pre-Acquisition Agreement are not satisfied or waived by Parent on or before
the Outside Mailing Date; |
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(iii) |
the
conditions of the Offer as set out in Schedule B-2 of the Pre-Acquisition
Agreement and as set out in the Offer Documents are not satisfied or waived by
the Offeror at or before the Expiry Time; |
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(iv) |
a
Seller is in default of any material covenant or obligation under this
Agreement; or |
| |
(v) |
any
representation or warranty of a Seller under this Agreement shall have been as
at the date made in accordance with the terms of this Agreement untrue or
incorrect in any material respect; |
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and
provided that Parent may not terminate this Agreement on the basis of the foregoing if
the event giving rise to the termination right shall have been caused by Parent’s
failure to perform any of its obligations under this Agreement or the breach of any
representation or warranty made by Parent in this Agreement. |
(2) If
this Agreement is terminated as provided in this section 4.1, this Agreement
shall forthwith become void and there shall be no liability on the part of
Parent or the Sellers and the Sellers shall be entitled to withdraw their
Shares deposited under the Offer and Parent may cause the Offeror to terminate
or withdraw the Offer, in each case, without any liability or further
obligation. Nothing contained in this section 4.1 shall:
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(a) |
relieve
any party from liability for the breach of any provision of this
Agreement prior to the termination hereof; or |
| |
(b) |
prejudice
the rights of a party as a result of breach by the other party of its
obligations under this Agreement (including any breach of the
representations and warranties contained in this Agreement) or impair
the right of any party to compel specific performance by any other
party of its obligations to consummate the transactions contemplated
hereby. |
This
Agreement may only be amended by written agreement of the parties.
SECTION 5 –
GENERAL
So
long as this Agreement is in effect, Parent and Sellers shall consult with each other
before issuing, and provide each other with a reasonable opportunity to review and comment
upon, any press release or other public announcement with respect to the Offer or the
Subsequent Acquisition Transaction (including a press release announcing the entering into
of this Agreement), and none of the Sellers or Parent shall issue, or permit their
respective affiliates or their Representatives to issue, any such press release or public
announcement prior to such consultation, except as such release or announcement may, in
the judgment of the releasing party, be required by the Laws of the United States or
Canada or any state or province thereof or the rules or regulations of the Toronto Stock
Exchange or the New York Stock Exchange, in which case the party required to make the
release or announcement shall allow the other party reasonable time to comment on such
release or announcement in advance of such issuance.
The
Sellers hereby:
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(a) |
confirm
that the entering into of this Agreement was a condition imposed by Parent
and the Offeror to proceeding with the Offer; and |
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(b) |
consent
to being treated, and confirm that they will support their treatment, as
part of the minority for purposes of the minority approval requirement
under Rule 61-501 of the Ontario Securities Commission (or equivalent
provisions in other jurisdictions) in any regulatory or court proceedings. |
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Each
of the parties represents and warrants to the other that no broker, finder or investment
banker is entitled to any brokerage, finder’s or other fee or commission or to the
reimbursement of any of its expenses or any similar arrangements in connection with the
Offer or any other transaction contemplated under this Agreement.
This
Agreement is not assignable by any party.
This Agreement
is binding upon and will enure to the benefit of and be enforceable by the parties and
their respective successors.
Parent
will pay its own expenses incurred in connection with this Agreement and the completion of
the transactions contemplated under this Agreement. Parent acknowledges that Company may
pay Sellers’ expenses incurred in connection with this Agreement and the completion
of the transactions contemplated under this Agreement.
Time
is of the essence of this Agreement in each and every matter or thing herein provided.
Any
written notice or other communications required or permitted to be given hereunder will be
sufficiently given if delivered in person or if sent by fax, email or other electronic
means (provided such transmission is recorded as being transmitted successfully and sender
shall bear the burden of proof of delivery):
| |
(a) |
in
the case of Parent as follows: |
| |
X.
X. Xxxxx Corporation
00000 Xxxx Xxxx Xxxxx
Xxxxxxxxx,
XX
00000-0000 |
| |
Fax
No.: (000) 000-0000
Attention: W. Xxxxx Xxxxxxx
Email: xxxxxxxx@xxxxxxx.xxx |
-14-
| |
with
a copy (which shall not constitute notice to Parent) to: |
| |
Xxxxx
& Xxxxxxx LLP
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX
00000-0000 |
| |
Fax
No.: (000) 000-0000
Attention: Xxxxxxx X. Quick
Email: xxxxxxx@xxxxx.xxx |
| |
McMillan
Xxxxx Xxxxxxxxxx XXX
XXX Xxxxx, Xxx Xxxxxxxxxx Tower
000 Xxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX
X0X 0X0 |
| |
Fax
No.: (000) 000-0000
Attention: Xxxx Xxxxxxx
Email: xxxx.xxxxxxx@xxxxx.xxx |
| |
(b) |
in
the case of Sellers, as follows: |
| |
Valleydene
Corporation Limited
Suite 1903, 00 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX
X0X 0X0
Fax No.: (000)
000-0000
Attention: Xxxx Xxxxxxx
Email:
xxxxxxxx@xxx.xx |
| |
Xxxxxxxx
Group Capital Limited
Standard Life Centre
Suite
1770, 000 Xxxx Xxxxxx Xxxx
Xxxxxxx, XX
X0X 0X0 |
| |
Fax
No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx
Email: xxxxxxx@xxxxxx.xx.xx |
-15-
| |
with
a copy (which shall not constitute notice to Sellers) to: |
| |
Torys
LLP
Suite 3000
00 Xxxxxxxxxx Xxxxxx Xxxx
XX Xxxxxx
Xxxxxxx, XX
X0X 0X0 |
| |
Fax
No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
Email: xxxxxxxxx@xxxxx.xxx |
or at such other address as the party
to which such notice or other communication is to be given has last notified the other
party giving same in the manner provided by this section 5.8 and, if so given, the same
shall be deemed to have been received on the date of such delivery or sending thereof if
sent or delivered during normal business hours on a business day at the place of receipt
and, otherwise, on the next following business day (provided that if sent by fax
such transmission is recorded as being transmitted successfully).
This
Agreement will be governed by and construed in accordance with the laws of the Province of
Ontario and the federal laws of Canada applicable therein. The parties hereby irrevocably
attorn to the federal jurisdiction of the courts of the Province of Ontario in respect of
all matters arising under or in relation to this Agreement.
The
parties agree that the remedy at law for any breach of the provisions of this Agreement
will be inadequate and any aggrieved party, on any application to a court, will be
entitled to temporary and permanent injunctive relief, specific performance and any other
equitable relief against the party in breach of the provisions of this Agreement. The
specific remedies contemplated in this section 5.10 are in addition to and without
prejudice to any other remedy to which the party may be entitled under this Agreement, at
law or in equity.
Except
as may be expressly indicated otherwise, all sums of money referred to in this Agreement
are expressed and will be payable in Canadian dollars.
This
Agreement and the documents referred to herein constitute the entire obligation of the
parties with respect to the subject matter hereof and will supersede any prior expression
of intent or understandings with respect to the subject matter hereof and will supersede
any prior expression of intent or understandings with respect to the transactions
contemplated hereby.
-16-
Each
party will, from time to time, and at all times hereafter, at the request of the other
party hereto, but without further consideration, do all such further acts and execute and
deliver all such further documents and instruments as will be reasonably required in order
to fully perform and carry out the terms and intent hereof.
| 5.14 |
Defence
of Proceedings |
If
any legal proceedings are brought against any of the parties challenging this Agreement or
the Offer or any other transaction contemplated by this Agreement:
| |
(a) |
each
of the parties shall, and shall cause its Representatives to, at
Parent’s sole cost and expense, co-operate with the other
parties in the defence of such proceeding, including, in the case of
the Sellers, providing evidence and testimony with respect to the
background to and the nature of the negotiations between Parent and
Sellers preceding the execution of this Agreement and the reasons for
the Sellers’ pursuit of the transaction evidenced hereby and the
entering into of this Agreement; and |
| |
(b) |
none
of the parties shall settle or compromise (or permit any of its
Representatives to compromise or settle) such proceedings without the
prior written consent of the other parties, which consent shall not
be unreasonably withheld. |
| 5.15 |
Waiver
and Modifications |
Any
party may waive or consent to the modification of any of the obligations herein contained
for its benefit. Any such waiver or consent to the modification of any of the provisions
of this Agreement, to be effective, must be in writing and executed by the party or
parties granting such waiver or consent.
The
following are the schedules to this Agreement:
| |
Schedule
A - Definitions
Schedule B - Share Ownership |
Any provision
of this Agreement that is prohibited or unenforceable in any jurisdiction will not
invalidate the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction will not invalidate or render unenforceable such provision in any
other jurisdiction, and any such provision, to the extent invalid or unenforceable, will
be replaced by a valid and enforceable provision that comes closest to the intention of
the parties underlying such invalid or unenforceable provision.
-17-
| 5.18 |
No
Third Party Beneficiaries |
Except
as specifically set forth or referred to herein, nothing herein is intended or shall be
construed to confer upon any person other than the parties hereto and the Offeror and
their successors and permitted assigns any rights or remedies under or by reason of this
Agreement.
In
this Agreement:
| |
(a) |
words
denoting the singular include the plural and vice versa, and words
denoting any gender include all genders; |
| |
(b) |
the
word “including” means “including without limitation”; |
| |
(c) |
any
reference to any statute will mean the statute in force, as amended from
time to time, and any regulation in force thereunder, unless otherwise
expressly provided; |
| |
(d) |
the
use of headings is for convenience of reference only and will not affect the
construction of this Agreement; |
| |
(e) |
when
calculating the period of time within which or following which any act is
to be done or step taken, the date which is the reference day in
calculating such period will be excluded; and |
| |
(f) |
any
tender of documents or money under this Agreement may be made upon the
parties or their respective counsel. |
This
Agreement may be signed in any number of counterparts (by facsimile or otherwise), each of
which will be deemed to be original and all of which, when taken together, will be deemed
to constitute one and the same instrument. It will not be necessary in making proof of
this Agreement to produce more than one counterpart.
-18-
The parties have executed this
Agreement.
|
|
|
X. X. XXXXX CORPORATION |
|
By: /s/ Xxxx X. Xxxxx |
|
Name: Xxxx X. Xxxxx |
|
Title: Chairman & Chief Executive Officer |
|
VALLEYDENE CORPORATION LIMITED |
|
By: /s/ X.X. Xxxxxxx |
|
Name: X.X. Xxxxxxx |
|
Title: President |
|
XXXXXXXX GROUP CAPITAL LIMITED |
|
By: /s/ Xxxxxx X. Xxxxxx |
|
Name: Xxxxxx X. Xxxxxx |
|
Title: President & CEO |
|
By: /s/ Xxxxxx X. Xxxxxxx |
|
Name: Xxxxxx X. Xxxxxxx |
|
Title: VP Finance & Treasurer |
Schedule A –
Definitions
Acquisition
Proposal has the meaning given to such term in the Pre-Acquisition
Agreement.
affiliate means,
with respect to a specified person, any person that controls, is controlled by or is under
common control with such specified person. For this purpose, the term
“control” (including the terms “controlled
by” and “under common control with”)
shall mean the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a person, whether through the ownership of
securities, by contract or by any other means. However, neither Company nor its
subsidiaries shall be considered affiliates of either Seller.
Agreement means
this Deposit Agreement dated February 3, 2006 between Parent and the Sellers, including
the recitals and schedules hereto, as amended, supplemented or restated from time to time.
associate has the
meaning given to such term in the Securities Act (Ontario).
beneficial
ownership has the meaning given to such term in the Securities Act
(Ontario).
business day means a
day (other than a Saturday or a Sunday) on which banks are open for business in Toronto,
Ontario.
CBCA means the
Canada Business Corporations Act.
Company means GSW Inc.
Depositary means the
depositary for the Offer, who will be Company’s registrar and transfer agent.
Encumbrance means any
security interest, pledge, mortgage, option, lien (including environmental or tax liens),
assessment, lease, charge, encumbrance, adverse claim, preferential arrangement,
condition, equitable interest, right of first refusal or restriction of any kind, ,
including any (a) shareholders’ agreement, voting trust, proxy, power of attorney or
similar instrument affecting the shares of Company or any subsidiary and (b) restriction
affecting the ability of any holder of the shares of Company or any Subsidiary to exercise
all ownership rights thereto.
Expiry Time
means the expiry time of the Offer as contemplated in the Pre-Acquisition Agreement.
Governmental
Authority means any domestic or foreign government, including any federal,
provincial, state, territorial or municipal government, and any government agency,
tribunal, commission or other authority exercising or purporting to exercise executive,
legislative, judicial, regulatory or administrative functions of, or pertaining to,
government.
Holdco, Holdco
Election and Holdco Shareholders have the meanings
given to such terms in the Pre-Acquisition Agreement.
A-1
Laws, in respect
of any person, property, transaction or event, means all present and future laws,
statutes, regulations, treaties, judgments and decrees applicable to that person,
property, transaction or event and, whether or not having the force of law, all applicable
requirements, requests, official directives, rules, consents, approvals, authorizations,
guidelines, orders and policies of any Governmental Authority having or purporting to have
authority over that person, property, transaction or event.
Offer means an offer to
all of the Shareholders to acquire all of the outstanding Shares upon the terms and
subject to the conditions contained in the Pre-Acquisition Agreement.
Offer Documents has the
meaning given to such term in the Pre-Acquisition Agreement.
Offeror means a
direct or indirect wholly-owned subsidiary of Parent to be incorporated under the CBCA.
Outside Mailing
Date has the meaning given to such term in the Pre-Acquisition Agreement.
Parent means X.
X. Xxxxx Corporation.
person means and
includes any individual, sole proprietorship, partnership, joint venture, unincorporated
association, unincorporated syndicate, unincorporated organization, trust, body corporate,
a trustee, executor, administrator or other legal representative and any Governmental
Authority or any agency or instrumentality thereof.
Pre-Acquisition Agreement
means the Pre-Acquisition agreement dated February 3, 2006 between Parent and Company
with respect to the Offer.
Representatives
as to any person means the person’s affiliates and the directors, officers,
employees, consultants, representatives and other agents, including investment bankers,
attorneys and accountants, of the person and its affiliates.
Sellers means
Valleydene Corporation Limited and Xxxxxxxx Group Capital Limited and
Seller means either of them.
Shareholders means
holders of Shares.
Shares means Class A
common shares and Class B subordinate voting shares in the capital of Company, including
all Class A common shares and Class B subordinate voting shares acquired in any capacity
by means of purchase, dividend, distribution, exercise of warrants, options or other
rights to acquire any such common shares or subordinate voting shares or in any other way.
Subsequent Acquisition
Transaction means an amalgamation, statutory arrangement or other
transaction by which the Offeror may acquire Shares not deposited pursuant to the Offer in
accordance with applicable Law.
subsidiary has the
meaning given to such term in the Securities Act (Ontario).
A-2
Schedule B –
Share Ownership
|
|
Class A Common
Shares
|
Class B Subordinate
Voting Shares
|
| Valleydene Corporation Limited |
494,546 |
950,690 |
|
| Xxxxxxxx Group Capital Limited |
13,986 |
1,072,466 |
|
B-1
