EXHIBIT 3
---------
SHAREHOLDERS' AGREEMENT
AMONG
Strategic TECHNOLOGIES INC.
and
Certain Shareholders of Strategic TECHNOLOGIES INC.
and
DIGITAL PRODUCTS CORP.
and
Certain Shareholders of DIGITAL PRODUCTS CORP.
DATED FOR REFERENCE THE 13th DAY OF OCTOBER, 1995
TABLE OF CONTENTS
1 SHAREHOLDERS' REPRESENTATIONS . . . . . . . . . . . . . . . . . . . . 2
1.1 Ownership and control of shares . . . . . . . . . . . . . . 2
1.2 No Knowledge of Objection . . . . . . . . . . . . . . . . . 2
1.3 No Current Intention to Sell Shares . . . . . . . . . . . . 2
2 VOTING OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Support of Merger . . . . . . . . . . . . . . . . . . . . . 3
2.2 Additional Merger Covenants of Strategic . . . . . . . . . . 4
2.3 Additional Covenants of Shareholders . . . . . . . . . . . . 4
3 GENERAL AND INTERPRETATION PROVISIONS . . . . . . . . . . . . . . . . 5
3.1 Applicable Laws and Attornment . . . . . . . . . . . . . . . 5
3.2 Termination . . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 No Partnership . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Enurement . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Severability . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 8
3.9 Further Assurances . . . . . . . . . . . . . . . . . . . . . 8
3.10 Execution . . . . . . . . . . . . . . . . . . . . . . . . . 8
Schedule "A" Particulars of Shareholders of Strategic and Digital
SHAREHOLDERS' AGREEMENT
-----------------------
THIS AGREEMENT dated for reference the 13th day of October, 1995.
AMONG:
Strategic TECHNOLOGIES INC., Building A, Unit 102 00000 00xx
Xxxxxx, Xxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0 Telephone: (604)
576-8658; Telecopier: (000) 000-0000
("Strategic")
OF THE FIRST PART
AND:
THOSE SHAREHOLDERS OF Strategic more particularly described
on Schedule "A" hereto, all c/o the facsimile numbers set
opposite their names
(herein collectively the "Strategic Shareholders")
OF THE SECOND PART
AND:
DIGITAL PRODUCTS CORPORATION, 000 X.X. 00xx Xx., Xxxxxxx
Xxxxx, Xxxxxxx XXX 00000 Telephone (000) 000-0000;
Telecopier (000) 000-0000
("Digital")
OF THE THIRD PART
AND:
THOSE SHAREHOLDERS OF DIGITAL PRODUCTS CORPORATION more
particularly described on Schedule "A" hereto, all c/o the
facsimile numbers set opposite their names
(herein collectively the "Digital Shareholders")
OF THE FOURTH PART
WHEREAS:
(A) Strategic and Digital are parties to a merger letter agreement dated
August 1, 1995, as amended or extended August 31, 1995, September 15, 1995,
September 22, 1995 and October 6, 1995 to be superseded by an Agreement and Plan
of Merger of even date (the "Merger Agreement") between the companies which
proposes a merger whereby Digital will, on closing of the Merger (the "Effective
Time") become a wholly-owned subsidiary of Strategic and Digital shareholders
will receive Strategic shares in exchange for their Digital stock;
(B) each of the Digital Shareholders and the Strategic Shareholders
(herein collectively, the "Shareholders" or individually a "Shareholder") wish
to support the Merger and further to provide for certain matters of management
pertaining thereto;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises
and of the mutual covenants and agreements hereinafter set forth, the parties
hereto agree each with the other as follows:
ARTICLE 1
SHAREHOLDERS' REPRESENTATIONS
1.1 Ownership and control of shares
Each of the Strategic Shareholders represents to and covenants with
each of the other Strategic Shareholders and all the Digital Shareholder that he
beneficially owns or controls and exercises voting control over or has the right
to acquire the number of shares of Strategic set forth opposite his name on
Schedule "A" and each Digital Shareholder hereby makes a reciprocal
representation to the other Digital Shareholders and the Strategic Shareholders
respecting the number of Digital shares owned, controlled or which such person
has the right to acquire.
1.2 No Knowledge of Objection
Each Shareholder represents to all the other Shareholders that such
Shareholder is not aware of any other shareholders of Digital or Strategic who
object to or intend to actively oppose the Merger.
1.3 No Current Intention to Sell Shares
Each Shareholder represents to the other Shareholders that such
Shareholder does not have any current intention to sell any Digital or Strategic
Shares owned or controlled by such Shareholder.
ARTICLE 2
VOTING OF SHARES
2.1 Support of Merger
Each of the Shareholders agrees and covenants with each of the other
Shareholders that:
(a) he will vote all his shares in the capital of each of Strategic and
Digital (together, the "Merger Companies") in favour of the Merger at
any meeting of the shareholders of Digital or Strategic or any
adjournment thereof convened to consider the Merger;
(b) in the event he acquires, directly or indirectly, beneficial ownership
of or voting control over any additional shares of any of the Merger
Companies, he will vote such additional shares in favour of the
Merger;
(c) he will not exercise any statutory right of dissent nor encourage any
other person to exercise any statutory right of dissent with respect
to the Merger;
(d) he will not prior to the Effective Time sell, transfer or otherwise
dispose of any more than 2% of the number of Digital Shares or
Strategic Shares owned by him including any Digital Shares or
Strategic Shares acquired after the date of this Agreement and before
the Effective Date, unless:
(i) this Agreement is earlier terminated in accordance with
Sec.3.2; or
(ii) such Digital Shares or Strategic Shares are sold to another
Shareholder; or
(iii) the transferee shall have executed an agreement to become a
Shareholder party to this Agreement;
(e) he will not do or perform any act or conduct himself in a manner
inconsistent with the terms of this Agreement and will use his best
efforts to encourage other Shareholders of each of the Merger
Companies to vote their Share in favour of the Merger; and
(f) he will execute any proxies, powers of attorney, and all other written
assurances, without further consideration, as may be necessary to
effect the intent of this Agreement and will permit the
representatives of Digital or Strategic to contact third parties
including brokerages to verify and ensure compliance with the terms
hereof.
2.2 Additional Merger Covenants of Strategic
(a) Strategic hereby covenants and agrees with the Shareholders and
Digital that for a period of two years from the Effective Time it will
only effect the following special business or corporate matters of
Strategic with the approval of at least two of the four Digital
appointees to Strategic's Board of Directors as contemplated by the
Merger Agreement:
(i) the appointment of auditors of Strategic and Digital other
than Deloitte & Touche;
(ii) any relocation of Digital's Pompano Beach offices;
(iii) any equity financing of Strategic in excess of $2,000,000
(Cdn.);
(iv) any expansion of the size of the Board of Directors beyond
nine; and
(v) any significant corporate acquisition or divestiture
($2,000,000 (Cdn.) threshold) or any corporate
reorganization or alteration of authorized share capital or
similar fundamental corporate change.
Strategic shall nominate and keep nominated as directors at all general
shareholders meetings of Strategic for two years from the Effective Time the
nine directors of Strategic holding office at the Effective Time or their
replacements as contemplated by Sec.2.3.
(b) Strategic further agrees to:
(i) adopt a Board Policy Statement to implement the foregoing
covenants, which statement may not be amended or terminated
without the consent of 75% of the directors of Strategic;
(ii) indemnify and save harmless any of the Shareholders who act
as directors of Strategic after the Effective Time for any
good faith actions as directors, subject to the provisions
of the British Columbia Company Act requiring prior judicial
approval for such indemnification, and further agrees to pay
the actual legal fees and expenses of any of the
Shareholders who seek and obtain any injunctive or other
relief from a court of competent jurisdiction requiring that
Strategic modify, abandon or reverse any action or proposed
action which is determined to be a breach of this Agreement;
(iii) establish an Executive Compensation Committee of the Board
of Directors of Strategic comprised of two of the former
Digital Directors and two current Directors of Strategic who
shall review the compensation of the four highest paid
senior officers of the Company
annually and make recommendation to the Board respecting
modification to such compensation arrangements.
2.3 Additional Covenants of Shareholders
(a) Each of the Shareholders agrees to vote any Strategic shares owned or
controlled by them for a two-year period after the Effective Time to
elect and keep elected the nine directors of Strategic who will hold
office as of the Effective Time being the five existing Strategic
directors, plus the four Digital appointees contemplated by the Merger
Agreement. In the event of the death, incapacity, resignation, or
unwillingness to serve as a director of any of the nine aforesaid
individuals or the written request of seven of the nine directors not
to elect one of the nine aforesaid individuals, Strategic shall
nominate as a replacement a person nominated in the case of a
Strategic appointee, by the remaining Strategic appointees, or if a
Digital appointee is unable to act, then by the remaining Digital
appointees and such replacement appointees shall be nominated for
election by Strategic in its annual proxy materials and voted in
favour of by the Shareholders and each of the Shareholders agrees to
vote any Strategic shares owned or controlled by them for the two-year
period after the Effective Time in favour of such persons.
(b) Each of the Shareholders who are intended under the Merger Agreement
to become or remain directors of Strategic after the Effective Time
hereby acknowledge their consent and preparedness to act as directors
of Strategic and confirm the reasonableness of Strategic's post-
closing covenants contemplated by Sec.2.2 hereof and confirm their
intention to use their best efforts to cause Strategic to comply with
the provisions thereof.
ARTICLE 3
GENERAL AND INTERPRETATION PROVISIONS
3.1 Applicable Laws and Attornment
This Agreement will in all respects be governed by and be construed in
accordance with the laws of the State of Florida and the laws of the United
States applicable in the State of Florida.
3.2 Termination
This Agreement will terminate on the earliest of:
(a) with respect to any Shareholder, at the time he disposes all of or
substantially all of his Shares of both Strategic and Digital,
providing he does so after the Effective Time;
(b) two years after the Effective Time;
(c) on March 15, 1996 or such later date as agreed to by Digital and
Strategic under the terms of the Merger Agreement, if the Effective
Time has not occurred on or before that date;
(d) on the termination of the Merger Agreement if that date is prior to
the Effective Time; or
(e) on that date mutually consented to in writing by all the parties.
3.3 No Partnership
Nothing in this Agreement shall be deemed in any way or for any
purpose to constitute any party a partner of any other party to this Agreement
in the conduct of any business or otherwise as a member of a joint venture or
joint enterprise with any other party to this Agreement or to deem any party
acting in concert with another as contemplated by securities legislation.
3.4 Notices
Unless otherwise specified herein, any notice required to be given
hereunder by any party will be deemed to have been well and sufficiently given
if delivered personally or if sent by prepaid registered mail, telex, telecopy
to, or delivered at, the address of the other party hereinafter set forth:
(a) If to Digital:
DIGITAL PRODUCTS CORPORATION
000 X.X. 00xx Xx.
Xxxxxxx Xxxxx, Xxxxxxx XXX 00000
Telephone (000) 000-0000; Telecopier (000) 000-0000
with a copy to:
Mason, Briody, Xxxxxxxxx & Xxxxxx
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx/Xxxxxxx X. Xxxxx
------------------------------------------------
(b) If to STRATEGIC:
STRATEGIC TECHNOLOGIES INC.
Building A, Unit 102
00000 00xx Xxxxxx, Xxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Telephone: (000) 000-0000; Telecopier: (000) 000-0000
with a copy to:
Lang Xxxxxxxx Xxxxxxxx & Xxxx
Barristers and Solicitors
Xxxxx 0000, 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
Attention: Xxxxxxxx Xxxxxxxxx
Fax: (604) 685 - 7084
(c) If to any Shareholder, at the facsimile number set forth on Schedule
"A" hereto. If a Shareholder does not have a facsimile number,
delivery shall be made by ordinary mail at the Shareholder's address
listed in Schedule "A",
or at such other address as the other party may from time to time direct in
writing. Any such notice will be deemed to have been received, if mailed,
telexed or telecopied, 72 hours after the time of mailing, telexing or
telecopying, and if delivered, upon the date of delivery, provided that if such
day is not a business day, then the notice will be deemed to have been given and
received on the first business day following such day. If normal mail service,
telex service or telegraph service is interrupted by strike, slowdown, force
majeure or other cause, a notice sent by the impaired means of communication
will not be deemed to be received until actually received, and the party sending
the notice shall utilize any other such services which have not been so
interrupted or will deliver such notice in order to ensure prompt receipt
thereof.
3.5 Time
Time will be of the essence hereof.
3.6 Enurement
This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors, heirs and personal
representatives, as the case may be. The obligations of the parties under this
Agreement are non-assignable.
3.7 Severability
If any one or more of the provisions contained in this Agreement is
invalid, illegal or unenforceable in any respect in any jurisdiction, the
validity, legality, and enforceability of such provision or provisions will not
in any way be affected or impaired thereby in any other jurisdiction and the
validity, legality and enforceability of the remaining provisions contained
herein will not in any way be affected or impaired thereby.
3.8 Counterparts
This Agreement may be executed by the parties in separate counterparts each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument. A faxed
signature shall be deemed an original copy for purposes hereof.
3.9 Further Assurances
The parties hereto shall with reasonable diligence do all such things
and provide all such reasonable assurances as may be required to consummate any
transaction contemplated hereby, and each party shall execute and deliver such
further documents or instruments required by any other party as may be
reasonably necessary or desirable to effect the purpose of this Agreement and
carry out its provisions.
3.10 Execution
This Agreement is binding on each of the parties at the time this
Agreement (or a counterpart hereof) is executed.
THE PARTIES HAVE EXECUTED this agreement and Schedule "A" hereto effective
the day and year first above written.
STRATEGIC TECHNOLOGIES INC.
by:
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxxx,
Chairman and Chief Executive
Officer
Attest:
/s/ Xxxxxx Xxxxxxxxx
--------------------
Xxxxxxxx Xxxxxxxxx,
Secretary
Execution Date: October 18, 1995
DIGITAL PRODUCTS CORPORATION
by:
/s/ Xxxxxxx Xxxxxx
------------------
Xxxxxxx Xxxxxx,
President and Chief Executive
Officer
Attest:
/s/ Xxxxxx X. Xxxxxxxxx Execution Date: October 20,
-----------------------
Xxxxxx X. Xxxxxxxxx 1995
Secretary
SCHEDULE "A"
This is Schedule "A" to the Shareholders' Agreement among Strategic
Technologies Inc., certain Strategic Shareholders, Digital Products Corp. and
certain Digital Shareholders.
Name, Address and Fax
Number of Strategic Number of
Shareholder Securities Signature Date
Xxxx Xxxxxxxx and 670,877 shares /s/ Xxxx Xxxxxxxx October 18, 1995
Geni D Ventures Inc. 274,350 warrants
Xxxxxx Xxxxxxxxx 54,870 shares /s/ Xxxxxx Xxxxxxxxx October 18, 1995
3,750 warrants
Xxxx Xxxxx 11,427 shares /s/ Xxxx Xxxxx October 18, 1995
Xxx Xxxxxx 64,857 shares /s/ Xxx Xxxxxx October 18, 1995
2,500 warrants
Xxx Xxxxx 267,540 shares /s/ Xxx Xxxxx October 18, 1995
37,810 warrants
Name, Address and Fax
Number of Digital Number of
Shareholder Securities Signature Date
Xxxxxxx Xxxxxx 850,000 shares /s/ Xxxxxxx Xxxxxx October 20, 1995
486,140 options
Xxxxxxx Xxxxxx 150,000 shares /s/ Xxxxxxx Xxxxxx October 20, 1995
132,340 options
Xxxx X. Dell 629,127 shares /s/ Xxxx X. Dell October 20, 1995
396,500 options
Xxxx Xxxxxx 50,000 shares /s/ Xxxx Xxxxxx October 20, 1995
120,250 options
Mason, Briody, 120,000 shares /s/ Xxxxxx X. Xxxxxxxxx October 20, 1995
Xxxxxxxxx & Xxxxxx 0 options
