VOTING TRUST AND LIMITED SHAREHOLDERS AGREEMENT ENTERED INTO IN XXX XXXX XXX
XXXXXXXX XX XXXXXXXX, XX THE 18TH DAY OF MAY, 2000
BY AND AMONG: TECHNO EXPRES S.A., a corporation
duly constituted in accordance with
the laws of France, having its head
office and principal place of
business at 00 xxx xx Xxxxxx, 00000
Xxxxxxxxxxx, Xxxxxx,
(hereinafter referred to as "Techno
Expres")
PARTY OF THE FIRST PART
AND CAPITAL COMMUNICATIONS CDPQ INC., a
body politic duly incorporated
according to the Companies Act
(Quebec), having its head office
and principal place of business in
the City of Montreal, Province of
Quebec,
(hereinafter referred to as "CDPQ")
PARTY OF THE SECOND PART
AND: SOFINOV SOCIETE FINANCIERE
D'INNOVATION INC., a body politic
and corporate, duly incorporated
according to the Companies Act
(Quebec), having its head office
and principal place of business in
the City of Montreal, Province of
Quebec,
(hereinafter referred to as
"Sofinov")
PARTY OF THE THIRD PART
AND SOCIETE INNOVATECH DU GRAND
MONTREAL, a body politic duly
constituted according to An Act
respecting Societe Innovatech du
Grand Montreal, R.S.Q., ch. S-1,
having its head office and
principal place of business in the
City of Montreal, Province of
Quebec,
(hereinafter referred to as
"Innovatech")
PARTY OF THE FOURTH PART
AND: TOUCHTUNES MUSIC CORPORATION, a
body politic and corporate, duly
incorporated according to the laws
of the State of Nevada, having its
head office and principal place of
business in the City of Las Vegas,
Nevada,
(hereinafter referred to as the
"Corporation")
PARTY OF THE FIFTH PART
1. PREAMBLE
1.1 WHEREAS each of the Shareholders holds the following number and class of
Shares as of the date hereof:
Shareholder Number and Class
Techno Expres 10,001,920 Common Shares
Sofinov
9,235,774 Series A Preferred Shares
2,222,222 Series B Preferred Shares
Innovatech 3 608 186 Series A Preferred Shares
CDPQ 6 666 667 Series B Preferred Shares
1.2 WHEREAS the parties hereto wish to determine their respective rights,
duties and obligations in and to the Corporation and towards one another.
NOW, THEREFORE, THIS AGREEMENT WITNESSETH:
2. INTERPRETATION
2.1 Definitions. In this Agreement:
2.1.1 "Accepting Investor" has the meaning ascribed thereto at subsection 5.3;
2.1.2 "Accepting Investors" has the meaning ascribed thereto at subsection 5.4;
2.1.3 "Accepting Offeree Shareholders" has the meaning ascribed thereto in
subsection 7.3.2;
2.1.4 "Additional Offer" has the meaning ascribed thereto in subsection 7.3.2;
2.1.5 "Additional Shares" has the meaning ascribed thereto at subsection 5.1;
2.1.6 "Affiliate" or "Affiliated" has the meaning ascribed thereto in the
Canada Business Corporations Act;
2.1.7 "Agreement" means this agreement and all instruments supplemental hereto
or in amendment or confirmation hereof; "herein", "hereof", "hereto",
"hereunder" and similar expressions mean and refer to this Agreement and
not to any particular Section, subsection or other subdivision;
"Section", "subsection" or other subdivision of this Agreement means and
refers to the specified Section, subsection or other subdivision of this
Agreement;
2.1.8 "Arm's Length" shall mean, in respect of any Person, a relationship
between such Person and any particular Person which would be an arm's
length relationship between such Person and the particular Person within
the meaning of the Income Tax Act (Canada);
2.1.9 "Auditors" shall mean such firm of chartered accountants as may be agreed
upon from time to time by the Shareholders to act as auditors for the
Corporation;
2.1.10 "Board" means the Board of Directors of the Corporation and/or any of its
subsidiaries;
2.1.11 "Business Day" means any day, other than a Saturday or Sunday or a day on
which the principal commercial banks in the State of New York are not
open for business during normal banking hours;
2.1.12 "Closing" means the sale of the Offered Shares by the Offering
Shareholder pursuant to subsection 7.4;
2.1.13 "Closing Date" means, pursuant to subsections 7.1 and 7.2, the date which
is sixty (60) days after the expiry of the last offer period described
therein in which the Purchaser agrees to purchase the Offered Shares,
provided, however, that if on the Closing Date all Governmental Body and
third party approvals, consents, notifications and assurances (including,
without limitation, approvals under the Investment Canada Act) necessary
to permit the consummation of the transactions contemplated by the
Closing have been applied for but not yet received by the Purchaser, then
the Closing Date shall be postponed to the thirtieth (30th) day after the
receipt by the Purchaser of the last of the aforesaid approvals,
consents, notifications and assurances; notwithstanding the foregoing,
the Closing shall not be extended more than one hundred and eighty (180)
days after the date which was supposed to have been the original Closing
Date herein;
2.1.14 "Common Shares" means the shares of Class A voting common stock of the
Corporation, as such shares are described in the Second Amended and
Restated Articles of Incorporation of the Corporation dated May 3, 2000;
2.1.15 "Declining Investor" has the meaning ascribed thereto at subsection 5.4;
2.1.16 "Declining Investors" has the meaning ascribed thereto at subsection 5.3;
2.1.17 "Declining Investor's Shares" has the meaning ascribed thereto at
subsection 5.4;
2.1.18 "Declining Investors' Shares" has the meaning ascribed thereto at
subsection 5.3;
2.1.19 "Final Accepting Investor" has the meaning ascribed thereto at
subsection 5.4;
2.1.20 "Final Declining Investor" has the meaning ascribed thereto at subsection
5.4;
2.1.21 "Final Declining Investor's Shares" has the meaning ascribed thereto at
subsection 5.4;
2.1.22 "First Offer" has the meaning ascribed thereto at subsection 7.3.1;
2.1.23 "Generally Accepted Accounting Principles" means generally accepted
accounting principles in the United States of America applicable as at
the date on which any calculation and determination is required to be
made in accordance with generally accepted accounting principles, applied
on a consistent basis;
2.1.24 "Governmental Body" means (i) any domestic or foreign national, federal,
provincial, state, municipal or other government or body, (ii) any
multinational, multilateral or international body, (iii) any subdivision,
agent, commission, board, instrumentality or authority of any of the
foregoing governments or bodies, (iv) any quasi-governmental or private
body exercising any regulatory, expropriation or taxing authority under
or for the account of any of the foregoing governments or bodies, or (v)
any domestic, foreign, international, multilateral or multinational
judicial, quasi-judicial, arbitration or administrative court, tribunal,
commission, board or panel;
2.1.25 "I Offer" has the meaning ascribed thereto at subsection 7.1;
2.1.26 "Investors" means CDPQ, Sofinov and Innovatech, and all Transferees of
Shares of CDPQ, Sofinov or Innovatech and all Transferees of Shares of
such Transferees, collectively, and "Investor" means any one of them;
2.1.27 "Offer" means for purposes of (i) subsection 7.1, each of the offers made
by an Investor; and (ii) subsection 7.2, each of the offers made by
Techno Expres;
2.1.28 "Offered Shares" has the meaning ascribed thereto at subsections 7.1.1 or
subsection 7.2, as the case may be;
2.1.29 "Offeree Shareholders" has the meaning ascribed thereto at subsection
7.3;
2.1.30 "Offering Investor" has the meaning ascribed thereto at subsection 7.1;
2.1.31 "Offering Shareholder" has the meaning ascribed thereto at subsection
7.3;
2.1.32 "Other Investors" has the meaning ascribed thereto at subsection 7.1.1;
2.1.33 "Other Shareholders" has the meaning ascribed thereto at subsections
7.1.4 or 7.2.1, as the case may be;
2.1.34 "Person" means an individual, corporation, company, cooperative,
partnership, trust, unincorporated association, entity with judicial
personality, Governmental Body; and pronouns when they refer to a Person
have a similarly extended meaning;
2.1.35 "Preferred Shares" means Series A Preferred Shares and Series B Preferred
Shares, collectively;
2.1.36 "Prior Offers" has the meaning ascribed thereto at subsection 7.3.2;
2.1.37 "Proportion" means a fraction, the numerator of which shall be the number
of Common Shares owned by the particular Shareholder to whom reference is
made and the denominator of which shall be the total of the issued and
outstanding Common Shares, it being understood that for the purposes of
calculating the number of Common Shares owned by the particular
Shareholder and/or the number of issued and outstanding Common Shares,
all Preferred Shares held by the Investors shall be deemed to have been
converted into Common Shares and each Investor shall be deemed to hold
that number of Common Shares as would be issuable to such Investor upon
the conversion into Common Shares of all Preferred Shares held by such
Investor;
2.1.38 "Proportionate Share" means, for purposes of subsection 7.3, the number
of Shares determined by multiplying the number of Offered Shares by a
fraction, the numerator of which is the number of Common Shares held by a
particular Offeree Shareholder or Accepting Offeree Shareholder, as the
case may be, entitled to accept an offer and the denominator of which is
the total number of Common Shares held by all Offeree Shareholders or all
Accepting Offeree Shareholders, as the case may be, entitled to accept
the same offer, it being understood that for the purposes hereof, each
Investor shall be deemed to hold that number of Common Shares as would be
issuable to such Investor upon the conversion into Common Shares of all
Preferred Shares held by such Investor;
2.1.39 "Public Offering" means any offering by the Corporation of its Shares for
distribution to the public;
2.1.40 "Purchaser" has the meaning ascribed thereto at subsection 7.4.3.1;
2.1.41 "Receiving Party" has the meaning ascribed thereto at subsection 6.3.3.
A Receiving Party shall not be considered to be a Transferee;
2.1.42 "Related" means related as that term is used in the Income Tax Act
(Canada);
2.1.43 "Remaining Offered Shares" has the meaning ascribed thereto at subsection
7.3.2;
2.1.44 "Series A Preferred Shares" means the shares of Series A Preferred Stock
as described in the Second Amended and Restated Articles of Incorporation
of the Corporation dated May 3, 2000;
2.1.45 "Series B Preferred Shares" means the shares of Series B Preferred Stock
as described in the Second Amended and Restated Articles of Incorporation
of the Corporation dated May 3, 2000;
2.1.46 "Share(s)" means any share(s) of any class, series or category in the
capital stock of the Corporation;
2.1.47 "Shareholder" means any of the Shareholders;
2.1.48 "Shareholders" initially means Techno Expres, CDPQ, Sofinov and
Innovatech, and the definition shall be deemed to be modified from time
to time to (i) delete Persons who cease to hold Shares in accordance with
the terms of this Agreement, and (ii) add all Persons who, from time to
time, become holders of Shares and who undertake in writing to be bound
by the provisions of this Agreement;
2.1.49 "TE Offer" has the meaning ascribed thereto at subsection 7.2;
2.1.50 "TP Offer" has the meaning ascribed thereto at subsection 7.1 or 7.2, as
the case may be;
2.1.51 "TP Offeror" has the meaning ascribed thereto at subsection 7.1 or 7.2,
as the case may be. A TP Offeror shall not be considered to be a
Transferee;
2.1.52 "Techno Offer" has the meaning ascribed thereto at subsection 7.2;
2.1.53 "Third Party" has the meaning ascribed thereto at subsection 7.1.4 or
7.2.3, as the case may be. A Third Party shall not be considered to be a
Transferee;
2.1.54 "Transferee" has the meaning ascribed thereto at subsection 6.2;
2.1.55 "TouchTunes" means TouchTunes Digital Jukebox Inc.;
2.1.56 "Unaccepted Additional Shares" has the meaning ascribed thereto at
subsection 5.4;
2.1.57 "Unaccepted Offered Shares" has the meaning ascribed thereto at
subsection 7.1.2;
2.1.58 "Voting Shares" means Shares to which are attached votes that may be cast
to elect directors of the Corporation, including Common Shares.
2.2 Gender. Any reference in this Agreement to any gender shall include both
genders and the neutral, and words used herein importing the singular number
only shall include the plural and vice versa.
2.3 Headings. The division of this Agreement into Sections, subsections and
other subdivisions, and the insertion of headings are for convenience of
reference only and shall not affect or be utilized in the construction or
interpretation of this Agreement.
2.4 Severability. Any Section, subsection or other subdivision of this
Agreement or any other provision of this Agreement which is, or becomes,
illegal, invalid or unenforceable shall be severed therefrom and shall be
ineffective to the extent of such illegality, invalidity or unenforceability
and shall not affect or impair the remaining provisions hereof, which
provisions shall be severed from an illegal or unenforceable Section,
subsection or other subdivision of this Agreement or any other provisions of
this Agreement.
2.5 Entire Agreement. This Agreement together with any other instruments to
be delivered pursuant hereto, constitute the entire agreement among the parties
pertaining to the subject matter hereof and supersede all prior agreements,
understandings, negotiations, and discussions, whether oral or written, among
any or all of the parties.
2.6 Amendments. No amendment of this Agreement shall be binding unless
otherwise expressly provided in an instrument duly executed by the Shareholders
and the Corporation.
2.7 Waiver. Except as otherwise provided in this Agreement, no waiver of any
of the provisions of this Agreement shall be deemed to constitute a waiver of
any other provisions (whether or not similar), nor shall such waiver constitute
a continuing waiver unless otherwise expressly provided in an instrument duly
executed by the parties.
2.8 Delays. When calculating the period of time within which or following
which any act is to be done or step taken pursuant to this Agreement, the day
which is the reference day in calculating such period shall be excluded. If the
day on which such delay expires is not a Business Day, then the delay shall be
extended to the next succeeding Business Day.
2.9 Conflict. This Agreement shall override the Schedules annexed hereto to
the extent of any inconsistency. If any conflict should appear between this
Agreement and the Articles, by-laws or resolutions of the Corporation, then the
provisions of this Agreement shall prevail.
2.10 Preamble. The preamble hereof shall form an integral part of this
Agreement.
2.11 Governing Law. This Agreement shall be governed in all respects by the
laws of the State of New York as they are applied to agreements entered into in
New York between New York residents and performed entirely within New York.
3. COMMISSIONS, FEES, ETC.
3.1 Commissions. Except as provided in subsection 3.2 hereof, no fee,
rebate, commission or gain of whatsoever nature shall be earned by any of the
Shareholders as a result of that Shareholder obtaining financing for or on
behalf of the Corporation.
3.2 Commitment Fee. The parties hereto acknowledge and confirm that,
concurrently with the execution hereof, the Corporation shall pay to CDPQ a
commitment fee in the amount of CDN$175 000.
4. DIRECTORS
4.1 Board and Quorum. The Shareholders agree that (i) each time the
shareholders of the Corporation meet, or act by written consent in lieu of
meeting, for the purposes of electing the directors of the Corporation or any
of its subsidiaries, they shall vote in such a manner so as to ensure that at
least seven (7) directors be elected to each Board, (a) as long as the
Investors collectively own 15 % of the issued and outstanding Common Shares
(assuming the conversion into Common Shares of all Preferred Shares held by the
Investors), three (3) of which shall be nominees of the Investors, (b) as long
as Techno Expres owns at least 20 % of the issued and outstanding Common Shares
(assuming the conversion into Common Shares of all Preferred Shares held by the
Investors), two (2) of which shall be nominees of Techno Expres and (c) the
other two (2), which shall not be employees, Persons Related or Affiliated to
shareholders, directors or officers of the Corporation or of the Investors,
shall be nominated by such five (5) nominees, and (ii) each time the
shareholders of the Corporation meet or act for the purposes of electing or
replacing any of such seven (7) directors of the Corporation or any of its
subsidiaries, they shall vote in such a manner so as to ensure that the removal
and/or election of such new nominee director(s) as is(are) designated by the
Person or Persons whose nominee died, resigned or was replaced.
So long as an Investor owns at least 5 % of the issued and outstanding
Common Shares (assuming the conversion into Common Shares of all Preferred
Shares held by the Investors), such Investor shall be entitled to appoint to a
Board at least one (1) nominee of the total number of directors to be appointed
collectively by the Investors to a Board. In the event that an Investor owns
less than 5 % of the Common Shares issued to the Shareholders (assuming the
conversion into Common Shares of all Preferred Shares held by the Investors),
the number of nominees that each Investor is entitled to appoint to a Board
shall be equal to the proportion that the number of Common Shares held by such
Investor is to the aggregate of all the Common Shares held by all the Investors
(assuming the conversion into Common Shares of all Preferred Shares held by the
Investors) multiplied by the total number of directors to be appointed by the
Investors collectively to a Board.
Notwithstanding the foregoing, in the event that the Investors
collectively own less than 15 % of the issued and outstanding Common Shares
(assuming the conversion into Common Shares of all Preferred Shares held by the
Investors) or that Techno Expres owns less than 20 % of the issued and
outstanding Common Shares (assuming the conversion into Common Shares of all
Preferred Shares held by the Investors), each Shareholder shall be entitled to
appoint to a Board the number of nominees as is equal to its respective
Proportion multiplied by the total number of directors to be appointed by the
shareholders of the Corporation or any of its subsidiaries (rounded to the
nearest whole number) provided however that so long as a Shareholder owns at
least 5 % of the issued and outstanding Common Shares (assuming the conversion
into Common Shares of all Preferred Shares held by the Investors), each such
Shareholder shall be entitled to appoint to a Board at least one (1) nominee.
Furthermore, the Shareholders hereby agree that as long as Techno Expres
has the right to appoint at least one nominee to a Board, one of such nominees
shall be Xxxx Xxxxxxxxxxx.
In all circumstances, a quorum of a meeting of directors shall be a
majority of the elected directors provided that a majority of directors
appointed by the Investors form part of such quorum and all decisions having
the object or purposes set forth in subsections 4.6 and 4.7 shall be submitted
to the Shareholders pursuant to such subsections.
4.2 Designation of nominees. The Investors shall advise Techno Expres and
the Corporation in writing of the names of the individuals the Investors have
designated as their nominees to each Board as soon as practicable before each
meeting of Shareholders. In addition, the Corporation shall reimburse each
nominee to a Board that is an employee of an Investor his reasonable out-of-
pocket expenses (including travelling costs) incurred in connection with his
attendance at each meeting of a Board.
4.3 Non-Transferable. The parties hereto hereby agree that the right granted
to the Investors to designate nominees to a Board pursuant to this Section 4 is
non-transferable.
4.4 Voting by nominees. Each Shareholder shall at all times carry out and
use its best efforts to cause the Corporation and its nominees on a Board to
carry out the provisions of this Agreement, subject to the fiduciary
obligations of the directors. Each Shareholder shall duly and punctually do,
or cause to be done, all such things, including, without limitation, voting or
causing to be voted all the Shares held by the Shareholder as shall be
necessary or desirable to give effect to this Agreement.
4.5 Directors and Officers Insurance. The Corporation shall at all times
maintain in full force insurance covering directors and officers liability for
a minimum amount of US$5,000,000.
4.6 Matters Requiring Approval of two Investors. Until the completion of the
Corporation's next Public Offering or for so long as the Investors collectively
own at least 15 % of the issued and outstanding Common Shares (assuming the
conversion into Common Shares of all Preferred Shares held by the Investors),
the Shareholders agree to cause the Corporation, by taking all necessary
corporate action including, without limitation, adopting a new by-law to such
effect, to submit to the Investors for their prior written approval, which
shall be deemed to have been given if two of the Investors owning at least 5 %
each of the issued and outstanding Common Shares (assuming the conversion into
Common Shares of all Preferred Shares held by the Investors) grant such
approval, any by-law, resolution or act of the Shareholders, the shareholders
of subsidiaries of the Corporation, a Board or officers of the Corporation or
its subsidiaries (the Corporation and/or its subsidiaries are referred to, in
this subsection 4.6, as the "Corporations" or a "Corporation") having any of
the following objects or purposes:
4.6.1 the approval, which shall not be unreasonably withheld, of the annual
operating budget and the annual capital budget of the Corporations;
4.6.2 the hiring and firing of any of any senior officers, senior executives or
senior employees of a Corporation;
4.6.3 the engaging of any underwriters in connection with a Corporation's next
Public Offering;
4.6.4 the entering into of any underwriting or similar agreements in connection
with (i) any private placement pursuant to which a Corporation raises
funds in excess of $1,000,000 or (ii) a Corporation's next Public
Offering;
4.6.5 a decrease in the number of directors of a Corporation, except as
provided for in this Agreement;
4.6.6 the filing of Articles of Amendment or Articles of Amalgamation by a
Corporation;
4.6.7 changes in the remuneration paid to the shareholders, directors or
officers of a Corporation or to Persons Related or Affiliated to the
shareholders, directors or officers of a Corporation;
4.6.8 payment of bonuses or granting of options or other benefits to
shareholders, directors or officers of a Corporation or to Persons
Related or Affiliated to the shareholders, directors or officers of a
Corporation;
4.6.9 granting or repayment of any loan to shareholders, directors or officers
of a Corporation or to Persons Related or Affiliated to shareholders,
directors or officers of a Corporation or to any other Persons;
4.6.10 guaranteeing any obligations of shareholders, directors or officers of a
Corporation or of Persons Related or Affiliated to shareholders,
directors or officers of a Corporation;
4.6.11 the purchase or sale of any immovable property on behalf of a
Corporation;
4.6.12 an assignment under the Bankruptcy and Insolvency Act or a proposal made
thereunder, or recourse to any other measure designed for the protection
of insolvent debtors pursuant to any other legislation in connection with
insolvency;
4.6.13 the judicial or voluntary winding-up of a Corporation or the liquidation
of the business or assets of a Corporation;
4.6.14 the waiver by a Corporation of any of its rights or payments due to it
pursuant to any contract;
4.6.15 the entering into of any loan agreement on behalf of a Corporation, or
the granting of any security by a Corporation on any of its movable or
immovable property for an aggregate amount in excess of an amount equal
to the value of ten percent (10%) of its total assets, except for loan
agreements or security interests in respect of borrowings of money from
its bankers or other reputable commercial lenders in respect of the
financing of its individual Juke-Boxes and other equipment in the manner
set forth in its Business Plan as adopted by a Board from time to time;
4.6.16 the sale of part of the assets of a Corporation for an aggregate annual
amount in excess of an amount equal to the value of ten percent (10%) of
its total assets;
4.6.17 the adoption for or on behalf of a Corporation of any decision or
contract not in the ordinary course of such Corporation's business or any
contract with (i) any shareholder, director or officer of a Corporation
or any Person Related or Affiliated to such shareholder, director or
officer of a Corporation or (ii) any Person who is not dealing at Arm's
Length with a Corporation;
4.6.18 the conclusion of any partnership or joint venture agreement or the
creation of a subsidiary or acquisition of another business for
activities not in the ordinary course of a Corporation's business;
4.6.19 the amendment, repeal or abrogation of any by-law of a Corporation;
4.6.20 the change in the powers of the directors in general or any one of them
in particular;
4.6.21 any decision concerning any change regarding the accounting policies of a
Corporation;
4.6.22 the removal or nomination of the Auditors;
4.6.23 any decision concerning any significant change in the nature of a
Corporation's business; and
4.6.24 the institution or the settlement by a Corporation of any action or legal
proceeding.
4.7 Matters Requiring Approval of all Investors. Until the completion of the
Corporation's next Public Offering or for so long as the Investors collectively
own at least 15% of the issued and outstanding Common Shares (assuming the
conversion into Common Shares of all Preferred Shares held by the Investors),
the Shareholders agree to cause the Corporation, by taking all necessary
corporate action including, without limitation, adopting a new by-law to such
effect, to submit to the Investors for their prior written approval, which
shall be deemed to have been given if all of the Investors owning at least 5 %
each of the issued and outstanding Common Shares (assuming the conversion into
Common Shares of all Preferred Shares held by the Investors) grant such
approval, any by-law, resolution or act of the Shareholders, the shareholders
of subsidiaries of the Corporation, a Board or officers of the Corporation or
its subsidiaries (the Corporation and/or its subsidiaries are referred to, in
this subsection 4.7, as the "Corporations" or a "Corporation") having any of
the following objects or purposes:
4.7.1 any change in or alteration to the share capital of a Corporation;
4.7.2 the sale, issue or allotment of shares from the treasury of a
Corporation, or the granting of options allowing for the subscription
thereof, other than in conformity with the provisions of this Agreement;
4.7.3 the sale of the whole or a substantial part of the assets of a
Corporation or the granting of an option for same or the merger or
consolidation of a Corporation with or into another entity; and
4.7.4 the declaration of dividends by a Corporation or the redemption, purchase
or repurchase by a Corporation of its share capital, other than in
conformity with the Second Amended and Restated Articles of Incorporation
of a Corporation.
5. PRE-EMPTIVE RIGHT
5.1 Issuance of Common Shares. Should the Board of the Corporation decide
that the Corporation requires additional funds and that such funds are to be
raised by issuing Common Shares from treasury in accordance with this Section
5. Each Shareholder shall have pre-emptive rights with respect to the issue of
such additional Common Shares (the "Additional Shares"), such that the
Corporation shall not issue any Additional Shares without offering to each
Shareholder the right to subscribe for its Proportion of the Additional Shares
to be issued by the Corporation.
The pre-emptive rights referred to in this Section 5 shall not, however,
apply to (i) Shares and/or options, warrants or other Share purchase rights,
and the Shares issued pursuant to such options, warrants or other rights (as
adjusted for any stock dividends, combinations, splits, recapitalization and
the like) issued or to be issued to employees, officers, or directors of, or
consultants or advisors to the Corporation or any subsidiary pursuant to stock
purchase or stock option plans or other arrangements that have been or are
approved by the Board of the Corporation, (ii) Common Shares issued pursuant to
the conversion of Preferred Shares, or (iii) Common Shares issued as
consideration pursuant to any acquisition, merger, or similar agreement.
5.2 Notice to Shareholders. If the Corporation decides to issue any
Additional Shares, then the Corporation shall give detailed notice thereof to
each Shareholder, describing the Additional Shares, the price, and the general
terms upon which the Corporation proposes to issue the same. Each Investor may
assign to another Investor all or a portion of its right to subscribe for its
Proportion of the Additional Shares. Each Shareholder shall have thirty (30)
days from the receipt of such notice within which to notify the Corporation of
its intent to exercise its right under subsections 5.1 and 5.2 in connection
with such issue of Additional Shares. If a Shareholder fails to so notify the
Corporation within the prescribed delay, then such Shareholder shall be
conclusively deemed to have waived its pre-emptive right in connection with
such issue of Additional Shares. If all of the Shareholders waive or are
deemed to have waived their pre-emptive rights in connection with such issue of
Additional Shares, then the Corporation shall be free for a period of one
hundred and eighty (180) days thereafter to sell such Additional Shares to any
Person not Affiliated or Related to any Shareholder, on terms not more
favourable than those provided in the original offer of the Corporation to
issue Additional Shares, provided, however, that it is a condition precedent to
such sale that such Person has executed a counterpart of this Agreement in
accordance with subsection 12.6 and has agreed to be bound by the terms and
conditions of this Agreement and any other agreement executed by the parties in
connection with this Agreement.
5.3 Declining Investor. If only one of the Investors has agreed to exercise
its right under subsections 5.1 and 5.2 hereof to subscribe for its Proportion
of the Additional Shares (the "Accepting Investor") and the other Investors
have, or are deemed to have, declined to exercise such pre-emptive right (the
"Declining Investors"), the Corporation shall, within seven (7) days of the end
of the above thirty (30) day period, be required to offer by written notice to
the Accepting Investor all of the Additional Shares which could have been
subscribed for by the Declining Investors (the "Declining Investors' Shares")
before Techno Expres is offered pursuant to subsection 5.4 its pro rata share
of such Declining Investors' Shares. The Accepting Investor shall have seven
(7) days from the receipt of the notice mentioned above to notify the
Corporation of its intent to exercise its right to subscribe for the Declining
Investors' Shares, failing which the Accepting Investor shall be deemed to have
waived its pre-emptive right in connection with the issue of the Declining
Investors' Shares.
5.4 Declining Investor. If two of the Investors have agreed to exercise
their right under subsections 5.1 and 5.2 hereof to subscribe for their
respective Proportion of the Additional Shares (the "Accepting Investors") and
the other Investor has, or is deemed to have, declined to exercise such pre-
emptive right (the "Declining Investor"), the Corporation shall, within seven
(7) days of the end of the above thirty (30) days period, be required to offer
by written notice to the Accepting Investors all of the Additional Shares which
could have been subscribed for by the Declining Investor (the "Declining
Investor's Shares") before Techno Expres is offered pursuant to subsection 5.5
its pro rata share of such Declining Investor's Shares. The Accepting
Investors shall, unless otherwise agreed to between themselves, be entitled to
subscribe for that proportion of the Declining Investor's Shares which is equal
to the number of Common Shares held by each of the Accepting Investors in
relation to the total number of Common Shares held by both Accepting Investors
(assuming the conversion into Common Shares of all Preferred Shares held by the
Investors). Each of the Accepting Investors shall have seven (7) days from the
receipt of the notice mentioned above to notify the Corporation of its intent
to exercise its right to subscribe for the Declining Investor's Shares, failing
which it shall be deemed to have waived its pre-emptive right in connection
with the issue of its proportion of the Declining Investor's Shares. If only
one of the Accepting Investors (the "Final Accepting Investor") agrees to
subscribe for its proportion of the Declining Investor's Shares in accordance
with this subsection 5.4 and the other Accepting Investor (the "Final Declining
Investor") has declined or is deemed to have declined its right to subscribe
for its proportion of the Declining Investor's Shares (the "Final Declining
Investor's Shares") in accordance with this subsection 5.4, then the
Corporation shall, within seven (7) days of the end of the above seven (7) day
period, be required to offer by written notice to the Final Accepting Investor
all of the Final Declining Investor's Shares before Techno Expres is offered
pursuant to subsection 5.5 its pro rata share of such Final Declining
Investor's Shares. The Final Accepting Investor shall have seven (7) days from
the receipt of the notice mentioned above to notify the Corporation of its
intent to exercise its right to subscribe for the Final Declining Investor's
Shares, failing which the Final Accepting Investor shall be deemed to have
waived its preemptive right in connection with the issue of the Final Declining
Investor's Shares.
5.5 Shareholders Rights. If (i) one (1) or more Shareholders has or is
deemed to have declined its right to subscribe for its Proportion of the
Additional Shares, and, (a) in the event such Additional Shares were offered to
the Accepting Investor pursuant to subsection 5.3 and the Accepting Investor
has or is deemed to have declined to exercise its right to acquire all of the
Declining Investors' Shares, or (b) in the event such Additional Shares were
offered to the Accepting Investors pursuant to subsection 5.4 and the Accepting
Investors have or are deemed to have declined to exercise their rights to
acquire all of the Declining Investor's Shares or the Final Accepting Investor
has or is deemed to have declined to exercise its right to acquire all of the
Final Declining Investor's Shares, or (ii) if one (1) or more Shareholders has
or is deemed to have declined its right to subscribe for its Proportion of the
Additional Shares and subsections 5.3 and 5.4 are not applicable, then the
Corporation, within seven (7) days of the end of the above thirty (30) day
period provided for in subsection 5.2 or within seven (7) days of the end of
the last seven (7) day period provided for in subsection 5.3 or 5.4, as the
case may be, shall be required to offer by written notice to the Shareholder(s)
who agreed to exercise its or their right under subsections 5.1 and 5.2 in
connection with the initial issue of Additional Shares, to issue to such
Shareholder(s), in addition to any Additional Shares such Shareholder(s) agreed
to subscribe for, its or their pro rata share of the Additional Shares for
which any other Shareholder(s) has, or is deemed to have, waived its or their
pre-emptive right hereunder (collectively the "Unaccepted Additional Shares").
For the purposes of the preceding, each such Shareholder's pro rata share of
the Unaccepted Additional Shares shall, unless otherwise agreed to among
themselves, be equal to the proportion that the number of Common Shares held by
such Shareholder is to the aggregate of all the Common Shares held by all
Shareholders (assuming the conversion into Common Shares of all Preferred
Shares held by the Investors) who agreed to exercise their right under
subsections 5.1 and 5.2 and shall take into account the Additional Shares
subscribed for pursuant to subsections 5.2, 5.3 and 5.4.
5.6 Notice for Unaccepted Additional Shares. Each Shareholder who has been
offered to subscribe for Unaccepted Additional Shares by the Corporation
pursuant to subsection 5.5 shall have seven (7) days from the receipt of the
notice mentioned therein to notify the Corporation of its intent to exercise
its right to subscribe for its pro rata share of such Unaccepted Additional
Shares, failing which such Shareholder shall be deemed to have waived its pre-
emptive right in connection with the issue of such Unaccepted Additional
Shares.
5.7 Sale to any Person. The procedures set forth in subsections 5.5 and 5.6
shall be repeated, mutatis mutandis, with respect to any Unaccepted Additional
Shares which have not been subscribed for by a Shareholder until (i) all
Shareholders who have been made the most recent additional offer shall have or
be deemed to have declined it, or (ii) all Additional Shares (including
Unaccepted Additional Shares) which have been offered by the Corporation
pursuant to this Section 5 shall have been subscribed for by some or all of the
Shareholders. If upon completion of the above procedures some or all of the
Additional Shares which the Corporation intended to issue will not be purchased
by the Shareholders pursuant to the exercise of their pre-emptive rights, the
Corporation shall be free for a period of one hundred and eighty (180) days
thereafter to sell such Additional Shares, which will not be purchased by a
Shareholder, to any Person not Affiliated or Related to any Shareholder, on
terms not more favourable than those provided in the original offer of the
Corporation to issue Additional Shares, provided, however, that it shall be a
condition precedent to such sale that such Person has executed a counterpart of
this Agreement in accordance with subsection 12.6 and has agreed to be bound by
the terms and conditions of this Agreement. The purchase of Additional Shares
(including Unaccepted Additional Shares) by one (1) or more Shareholders, shall
be suspended until the day of the sale by the Corporation to such Person of the
Additional Shares (including Unaccepted Additional Shares) which have not been
subscribed for by a Shareholder. If the Corporation is unable to sell such
Additional Shares which have not been subscribed for by a Shareholder to a
Person as provided for in this subsection 5.7, then the Corporation shall
forthwith advise the Shareholders of same in writing and any Shareholder who
has agreed to subscribe for Additional Shares (including Unaccepted Additional
Shares) shall have the right to decide not to purchase such Additional Shares
by notifying the Corporation in writing thereof within seven (7) days of having
been advised by the Corporation that the Corporation was unable to sell such
Additional Shares to such Person.
5.8 Closing. Subject to subsection 5.7, the closing in connection with the
issuance of Additional Shares to any Shareholder or Person pursuant to
subsections 5.1 to 5.7 shall be held at the principal offices of the
Corporation at 10:00 a.m. on the date which is thirty (30) days after the
expiry of the applicable period under subsections 5.2 to 5.7, as the case may
be, or at such other place, at such other time or on such other date as the
parties thereto may agree. Payment for the Additional Shares being issued shall
be made in full at such closing. All payments shall be made by way of bank
draft or electronic fund transfer to the Corporation's account.
6. ALIENATION OF SHARES
6.1 Alienation prohibited. Unless otherwise provided for in accordance with
the terms hereof, no Shareholder shall transfer, assign, cede, pledge,
mortgage, hypothecate, charge or otherwise encumber, alienate or dispose of in
any manner whatsoever the whole or any part of its Shares without first
obtaining the written consent of all of the other Shareholders.
6.2 Transfers between the Investors. Notwithstanding any provision of this
Agreement, any of the Investors may transfer all or part of its Shares to
another Investor, to the subsidiaries of the Caisse de depot et placement du
Quebec or to any Governmental Body of or controlled by the Government of Quebec
or to the Caisse de depot et placement du Quebec or any Person controlled by
the Caisse de depot et placement du Quebec (any such Person being referred to
in this Agreement as the "Transferee"), at any time and from time to time
without being subject to the other terms and conditions in this Section 6 or in
Section 7; provided however, that (i) the Transferee must not be engaged in any
business, or any reasonable extension of such business, similar or identical to
or competitive with the business of the Corporation or any of its subsidiaries;
and (ii) none of the Investors shall be permitted to transfer its Shares to any
Governmental Body of or controlled by the Government of Quebec unless such
Governmental Body shall have first executed a counterpart of this Agreement in
accordance with subsection 12.6, and agreed that as long as it shall hold such
Shares it shall be bound by the terms and conditions of this Agreement, as if
such Governmental Body had been an original party to this Agreement as a
Shareholder and an Investor.
6.3 Unrestricted Transfers. Notwithstanding any provision of this Agreement:
6.3.1 in the event of (i) any transaction resulting in the reorganization of
the Corporation or (ii) any third party obtaining control of the
Corporation, the Investors shall be entitled, upon written notice to the
other Shareholders, to transfer to any party, without being subject to
the other terms and conditions in this Section 6 or in Section 7, all or
a portion of the total number of Common Shares held by them;
6.3.2 Techno Expres shall be entitled, in addition to the rights provided in
subsection 6.4 hereof, upon written notice to each of the Investors, to
transfer to any party which is not engaged in any business, or any
reasonable extension of such business, similar or identical to or
competitive with the business of the Corporation, from time to time at
any time on or prior to March 31, 2003, without being subject to the
other terms and conditions in this Section 6 or in Section 7, up to a
total of 100,000 Common Shares, provided that any such transfer is not by
way of solicitation or public offering, but by way of private placement
only in conformity with (i) all applicable securities laws and (ii) all
requirements imposed by any agent or underwriter engaged by the
Corporation as of the date of such transfer;
6.3.3 each Investor shall be entitled, upon written notice to the other
Investors, to transfer to any party which is not engaged in any business,
or any reasonable extension of such business, similar or identical to or
competitive with the business of the Corporation or any of its
subsidiaries (the "Receiving Party"), without being subject to the other
terms and conditions in this Section 6 or in Section 7 up to a maximum of
twenty-five percent (25%) of Shares held by it at the date hereof, by way
of a secondary distribution which may be either by way of solicitation or
public offering or by way of private placement and in all cases, only in
conformity with (i) all applicable securities laws and (ii) all
requirements imposed by any agent or underwriter engaged by the
Corporation as of the date of such transfer. The Receiving Party shall
not be deemed to be a Transferee and shall not be bound by the terms and
conditions of this Agreement as an Investor.
6.4 Transfers to Xxxx Xxxxxxxxxxx. Notwithstanding any provision of this
Agreement and in addition to the rights provided in subsection 6.3.2, Techno
Expres shall be entitled to transfer to Xxxx Xxxxxxxxxxx following the
termination of his employment with the Corporation, without being subject to
the other terms and conditions in this Section 6 or in Section 7, up to a total
number of Common Shares equal to the number of Common Shares held by Techno
Expres on the date of termination of Xxxx Xxxxxxxxxxx'x employment with the
Corporation multiplied by the percentage of voting shares held by Xxxx
Xxxxxxxxxxx in the capital stock of Techno Expres on the date of termination of
his employment with the Corporation, provided that any such transfer is
effected in compliance with all applicable securities law .
6.5 Shareholdings of Techno Expres. Subject to any transfer effected
pursuant to subsection 6.4, Xxx Xxxxxx and Xxxx Xxxxxxxxxxx hereby intervene
into the present Agreement and hereby solidarily acknowledge and confirm that
at present they have and that at all times while Techno Expres is a Shareholder
they shall retain control of not less than sixty percent (60%) of the
outstanding securities of Techno Expres carrying voting rights in all
circumstances and they hereby further solidarily undertake that, except for
transfers to members of their immediate families (which shall be permitted
provided that any such transferee shall undertake in writing in favour of the
remaining Shareholders to be bound solidarily with the transferor by the
provisions of this subsection ), neither of them will transfer, assign, cede,
pledge, mortgage, hypothecate, charge or otherwise encumber, alienate or
dispose of in any manner whatsoever the whole or any part of any of his shares
of Techno Expres without first obtaining the written consent of all of the
other Shareholders, and in all cases the transferor shall cause the transferee
to undertake in writing in favour of the remaining Shareholders to be bound
solidarily with the transferor by the provisions hereof.
7. RIGHTS OF FIRST REFUSAL AND PIGGY BACK
7.1 Alienation by Investors. Notwithstanding subsection 6.1, if, at any time
after the date hereof, (i) one or more Investors (the "Offering Investor")
receives an irrevocable offer (the "TP Offer") from a Person acting at Arm's
Length to the Offering Investor (the "TP Offeror") to purchase for cash,
securities, property and/or any other form of consideration (all of which is
payable at closing) 50% or more of the Shares held by the Offering Investor
(including by way of prospectus, whether underwritten or not), which TP Offer
the Offering Investor wishes to accept, in accordance with the procedures set
forth hereinafter, or (ii) the Offering Investor wishes to sell all (but not
less than all) of the Shares held by the Offering Investor, the Offering
Investor shall make an irrevocable offer (the "I Offer") in accordance with the
procedures set forth hereinafter (the TP Offer and I Offer are hereinafter
referred to collectively as the "Investor Offer"):
7.1.1 The Offering Investor shall first offer to the other Investors (the
"Other Investors") the option to purchase such Shares (the "Offered
Shares") in accordance with subsection 7.3. Should one or more of the
Other Investors exercise such option so as to purchase all of the Offered
Shares, the Offering Investor shall sell to each of such Other Investors
the Offered Shares, for which it has delivered notice(s) of exercise, in
accordance with this Agreement and the terms and conditions of the
Investor Offer.
7.1.2 Unless one or more of the Other Investors elects within the time required
to exercise the option pursuant to subsection 7.1.1 such that all of the
Offered Shares shall be purchased by the Other Investors, then the
Offering Investors shall offer the Offered Shares which were unaccepted
by the Other Investors (the "Unaccepted Offered Shares") to Techno Expres
in accordance with the procedures set forth in subsection 7.3.
7.1.3 Should Techno Expres exercise its option pursuant to subsection 7.1.2 so
as to purchase all of the Unaccepted Offered Shares, the Offering
Investor shall sell to (i) the Other Investors the Offered Shares, if
any, for which they delivered notice of exercise and (ii) Techno Expres
the Unaccepted Offered Shares for which it has delivered notice of
exercise, in accordance with this Agreement and the terms and conditions
of the TP Offer, or the I Offer, as the case may be.
7.1.4 Unless the Other Investors and/or Techno Expres (the "Other
Shareholders") have elected within the time required to exercise their
options pursuant to subsections 7.1.1 and/or 7.1.2 such that all of the
Offered Shares shall be purchased by the Other Shareholders, the option
of the Other Shareholders shall expire, none of the Other Shareholders
shall be eligible to purchase the Offered Shares, and the Offering
Investor shall be free for a period of ninety (90) days from the end of
the expiration of the last offer period to sell all (but not less than
all) of the Offered Shares to either (i) the TP Offeror on the terms and
conditions provided in the TP Offer, or (ii) in the event of an I Offer,
to a Person acting at Arm's Length to the Offering Investor (the "Third
Party") on the terms and conditions provided in the I Offer, provided,
however, that, in both cases, it shall be a condition precedent to the
right of the Offering Investor to sell the Offered Shares that the TP
Offeror or Third Party, as the case may be, has executed a counterpart of
this Agreement in accordance with subsection 12.6 and has agreed to be
bound by the terms and conditions of this Agreement, as if the TP Offeror
or the Third Party, as the case may be, had been an original party to
this Agreement in place of the Offering Investor. If no sale takes place
within the ninety (90) day period referred to in this subsection, then
the Offering Investor shall not transfer the Offered Shares without again
following and being subject to this Section 7.
7.2 Alienation by Techno Expres. Notwithstanding subsection 6.1, if, at any
time after the date hereof, (i) Techno Expres receives an irrevocable offer
(the "TP Offer") from a Person acting at Arm's Length to Techno Expres (the "TP
Offeror") to purchase for cash, securities, property and/or any other form of
consideration (all of which is payable at closing) all (but not less than all)
of the Shares held by Techno Expres (the "Offered Shares") (including by way of
prospectus, whether underwritten or not), which Techno Expres wishes to accept,
in accordance with the procedures set forth hereinafter, or (ii) Techno Expres
wishes to sell all (but not less than all) of the Shares held by Techno Expres,
Techno Expres shall make an irrevocable offer (the "TE Offer") in accordance
with the procedures set forth hereinafter (the TP Offer and TE Offer are
hereinafter collectively referred to as the "Techno Offer"):
7.2.1 Techno Expres shall offer the Offered Shares to the Investors (together
the "Other Shareholders") in accordance with the procedures set forth in
subsection 7.3.
7.2.2 Should one or more of the Other Shareholders exercise options pursuant to
subsection 7.2.1 so as to purchase all of the Offered Shares, Techno
Expres shall sell to each such Other Shareholder the Offered Shares for
which it has delivered notice(s) of exercise, in accordance with this
Agreement and the terms and conditions of the Techno Offer.
7.2.3 Unless one or more of the Other Shareholders elects within the time
required to exercise its options pursuant to subsection 7.2.1 such that
all of the Offered Shares shall be purchased by the Other Shareholders,
the option of the Other Shareholders shall expire, none of the Other
Shareholders shall be eligible to purchase the Offered Shares, and Techno
Expres shall be free for a period of ninety (90) days from the end of the
expiration of the last offer period to sell all (but not less than all)
of the Offered Shares to either (i) the TP Offeror on the terms and
conditions provided in the TP Offer, or (ii) in the event of a TE Offer,
to a Person acting at Arm's Length to Techno Expres (the "Third Party")
on the terms and conditions provided in the TE Offer, provided, however,
that, in both cases, it shall be a condition precedent to the right of
Techno Expres to sell the Offered Shares that the TP Offeror or Third
Party, as the case may be, has executed a counterpart of this Agreement
in accordance with subsection 12.6 and has agreed to be bound by the
terms and conditions of this Agreement, as if the TP Offeror or Third
Party, as the case may be, had been an original party to this Agreement
in place of Techno Expres. If no sale takes place within the ninety (90)
day period referred to in this subsection, then Techno Expres shall not
transfer the Offered Shares without again following and being subject to
this Section 7.
7.3 Procedure for Offers. Offers by the Offering Investor (pursuant to
subsection 7.1) or Techno Expres (pursuant to subsection 7.2) (the "Offering
Shareholder") to the Other Investors (pursuant to subsection 7.1.1), Techno
Expres (pursuant to subsection 7.1.2) or the Other Shareholders (pursuant to
subsection 7.2.1) (the "Offeree Shareholders") shall be conducted in accordance
with the following procedures:
7.3.1 The Offering Shareholder shall deliver a notice of its desire to sell the
Offered Shares in accordance with the terms of the Offer to the Offeree
Shareholders (a copy of which notice will be forwarded to all parties
hereto), and then each of the Offeree Shareholders shall have an option
to acquire its Proportionate Share of the Offered Shares or, if
subsection 7.1.2 applies, the Unaccepted Offered Shares (the "First
Offer"). Each of the Offeree Shareholders who elects to exercise its
option under this subsection shall deliver a notice to the Offering
Shareholder, each other Offeree Shareholder and the Corporation
indicating its exercise of the option, such notice to be sent no later
than thirty (30) days after the date on which the notice is received,
after which time the option hereby granted to the Offeree Shareholders
shall expire.
7.3.2 If after the First Offer or any Additional Offer made pursuant to this
subsection 7.3.2 (the "Prior Offers"), there remains Offered Shares that
the Offeree Shareholders have not accepted in the Prior Offers (the
"Remaining Offered Shares"), the Offering Shareholder shall deliver a
notice to the Offeree Shareholders that accepted the last such offer (the
"Accepting Offeree Shareholders"), of each such Accepting Offeree
Shareholder's option to purchase its Proportionate Share of the Remaining
Offered Shares (an "Additional Offer"). Each Accepting Offeree
Shareholders who elects to exercise its option under this subsection
shall deliver a notice to the Offering Shareholder, each other Accepting
Offeree Shareholder and the Corporation indicating its exercise of the
option, such notice to be sent no later than seven (7) days after the
date on which the notice of the Additional Offer is received, after which
time the option hereby granted to the Accepting Offeree Shareholders
shall expire. The Offering Shareholder shall continue to make offers
pursuant to this subsection 7.3.2 until there are no Accepting Offeree
Shareholders or no Remaining Offered Shares.
7.3.3 In the event of any sale by the Offering Shareholder to the Offeree
Shareholders pursuant to an Offer which provides that the purchase price
is to be payable, in whole or in part, by a non-cash consideration, the
Offeree Shareholders shall be entitled to pay to the Offering Shareholder
the cash equivalent of such non-cash consideration based upon the fair
market value of such non-cash consideration as of the date of the receipt
by the Offeree Shareholders of the notice from the Offering Shareholder
to sell the Offered Shares in accordance with subsection 7.3.1. The fair
market value of such non-cash consideration shall be the value agreed
upon by the parties to such transaction. If no such value has been agreed
upon in writing by the parties to such transaction within thirty (30)
days after the receipt by the Offeree Shareholders of the notice from the
Offering Shareholder to sell the Offered Shares in accordance with
subsection 7.3.1, such parties shall be entitled to collectively appoint
investment bankers or underwriters to determine such value by issuing a
fairness opinion, and the cost associated with such fairness opinion
shall be shared equally by such parties. The determination of such
investment bankers or underwriters shall be final and binding on the
parties without right of appeal and such investment bankers or
underwriters shall make such determination within fifteen (15) days of
their appointment.
7.4 Validity of Offer and Closing provisions. Each Offer made pursuant to
subsections 7.1 and 7.2 shall be in a writing signed by the Offering
Shareholder and addressed to the Offeree Shareholders and shall:
7.4.1 state the purchase price per Offered Share, which purchase price shall be
payable in full, at Closing;
7.4.2 state the name and address of the TP Offeror to whom it proposes to sell
the Offered Shares, and include a copy of the TP Offer; (this provision
shall not apply in the event of an I Offer or a TE Offer);
7.4.3 provide that the Closing shall be held at the principal offices of the
Corporation at 10:00 a.m. on the Closing Date, or at such other place, at
such other time or on such other date as the parties thereto may agree,
in accordance with the following terms and conditions:
7.4.3.1 at Closing, the Offering Shareholder shall deliver to the Offeree
Shareholders who have accepted an Offer (the "Purchaser") certificates
representing the Offered Shares being transferred, which certificates
shall be accompanied by a duly executed assignment of the Offered Shares
to the Purchaser;
7.4.3.2 payment for the Offered Shares being transferred shall be made in
full at Closing;
7.4.3.3 such transfer shall be effected in conformity with all applicable
securities laws;
7.4.3.4 if any of the conditions set forth in this subsection 7.4.3 made
for the exclusive benefit of the Purchaser are not satisfied at the
Closing, then the Purchaser may, at its option, either:
7.4.3.4.1 refuse to proceed with the Closing, or
7.4.3.4.2 proceed with the Closing,
in either case without prejudice to its remedies and recourses against
the Offering Shareholder as a result of such condition not being
satisfied;
7.4.3.5 however, if at Closing the Offered Shares being transferred are
not free and clear of all claims, liens and other encumbrances
whatsoever, the Purchaser may, without prejudice to any other rights
which it may have, purchase such Offered Shares subject to such claims,
liens and other encumbrances. In that event, the Purchaser shall at the
Closing assume all obligations and liabilities with respect to such
claims, liens and encumbrances and the purchase price payable by the
Purchaser for such Offered Shares shall be satisfied, in whole or in
part, as the case may be, by such assumption in the amount agreed to by
the Offering Shareholder and the Purchaser. The amount so assumed shall
reduce the purchase price payable at Closing;
7.4.3.6 if the Offering Shareholder fails to complete the transaction,
then the amount which the Purchaser would otherwise be required to pay to
the Offering Shareholder at Closing may be deposited by the Purchaser
into an interest-bearing trust account in the name of the Offering
Shareholder at the bank branch used by the Corporation. Upon making such
deposit and giving the Offering Shareholder notice thereof, the purchase
of the Offering Shareholder's Offered Shares by that Purchaser shall be
deemed to have been fully completed and all right, title, benefit and
interest in and to the Offered Shares to which the Purchaser is entitled
shall be deemed to have been transferred and assigned to and vested in
the Purchaser. The Offering Shareholder shall be entitled to receive the
amount deposited in the trust account upon satisfying the Offering
Shareholder's obligations pursuant to subsection 7.1;
7.4.3.7 the Offering Shareholder hereby irrevocably nominates,
constitutes and appoints each Purchaser as its true and lawful mandatary
and agent for, in the name of and on behalf of the Offering Shareholder
to execute and deliver in the name of the Offering Shareholder all such
instruments as may be necessary to effectively transfer the Offered
Shares being sold to the Purchaser. The Offering Shareholder hereby
ratifies and confirms, and agrees to ratify and confirm, all that the
Purchaser may lawfully do or cause to be done by virtue of such
appointment and power of attorney;
7.4.3.8 it is recognized that serious and irreparable damage for which
monetary damages would not be an adequate remedy would result to the
Purchaser from the violation of the provisions of this Section 7. Each
party agrees that, in addition to any and all remedies available to the
Purchaser in the event of a violation of such covenants, such Purchaser
shall have the immediate remedy of injunction or such other relief as may
be decreed or issued by any court of competent jurisdiction to enforce
this Section 7.
7.5 Piggy Back - Investors. Provided that Techno Expres owns more than 20%
of the issued and outstanding Shares (assuming the conversion into Common
Shares of all Preferred Shares held by the Investors) if Techno Expres receives
a TP Offer or makes a TE Offer pursuant to subsection 7.2, each Investor shall
have the right, at such Investor's option, in lieu of exercising options to
purchase Offered Shares, to require that all of the Shares held by such
Investor (assuming the conversion into Common Shares of all Preferred Shares
held by such Investor) be included in any sale to the TP Offeror or Third
Party, as the case may be, together with the Offered Shares, on terms and
conditions which are identical to those offered by the TP Offeror to Techno
Expres pursuant to the TP Offer or to those made pursuant to the TE Offer, as
the case may be, and it shall be a condition precedent of the right of Techno
Expres to sell any Offered Shares that the TP Offeror or Third Party, as the
case may be, purchase all the Shares held by an Investor exercising the right
granted in this subsection 7.5. If an Investor wishes to exercise the right
granted in this subsection 7.5, then it shall do so by giving written notice
thereof to Techno Expres at any time prior to the end of the expiration of the
last offer period of Techno Expres to sell Offered Shares to the Investors. For
greater certainty, the provisions of this subsection 7.5 shall only apply if
all of the Offered Shares are not purchased by one or more of the Investors
under subsection 7.2 and are sold to the TP Offeror or the Third Party, as the
case may be, by Techno Expres.
7.6 Offers irrevocable. All Offers and TP Offers are irrevocable for the
period of time during which they are open for acceptance.
7.7 Meaning of "Shares". For the purposes of this Section 7, when reference
is made to the Shares held by either Investor, the term "Shares" shall be
deemed to include any Common Shares as would be issuable to such Investor upon
the conversion into Common Shares of all Preferred Shares held by such
Investor.
8. FORCED SALE
8.1 Forced Sale. If the Corporation fails to redeem any of the Series B
Preferred Shares pursuant to subsection 11.14 of the Second Amended and
Restated Articles of Incorporation of the Corporation or to pay their
redemption price as provided therein, any Investor(s) requesting such
redemption may, after giving a thirty (30) day notice to all Shareholders and
the Corporation, in addition to any other rights it/they may have, seek a
written offer, which it/they is/are willing to accept, through an investment
banker of its/their choice, to purchase all the Shares held by the Shareholders
or to purchase all the assets of the Corporation as an on-going concern.
Notwithstanding any provision hereof, the Shareholders hereby agree to fully
collaborate with such sale and to sell their Shares at the same price as such
Investor(s) or to exercise their voting rights which they hold so as to permit
the Corporation to sell all its assets at the price accepted by such
Investor(s).
8.2 Delays for the Forced Sale. If within eighteen (18) months of the notice
provided under subsection 8.1, an offer to purchase has not been accepted by
the Investor(s) seeking such offer, the Shareholders agree to proceed with the
winding-up, dissolution or liquidation of the Corporation within six (6) months
of such eighteen (18) month period.
9. FINANCIAL INFORMATION AND COVENANTS OF THE CORPORATION
9.1 Financial Information. The Corporation, at its costs, undertakes toward
the Shareholders to prepare and to remit to the members of the Board of the
Corporation the following documents:
9.1.1 within ninety (90) days after the end of each fiscal year, a copy of the
audited financial statements of the Corporation on a consolidated basis
for such fiscal year consisting of the balance sheet and the statement of
income and retained earnings of the Corporation. These financial
statements shall be prepared in accordance with Generally Accepted
Accounting Principles applied on a consistent basis;
9.1.2 thirty (30) days following the end of each month, interim unaudited
monthly financial statements, on a consolidated basis, including the
balance sheet, the income statement and a cash flow statement as well as
a budget to actual analysis containing information reasonably expected in
such analysis;
9.1.3 within forty-five (45) days after the end of each quarter during each
fiscal year, complete unaudited quarterly financial statements on a
consolidated basis, including the balance sheet, the income statement and
the statement of changes in financial position;
9.1.4 at each meeting of the Board of the Corporation, a report prepared by the
controller of the Corporation and duly signed by the President of the
Corporation confirming that payments due by the Corporation to tax
authorities for sales taxes, deduction at source or for any other taxes
have been made and confirming that, to the best of the Corporation's
management knowledge, the Corporation has conducted and is conducting its
business in compliance with any applicable law, and that the Corporation
is not in breach of applicable law, including any environmental law.
10. NOTICES
10.1 Notices. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be given by telecopier, or
delivered by hand, to the other party at the following addresses:
if to Techno Expres: TECHNO EXPRES S.A.
c/o TouchTunes Digital Jukebox Inc.
0 Xxxxxxxx Xxxxx
0xx Xxxxx
Xxx'x Xxxxxx, Xxxxxx
X0X 0X0
Attention: The President
Telecopier: (000) 000-0000
If to CDPQ: CAPITAL COMMUNICATIONS CDPQ INC.
0000 XxXxxx Xxxxxxx Xxxxxx, 0xx
Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: The President
Telecopier: (000) 000-0000
if to Sofinov: SOFINOV SOCIETE FINANCIERE
D'INNOVATION INC.
0000 XxXxxx Xxxxxxx Xxxxxx, 0xx
Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: The President
Telecopier: (000) 000-0000
if to Innovatech: SOCIETE INNOVATECH DU GRAND
MONTREAL
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxxxx
Telecopier: (000) 000-0000
if to the Corporation: TOUCHTUNES MUSIC CORPORATION
0000 Xxxx Xxxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxx
00000, X.X.X.
Attention: The President
Telecopier: (000) 000-0000
with a copy in all cases to: XXXX & XXXXXXX
000 Xxxxx Xxxxxx
Xxx Xxxx, XX
00000, X.X.X.
Attention: Xxxxx Xxxx
Telecopier: (000) 000-0000
with a copy in all cases to: XXXXXXXX XXXXXXXXXX
0000 Xxxx-Xxxxxxxx Blvd. West
Suite 1400
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxxxxx
Telecopier: (000) 000-0000
with a copy in all cases to: XX XXXXXXXX CHAIT
1000 de la Gauchetiere Xxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxx
Attention: Xxxxxxx Xxxxxxx
Telecopier: (000) 000-0000
or at such other address as the parties may have previously indicated to the
other parties in writing in conformity with the foregoing. Any such notice,
request, demand or other communication shall be deemed to have been received on
the date of delivery if delivered by hand, or the next Business Day immediately
following the date of transmission if sent by telecopier. The original copy of
any notice sent by telecopier shall be forwarded to the other party by
registered mail, receipt return requested.
11. ARBITRATION
11.1 Arbitration. All disputes or controversies between the parties in
respect of the validity, interpretation or performance of the provisions of
this Agreement shall be definitively dealt with using the rules of conciliation
and arbitration of the International Chamber of Commerce, by one arbitrator
appointed in accordance with said rules, and to the exclusion of any courts
except for any provisional remedy including injunctive relief and seizure
before judgment which may be obtained from any court or tribunal, the whole in
accordance with said rules in force at the time of execution of this Agreement.
Any arbitration proceeding required pursuant to the terms thereof shall take
place in Montreal, Quebec and shall be conducted in both the English and French
language.
12. MISCELLANEOUS PROVISIONS
12.1 Press release. Any press release or any public announcement, statement
or publicity with respect to the transaction contemplated in this Agreement
shall be made only with the prior consent of the Shareholders unless such
release, announcement, statement or publicity is required by law, in which case
the Shareholder required to make such release, announcement, statement or
publicity shall use its best efforts to obtain the approval of the other
Shareholders to the form, nature and extent of such disclosure, which consent
and approval shall not be unreasonably withheld.
12.2 Further Assurances. Each party upon the request of the others, shall do,
execute, acknowledge and deliver or cause to be done, executed, acknowledged or
delivered all such further acts, deeds, documents, assignments, transfers,
conveyances, powers of attorney and assurances as may be reasonably necessary
or desirable to effect complete consummation of the transactions contemplated
by this Agreement.
12.3 Successors in Interest. This Agreement and the provisions hereof shall
enure to the benefit of and be binding upon the parties and their respective
successors and permitted assigns.
12.4 Transfer contrary to this Agreement. Any purported transfer of Shares
contrary to the terms of this Agreement shall be null and void and have no
legal effect.
12.5 Time of the essence. Time shall be of the essence in this Agreement.
12.6 Counterpart. No Person shall become a holder of any Shares without first
having executed a counterpart of this Agreement in accordance with Schedule
"12.6" annexed hereto. Each such counterpart so executed shall be deemed to be
an original and such counterparts together shall constitute one and the same
instrument.
12.7 Entire Agreement. This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matters herein contained and
supersedes and replaces any negotiations, discussions or agreements previously
held or entered into by them with respect to the subject matters herein
contained, including without limitation, the shareholders agreement dated
February 11, 1998 among Techno Expres, Sofinov, Innovatech and the Corporation,
as amended on March 22, 1999, April 8, 1999 and July 14, 1999. The parties
hereby renounce to and waive the benefits of all prior negotiations and
discussions concerning the subject matter hereof which are not embodied herein.
12.8 Originals. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same document.
12.9 Termination of Agreement. This Agreement shall remain in effect until
terminated by any party hereto by written notice upon the occurrence of any of
the following eventualities:
12.9.1 the bankruptcy or dissolution (whether voluntary or involuntary) of the
Corporation;
12.9.2 all issued and outstanding Shares are held by one Person only; or
12.9.3 by written agreement of all of the Shareholders.
IN WITNESS WHEREOF, the parties have signed at the place and on the date
first hereinabove mentioned.
TECHNO EXPRES S.A.
Per: /s/Xxx Xxxxxx
----------------------------
Xxx Xxxxxx
CAPITAL COMMUNICATIONS CDPQ INC.
Per: /s/Xxxxxx Xxxxxxxx
----------------------------
Xxxxxx Xxxxxxxx
Per: /s/Xxxxxx Ribotti
----------------------------
Xxxxxx Ribotti
SOFINOV SOCIETE FINANCIERE
D'INNOVATION INC.
Per: /s/Xxxxx Xxxxxx
----------------------------
Xxxxx Xxxxxx
Per: /s/Xxxxxx Xxxxxxx
----------------------------
Xxxxxx Xxxxxxx
SOCIETE INNOVATECH DU GRAND
MONTREAL
Per: /s/Xxxxxx Xxxxxxx
----------------------------
Xxxxxx Xxxxxxx
TOUCHTUNES MUSIC CORPORATION
Per: /s/Xxxx Xxxxxxxxxxx
----------------------------
Xxxx Xxxxxxxxxxx
INTERVENTION
EACH OF THE UNDERSIGNED INTERVENES TO THESE PRESENTS, hereby declares
having taken cognizance of all of the provisions contained in this Agreement,
with which he declares himself to be entirely satisfied and familiar, and
hereby agrees to be bound by the provisions of this Agreement which are
applicable to him.
Montreal, this 18th day of May 2000
/S/XXXX XXXXXXXXXXX
-------------------------
XXXX XXXXXXXXXXX
/S/XXX XXXXXX
-------------------------
XXX XXXXXX
SCHEDULE "12.6"
THIS INSTRUMENT forms part of the Voting Trust and Limited Shareholders
Agreement (the "Agreement") made as of May 18, 2000 by and among Techno Expres
S.A., Capital Communications CDPQ Inc., Sofinov Societe Financiere d'Innovation
Inc., Societe Innovatech du Grand Montreal and TouchTunes Music Corporation,
into which intervened each of Xxxx Xxxxxxxxxxx and Xxx Xxxxxx which Agreement
permits execution by counterpart. The undersigned hereby acknowledges having
received a copy of the said Agreement (which is annexed hereto as Schedule "1")
and, having read the said Agreement in its entirety, hereby agrees that the
terms and conditions of the said Agreement shall be binding upon the
undersigned (including, without limitation, the obligations of confidentiality)
as if the undersigned had been an original party to the Agreement as a
Shareholder (as such terms are defined in the Agreement) and such terms and
conditions shall enure to the benefit of and be binding upon the undersigned,
its successors and assigns.
IN WITNESS WHEREOF the undersigned has executed this instrument this
. day of , [year]
[SHAREHOLDER]
Per:
