TRANSFER AGREEMENT
TRANSFER AGREEMENT (the "AGREEMENT") dated as of December 28,
2001 among XXXXX CORPORATION LIMITED, a corporation incorporated under the laws
of the Province of Ontario (the "CORPORATION"), Greenwich Street Capital
Partners II, L.P., a Delaware limited partnership ("GREENWICH FUND II"), and the
other Persons listed in the Schedule of Investors attached hereto as SCHEDULE A
(together with Greenwich Fund II, the "Investors" and individually, an
"INVESTOR"). Capitalized terms used herein but not defined when used shall have
the meanings ascribed to such terms in Section 1.1.
WITNESSETH:
WHEREAS, the Corporation and the Partnership entered into that
certain Debenture Purchase Agreement dated as of December 12, 2000 (the
"DEBENTURE PURCHASE AGREEMENT");
WHEREAS, as contemplated under the Debenture Purchase
Agreement, on December 21, 2000, the Partnership purchased, and the Corporation
sold and issued to the Partnership, 8.70% Subordinated Convertible Debentures
due 2009 in the original aggregate principal amount of $70,500,000 (the
"DEBENTURES");
WHEREAS, the Corporation and the Partnership entered into that
certain Conversion Inducement Agreement dated as of the date hereof (the
"CONVERSION INDUCEMENT AGREEMENT") pursuant to which, among other things, (i)
the Corporation agreed to cause Xxxxx Holdings U.S.A. Inc., a corporation
incorporated under the laws of the State of Delaware and a wholly-owned
subsidiary of the Corporation ("SUBCO"), to issue to the Partnership an
aggregate amount of 1,650,000 Preferred Shares (the "SUBCO PREFERRED SHARES")
and covenanted to deliver the Contingent Consideration and (ii) the Partnership
agreed to cause the Subco Preferred Shares to be transferred to the Corporation
in exchange for 1,650,000 Common Shares (the "INITIAL SHARES") upon the terms
and conditions therein;
WHEREAS, pursuant to that certain Second Amendment to
Partnership Agreement and Conversion Agreement dated as of the date hereof, the
Partnership distributed the Subco Preferred Shares to the Investors and assigned
its rights and obligations with respect to the Initial Shares and the Contingent
Consideration to the Investors in accordance with the terms thereof and as
permitted under the terms of the Conversion Inducement Agreement;
WHEREAS, the parties hereto have agreed to enter into this
Agreement to effectuate the exchange of the Subco Preferred Shares upon the
terms and conditions herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged by each party), the
parties hereto agree as follows:
1. INTERPRETATION
1.1 DEFINITIONS. Capitalized used and not otherwise defined herein shall have
the meanings ascribed to them in the Conversion Inducement Agreement. Where used
in this Agreement and
any Schedule annexed hereto or in any amendments hereto, the following terms
shall have the following meanings, respectively:
"2002 ADDITIONAL SHARES" has the meaning set out in Section 2.2(b);
"2003 ADDITIONAL SHARES" has the meaning set out in Section 2.2(c);
"2002 BLACKOUT PERIOD" means the 30-day period immediately prior to December 31,
2002;
"2003 BLACKOUT PERIOD" means the 30-day period immediately prior to December 31,
2003;
"2002 CONTINGENT CASH PAYMENT" has the meaning set out in Section 2.2(b);
"2003 CONTINGENT CASH PAYMENT" has the meaning set out in Section 2.2(c);
"2002 PRICE" has the meaning set out in Section 2.2(b);
"2003 PRICE" has the meaning set out in Section 2.2(c);
"2002 RESTRICTED PERIOD" means the 60-day period immediately prior to the 2002
Blackout Period;
"2003 RESTRICTED PERIOD" means the 60-day period immediately prior to the 2003
Blackout Period;
"ADDITIONAL SHARES" means the 2002 Additional Shares, if any, and the 2003
Additional Shares, if any;
"AFFILIATE" means, at any time, and with respect to any Person, any other Person
that at such time directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control with, such first
Person. As used in this definition, "CONTROL" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Corporation;
"ANCILLARY AGREEMENTS" means, collectively, the Registration Rights Agreement
and any agreements or other documents delivered pursuant to this Agreement or
thereto;
"BOARD" means the Board of Directors of the Corporation;
"BUSINESS DAY" means a day which is not a Saturday, a Sunday or a day observed
as a bank holiday in Toronto, Ontario or New York, New York;
"CAPITAL LEASE" means, at any time, a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP;
"CLAIM" has the meaning set out in Section 7.2;
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"CLOSING" has the meaning set out in Section 3.1;
"CLOSING DATE" has the meaning set out in Section 3.1;
"COMMON SHARES" means the common shares in the capital of the Corporation as
currently constituted, any shares resulting from the change of the designation
of such common shares, and any shares into which such common shares may be
changed, converted, exchanged or reclassified;
"CONFIDENTIAL INFORMATION" has the meaning set out in Section 10.2(a);
"CONTINGENT CASH PAYMENTS" means the 2002 Contingent Cash Payment, if any, and
the 2003 Contingent Cash Payment, if any;
"CONTINGENT CONSIDERATION" means (i) the 2002 Contingent Cash Payment or, at the
option of the Corporation as provided in Section 2.2(b), the 2002 Additional
Shares and (ii) the 2003 Contingent Cash Payment or, at the option of the
Corporation as provided in Section 2.2(c), the 2003 Additional Shares, as the
case may be;
"CONVERSION INDUCEMENT AGREEMENT" has the meaning set out in the Recitals;
"CORPORATION" has the meaning set out in the Preamble;
"DEBENTURE PURCHASE AGREEMENT" has the meaning set out in the Recitals;
"DEBENTURES" has the meaning set out in the Recitals;
"DOJ" has the meaning set out in Section 5.3;
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended;
"EXCHANGES" means The Toronto Stock Exchange and the NYSE;
"FTC" has the meaning set out in Section 5.3;
"GAAP", in respect of any Person, means generally accepted accounting principles
as in effect from time to time in the country of organization of such Person (it
being understood that for the Corporation, GAAP means Canadian GAAP);
"GENERAL PARTNER" means Greenwich Street Investments II, L.L.C.;
"GOVERNMENTAL AUTHORITY" means any national, federal, state, provincial, county,
municipal, district or local government or government body, or any public
administrative or regulatory agency, political subdivision, commission, court,
arbitral body, board or body, or representative of any of the foregoing, foreign
or domestic, of, or established by any such government or government body which
has authority in respect of a particular matter or any quasi-governmental body
having the right to exercise any regulatory authority thereunder;
"GREENWICH FUND II" has the meaning set out in the Preamble;
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"GUARANTEE" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person (other than
Guarantees between members of such Person's consolidated financial reporting
group) in any manner, whether directly or indirectly, including (without
limitation) obligations incurred through an agreement, contingent or otherwise,
by such Person:
(a) to purchase such Indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such Indebtedness or obligation, or (ii) to maintain any
working capital or other balance sheet condition or any income
statement condition of any other Person or otherwise to
advance or make available funds for the purchase or payment of
such Indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of any other Person
to make payment of the Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or
obligation against loss in respect thereof;
"HSR ACT" has the meaning set out in Section 5.3;
"INDEBTEDNESS" means, in respect of any Person at any date, without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other than
trade payables incurred in the ordinary course of such Person's business), (c)
all obligations of such Person evidenced by notes, bonds, debentures (including
the Debentures) or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all Capital Leases of such
Person, (f) all obligations of such Person, contingent or otherwise, as an
account party under acceptance, letter of credit or similar facilities, (g) all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire
or otherwise acquire for value any capital stock (other than common shares) of
such Person, (h) all Guarantees of such Person in respect of obligations of the
kind referred to in clauses (a) through (g) above to the extent quantified as
liabilities, contingent obligations or like term in accordance with GAAP on the
balance sheet (including notes thereto) of such Person, (i) all obligations of
the kind referred to in clauses (a) through (h) above secured by (or for which
the holder of such obligation has an existing right, contingent or otherwise, to
be secured by) any Lien on property (including, without limitation, accounts and
contract rights) owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation, (but only to the extent of the
fair market value of such Property), (j) all Swaps of such Person and (k) the
liquidation value of any preferred capital stock of such Person or its
Subsidiaries held by any Person other than such Person and its Wholly-Owned
Subsidiaries;
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"INDEMNIFIED PARTY" has the meaning set out in Section 7.2;
"INDEMNIFYING PARTY" has the meaning set out in Section 7.2;
"INITIAL SHARES" has the meaning set out in the Recitals;
"INTENT NOTICE" has the meaning set out in Section 6.2;
"ITA" means the Income Tax Act (Canada);
"OFFER NOTICE" has the meaning set out in Section 6.2;
"OBCA" means the Business Corporations Act (Ontario);
"PARTNERSHIP" means Chancery Lane/GSC Investors L.P., a Delaware limited
partnership in which each of the Investors holds certain partnership interests;
"PARTNERSHIP AGREEMENT" means that certain Partnership Agreement of the
Partnership dated as of December 12, 2000, as amended, supplemented, changed or
modified from time to time;
"PERSON" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization or Governmental
Authority;
"PREFERRED SHARES" means the exchangeable preferred stock, no par value per
share, of Subco;
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, xxxxxx or inchoate;
"PROPOSED SHARES" has the meaning set out in Section 6.2;
"PROSPECTIVE SELLER" has the meaning set out in Section 6.2;
"PURCHASE OF COMMON SHARES" means the purchase of any Common Shares or entering
into of any derivative securities transaction related thereto that results in
the purchase of Common Shares, other than purchasing puts or purchases required
to meet obligations under employee benefit plans;
"REGISTRATION RIGHTS AGREEMENT" means the registration rights agreement to be
entered into by the Corporation, the Partnership and certain limited partners of
the Partnership on the Closing Date, substantially in the form annexed hereto as
EXHIBIT 1, as amended, supplemented, changed or modified from time to time;
"REPRESENTATIVES" has the meaning set out in Section 10.2(b);
"RESPONSIBLE OFFICERS" means, with respect to any Person, any chief financial
officer, treasurer or controller of the Person and any other officer of the
Person reasonably expected to have knowledge of the matter as to which such
officer's knowledge is required;
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"SALE OF COMMON SHARES" means the sale of any Common Shares or entering into of
any derivative securities transaction related thereto that results in the sale
of Common Shares, other than any such sale by the Partnership or its Affiliates
to an Affiliate of the Partnership;
"SEC" means the United States Securities and Exchange Commission;
"SENIOR FINANCIAL OFFICER" means the chief financial officer, treasurer or
controller of the Corporation;
"SIGNIFICANT SUBSIDIARY" means (i) any Subsidiary that, as of the relevant date
of determination, had assets that had a fair market value representing 10% or
more of the total consolidated assets of the Corporation and its Subsidiaries or
revenues representing 10% or more of the total consolidated revenues of the
Corporation and its Subsidiaries and (ii) Subco (for the purposes of this
Agreement);
"SUBCO" has the meaning set out in the Preamble;
"SUBCO PREFERRED SHARES" has the meaning set out in the Recitals;
"SUBSIDIARY" means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership, limited liability
company or joint venture if more than a 50% interest in the profits or capital
thereof is owned by such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries (unless such partnership, limited
liability company or joint venture can and does ordinarily take major business
actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Corporation;
"SWAPS" means, with respect to any Person, payment obligations with respect to
interest rate swaps, currency swaps and similar obligations obligating such
Person to make payments, whether periodically or upon the happening of a
contingency. For the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount determined in respect thereof as of the end
of the then most recently ended fiscal quarter of such Person, based on the
assumption that such Swap had terminated at the end of such fiscal quarter, and
in making such determination, if any agreement relating to such Swap provides
for the netting of amounts payable by and to such Person thereunder or if any
such agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligation shall be the net
amount so determined;
"TRADING PRICE" means, at the time of determination, the most recent reported
per share price at which a transaction in the Common Shares was executed on the
NYSE;
"U.S. SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time; and
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"WEIGHTED AVERAGE TRADING PRICE PER SHARE" means the weighted average of the
reported per share prices at which transactions in the Common Shares are
executed on the NYSE during the twenty consecutive NYSE trading days (defined as
9:30 a.m. through 4:00 p.m., Eastern Time) ending on the trading day immediately
prior to the date of determination (weighted based on the number of shares of
Common Shares traded), as such weighted average price appears on the Bloomberg
screen "Volume at Price" page for the Common Shares.
1.2 RULES OF CONSTRUCTION. Unless the context otherwise requires, in this
Agreement:
(a) "Agreement", "this Agreement", "the Agreement", "hereto",
"hereof", "herein", "hereby", "hereunder" and similar
expressions mean or refer to this Agreement as amended from
time to time, including the Schedules and Exhibits annexed
hereto or to any amendment to this Agreement, and any
agreement or instrument supplemental hereto and the
expressions "Article", "Section", "Schedule" and "Exhibit"
followed by a number or letter mean and refer to the specified
Article, Section, Schedule or Exhibit of this Agreement;
(b) the division of this Agreement into Articles and Sections and
the insertion of headings are for convenience of reference
only and shall not affect the construction or interpretation
thereof;
(c) words importing the singular number only shall include the
plural and vice versa and words importing the use of any
gender shall include all genders;
(d) reference to any agreement, indenture or other instrument in
writing means such agreement, indenture or other instrument in
writing as amended, modified, replaced or supplemented from
time to time;
(e) reference to any statute shall be deemed to be a reference to
such statute as amended, re-enacted or replaced from time to
time;
(f) if there is any conflict or inconsistency between the
provisions contained in the body of this Agreement and those
of any Schedule or Exhibit (other than the Ancillary
Agreements) hereto, the provisions contained in the body of
this Agreement shall prevail;
(g) time periods within which a payment is to be made or any other
action is to be taken hereunder shall be calculated excluding
the day on which the period commences and including the day on
which the period ends; and
(h) whenever any payment to be made or action to be taken
hereunder is required to be made or taken on a day other than
a Business Day, such payment shall be made or action taken on
the next following Business Day.
1.3 SEVERABILITY. If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
such determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is hereby
declared to be separate, severable and distinct. To the extent that any
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such provision is found to be invalid, illegal or unenforceable, the parties
hereto shall act in good faith to substitute for such provision, to the extent
possible, a new provision with content and purpose as close as possible to the
provision so determined to be invalid, illegal or unenforceable.
1.4 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be construed,
interpreted and enforced in accordance with, and the respective rights and
obligations of the parties shall be governed by, the laws of the State of New
York, without regard to principles governing conflicts of law. Each of the
parties hereby submits to the exclusive jurisdiction of the courts of the State
of New York and all courts competent to hear appeals therefrom, and waives any
objection as to venue in the County of New York, State of New York with respect
to any suit, claim or other dispute arising out of or related to this Agreement
or the Ancillary Agreements.
1.5 WAIVER OF IMMUNITY. To the extent that any of the parties hereto has or
hereafter may be entitled to claim or may acquire, for itself or any of its
assets, any immunity from suit, jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, or otherwise) with respect to itself or its
property, it hereby irrevocably waives such immunity in respect of its
obligations hereunder or under the Ancillary Agreements to which it may be a
party to the fullest extent permitted by applicable law and, without limiting
the generality of the foregoing, agrees that the waivers set forth in this
Section 1.5 shall be effective to the fullest extent now or hereafter permitted
under the Foreign Sovereign Immunities Act of 1976 of the United States of
America and are intended to be irrevocable for purposes of such Act.
1.6 WAIVER OF JURY TRIAL. Each party hereto hereby waives, to the fullest extent
permitted by applicable laws, any right it may have to a trial by jury in
respect of any litigation directly or indirectly arising out of, under or in
connection with this Agreement or the Ancillary Agreements. Each party hereto
(a) certifies that no representative, agent or counsel of the other party has
represented expressly or otherwise that the other party would not, in the event
of litigation, seek to enforce the foregoing waiver, and (b) acknowledges that
it and the other party hereto have been induced to enter into this Agreement and
the Ancillary Agreements by, among other things, the mutual waivers and
certifications contained in this Section 1.6.
1.7 CURRENCY. All references to currency herein are to lawful money of the
United States of America.
1.8 TAX EFFECT. The parties hereto intend, for United States federal income tax
purposes, that the transactions contemplated hereby qualify as a reorganization
within the meaning of Section 368(a)(1)(E) of the United States Internal Revenue
Code of 1986, as amended, and shall file all United States federal income tax
returns consistently with such treatment.
1.9 CONFLICT WITH CONVERSION INDUCEMENT AGREEMENT. In the event of any conflict
between the provisions of this Agreement and the provisions of the Conversion
Inducement Agreement, the provisions of this Agreement shall govern.
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2. EXCHANGE OF SUBCO PREFERRED SHARES; CONTINGENT CONSIDERATION
2.1 INITIAL SHARES. Upon the terms and subject to the conditions of this
Agreement, the Corporation shall issue the Initial Shares to the
Investors in exchange for the Subco Preferred Shares, free and clear of
any Liens, other than Liens created under this Agreement. Each Investor
shall be entitled to receive the number of Initial Shares that is
specified opposite its name on SCHEDULE A attached hereto. At the
request of the Corporation, each Investor agrees to make and cause to
be filed an election under subsection 85(1) or 85(2) of the ITA, as
applicable, in respect of the transfer of Subco Preferred Shares
transferred by such Investor, at an elected amount equal to the fair
market value of the Subco Preferred Shares transferred by such
Investor.
2.2 CONTINGENT CONSIDERATION.
(a) Upon the terms and subject to the conditions of this
Agreement, the Corporation shall issue or pay the Contingent
Consideration to the Investors in accordance with the terms of
this Section 2.2.
(b) If the Weighted Average Trading Price Per Share determined as
of December 31, 2002 (as adjusted pursuant to paragraph (e) of
this Section 2.2, the "2002 PRICE") is less than $8.00 per
share (as adjusted pursuant to paragraph (e) of this Section
2.2), then the Corporation shall pay to the Investors, on
December 31, 2002, an amount in cash (the "2002 CONTINGENT
CASH PAYMENT") equal to the lesser of : (i) (A) $14,000,000
minus (B) the value of the Initial Shares on such date,
determined by multiplying the number of Initial Shares (as
adjusted pursuant to paragraph (e) of this Section 2.2) by the
2002 Price; and (ii) the value of 3,000,000 Common Shares (as
adjusted pursuant to paragraph (e) of this Section 2.2), on
such date, determined by multiplying 3,000,000 by the 2002
Price. At the option of the Corporation, the Corporation may
satisfy the 2002 Contingent Cash Payment obligation by issuing
to the Investors, on December 31, 2002, instead of the 2002
Contingent Cash Payment, an additional number of Common
Shares, free and clear of any Liens other than Liens created
under this Agreement (the "2002 ADDITIONAL SHARES") equal to
the number obtained by dividing the 2002 Contingent Cash
Payment by the 2002 Price.
(c) If the Weighted Average Trading Price Per Share determined as
of December 31, 2003 (as adjusted pursuant to paragraph (e) of
this Section 2.2, the "2003 PRICE") is less than $10.83 per
share (as adjusted pursuant to paragraph (e) of this Section
2.2), then the Corporation shall pay to the Investors, on
December 31, 2003, an amount in cash (the "2003 CONTINGENT
CASH PAYMENT") equal to the lesser of : (i) $9,000,000 and (B)
the value of 6,000,000 Common Shares (as adjusted pursuant to
paragraph (e) of this Section 2.2), on such date, determined
by multiplying 6,000,000 by the 2003 Price; provided, however,
that if, prior to December 31, 2003, the Investors sell any of
the Initial Shares or the 2002 Additional Shares issued
pursuant to paragraph (b) of this Section 2.2 to any Person
(other than another Investor or an Affiliate of an Investor),
then the
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foregoing amount shall be reduced on a dollar-for-dollar basis
by the amount, if any, that the aggregate cash proceeds
received from any such sale(s) prior to December 31, 2003 of
Initial Shares or 2002 Additional Shares exceeds the product
of (i) the number of such Initial Shares and 2002 Additional
Shares that have been sold prior to December 31, 2003 and (ii)
the Weighted Average Trading Price Per Share determined as of
the Closing Date. At the option of the Corporation, the
Corporation may satisfy the 2003 Contingent Cash Payment
obligation by issuing to the Investors, on December 31, 2003,
instead of the 2003 Contingent Cash Payment, an additional
number of Common Shares, free and clear of any Liens other
than Liens created under this Agreement (the "2003 ADDITIONAL
SHARES") equal to the number obtained by dividing the 2003
Contingent Cash Payment by the 2003 Price. In order to
determine whether any Initial Shares or 2002 Additional Shares
have been sold as provided in the proviso of the first
sentence of this paragraph (c), all Common Shares received by
the Investors upon conversion of the Debentures shall be
deemed to have been sold first and shall not be considered in
the application of such proviso. In addition, the Initial
Shares and any 2002 Additional Shares that were issued
pursuant to paragraph (b) of Section 2.1 and paragraph (b) of
this Section 2.2 shall be kept in a segregated account
separate and apart from any shares issued upon conversion of
the Debentures or otherwise acquired by the Investors or their
Affiliates. Prior to issuing any of the 2003 Additional
Shares, the Investors shall provide a certificate to the
Corporation certifying the number and sale price of any
Initial Shares and any 2002 Additional Shares that were issued
pursuant to paragraph (b) of Section 2.1 and paragraph (b) of
this Section 2.2 that were sold by the Investors or their
Affiliates prior to December 31, 2003 (other than to another
Investor or an Affiliate of an Investor), together with a copy
of the broker's account statement for such sales if requested
by the Corporation.
(d) Any Additional Shares issued in satisfaction of the Contingent
Cash Payments may be issued to the Investors on exchange of
exchangeable preferred shares of a wholly-owned non-Canadian
subsidiary of the Corporation using the structure contemplated
in Sections 3.2(a), 3.2(b) and 3.3(c) of the Conversion
Inducement Agreement; provided, that, at the time of such
issuance, the Corporation makes representations, warranties,
covenants and indemnities to the Investors with respect to
such exchangeable preferred shares that are substantially the
same as those made by the Corporation to the Investors with
respect to the Subco Preferred Shares.
(e) The number of Common Shares used to determine the 2002
Contingent Cash Payment and the 2003 Contingent Cash Payment
pursuant to paragraphs (b) and (c) above and the 2002 Price
and the 2003 Price shall be adjusted in the event of a merger,
consolidation, recapitalization, stock split, reclassification
or other similar event or distribution in which the Common
Shares are converted, exchanged or otherwise changed. The
Corporation shall forthwith give notice to the Investors in
the manner provided in Section 11 specifying the event
requiring such adjustment or readjustment and the results
thereof, including the number of Common Shares used to
determine the 2002 Contingent Cash Payment and the
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2003 Contingent Cash Payment pursuant to paragraphs (b) or (c)
above and the resulting 2002 Price and 2003 Price.
Furthermore, the Corporation shall give notice to the
Investors, in the manner provided in Section 11, of its
intention to take any action that may give rise to any such
adjustment or readjustment at the same time as any public
announcement thereof and in any event no later than the time
at which holders of Common Shares are notified of any such
action, and, in each case, such notice shall specify the
particulars of such event and the record date and the
effective date for such event; provided, that the Corporation
shall only be required to specify in such notice such
particulars of such event as shall have been fixed and
determined on the date on which such notice is given. Such
notice shall be given not less than 7 days in each case prior
to such applicable record date or effective date, whichever is
earlier.
(f) Upon the issuance of any 2002 Additional Shares and 2003
Additional Shares as contemplated by this Section 2.2, the
Corporation shall deliver to the Investors a duly executed
stock certificate or certificates representing such shares
registered in the Investors' names in the amounts that
correspond to their original percentage ownership of the
Initial Shares as promptly on or after the relevant December
31 delivery date as the Corporation's transfer agent can
prepare such certificate or certificates for such delivery. In
addition, the Corporation shall enter in an agreement with the
Investors containing substantially the same representations,
warranties, covenants and indemnities, as applicable, as set
forth in this Agreement with respect to the 2002 Additional
Shares and the 2003 Additional Shares and also shall issue the
opinions of counsel to the Corporation, dated the issuance
dates of the 2002 Additional Shares and the 2003 Additional
Shares, with respect to the issuance of such Additional
Shares, each substantially in the form of the opinions
deliverable to the Partnership pursuant to Section 3.2(c)(ii).
3. CLOSING; DELIVERY
3.1 CLOSING. The closing of the transactions contemplated by Section 3 (the
"CLOSING") shall occur concurrently with the closing of the transactions
contemplated by the Conversion Inducement Agreement. The Closing shall take
place at 10:00 a.m. (New York City time) at the offices of Squadron Ellenoff
Plesent & Xxxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx December 28,
2001, (such closing day or such other time being hereinafter referred to as the
"CLOSING DATE") or at such other time or place as may be agreed by the parties
hereto in writing.
3.2 ACTIONS BY THE CORPORATION AT CLOSING. At the Closing, the
Corporation shall:
(a) against delivery by the Investors of the Subco Preferred
Shares as contemplated in Section 3.3(a) below, deliver to
Investors a duly executed stock certificate or certificates
registering that number of Initial Shares set forth opposite
such Investor's name on SCHEDULE A attached hereto;
(b) deliver to the Investors the Ancillary Agreements duly
executed by the Corporation; and
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(c) deliver or cause to be delivered to the Investors the
following:
(i) copies of resolutions of the Board
authorizing the transactions contemplated by
this Agreement and the Ancillary Agreements,
each certified as being true and correct and
not having been modified or rescinded since
their adoption by the Secretary or Assistant
Secretary of the Corporation, together with
an incumbency certificate duly executed by
the Secretary or Assistant Secretary of the
Corporation for those officers of the
Corporation executing this Agreement and any
of the Ancillary Agreements on its behalf;
(ii) the opinions of counsel addressed to the
Investors, each dated the Closing Date,
covering the matters set forth on EXHIBIT
2; and
(iii) such other documents and certificates duly
executed as the Investors may reasonably
request in order to effect the transactions
contemplated hereby.
3.3 ACTIONS BY THE INVESTORS AT CLOSING. At the Closing, the Investors
shall:
(a) deliver the Subco Preferred Shares to the Corporation in
exchange for the Initial Shares contemplated in Section 3.2(a)
above;
(b) deliver to the Corporation the Ancillary Agreements duly
executed by the parties thereto other than the Corporation;
and
(c) deliver or cause to be delivered to the Corporation the
following:
(i) an incumbency certificate duly executed by a
Member of the General Partner for those
officers of the General Partner executing
this Agreement and any of the Ancillary
Agreements on its behalf; and
(ii) such other documents and certificates duly
executed as the Corporation may reasonably
request in order to effect the transactions
contemplated hereby.
4. REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. The representations and
warranties of the Corporation set forth in Section 4.1 of the Conversion
Inducement Agreement are hereby incorporated by reference in their entirety and
references therein to the Partnership shall be deemed to be references to the
Investors for all purposes of this Agreement and such representations and
warranties shall enure to the benefit of the Investors without any qualification
or limitation, other than as expressly set forth in such representations and
warranties. The Corporation acknowledges that the Investors are relying upon
such representations and warranties in connection with their entering into this
Agreement.
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4.2 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each Investor severally and
not jointly represents and warrants to the Corporation as follows and
acknowledges that the Corporation is relying upon such representations and
warranties in connection with its entering into this Agreement:
(a) ORGANIZATION; POWER AND AUTHORITY. The Investor is a limited
partnership duly organized and is validly existing under the
laws of its jurisdiction of organization; the General Partner
is the sole general partner of the Investor; the General
Partner has all necessary limited liability company or
partnership power to execute and deliver this Agreement and
each of the Ancillary Agreements on behalf of the Investor and
the Investor has all necessary partnership power to enter into
this Agreement and each of the Ancillary Agreements and to
comply with its obligations hereunder and thereunder.
(b) AUTHORIZATION, ETC. The General Partner has taken all
necessary limited liability company or partnership action to
authorize the execution, delivery and performance of this
Agreement and the Ancillary Agreements; this Agreement and the
Ancillary Agreements have been duly executed and delivered by
the General Partner on behalf of the Investor and constitute
the legal, valid and binding obligations of the Investor
enforceable by the Corporation in accordance with their
respective terms, except as enforcement thereof may be limited
by bankruptcy, insolvency or other laws of general application
affecting the enforcement of creditors' rights and subject to
the qualification that specific performance and injunction,
being equitable remedies, may be granted only in the
discretion of a court of competent jurisdiction.
(c) COMPLIANCE WITH OTHER INSTRUMENTS, ETC. Neither: (i) the
authorization, execution, delivery or performance by the
Investor of this Agreement and the Ancillary Agreements; (ii)
the conversion of the Debentures held by the Investor; or
(iii) the acquisition of the Initial Shares as provided
herein, is in conflict with and does not and will not result
in any breach of and does not and will not create a state of
facts which after notice or lapse of time or both will result
in a breach of any of the terms or provisions of the limited
partnership agreement of the Investor, the resolutions of the
board of directors of the General Partner, or results or would
result in the creation or imposition of any security interest,
mortgage, Lien, charge or encumbrance of any nature whatsoever
upon any of the Material Properties or assets of the Investor
pursuant to the terms of any indenture, instrument, agreement
or undertaking.
(d) NO ORDERS. To the knowledge of the General Partner, after
reasonable inquiry, no order suspending the transfer of the
Subco Preferred Shares, the conversion of the Debentures held
by the Investor or the acquisition of the Initial Shares by
the Investor has been issued by any court, securities
commission or regulatory authority in Canada or the United
States, and no proceedings for such purpose are pending or
threatened.
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(e) INVESTMENT REPRESENTATION. The Investor is acquiring the
Initial Shares as principal for investment purposes only, and
not with a view to, or for, resale, distribution or any
present intention of distributing or selling the Initial
Shares or any part thereof. The Investor is acquiring the
Initial Shares as principal for its own account and the
Investor is an "accredited investor" as the term is defined in
Regulation D under the U.S. Securities Act and OSC Rule
45-501. The Investor is not a resident of Canada.
(f) ACKNOWLEDGEMENT RE: SECURITIES LAWS. The Investor understands,
recognizes and acknowledges that the Initial Shares have not
been qualified for distribution or registered under any
applicable securities legislation, including the Ontario
Securities Act, the U.S. Securities Act or any other
applicable federal, provincial or state securities laws by
reason of exemptions from such requirements being available,
and that the Initial Shares may not be sold, pledged, assigned
or otherwise disposed of in the absence of compliance with
such law or unless an exemption from the application of such
law is applicable, and certificates issued in respect of the
Initial Shares will be legended to reflect such restrictions.
4.3 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. All covenants,
representations and warranties of each party made herein and in any certificate
or other document delivered by it or on its behalf pursuant to the provisions
hereof or otherwise with respect to this Agreement and the transactions
contemplated hereby, shall survive the Closing and, notwithstanding such
closing, nor any investigation made by or on behalf of such party, shall
continue in full force and effect, subject as hereinafter provided, for a period
of eighteen months from the Closing Date for the benefit of the party to whom
the covenants, representations and warranties are made; provided, however, that
notwithstanding anything herein contained, the representations and warranties
contained in Sections 4.1(b), (c), (d) and (e) of the Conversion Inducement
Agreement which have been incorporated herein by reference shall survive the
Closing and shall continue in full force and effect for the benefit the
Investors without any limitation period and the representation and warranty
contained in Section 4.1(k) of the Conversion Inducement Agreement which has
been incorporated herein by reference shall survive the Closing and shall
continue in full force and effect for the benefit of the Investors until the
60th day after the expiration of the relevant statute of limitations period.
5. COVENANTS OF THE PARTIES
5.1 AFFIRMATIVE COVENANTS OF THE CORPORATION. The Corporation covenants and
agrees with the Investors that it will do or cause to be done, and, as
applicable, will cause Subco to do or cause to be done, the following:
(a) use its reasonable best efforts to comply with, satisfy and
fulfill promptly all prerequisites, conditions and
requirements imposed by or arising out of legal, regulatory
and administrative requirements applicable to the Corporation
with respect to the consummation of the transactions
contemplated hereby, including, without limiting the
generality of the foregoing, (i) filing or causing to be filed
all documents, certificates, opinions, forms or undertakings
required to be filed by the Corporation in connection with the
acquisition by the Investors of the Initial
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Shares, the issuance of the Initial Shares and the listing and
posting for trading of the Initial Shares on the Exchanges,
and (ii) subject to Section 5.3, obtaining all necessary
legal, regulatory and administrative approvals, consents,
authorizations, rulings, orders and permits;
(b) maintain its status as a "reporting issuer" in good standing
under the Ontario Securities Act and other applicable Canadian
securities legislation and as a "registrant" in good standing
under the Exchange Act;
(c) maintain the listing or posting for trading of the Common
Shares (including the Initial Shares) on the NYSE; and
(d) pay all stamp or duty or similar taxes, if any, associated
with the issuance and/or delivery of the Initial Shares.
5.2 AFFIRMATIVE COVENANTS OF THE INVESTORS. Subject to Section 5.3, the
Investors covenants and agrees with the Corporation that it will use its
reasonable best efforts to comply with, satisfy and fulfill promptly all
prerequisites, conditions and requirements imposed by or arising out of legal,
regulatory and administrative requirements applicable to the Investors with
respect to the consummation of the transactions contemplated hereby, including,
without limiting the generality of the foregoing, (i) filing or causing to be
filed all documents, certificates, opinions, forms or undertakings required to
be filed by the Investors in connection with the acquisition by the Investors of
the Initial Shares and the issuance of the Initial Shares, and (ii) obtaining
all necessary legal, regulatory and administrative approvals, consents,
authorizations, rulings, orders and permits.
5.3 HSR ACT. The Corporation and Greenwich Fund II have filed or will file
concurrently with the execution of this Agreement (a) all Notification and
Report Forms and related material required to be filed by it with the Federal
Trade Commission ("FTC") and the Antitrust Division of the United States
Department of Justice ("DOJ") under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder
(the "HSR ACT") with respect to the transactions contemplated hereby and by the
Ancillary Agreements and (b) the necessary filings and notifications with any
other jurisdictions with respect to the transactions contemplated hereby and the
Ancillary Agreements to the extent required to effect the conversion of the
Debentures and, in each case, shall promptly make any further filings pursuant
thereto that may be required by law. Each of the Corporation and Greenwich Fund
II shall use its commercially reasonable efforts to furnish to the other party
such information, cooperation and assistance as the other party reasonably may
request in connection with the submissions to, or agency proceedings by, any
Governmental Authority under the HSR Act, or any comparable laws of foreign
jurisdictions, and each of the parties hereto shall keep the other promptly
apprised of any communications with, and inquiries or requests for information
from, such Governmental Authorities.
5.4 VCOC. The rights granted to the Investors under Section 8.1 of this
Agreement and the existing rights with respect to the nomination of directors
are intended to satisfy the requirement of management rights for purposes of
qualifying the investment by the Investors in the ownership of Common Shares as
a venture capital investment for purposes of the Department of
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Labor "plan asset" regulations, 9 C.F.R. Section 2510.3-101, and in the event
such rights are not satisfactory for such purpose, the Corporation and the
Investors shall reasonably cooperate in good faith to agree upon mutually
satisfactory access rights which satisfy such regulations.
6. RESTRICTIONS ON TRANSFERS OF THE COMMON SHARES
6.1 RESTRICTIONS ON SALE OF COMMON SHARES.
-------------------------------------
(a) 30 DAY BLACKOUT PERIOD. The Investors and their Affiliates
shall not engage in any Sale of Common Shares during the 2002
Blackout Period and the 2003 Blackout Period. The Corporation
and its Affiliates shall not engage in any Purchase of Common
Shares during the 2002 Blackout Period and the 2003 Blackout
Period.
(b) 60 DAY RESTRICTED PERIOD.
(i) During the 2002 Restricted Period, the Investors and
their Affiliates shall not engage in any Sale of
Common Shares if at the time of the proposed sale the
Trading Price is between $7.00 and $9.00.
(ii) During the 2003 Restricted Period, each of the
Investors and their Affiliates shall not engage in
any Sale of Common Shares if at the time of the
proposed sale the Trading Price is between $9.00 and
$12.50.
(iii) Subject to paragraphs (i) and (ii) above, the
Investors and their Affiliates may, during each of
the 2002 Restricted Period and 2003 Restricted
Period, (A) sell Common Shares in one or more
registered public offerings; (B) sell up to 3,750,000
Common Shares in open-market transactions; and (C)
sell Common Shares in one or more private placements
so long as the buyer(s) in such private placement(s)
agrees in writing to be bound by the provisions of
paragraphs (i) and (ii) above.
(c) The per share prices of Common Shares contained in this
paragraph (b) above shall be adjusted in the event of a
merger, consolidation, recapitalization, stock split,
reclassification or other similar event or distribution with
respect to, or in exchange for or in replacement of, the
Common Shares.
6.2 RIGHT OF FIRST OFFER. If any Investor or an Affiliate of an Investor (the
"PROSPECTIVE SELLER") wishes to sell any of its Common Shares prior to December
31, 2003 (other than a sale to another Investor or an Affiliate of an Investor
and other than pursuant to the exercise of registration rights or an open-market
sale on the NYSE or The Toronto Stock Exchange), the Prospective Seller shall
deliver a written notice ("INTENT NOTICE") to the Corporation specifying the
number of Common Shares which are proposed to be sold and the desired price for
such shares (the "PROPOSED SHARES"). The Corporation shall, upon receipt of an
Intent Notice, have ten (10) Business Days to deliver a written notice ("OFFER
NOTICE") to the Prospective Seller specifying the name(s) of one or more
bona-fide purchasers offering to purchase the Proposed Shares at a cash purchase
price equal to or greater than the purchase price specified in the Intent Notice
within three (3) Business Days from the date such Offer Notice is delivered to
the
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Prospective Seller. The Prospective Seller shall forthwith accept any Offer
Notice delivered in accordance with the requirements of this Section 6.2, and
the closing of the purchase and sale of the Proposed Shares shall occur within
three (3) Business Days thereafter. If at the end of such ten-day period, the
Prospective Seller has not received an Offer Notice or the purchase and sale of
the Proposed Shares pursuant to the Offer Notice has not occurred within such
3-day period (and such failure to close has not been caused by the Prospective
Seller), the Prospective Seller shall be permitted to sell the Proposed Shares
during the 90 day period thereafter at a price which is not less than 90% of the
desired price specified in the Intent Notice.
6.3 RESTRICTION ON DISTRIBUTION. Notwithstanding any other provision of this
Agreement, the Investors shall not distribute the Initial Shares or the Common
Shares received by them upon conversion of the Debentures to their limited
partners for a period of one year from the Closing Date.
7. INDEMNIFICATION
7.1 INDEMNIFICATION BY THE CORPORATION. From and after the Closing, the
Corporation agrees to indemnify and save harmless the Investors and their
Affiliates and the directors, officers, general partners, employees,
shareholders, representatives and agents of the Investors and their Affiliates
(collectively, the "INDEMNITEES") from all Losses suffered or incurred by any of
them as a result of or arising directly or indirectly out of or in connection
with: (a) any breach by the Corporation of or any inaccuracy of any
representation or warranty of the Corporation contained in this Agreement, the
Ancillary Agreements or in any agreement, certificate or other document
delivered pursuant hereto and (b) any breach or non-performance by the
Corporation of any covenant to be performed by any of them which is contained in
this Agreement, the Ancillary Agreements or in any agreement, certificate or
other document delivered pursuant hereto. Notwithstanding anything contained
herein to the contrary, the indemnification provided above (except with respect
to any breach of the representations and warranties set forth in Sections
4.1(b), (c), (d), (e) and (k) of the Conversion Inducement Agreement which have
been incorporated herein by reference) shall (i) only apply to the extent that,
and not until, the aggregate of all amounts subject to indemnification under
clause (a) of this Section 7.1 exceeds $1,000,000 (in which event, the
Indemnitees shall be entitled to indemnification as provided herein for all such
Losses and not just the excess over $1,000,000) and (ii) not exceed $23,000,000
in the aggregate. The indemnification with respect to any breach of Section
4.1(k) of the Conversion Inducement Agreement shall be increased by an amount
such that the Indemnitees will receive cash, after taking into account any
Canadian non-resident withholding tax imposed under Part XIII of the ITA, equal
to the amount owing pursuant to this Section 7.1 (without regard to this
sentence) as a result of the breach of Section 4.1(k).
7.2 NOTICE OF CLAIM; INVESTIGATIONS; DETERMINATION. Subject to Section 7.3, in
the event that a party (the "INDEMNIFIED PARTY") shall become aware of any
claim, proceeding or other matter (a "CLAIM") in respect of which another party
(the "INDEMNIFYING PARTY") agreed to indemnify the Indemnified Party pursuant to
this Agreement and, if a claim for breach of representation and warranty of the
Indemnifying Party, in respect of which the applicable survival period shall not
have lapsed, the Indemnified Party shall promptly give written notice thereof to
the Indemnifying Party. Such notice shall specify the factual basis for the
Claim and the amount of the Claim, if known. Following receipt of notice from
the Indemnified Party of
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the Claim, the Indemnifying Party shall have 60 days to make such investigation
of the Claim as is considered necessary or desirable. For the purpose of such
investigation, the Indemnified Party shall make available to the Indemnifying
Party the information relied upon by the Indemnified Party to substantiate the
Claim, together with all such other information as the Indemnifying Party may
reasonably request. If both parties agree at or prior to the expiration of such
60-day period (or any mutually agreed upon extension thereof) to the validity
and amount of such Claim, the Indemnifying Party shall immediately pay to the
Indemnified Party the full agreed upon amount of the Claim.
7.3 CERTAIN CLAIMS. If any Claim arises directly or indirectly out of or in
connection with the Corporation's execution, delivery and performance of this
Agreement or the Ancillary Agreements and is asserted against any Indemnitee,
such Indemnitee shall promptly give the Corporation notice thereof in accordance
with Section 7.2. The Corporation shall have the right to control negotiations
toward resolution of such Claim without the necessity of litigation, and, if
litigation ensues, to defend the same with counsel chosen by the Corporation and
reasonably acceptable to the such Indemnitee, at the Corporation's expense with
respect to the conduct of such defense, and such Indemnitee shall in such case
extend reasonable cooperation in connection with such negotiation and defense
and the Corporation shall keep such Indemnitee reasonably informed as to such
case. If the Corporation fails to assume control of the negotiations prior to
litigation or to defend such action within a reasonable time, such Indemnitee
shall be entitled, but not obligated, to assume control of such negotiations or
defense of such action, and the Corporation shall be liable to such Indemnitee
for its expenses reasonably incurred in connection therewith which the
Corporation shall promptly pay. Neither party shall settle, compromise, or make
any other disposition of any Claims, which would or might result in any
liability to the Indemnitee or the Corporation, respectively, under this Section
7 without the written consent of the Indemnitee or the Corporation,
respectively, which consent shall not be unreasonably withheld.
7.4 THIRD PARTY CLAIMS. If any Claim covered by the foregoing indemnities is
asserted against any Indemnified Party, it shall be a condition to the
obligations under this Section 7 that the Indemnified Party shall promptly give
the Indemnifying Party notice thereof in accordance with Section 7.2. The
Indemnifying Party shall be entitled to control negotiations toward resolution
of such claim without the necessity of litigation, and, if litigation ensues, to
defend the same with counsel reasonably acceptable to the Indemnified Party, at
the Indemnifying Party's expense, and the Indemnified Party shall in such case
extend reasonable cooperation in connection with such negotiation and defense.
If the Indemnifying Party fails to assume control of the negotiations prior to
litigation or to defend such action within a reasonable time, the Indemnified
Party shall be entitled, but not obligated, to assume control of such
negotiations or defense of such action, and the Indemnifying Party shall be
liable to the Indemnified Party for its expenses reasonably incurred in
connection therewith which the Indemnifying Party shall promptly pay. Neither
the Indemnifying Party nor the Indemnified Party shall settle, compromise, or
make any other disposition of any Claims, which would or might result in any
liability to the Indemnified Party or the Indemnifying Party, respectively,
under this Section 7 without the written consent of the Indemnified Party or the
Indemnifying Party, respectively, which consent shall not be unreasonably
withheld.
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7.5 EXCLUSIVITY. The provisions of this Section 7 shall be the exclusive remedy
with respect to any Claim for breach by the Corporation of any of its covenants,
representations, warranties or agreements under this Agreement or the Ancillary
Agreements, or any agreement, certificate or other document delivered pursuant
thereto (other than a Claim for specific performance or injunctive relief) and
all such Claims against the Corporation shall be subject to the limitations and
other provisions contained in this Section 7, other than claims against the
Corporation for fraud or fraudulent misrepresentation.
8. INFORMATION AS TO THE CORPORATION
8.1 FINANCIAL AND BUSINESS INFORMATION. So long as an Investor together with any
of its Affiliates holds at least 2.5% of the issued and outstanding Common
Shares, the Corporation shall deliver to the Investor:
(a) MONTHLY STATEMENTS - within 20 Business Days after the end of
each month upon the written request of the Investor to the
Corporation, duplicate copies of financial reports prepared
monthly in the normal course of business for the Corporation's
management and/or the Board with respect to the Corporation's
operations by region and business segment, including an income
statement, balance sheet and statement of cash flows;
(b) QUARTERLY STATEMENTS - within 45 days after the end of each
quarterly fiscal period in each fiscal year of the Corporation
(other than the last quarterly fiscal period of each such
fiscal year), duplicate copies of:
(i) a consolidated balance sheet of the
Corporation and its Subsidiaries as at the
end of such quarter; and
(ii) consolidated statements of income, changes
in shareholders' equity and cash flows of
the Corporation and its Subsidiaries, for
such quarter and (in the case of the second
and third quarters) for the portion of the
fiscal year ending with such quarter,
setting forth in each case in comparative form the
figures for the corresponding periods in the previous
fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly
financial statements generally, and certified by a
Senior Financial Officer as fairly presenting, in all
material respects, the financial position of the
companies being reported on and their results of
operations and cash flows, subject to changes
resulting from year-end adjustments, provided that
delivery within the time period specified above of
copies of the Corporation's Quarterly Report on Form
10-Q prepared in compliance with the requirements
therefor applicable to the Corporation (or such other
quarterly report as is applicable to the Corporation)
and filed with the SEC shall be deemed to satisfy the
requirements of this Section 8.1(b);
(c) ANNUAL STATEMENTS - within 90 days after the end of each
fiscal year of the Corporation, duplicate copies of:
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(i) a consolidated balance sheet of the
Corporation and its Subsidiaries, as at the
end of such year; and
(ii) consolidated statements of income, changes
in shareholders' equity and cash flows of
the Corporation and its Subsidiaries, for
such year,
setting forth in each case in comparative form the
figures for the previous fiscal year, all in
reasonable detail, prepared in accordance with GAAP,
and accompanied by an opinion thereon of independent
certified public accountants of recognized national
standing in the Corporation's jurisdiction, which
opinion shall state that such financial statements
present fairly, in all material respects, the
financial position of the companies being reported
upon and their results of operations and cash flows
and have been prepared in conformity with GAAP, and
that the examination of such accountants in
connection with such financial statements has been
made in accordance with generally accepted auditing
standards, and that such audit provides a reasonable
basis for such opinion in the circumstances, provided
that the Corporation's Annual Report on Form 10-K for
such fiscal year (together with the Corporation's
annual report to shareholders, if any, prepared
pursuant to Rule 14a-3 under the Exchange Act)
prepared in accordance with the requirements therefor
applicable to the Corporation (or such other annual
report as is applicable to the Corporation) and sent
to shareholders with the annual proxy statement and
filed with the SEC shall be deemed to satisfy the
requirements of this Section 8.1(c);
(d) SEC, OSC AND OTHER REPORTS - promptly upon their becoming
publicly available and upon request by the Investor to the
Corporation, one copy of (i) each financial statement, report,
notice or proxy statement sent by the Corporation or any
Subsidiary to public securities holders generally, and (ii)
each regular or periodic report, each registration statement
that shall have become effective (without exhibits except as
expressly requested by such holder), and each final prospectus
and all amendments thereto filed by the Corporation or any
Subsidiary with the SEC, the OSC or any other Canadian
securities regulatory authorities;
(e) REQUESTED INFORMATION - with reasonable promptness, such other
data and information relating to the business, operations,
affairs, financial or other condition, prospects, assets or
properties of the Corporation or any of its Subsidiaries or
relating to the ability of the Corporation to perform its
obligations under this Agreement and the Ancillary Agreements
prepared by the Corporation in the normal course of business
for the Corporation's management prior to such request as from
time to time may be reasonably requested by any such holder of
Common Shares.
8.2 INSPECTION. The Corporation shall permit an Investor, at the expense of the
Investor and upon reasonable prior notice to the Corporation, to visit the
principal executive office of the
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Corporation, to discuss the affairs, finances and accounts of the Corporation
and its Subsidiaries with the Corporation's officers, and, with the consent of
the Corporation (which consent will not be unreasonably withheld) to visit the
other offices and properties of the Corporation and each Significant Subsidiary,
all at such reasonable times during normal business hours and as often as may be
reasonably requested in writing.
9. EXPENSES, ETC. The Corporation shall pay up to $275,000 of the Investors'
reasonable costs and expenses (including legal fees and disbursements) incurred
in connection with the transactions contemplated by this Agreement and the
Conversion Inducement Agreement (but excluding any reasonable costs and expenses
incurred by the Investors in connection with the payment or issuance of the
Contingent Consideration). Such expenses shall be paid in cash at the Closing by
way of wire transfer of immediately available funds in accordance with the
Investors' instructions.
10. CONFIDENTIALITY
10.1 Neither the Investors nor the Corporation shall make any public disclosure,
except to the extent required by law or the rules and procedures of the
Exchanges, of the terms of this Agreement or regarding the transaction
contemplated hereby without the prior consent of the other, such consent not to
be unreasonably withheld. The wording of any public disclosure to be made in
respect of the transactions contemplated by this Agreement must be approved by
each of the Corporation and the General Partner. This Section 10.1 shall survive
any termination of this Agreement.
10.2 CONFIDENTIAL INFORMATION.
(a) Any information furnished to an Investor (or an Investor's
Affiliate) concerning the Corporation under Sections 8.1(a)
and (e) and Section 8.2 hereof (including through its director
nominees) shall be deemed to be "CONFIDENTIAL INFORMATION."
Notwithstanding the generality of the foregoing, information
that is publicly available or becomes publicly available other
than through disclosure by an Investor (or an Investor's
Affiliate) or its Representatives (as defined below) or
otherwise was known to an Investor (or an Investor's
Affiliate) or its Representatives prior to disclosure to any
of them by the Corporation or its Representatives other than
as a result of disclosure by a Person under an obligation of
confidentiality to the Corporation known to an Investor (or an
Investor's Affiliate) or its Representatives shall not be
deemed to be Confidential Information.
(b) Except as may be otherwise required by law, legal process or
the rules of any securities regulatory organization (in which
event the Investors shall provide advance notice to the
Corporation, to the extent practicable), each Investor shall
(and shall use its reasonable best efforts to cause its
Affiliates to) keep all Confidential Information confidential,
and shall not disclose it to anyone except to another Investor
or an Investor's Affiliate and to its and their own employees,
directors, attorneys, accountants, financial advisers and
other consultants and agents with a need to know
(collectively, "REPRESENTATIVES") (and each Investor
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shall be responsible for any violation of the terms hereof by
its Representatives) or to such Persons as required by law.
Each Person to whom such Confidential Information is disclosed
must be advised of its confidential nature and of the terms of
this Section 10.2. The Investors acknowledge that Confidential
Information may include material, non-public information and
that the United States and Canadian federal, state and
provincial securities laws restrict the ability of any Person
in possession of such information to acquire or dispose of
affected securities, and that such laws impose liability on
such Person for doing so.
(c) This Section 10.2 shall survive any termination of this
Agreement.
11. GENERAL PROVISIONS
11.1 NOTICES. Any notice, direction or other instrument required or permitted to
be given or made hereunder shall be in writing and shall be sufficiently given
or made if delivered in person to the address set forth below or if facsimiled
or sent by other means of recorded electronic communication and confirmed by
delivery as soon as practicable thereafter.
Notices to the Corporation shall be addressed as follows:
Xxxxx Corporation Limited
c/x Xxxxx Executive Xxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Chief Financial Officer
Fax: 000-000-0000
with copies to:
Xxxxx Corporation Limited
c/x Xxxxx Executive Xxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
Fax: 000-000-0000
Notices to the Investors shall be addressed as follows:
Greenwich Street Capital Partners II, L.P.
GSCP Offshore Fund, L.P.
Greenwich Fund, L.P.
Greenwich Street Employees Fund, L.P.
TRV Executive Fund, L.P.
x/x Xxxxxxxxx Xxxxxx Investments II, L.L.C., General Partner
00 Xxxx 00xx Xxxxxx - Xxxxx 0000
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New York, New York, 10017
Attention: Xxxxxxx Xxxxxxx
Fax: 000-000-0000
with copies to:
Squadron Ellenoff Plesent & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxx
Fax: 000-000-0000
Any notice, direction or other communication so given or made shall be deemed to
have been given or made and to have been received on the day of delivery, if
delivered, or on the day of sending if sent by facsimile or other means of
recorded electronic communication (provided such day of delivery or sending is a
Business Day and, if not, then on the first Business Day thereafter). Any party
hereto may change its address for notice to the other parties by notice given in
the manner aforesaid.
11.2 ASSIGNMENT. No party hereto may assign this Agreement or its rights or
obligations hereunder without the prior written consent of the other parties,
except that the Investors may assign its rights and obligations hereunder, in
whole or in part, to any Affiliate of an Investor; provided, that any such
assignee agrees to be bound by the terms and conditions of this Agreement
relating to the assigned portion of the Agreement.
11.3 ENUREMENT. This Agreement shall enure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.
11.4 FURTHER ASSURANCES. Each of the parties agrees to take all such reasonable
actions as may be requested by any other party hereto to implement and give full
effect to the provisions of this Agreement.
11.5 TIME OF THE ESSENCE. Time shall be of the essence of this Agreement.
11.6 ENTIRE AGREEMENT. This Agreement, the Ancillary Agreements and the
Conversion Inducement Agreement constitute the entire agreement between the
parties hereto pertaining to the transfer of the Subco Preferred Shares upon the
conditions described herein and supersede all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties and there
are no other agreements between the parties in connection with such subject
matter hereof. No supplement, modification or termination of this Agreement and
the Ancillary Agreements shall be binding unless executed in writing by both of
the parties hereto.
11.7 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which when taken together shall constitute this Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above stated.
XXXXX CORPORATION LIMITED
By: _________________________________________________
Name:
Title:
GREENWICH STREET CAPITAL PARTNERS II, L.P.
GSCP OFFSHORE FUND, L.P.
GREENWICH FUND, L.P.
GREENWICH STREET EMPLOYEES FUND, L.P.
TRV EXECUTIVE FUND, L.P.
By: Greenwich Street Investments II, L.L.C., its
General Partner
By: ________________________________________________
Name:
Title:
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SCHEDULE A
----------
SCHEDULE OF INVESTORS
---------------------
Investor Number of Initial Shares
-------- ------------------------
Greenwich Street Capital Partners II, L.P. 1,474,074
GSCP Offshore Fund, L.P. 30,731
Greenwich Fund, L.P. 49,932
Greenwich Street Employees Fund, L.P. 87,998
TRV Executive Fund, L.P. 7,265
---------
Total: 1,650,000
---------
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EXHIBIT 1
---------
FORM OF REGISTRATION RIGHTS AGREEMENT
-------------------------------------
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EXHIBIT 2
---------
OPINIONS TO BE DELIVERED BY THE CORPORATION
-------------------------------------------
(a) Favorable written opinions from nationally-recognized counsel
(in the appropriate jurisdiction) (reasonably satisfactory to
the Investors) to the Corporation (who may rely on
certificates from the Corporation with respect to factual
matters), dated the Closing Date and satisfactory in scope and
substance to the Investors and its counsel, acting reasonably,
with respect to the following substantive matters:
(i) the Corporation is a corporation
incorporated under the laws of the Province
of Ontario and has all necessary corporate
power and authority to own its property and
to execute and deliver this Agreement and
the Ancillary Agreements and to perform all
its respective obligations hereunder and
thereunder;
(ii) all necessary corporate action has been
taken by the Corporation to authorize the
issuance of the Initial Shares and the
execution and delivery of this Agreement and
the Ancillary Agreements and, upon issuance
the Initial Shares will have been validly
issued, as fully paid and non-assessable
Common Shares;
(iii) no action of the shareholders of the
Corporation is required to authorize the
issuance of the Initial Shares and the
execution and delivery of this Agreement and
the Ancillary Agreements;
(iv) each of this Agreement and the Ancillary
Agreements has been duly executed and
delivered by the Corporation;
(v) the authorization, execution, delivery and
performance by the Corporation of this
Agreement and the Ancillary Agreements and
the issuance of the Initial Shares do not
conflict with, and do not result in a breach
of, the articles or by-laws of the
Corporation;
(vi) the issuance of the Initial Shares to the
Investors pursuant to this Agreement are
exempt from the registration and prospectus
requirements of the Ontario Securities Act;
and
(vii) the issuance of the Initial Shares to the
Investors pursuant to this Agreement are not
in violation of United States federal
securities laws.
(b) Favorable written opinion from in-house counsel or any
reputable outside counsel to the Corporation (at the
Corporation's election), dated the Closing Date and
satisfactory in scope and substance to the Investors and its
counsel, acting reasonably, with respect to the following
substantive matters:
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(i) the Corporation is duly qualified to carry
on business in all jurisdictions in which it
currently carries on business, and has all
necessary corporate power and authority to
carry on its business as aforesaid; and
(ii) none of: (A) the authorization, execution,
delivery or performance by the Corporation
of this Agreement or the Ancillary
Agreements, including, without limitation,
or (B) the allotment and issuance of the
Initial Shares as provided herein, will
contravene, result in any breach of or is in
conflict with and does not and will not
result in a breach of and does not and will
not create a state of facts which after
notice or lapse of time or both will result
in a breach of any of the terms or
provisions of the articles or by-laws of the
Corporation, the resolutions of the
directors or shareholders of the Corporation
or any Material Contract to which the
Corporation is a party or by which the
Corporation or the Properties or assets of
the Corporation are bound or results in the
creation or imposition of any Lien upon any
of the Material Properties or assets of the
Corporation pursuant to the terms of any
Material Contract.
(c) Favorable written opinions from nationally-recognized counsel
(in the appropriate jurisdiction) (reasonably satisfactory to
the Investors) to Subco (who may rely on certificates from
Subco with respect to factual matters), dated the Closing Date
and satisfactory in scope and substance to the Investors and
its counsel, acting reasonably, with respect to the following
substantive matters:
(i) Subco is a corporation incorporated under
the laws of the State of Delaware and has
all necessary corporate power and authority
to own its property and to execute and
deliver this Agreement and to perform all
its obligations hereunder;
(ii) all necessary corporate action has been
taken by Subco to authorize the issuance of
the Subco Preferred Shares and the execution
and delivery of this Agreement and, upon
issuance the Subco Preferred Shares will
have been validly issued, as fully paid and
non-assessable shares;
(iii) all necessary action of the shareholders of
Subco has been taken to authorize the
creation of the Subco Preferred Shares and
the execution and delivery of this
Agreement;
(iv) this Agreement has been duly executed and
delivered by Subco;
(v) the authorization, execution, delivery and
performance by Subco of this Agreement and
the issuance of the Subco Preferred Shares
do not conflict with, and do not result in a
breach of, the articles or by-laws of Subco;
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(vi) the issuance of the Subco Preferred Shares
to the Partnership pursuant to the
Conversion Inducement Agreement and the
distribution of the Subco Preferred Shares
to the limited partners of the Partnership
are exempt from the registration and
prospectus requirements of the Ontario
Securities Act;
(vii) the acquisition of the Corporation of the
Subco Preferred Shares from the Investors
does not constitute a "take-over bid" or an
"issuer bid" for the purposes of Part XX of
the Securities Act (Ontario); and
(viii) the issuance of the Subco Preferred Shares
to the Partnership pursuant to the
Conversion Inducement Agreement and the
distribution of the Subco Preferred Shares
to the limited partners of the Partnership
are not in violation of United States
federal securities laws.
(d) A favorable written opinion from in-house counsel or any
reputable outside counsel to Subco (at Subco's election),
dated the Closing Date and satisfactory in scope and substance
to the Investors and their counsel, acting reasonably, with
respect to the following substantive matters:
(i) Subco is duly qualified to carry on business
in all jurisdictions in which it currently
carries on business, and has all necessary
corporate power and authority to carry on
its business as aforesaid; and
(ii) none of: (A) the authorization, execution,
delivery or performance by Subco of this
Agreement, including, without limitation,
the allotment and issuance of the Subco
Preferred Shares; or (B) the issuance of the
Subco Preferred Shares as provided herein,
(x) will violate the provision of any
statute or other rule or regulation of any
Governmental Authority or (y) will
contravene, result in any breach of or is in
conflict with and does not and will not
result in a breach of and does not and will
not create a state of facts which after
notice or lapse of time or both will result
in a breach of any of the terms or
provisions of the articles or by-laws of
Subco.
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