EXHIBIT 12
VOTING, RIGHT OF FIRST OFFER
AND
WAIVER AGREEMENT
THIS AGREEMENT made as of the 12th day of June, 1998.
BY AND AMONG:
LYNX VENTURES L.P.,
a limited partnership existing under the laws of
the State of Delaware
(hereinafter referred to as the "Investor"),
OF THE FIRST PART,
- and -
XXXXXX X. XXX EQUITY PARTNERS, L.P.,
a limited partnership existing under the laws
of the State of Delaware,
(hereinafter referred to as "THL"),
OF THE SECOND PART,
- and -
THL-CCI LIMITED PARTNERSHIP,
a limited partnership existing under the
laws of the Commonwealth of Massachusetts,
(hereinafter referred to as "THL-CCI"),
OF THE THIRD PART.
WHEREAS, as of the date hereof, each of Investor, THL and THL-CCI
(together, the "Parties") owns (either beneficially or of record) the
number of shares of common stock, no par value (the "Common Shares") of
Livent Inc., an Ontario corporation (the "Corporation") set forth in
Schedule A annexed hereto (all such shares, including any shares or other
voting securities of the Corporation which are issued upon exercise of any
options, rights or similar arrangements held by any of the Parties and any
shares or other voting securities of the Corporation hereafter acquired
(including as dividends) by any of the Parties being hereinafter referred
to as the "Shares");
WHEREAS the execution and delivery of this Agreement is a
condition precedent to the closing of the transactions contemplated by the
Investment Agreement, dated as of April 13, 1998 (the "Investment
Agreement"), between the Corporation and the Investor; and
WHEREAS, THL and THL-CCI have agreed to grant Investor a right of
first offer over all the Shares owned beneficially or of record by them.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of
the respective covenants and agreements of the parties contained herein and
for other good and valuable consideration (the receipt and sufficiency of
which are hereby acknowledged by each of the parties hereto), the parties,
intending to be legally bound, hereby agree as follows:
1. SHARES. Each of the Parties hereby agrees that all Shares shall be
subject to the terms and provisions of this Agreement. Each of the
Parties, with respect to the Common Shares indicated opposite such
Party's name in Schedule A annexed hereto, does hereby represent and
warrant that such shares represent all of the Common Shares and other
voting securities in the Corporation beneficially owned by it as of
the date hereof. Each of the Parties hereby agrees to provide prompt
notice to the other in the event of a change in the number of Shares
beneficially owned by such Party.
2. VOTING OF SHARES. Each of the Parties agrees to vote or cause to be
voted all Shares, and to exercise its influence in respect of the
Corporation (including with respect to its nominees who are directors
of the Corporation) in an effort to ensure that the nominees for
election as directors nominated from time to time by each of the
Parties pursuant to (i) the Shareholders Agreement dated the date
hereof between the Company, Investor, Xxxxx X. Xxxxxx, Xxxxx X.
Xxxxxxxxx ("Xxxxxxxxx"), Xxxxx X. Xxxxxxxx ("Xxxxxxxx") and Xxx X.
Xxxxxx (the "1998 Shareholders Agreement") and (ii) the Shareholders
Agreement dated February 3, 1995, between Drabinsky, Gottlieb, THL and
THL-CCI (the "1995 Shareholders Agreement"), shall be elected as
directors of the Corporation; provided, however, that the number of
Common Shares which shall be subject to this Agreement shall be
reduced on a pro rata basis among the Parties, based on the number of
votes each Party has a right to cast, such that the total number of
votes cast by the Parties shall never exceed 50% of the total votes
which can be cast by all of the voting securities of the Corporation.
3. CONSENT TO ASSIGNMENT OF RIGHTS. THL and THL-CCI hereby consent to
the assignment by Xxxxxxxx and Drabinsky to Investor of their rights
under Sections 4.5 and 4.6 of the 1995 Shareholders Agreement.
4. WAIVER OF PRE-EMPTIVE RIGHTS. Each of THL and THL-CCI hereby agrees
to waive any existing pre-emptive rights it may have in connection
with any Shares owned beneficially or of record by it pursuant to
Section 3.1(b) of the Investors Agreement dated February 3, 1995,
between the Corporation, THL and THL-CCI (the "1995 Investors
Agreement") and Section 3.1(h) of the 1995 Shareholders Agreement.
5. WAIVER OF TAG-ALONG RIGHTS. Each of THL and THL-CCI hereby agrees to
waive any existing rights it may have to sell any Shares owned
beneficially or of record by it pursuant to any Tag-Along Rights (as
defined below) with respect to any sale by Drabinsky or Xxxxxxxx of
Common Shares owned beneficially or of record by each of them. For
purposes of this Section 5, "Tag-Along Rights" shall mean any right to
sell Common Shares owned beneficially or of record by participating in
a sale by Drabinsky or Xxxxxxxx of the Common Shares owned by each of
them.
6. CONVERTIBLE NOTE COVENANTS. Each of THL and THL-CCI hereby agree that
in the event that the Corporation is requested by the Investor to take
an action which would otherwise require the Corporation to obtain a
waiver or consent from THL and/or THL-CCI of any of the covenants
contained in Section 3.1(j) of the 1995 Shareholders Agreement and
Section 3.1(f) of the 1995 Investors Agreement, such waiver or consent
shall be deemed granted pursuant hereto by each of THL and THL-CCI for
purposes of the Corporation taking any such action immediately upon
receipt of notice from the Corporation or the Investor of such request
and no further action shall be required to be taken by THL and THL-CCI
in connection with such waiver or consent.
7. CONTROLLED FOREIGN CORPORATION PROHIBITION.
a. Each of the Parties hereby covenants and agrees that, after the
date hereof, it shall not take any action (including the purchase
of, or acquisition of voting rights with respect to, Voting
Securities) that would cause the Corporation to be a controlled
foreign corporation ("CFC") for U.S. federal income tax purposes.
b. Section 7(a) above shall not apply with respect to a bona fide
offer by Investor to purchase all outstanding Voting Securities
provided that if the Corporation becomes a CFC as a result of
such offer, THL and THL-CCI would not collectively own, directly,
indirectly, or by attribution, 10% or more of all Voting
Securities at the end of the day on which the Corporation becomes
a CFC. For purposes of this provision, it is assumed that all
Outstanding Options held by THL and THL-CCI are converted to
Common Shares.
c. Each of the Parties hereby covenants and agrees to cooperate with
each other with respect to compliance with the provisions of this
Section 7 and to report to each other any information affecting
such compliance. Further, each of the Parties hereby covenants
and agrees to implement a strategy to prevent the voting rights
of any person other than Investor to equal or exceed 10% of the
total number of votes which can be cast by all Voting Securities
(assuming for such purposes that all Outstanding Options are
converted to Common Shares if such person would have the right to
vote such Common Shares).
d. For purposes of this Section 7 only, the term "Voting Securities"
means all Common Shares and any other voting securities of the
Corporation.
e. For purposes of this Section 7 only, the term "Outstanding
Options" means all outstanding options, warrants and convertible
debentures of the Corporation that may be converted to Common
Shares.
8. NO INCONSISTENT ARRANGEMENTS. Each of the Parties hereby covenants
and agrees that, except as expressly provided in this Agreement, it
shall not take any action that would in any way restrict, limit or
interfere with the performance of its obligations hereunder or the
transactions contemplated hereby.
9. TERM AND TERMINATION OF AGREEMENT.
a. This Agreement shall become effective as of the Closing Date (as
such term is defined under the Investment Agreement) and shall
remain in full force and effect, unless otherwise terminated in
accordance with the terms of this Agreement.
b. Any Party may terminate this Agreement in the event that (i) the
Investor and its affiliates collectively or (ii) THL and THL-CCI
collectively, beneficially own less than the Share Limit (as
defined below). As used herein, the term "Share Limit" shall
mean initially 500,000 Common Shares and shall be appropriately
adjusted from time to time to take into account dilutive effects
resulting from changes in the number of Common Shares outstanding
subsequent to the Closing Date, whether by recapitalization,
declaration of a stock split, payment of a stock dividend or
otherwise.
10. CHANGE OF COMMON SHARES. The Parties agree that the provisions of
this Agreement relating to the Shares shall apply, mutatis mutandis, to any
shares or securities into which such Shares may be converted, changed,
reclassified, redivided, redisignated, subdivided or consolidated, to any
shares or securities which are received by a Party as a stock dividend or
distribution payable in shares or securities of the Corporation which
entitle the holder thereof to vote at any meeting of the shareholders of
the Corporation and to any shares or securities of the Corporation or of
any successor or continuing company or corporation to the Corporation which
may be received by any Party on a reorganization, amalgamation,
consolidation or merger, statutory or otherwise.
11. AMENDMENTS. This Agreement may be amended only with the approval of
each of the parties hereto.
12. WARRANTY. Each of the Parties represents, warrants and agrees that it
is free to enter into this Agreement and is not subject to any obligations
or agreements which will or might prevent or interfere with the performance
of its obligations hereunder. Each of the parties hereto further
represents and warrants and acknowledges and agrees that it has had the
opportunity to seek, and was not prevented or discouraged from seeking,
independent legal advice prior to the execution and delivery of this
Agreement and that, in the event that it did not avail himself of that
opportunity prior to signing this Agreement, it did so voluntarily without
any undue duress or pressure and agrees that this failure to obtain legal
advice shall not be used by it as a defense as to the enforcement of its
obligations under this Agreement.
13. NOTICE. All notices, requests, demands and other communications shall
be in writing and shall be deemed to have been duly given if personally
delivered or sent by United States or Canadian mails or by telegram or
telex confirmed by letter, or by facsimile transmission, receipt confirmed,
to the address set forth below:
Notices to Investor shall be addressed as follows:
Lynx Ventures L.P.
c/x Xxxxxx, Xxxxxxx & Associates
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
U.S.A.
Fax No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
U.S.A.
Fax No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
with a courtesy copy to:
Xxxxxx, Xxxxxx & Xxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
U.S.A.
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
Notices to THL or THL-CCI shall be addressed as follows:
Xxxxxx X. Xxx Company
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
X.X.X.
Fax No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
with a copy to:
Xxxxxxxx, Xxxxxxx & Xxxxxxx
A Professional Corporation
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
X.X.X.
Fax No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
All notices requiring timely attention shall be sent by facsimile
transmission, telex or overnight mail. Any notice shall be deemed
received, unless earlier received, (a) if sent by certified or registered
mail, return receipt requested, when actually received, (b) if sent by
overnight mail, on the next business day, (c) if sent by telegram or telex,
on the date sent, and (d) if sent by facsimile transmission or delivered by
hand, on the date of receipt. Any party may change its address for service
from time to time by notice given in accordance with the foregoing
provisions.
14. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY
AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE PROVINCE OF
ONTARIO AND THE FEDERAL LAWS OF CANADA AS APPLICABLE THEREIN, WITHOUT
GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR
RULE (WHETHER OF THE PROVINCE OF ONTARIO OR ANY OTHER JURISDICTION)
THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER
THAN THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA AS
APPLICABLE THEREIN.
15. SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason,
the parties shall negotiate in good faith with a view to the
substitution therefor of a suitable and equitable solution in order to
carry out, so far as may be valid and enforceable, the intent and
purpose of such invalid provision, provided, however, that the
validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions contained herein shall
not be in any way impaired thereby, it being intended that all of the
rights and privileges of the parties hereto shall be enforceable to
the fullest extent permitted by law.
16. ASSIGNMENT. This Agreement may not be assigned by a party hereto
without the prior written consent of the other parties hereto.
17. SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors,
permitted assigns, heirs, administrators, executors and legal personal
representatives.
18. NUMBER AND GENDER. Words importing the singular number only shall
include the plural and vice versa, and words importing the masculine
gender shall include the feminine and neuter genders and vice versa
importing persons shall include individuals, partnerships,
associations, trusts, unincorporated organizations and corporations
and vice versa.
19. ENTIRE AGREEMENT. This Agreement, including Schedule A hereto,
constitutes the entire agreement between the parties with respect to
the subject matter hereof. There are no conditions, covenants,
agreements, representations, warranties or other provisions, express
or implied, collateral, statutory or otherwise, relating to the
subject matter hereof, except as provided herein. No amendment,
waiver or termination of this Agreement shall be binding on a party
hereto unless consented to in writing by such party.
20. SPECIFIC PERFORMANCE. The parties hereto agree that if any of the
provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached, irreparable damage
would occur, no adequate remedy at law would exist and damages would
be difficult to determine, and that the parties shall be entitled to
specific performance of the terms hereof, without any requirement for
securing or posting any bond, in addition to any other remedy at law
or equity.
21. TIME OF THE ESSENCE. Time shall be the essence of this Agreement.
22. FURTHER ASSURANCES. Each of the parties to this Agreement shall do
all such acts and things and shall execute and deliver, or cause to be
executed and delivered, all such documents, instruments and agreements
as may be necessary or desirable to give effect to the provisions of
and the intent of this Agreement.
23. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which, when executed by a party hereto, shall be deemed to be
an original and such counterparts shall together constitute one and
the same instrument.
IN WITNESS WHEREOF, each of the Parties have caused this
Agreement to be duly executed on the date hereof.
LYNX VENTURES L.P.
By: Lynx Ventures L.L.C.,
its General Partner
By: /s/ Xxxxxxx X. Xxxxx
_____________________________
Name: Xxxxxxx X. Xxxxx
Title: Managing Member
XXXXXX X. XXX EQUITY
PARTNERS, L.P.
By: THL Equity Advisors Limited
Partnership, its General Partner
By: THL Equity Trust,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
_____________________________
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director and Trustee
THL-CCI LIMITED PARTNERSHIP
By: THL Investment Management Corp.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
_____________________________
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
SCHEDULE A
Shareholder Common Shares
Lynx Ventures L.P. 2,500,000 (1)
Xxxxxx X. Xxx Equity Partners, L.P. 1,261,026
THL-CCI Limited Partnership 266,246
______________________
1 Number of Common Shares acquired upon closing of the transactions
contemplated by the Investment Agree- ment.
