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EXCHANGE RIGHTS AGREEMENT
THIS EXCHANGE RIGHTS AGREEMENT is entered into as of September
29, 1997, by and between The ForeFront Group, Inc., a Delaware corporation
("ParentCo"), LanProfessional Inc., a corporation incorporated under the laws of
Canada (the "Corporation"), and Xxxxx X. Xxxxx, Xxxxxx Xxxx, Xxxxxxx Xxxxx,
Xxxxxx Xxxxx and Jang Xxxxxxx Xxxxx (the "Vendors").
WHEREAS, pursuant to an Acquisition Agreement dated as of
September 29, 1997, by and between ParentCo, the Corporation and the Vendors
(hereinafter referred to as the "Acquisition Agreement") the parties agreed that
on the closing of the transaction contemplated under the Acquisition Agreement,
ParentCo, the Corporation and the Vendors would execute and deliver an Exchange
Rights Agreement containing the terms and conditions set forth in an Exhibit to
the Acquisition Agreement together with such other terms and conditions as may
be agreed to by the parties to the Acquisition Agreement acting reasonably.
WHEREAS, pursuant to the Acquisition Agreement, the
Corporation issued to the Vendors certain exchangeable shares (the "Exchangeable
Shares") having attached thereto certain rights, privileges, restrictions and
conditions (collectively, the "Exchangeable Share Provisions").
WHEREAS, ParentCo is to grant to and in favour of the Vendors
the right, in the circumstances set forth herein, to require ParentCo to
purchase from each such Vendor all or any part of the Exchangeable Shares held
by the Vendor.
WHEREAS, the parties desire to make appropriate provision and
to establish a procedure whereby the rights to require ParentCo to purchase
Exchangeable Shares from the Vendors (other than ParentCo and its Subsidiaries)
shall be exercisable by the Vendors from time to time.
NOW, THEREFORE, in consideration of the respective covenants
and agreements provided in this agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Definitions. In this agreement, the following terms shall have the
following meanings:
"Automatic Exchange Rights" means the benefit of the obligation of
ParentCo to effect the automatic exchange of ParentCo Common Shares for
Exchangeable Shares pursuant to Section 3.11 hereof;
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"Board of Directors" means the Board of Directors of the Corporation;
"Business Day" has the meaning provided in the Exchangeable Share
Provisions;
"Exchange Put Right" has the meaning provided in the Exchangeable Share
Provisions;
"Exchange Right" has the meaning provided in Article III hereof;
"Exchange Rights" means the Exchange Right, the Exchange Put Right and
the Automatic Exchange Rights;
"Exchangeable Share Consideration" has the meaning provided in the
Exchangeable Share Provisions;
"Exchangeable Share Price" has the meaning provided in the Exchangeable
Share Provisions;
"Exchangeable Share Provisions" has the meaning provided in the
recitals hereto;
"Exchangeable Shares" has the meaning provided in the recitals hereto;
"Insolvency Event" means the institution by the Corporation of any
proceeding to be adjudicated a bankrupt or insolvent or to be dissolved or
wound-up, or the consent of the Corporation to the institution of bankruptcy,
insolvency, dissolution or winding-up proceedings against it, or the filing of a
petition, answer or consent seeking dissolution or winding-up under any
bankruptcy, insolvency or analogous laws, including without limitation the
Companies Creditors' Arrangement Act (Canada) and the Bankruptcy and Insolvency
Act (Canada), and the failure by the Corporation to contest in good faith any
such proceedings commenced in respect of the Corporation within 30 days of
becoming aware thereof, or the consent by the Corporation to the filing of any
such petition or to the appointment of a receiver, or the making by the
Corporation of a general assignment for the benefit of creditors, or the
admission in writing by the Corporation of its inability to pay its debts
generally as they become due, or the Corporation's not being permitted, pursuant
to liquidity or solvency requirements of applicable law, to redeem any Retracted
Shares pursuant to Section 6.6 of the Exchangeable Share Provisions;
"Liquidation Call Right" has the meaning provided in the Exchangeable
Share Provisions;
"Liquidation Event" has the meaning provided in subsection 3.11(a)
hereof;
"Liquidation Event Effective Time" has the meaning provided in
subsection 3.11(b) hereof;
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"Officer's Certificate" means, with respect to ParentCo or the
Corporation, as the case may be, a certificate signed by any one of the Chairman
of the Board, the Vice-Chairman of the Board (if there be one), the President or
any Vice-President of ParentCo or the Corporation, as the case may be;
"ParentCo Common Share" has the meaning provided in the Exchangeable
Share Provisions;
"ParentCo Successor" has the meaning provided in subsection 4.1(a)
hereof;
"Person" includes an individual, body corporate, partnership, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative;
"Redemption Call Right" has the meaning provided in the Exchangeable
Share Provisions;
"Retracted Shares" has the meaning provided in Section 3.6 hereof;
"Retraction Call Right" has the meaning provided in the Exchangeable
Share Provisions;
"Subsidiary" has the meaning provided in the Exchangeable Share
Provisions; and
"Support Agreement" means that certain support agreement made as of the
date hereof by and between ParentCo and the Corporation.
1.2 Integration Not Affected by Headings, Etc. The division of this
agreement into articles, sections and paragraphs and the insertion of headings
are for convenience of reference only and shall not affect the construction or
interpretation of this agreement.
1.3 Number, Gender, Etc. Words importing the singular number only shall
include the plural and vice versa. Words importing the use of any gender shall
include all genders.
1.4 Date for Any Action. If any date on which any action is required to
be taken under this agreement is not a Business Day, such action shall be
required to be taken on the next succeeding Business Day.
ARTICLE II
PURPOSE OF AGREEMENT
2.1 The purpose of this agreement is to provide for the grant by
ParentCo to the Vendors of the Exchange Put Right, the Exchange Right and the
Automatic Exchange Rights and the grant by the Vendors to ParentCo of the
Redemption Call Right and the Liquidation Call Right.
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ARTICLE III
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
3.1 Grant and Ownership of the Exchange Right. ParentCo hereby grants
to the Vendors:
(a) the Exchange Put Right,
(b) the right (the "Exchange Right"), upon the occurrence and during
the continuance of an Insolvency Event, to require ParentCo to purchase from
each or any Vendor all or any part of the Exchangeable Shares held by the
Vendors, and
(c) the Automatic Exchange Rights,
all in accordance with the provisions of this agreement and the Exchangeable
Share Provisions, as the case may be. ParentCo hereby acknowledges receipt of
$10 and the grant to ParentCo of the Redemption Call Right, Liquidation Call
Right and the Retraction Call Right from each of the Vendors in consideration
for the grant of the Exchange Put Right, the Exchange Right and the Automatic
Exchange Rights by ParentCo to the Vendors.
3.2 Legended Share Certificates. The Corporation will cause each
certificate representing Exchangeable Shares to bear an appropriate legend
notifying the Vendors of:
(a) their right to instruct ParentCo with respect to the exercise of
the Exchange Put Right and the Exchange Right in respect of the Exchangeable
Shares held by a Vendor; and
(b) the Automatic Exchange Rights.
3.3 Purchase Price. The purchase price payable by ParentCo for each
Exchangeable Share to be purchased by ParentCo (a) under the Exchange Put Right
shall be the amount determined under the Exchangeable Share Provisions, and (b)
under the Exchange Right shall be an amount equal to the Exchangeable Share
Price on the last Business Day prior to the day of closing of the purchase and
sale of such Exchangeable Share under the Exchange Right. In connection with
each exercise of the Exchange Right or the Exchange Put Right, ParentCo will
provide to the Vendors an Officer's Certificate setting forth the calculation of
the applicable Exchangeable Share Price for each Exchangeable Share. The
applicable Exchangeable Share Price for each such Exchangeable Share so
purchased may be satisfied only by ParentCo's issuing and delivering or causing
to be delivered to the relevant Vendor, the applicable Exchangeable Share
Consideration representing the total applicable Exchangeable Share Price.
3.4 Exercise Instructions. Subject to the terms and conditions herein
set forth, a Vendor shall be entitled, upon the occurrence and during the
continuance of an Insolvency Event,
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to exercise the Exchange Right with respect to all or any part of the
Exchangeable Shares registered in the name of such Vendor on the books of the
Corporation. To cause the exercise of the Exchange Right, the Vendor shall
deliver to ParentCo, in person or by certified or registered mail, or at such
other place as ParentCo may from time to time designate by written notice to the
Vendors, the certificates representing the Exchangeable Shares which such Vendor
desires ParentCo to purchase, duly endorsed in blank, and accompanied by such
other documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the articles and the by-laws of the Corporation and
such additional documents and instruments as ParentCo may reasonably require,
together with:
(a) a duly signed notice of exercise of the Exchange Right
stating:
(i) that the Vendor thereby exercises the Exchange Right so as
to require ParentCo to purchase from the Vendor the number of Exchangeable
Shares specified therein,
(ii) that such Vendor has good title to and owns all such
Exchangeable Shares to be acquired by ParentCo free and clear of all liens,
claims, encumbrances, security interests and adverse claims or interests; and
(b) payment (or evidence satisfactory to the Corporation and ParentCo
of payment) of the taxes (if any) payable as contemplated by Section 3.7 of this
agreement.
If only a part of the Exchangeable Shares represented by any
certificate or certificates delivered to ParentCo are to be purchased by
ParentCo under the Exchange Right, a new certificate for the balance of such
Exchangeable Shares shall be issued to the Vendor at the expense of the
Corporation.
3.5 Delivery of Exchangeable Share Consideration; Effect of Exercise.
Promptly after receipt by ParentCo of the certificates representing the
Exchangeable Shares which the Vendor desires ParentCo to purchase under the
Exchange Put Right or the Exchange Right (together with such documents and
instruments of transfer and a duly completed form of notice of exercise of the
Exchange Put Right or the Exchange Right), duly endorsed for transfer to
ParentCo, ParentCo shall advise the Corporation of its receipt of the same,
which notice to ParentCo and the Corporation shall constitute exercise of the
Exchange Put Right or the Exchange Right by the Vendor of such Exchangeable
Shares, and ParentCo shall immediately thereafter deliver or cause to be
delivered to the Vendor of such Exchangeable Shares (or to such other persons,
if any, properly designated by such Vendor), the Exchangeable Share
Consideration deliverable in connection with the exercise of the Exchange Put
Right or the Exchange Right; provided, however, that no such delivery shall be
made unless and until the Vendor requesting the same shall have paid (or
provided evidence satisfactory to the Corporation and ParentCo of the payment
of) the taxes (if any) payable as contemplated by Section 3.7 of this agreement.
Immediately upon the giving of notice by the Vendor to ParentCo and the
Corporation of the exercise of the Exchange Put Right or the Exchange Right, as
provided in this Section 3.5, the closing of the
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transaction of purchase and sale contemplated by the Exchange Put Right or the
Exchange Right shall be deemed to have occurred, and the Vendor of such
Exchangeable Shares shall be deemed to have transferred to ParentCo all of its
right, title and interest in and to such Exchangeable Shares and the related
interest in the Exchange Rights, shall cease to be a holder of such Exchangeable
Shares and shall not be entitled to exercise any of the rights of a holder in
respect thereof, other than the right to receive his proportionate part of the
total purchase price therefor, unless such Exchangeable Share Consideration is
not delivered by ParentCo to such Vendor (or to such other persons, if any,
properly designated by such Vendor), within seven Business Days of the date of
the giving of such notice, in which case the rights of the Vendor shall remain
unaffected until such Exchangeable Share Consideration is delivered by ParentCo
and any check included therein is paid. Concurrently with such Vendor ceasing to
be a holder of Exchangeable Shares, the Vendor shall be considered and deemed
for all purposes to be the holder of the ParentCo Common Shares delivered to it
pursuant to the Exchange Put Right or the Exchange Right.
3.6 Exercise of Exchange Right Subsequent to Retraction. In the event
that a Vendor has exercised its right under Article 6 of the Exchangeable Share
Provisions to require the Corporation to redeem any or all of the Exchangeable
Shares held by the Vendor (the "Retracted Shares") and is notified by the
Corporation pursuant to Section 6.6 of the Exchangeable Share Provisions that
the Corporation will not be permitted as a result of liquidity or solvency
requirements of applicable law to redeem all such Retracted Shares, subject to
receipt by the Vendor of written notice to that effect from the Corporation and
provided that ParentCo shall not have exercised the Retraction Call Right with
respect to the Retracted Shares and that the Vendor has not revoked the
retraction request delivered by the Vendor to the Corporation pursuant to
Section 6.1 of the Exchangeable Share Provisions, the retraction request will
constitute and will be deemed to constitute notice from the Vendor to exercise
the Exchange Right with respect to those Retracted Shares which the Corporation
is unable to redeem. In any such event, the Corporation hereby agrees with the
Vendor immediately to notify the Vendor of such prohibition against the
Corporation's redeeming all of the Retracted Shares and immediately to forward
or cause to be forwarded to ParentCo all relevant materials delivered by the
Vendor to the Corporation (including without limitation a copy of the retraction
request delivered pursuant to Section 6.1 of the Exchangeable Share Provisions)
in connection with such proposed redemption of the Retracted Shares, ParentCo
will purchase such shares in accordance with the provisions of this Article III.
3.7 Stamp or Other Transfer Taxes. Upon any sale of Exchangeable Shares
to ParentCo pursuant to the Exchange Put Right, the Exchange Right or the
Automatic Exchange Rights, the share certificate or certificates representing
ParentCo Common Shares to be delivered in connection with the payment of the
total purchase price therefor shall be issued in the name of the Vendor of the
Exchangeable Shares so sold without charge to the Vendor of the Exchangeable
Shares so sold, provided, however, that such Vendor:
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(a) shall pay (and neither ParentCo nor the Corporation shall be
required to pay) any documentary, stamp, transfer or other similar taxes that
may be payable in respect of any transfer involved in the issuance or delivery
of such shares to a person other than such Vendor; or
(b) shall have established to the satisfaction of ParentCo and the
Corporation that such taxes, if any, have been paid.
3.8 Notice of Insolvency Event. Immediately upon the occurrence of an
Insolvency Event or any event which with the giving of notice or the passage of
time or both would be an Insolvency Event, the Corporation and ParentCo shall
give written notice thereof to the Vendors which notice shall contain a brief
statement of the right of the Vendors with respect to the Exchange Right.
3.9 Qualification of ParentCo Common Shares. ParentCo shall, at all
times following the issue of the ParentCo Common Shares and the expiration of
the LockUp Agreement as defined in the Acquisition Agreement, use good faith to
cooperate with the Vendors to ensure that the ParentCo Common Shares shall be
eligible for resale under an available exemption from registration under United
States securities laws, including removing any legends which are no longer
applicable upon written request from the Vendors, and providing necessary legal
opinions to the transfer agent on a timely basis. Should the parties determine,
either before or after the issue of the ParentCo Common Shares and the
expiration of the LockUp Agreement, that there are no available exemptions from
registration relating to the resale of the ParentCo Common Shares, then in such
instance ParentCo, on ten days written notice from any Vendor, shall execute the
Registration Rights Agreement in the form attached as Exhibit J to the
Acquisition Agreement, and subject to execution by the Vendors, prepare and file
a registration statement pursuant to the terms thereof at least 30 days prior to
the expiration or earlier termination of the LockUp Agreement.
3.10 Reservation of ParentCo Common Shares. ParentCo hereby represents,
warrants and covenants that it has irrevocably reserved for issuance and will at
all times keep available, free from pre-emptive and other rights, out of its
authorized and unissued capital shares such number of ParentCo Common Shares:
(a) as is equal to the sum of
(i) the number of Exchangeable Shares
issued and outstanding from time to
time and
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(ii) the number of Exchangeable Shares
issuable upon the exercise of all
rights to acquire Exchangeable
Shares outstanding from time to time
and
(b) as are now and may hereafter be required to enable and permit the
Corporation to meet its obligations hereunder, under the incorporating documents
of ParentCo, under the Support Agreement and under the Exchangeable Share
Provisions.
3.11 Automatic Exchange on Liquidation of ParentCo.
(a) ParentCo will give each Vendor written notice of each of the
following events (each, a "Liquidation Event") at the time set forth below:
(i) in the event of any determination by the board of
directors of the ParentCo to institute voluntary liquidation, dissolution or
winding-up proceedings with respect to ParentCo or to effect any other
distribution of assets of ParentCo among its shareholders for the purpose of
winding up its affairs, at least 20 days prior to the proposed effective date of
such liquidation, dissolution, winding-up or other distribution; and
(ii) immediately, upon the earlier of
(A) receipt by ParentCo of notice of; and
(B) ParentCo's otherwise becoming aware of
any instituted claim, suit, petition or other proceedings with respect to the
involuntary liquidation, dissolution or winding-up of ParentCo or to effect any
other distribution of assets of ParentCo among its shareholders for the purpose
of winding up its affairs. Such notice shall include a brief description of the
automatic exchange of Exchangeable Shares for ParentCo Common Shares provided
for in Section 3.11(b) below.
(b) In order that the Vendors will be able to participate on a pro rata
basis with the Vendors of ParentCo Common Shares in the distribution of assets
of ParentCo in connection with a Liquidation Event, immediately prior to the
effective time (the "Liquidation Event Effective Time") of a Liquidation Event,
all of the then outstanding Exchangeable Shares shall be automatically exchanged
for ParentCo Common Shares. To effect such automatic exchange, ParentCo shall be
deemed to have purchased each Exchangeable Share outstanding immediately prior
to the Liquidation Event Effective Time and held by Vendors, and each Vendor
shall be deemed to have sold the Exchangeable Shares held by it at such time,
for a purchase price per share equal to the Exchangeable Share Price applicable
at such time. In connection with such automatic exchange, ParentCo will provide
to each Vendor an Officer's Certificate setting forth the calculation of the
purchase price for each Exchangeable Share.
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(c) The closing of the transaction of purchase and sale contemplated by
Section 3.11(b) above shall be deemed to have occurred immediately prior to the
Liquidation Event Effective Time, and each Vendor of Exchangeable Shares shall
be deemed to have transferred to ParentCo all of the Vendor's right, title and
interest in and to such Exchangeable Shares and the related interest in the
Exchange Rights and shall cease to be a Vendor of such Exchangeable Shares, and
ParentCo shall deliver to the Vendor the Exchangeable Share Consideration
deliverable upon the automatic exchange of Exchangeable Shares. Concurrently
with such Vendor's ceasing to be a Vendor of Exchangeable Shares, the Vendor
shall be considered and deemed for all purposes to be the holder of the ParentCo
Common Shares issued to it pursuant to the automatic exchange of Exchangeable
Shares for ParentCo Common Shares, and the certificates held by the Vendor
previously representing the Exchangeable Shares exchanged by the Vendor with
ParentCo pursuant to such automatic exchange shall thereafter be deemed to
represent the ParentCo Common Shares issued to the Vendor by ParentCo pursuant
to such automatic exchange. Upon the request of a Vendor and the surrender by
the Vendor of Exchangeable Share certificates deemed to represent ParentCo
Common Shares, duly endorsed in blank and accompanied by such instruments of
transfer as ParentCo may reasonably require, ParentCo shall deliver or cause to
be delivered to the Vendor certificates representing the ParentCo Common Shares
of which the Vendor is the holder.
(d) ParentCo covenants that it will supply its transfer agent with duly
executed share certificates for the purpose of completing the exercise from time
to time of the Exchange Put Right, the Exchange Right and the Automatic Exchange
Rights, in each case pursuant to Article III hereof.
ARTICLE IV
CERTAIN RIGHTS OF PARENTCO TO ACQUIRE
EXCHANGEABLE SHARES
4.1 ParentCo Liquidation Call Right.
(a) ParentCo shall have the overriding right (the "Liquidation Call
Right"), in the event of and notwithstanding the proposed liquidation,
dissolution or winding-up of the Corporation as referred to in Article 5 of the
Exchangeable Share Provisions, to purchase from all but not less than all, of
the holders of Exchangeable Shares on the Liquidation Date (other than ParentCo
or any Subsidiary thereof) all but not less than all of the Exchangeable Shares
held by each such holder on payment by ParentCo to each holder of the
Exchangeable Share Price applicable on the last Business Day prior to the
Liquidation Date (the "Liquidation Call Purchase Price"), which as provided in
this Section 4.1, shall be fully paid and satisfied by the delivery by or on
behalf of ParentCo of the Exchangeable Share Consideration representing the
Liquidation Call Purchase Price. In the event of the exercise of the Liquidation
Call Right by ParentCo, each holder shall be obligated to sell all the
Exchangeable Shares held by the holder to ParentCo on the Liquidation
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Date on payment by ParentCo to the holder of the Exchangeable Share
Consideration representing the Liquidation Call Purchase Price for each such
share.
(b) To exercise the Liquidation Call Right, ParentCo must notify the
Corporation and the holders of Exchangeable Shares of ParentCo's intention to
exercise such right at least 20 days before the Liquidation Date in the case of
a voluntary liquidation, dissolution or winding-up of the Corporation and at
least five Business Days before the Liquidation Date in the case of an
involuntary liquidation, dissolution or winding-up of the Corporation. ParentCo
will notify the holders of Exchangeable Shares as to whether or not ParentCo has
exercised the Liquidation Call Right forthwith after the expiry of the date by
which the same may be exercised by ParentCo. If ParentCo exercises the
Liquidation Call Right, on the Liquidation Date, ParentCo will purchase and the
holders will sell all of the Exchangeable Shares then outstanding for the
Exchangeable Share Consideration representing the total Liquidation Call
Purchase Price.
(c) For the purposes of completing the purchase of the Exchangeable
Shares pursuant to the Liquidation Call Right, ParentCo shall deposit with the
Corporation, on or before the Liquidation Date, the Exchangeable Share
Consideration representing the total Liquidation Call Purchase Price. Provided
that such Exchangeable Share Consideration has been so deposited with the
Corporation, on and after the Liquidation Date the right of each holder of
Exchangeable Shares will be limited to receiving such holder's proportionate
share of the Exchangeable Share Consideration representing the total Liquidation
Call Purchase Price payable by ParentCo without interest upon presentation and
surrender by the holder of certificates representing the Exchangeable Shares
held by such holder and the holder shall on and after the Liquidation Date be
considered and deemed for all purposes to be the holder of the ParentCo Common
Share delivered to it. Upon surrender to the Corporation of a certificate or
certificates representing the Exchangeable Shares, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the articles and the by-laws of the Corporation and
such additional documents and instruments as the Corporation may reasonably
require, the holder of such surrendered certificate or certificates shall be
entitled to receive in exchange therefor, and the Corporation on behalf of
ParentCo shall deliver to such holder, the Exchangeable Share Consideration to
which the holder is entitled. If ParentCo does not exercise the Liquidation Call
Right in the manner described above, on the Liquidation Date the holders of the
Exchangeable Shares will be entitled to receive in exchange therefor the
Exchangeable Share Consideration representing the Liquidation Amount otherwise
payable by the Corporation in connection with the liquidation, dissolution or
winding-up of the Corporation pursuant to Article 5 of the Exchangeable Share
Provisions.
4.2 ParentCo Redemption Call Right.
(a) ParentCo shall have the overriding right (the "Redemption Call
Right"), notwithstanding the proposed redemption of the Exchangeable Shares by
the Corporation pursuant to Article 7 of the Exchangeable Share Provisions, to
purchase from all, but not less than all, of the holders of Exchangeable Shares
on the Automatic Redemption Date (other than ParentCo or
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any Subsidiary thereof) all but not less than all of the Exchangeable Shares
held by each such holder on payment by ParentCo to the holder of the
Exchangeable Share Price applicable on the last Business Day prior to the
Automatic Redemption Date (the "Redemption Call Purchase Price"), which as
provided in this Section 4.2, shall be fully paid and satisfied by the delivery
by or on behalf of ParentCo of the Exchangeable Share Consideration representing
the Redemption Call Purchase Price. In the event of the exercise of the
Redemption Call Right by ParentCo, each holder shall be obligated to sell all
the Exchangeable Shares held by the holder to ParentCo on the Automatic
Redemption Date on payment by ParentCo to the holder of the Exchangeable Share
Consideration representing the Redemption Call Purchase Price for each such
share.
(b) Unless ParentCo delivers written notice to the Vendors and the
Corporation no less than 20 days before the Automatic Redemption Date of its
intention not to exercise the Redemption Call Right, ParentCo will be deemed to
have exercised the Redemption Call Right on the date by which the same may be
exercised by ParentCo. If ParentCo exercises the Redemption Call Right, on the
Automatic Redemption Date, ParentCo will purchase and the holders will sell all
of the Exchangeable Shares then outstanding for the Exchangeable Share
Consideration representing the total Redemption Call Purchase Price.
(c) For the purposes of completing the purchase of the Exchangeable
Shares pursuant to the Redemption Call Right, ParentCo shall deposit with the
Corporation, on or before the Automatic Redemption Date, the Exchangeable Share
Consideration representing the total Redemption Call Purchase Price. Provided
that such Exchangeable Share Consideration has been so deposited with the
Corporation, on and after the Automatic Redemption Date the rights of each
holder of Exchangeable Shares will be limited to receiving such holder's
proportionate share of the Exchangeable Share Consideration representing the
total Redemption Call Purchase Price payable by ParentCo upon presentation and
surrender by the holder of certificates representing the Exchangeable Shares
held by such holder and the holder shall on and after the Automatic Redemption
Date be considered and deemed for all purposes to be the holder of the
Exchangeable Shares delivered to such holder. Upon surrender to the Corporation
of a certificate or certificates representing Exchangeable Shares, together with
such other documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the articles and the by-laws of the Corporation and
such additional documents and instruments as the Corporation may reasonably
require, the holder of such surrendered certificate or certificates shall be
entitled to receive in exchange therefor, and the Corporation shall deliver to
such holder, the Exchangeable Share Consideration to which the holder is
entitled. If ParentCo notifies the Vendors and the Corporation in the manner
described above of its intention not to exercise the Redemption Call Right on
the Automatic Redemption Date the holders of the Exchangeable Shares will be
entitled to receive in exchange therefor the Exchangeable Share Consideration
representing the Redemption Price otherwise payable by the Corporation in
connection with the redemption of the Exchangeable Shares pursuant to Article 7
of the Exchangeable Share Provisions.
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ARTICLE V
PARENTCO SUCCESSORS
5.1 Certain Requirements in Respect of Combination, Etc. If ParentCo
shall enter into any transaction (whether by way of reconstruction,
reorganization, consolidation, merger, transfer, sale, lease or otherwise)
whereby all or substantially all of its undertaking, property and assets would
become the property of any other Person or, in the case of a merger, of the
continuing corporation resulting therefrom, it shall ensure that:
(a) such other Person or continuing corporation (the "ParentCo
Successor"), by operation of law, becomes, without more, bound by the terms and
provisions of this agreement or, if not so bound, executes, prior to or
contemporaneously with the consummation of such transaction an agreement
supplemental hereto and such other instruments (if any) are necessary or
advisable to evidence the assumption by the ParentCo Successor of liability for
all moneys payable and property deliverable hereunder, the covenant of such
ParentCo Successor to pay and deliver or cause to be delivered the same and its
agreement to observe and perform all the covenants and obligations of ParentCo
under this agreement; and
(b) such transaction shall be upon such terms which substantially
preserve and do not impair in any material respect any of the rights, duties,
powers and authorities of the Vendors hereunder.
5.2 Vesting of Powers in Successor. In the event that Section 5.1
applies, the ParentCo Successor and the Corporation shall execute and deliver
the supplemental agreement provided for in Article VI hereof, and thereupon the
ParentCo Successor shall possess and from time to time may exercise each and
every right and power of ParentCo under this agreement in the name of ParentCo
or otherwise and any act or proceeding by any provision of this agreement
required to be done or performed by the board of directors of ParentCo or any
officers of ParentCo may be done and performed with like force and effect by the
directors or officers of such ParentCo Successor.
5.3 Wholly-owned Subsidiaries. Nothing herein shall be construed as
preventing the amalgamation or merger of any wholly-owned subsidiary of ParentCo
with or into ParentCo or the winding-up, liquidation or dissolution of any
wholly-owned subsidiary of ParentCo provided that all of the assets of such
subsidiary are transferred to ParentCo or another wholly-owned subsidiary of
ParentCo, and any such transactions are expressly permitted by this Article V.
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ARTICLE VI
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
6.1 Amendments, Modifications, Etc. Subject to Section 6.2, this
agreement may not be amended, modified or waived except by an agreement in
writing executed by the Corporation and ParentCo and approved by the Vendors in
accordance with Section 10.1 of the Exchangeable Share Provisions. No amendment
to or modification or waiver of any of the provisions of this agreement
otherwise permitted hereunder shall be effective unless made in writing and
signed by all of the parties hereto.
6.2 Changes in Capital of ParentCo and the Corporation. At all times
after the occurrence of any event effected pursuant to Section 2.6 or Section
2.7 of the Support Agreement, as a result of which either ParentCo Common Shares
or the Exchangeable Shares or both are in any way changed, this agreement shall
forthwith be amended and modified as necessary in order that it shall apply with
full force and effect, mutatis mutandis, to all new securities into which
ParentCo Common Shares or the Exchangeable Shares or both are so changed, and
the parties hereto shall execute and deliver a supplemental agreement giving
effect to and evidencing such necessary amendments and modifications.
6.3 Execution of Supplemental Agreements. From time to time the
Corporation (when authorized by a resolution of its board of directors), and
ParentCo (when authorized by a resolution of its board of directors) may,
subject to the provisions of these presents, and they shall, when so directed by
these presents, execute and deliver by their proper officers, agreements or
other instruments supplemental hereto, which thereafter shall form part hereof
to evidence the succession of any ParentCo Successors to ParentCo and the
covenants of and obligations assumed by each such ParentCo Successor in
accordance with the provisions of Article V.
ARTICLE VII
TERM
7.1 Term. This agreement shall continue until there are no Exchangeable
Shares outstanding held by a Vendor.
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ARTICLE VIII
GENERAL
8.1 Severability. If any provision of this agreement is held to be
invalid, illegal or unenforceable, the validity, legality or enforceability of
the remainder of this agreement shall not in any way be affected or impaired
thereby, and the agreement shall be carried out as nearly as possible in
accordance with its original terms and conditions.
8.2 Enurement. This agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
8.3 Notices to Parties. All notices and other communications between
the parties hereunder shall be in writing and shall be deemed to have been given
if delivered personally or by confirmed telecopy to the parties at the following
addresses (or at such other address for such party as shall be specified in like
notice):
(a) if to ParentCo to:
The ForeFront Group, Inc.
0000 Xxxx Xxx Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx
00000
Attention: Secretary
Fax: (000) 000-0000
Tel: (000) 000-0000
(b) if to the Corporation to:
c/o The ForeFront Group, Inc.
0000 Xxxx Xxx Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx
00000
Attention: Secretary
Fax: (000) 000-0000
Tel: (000) 000-0000
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(c) if to the Vendors at their registered addresses on the share
registers of the Corporation.
Except as otherwise specifically provided herein, any notice
or other communication given personally shall be deemed to have been given and
received upon delivery thereof, and if given by telecopy shall be deemed to have
been given and received on the date of receipt thereof unless such day is not a
Business Day in which case it shall be deemed to have been given and received
upon the immediately following Business Day.
8.4 Notice to Vendors. Except as otherwise specicially provided herein,
any and all notices to be given and any documents to be sent to any Vendors may
be given or sent to the address of such Vendor shown on the register of Vendors
of Exchangeable Shares in any manner permitted by the Exchangeable Share
Provisions and shall be deemed to be received (if given or sent in such manner)
at the time specified in such Exchangeable Share Provisions, the provisions of
which Exchangeable Share Provisions shall apply mutatis mutandis to notices or
documents as aforesaid sent to such Vendors.
8.5 Risk of Payments by Post. Whenever payments are to be made or
documents are to be sent to any Vendor, by the Corporation or by ParentCo or by
such Vendor to ParentCo or the Corporation, the making of such payment or
sending of such document sent through the post shall be at the risk of the
Corporation or ParentCo, in the case of payments made or documents sent by the
Corporation or ParentCo, and the Vendor, in the case of payments made or
documents sent by the Vendor.
7.6 Counterparts. This agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
8.7 Jurisdiction. This agreement shall be construed and enforced in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
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IN WITNESS WHEREOF, the parties hereby have caused this
agreement to be duly executed as of the date first above written.
THE FOREFRONT GROUP, INC.
By: /s/ Xxxxx Xxxxxx
LANPROFESSIONAL INC.
By: /s/ Xxxxx Xxxxxx
/s/ Xxxxx Xxxxx
Xxxxx X. Xxxxx
/s/ Naveen Seth
Naveen Seth
/s/ Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
/s/ XX Xxxxx
Jang Xxxxxxx Xxxxx
