Exhibit 10.1
LOCK-UP AGREEMENT
THIS AGREEMENT made the 28th day of
October, 1996
AMONG:
XXXX X. XXXXXXX, Businessman, of 0000
Xxxxxxxx Xxxxxxxx, Xxxxx Xxxxxxxxx,
Xxxxxxx, Xxxxxxxx, X0X 0X0
(Xxxxxxx")
AND:
AOD ACQUISITION CORP., a Yukon company
having an office at Suite 1500 - 000
Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0
("AOD")
AND:
AMERICAN OILFIELD DIVERS, INC., a
Louisiana company having an office at
000 X. Xxxxxxx Xxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxx, 00000.
("AOD PARENT")
WHEREAS:
X. Xxxxxxx is the direct or indirect
beneficial owner of not less than 1.5 million common shares ("Subject
Shares") in the capital of Hard Suits Inc. ("HSI") and 2,500,000 Class
A Performance Shares in the capital of HSI (the "Performance Shares");
B. AOD has made an offer (the "Offer") to
purchase all of the issued and outstanding common shares ("Common
Shares") of HSI at a price of Cdn. $1.65 per Common Share pursuant to
a take-over bid circular dated September 25, 1996 and a notice of
variation dated October 18, 1996;
C. The parties wish to enter into this
Agreement to evidence their agreement with respect to the Subject
Shares and the other matters set forth herein.
NOW THEREFORE THIS AGREEMENT WITNESSES
THAT in consideration of the premises and the respective covenants and
agreements herein contained, the parties hereto covenant and agree as
follows:
1.0 LOCKUP AND ACQUISITION AGREEMENT
1.1 Concurrently with the execution hereof,
each of Xxxxxxx, AOD and AOD Parent will enter into the Acquisition
Agreement with HSI and each of its other directors in the form
attached has Schedule "A" (the "Acquisition Agreement').
1.2 On or before 5:00 p.m. (Vancouver time)
on October 29, 1996 AOD or AOD Parent shall provide to Xxxxxxx and HSI
written confirmation of the deposit of at least $1.0 million (Cdn.)
With Price Waterhouse (Vancouver), in trust for the account of AOD,
and upon Xxxxxxx depositing the Subject Shares under the Offer, such
funds shall be held and disbursed pursuant to Section 1.1(5) of the
Acquisition Agreement.
1.3 Subject to receipt of the confirmation
referred to in Section 1.2, Xxxxxxx shall forthwith, and in any event
no later than 8:00 p.m. (Vancouver time) on October 29, 1996,
irrevocably deposit all of the Subject Shares under the Offer, and
thereafter deposit any additional Common Shares acquired by him upon
exercise of any outstanding options or warrants held by him under the
Varied Offer prior to the Expiry Time, and will not withdraw or take
any action to withdraw any of the Subject Shares deposited under the
Offer or such other Common Shares deposited under the Varied Offer
notwithstanding any statutory rights or rights under the terms of the
Offer or the Varied Offer which he might otherwise have unless this
Agreement is terminated prior to the taking up of any Common Shares
under the Offer or the Varied Offer.
2.0 VARIED OFFER
2.1 As soon as is reasonably practicable
following the execution and delivery of this Agreement, AOD and AOD
Parent agree, subject to the terms hereof and the Acquisition
Agreement:
(a) to vary the Offer to disclose this
Agreement and the Acquisition Agreement;
(b) to vary the Offer by extending the
Expiry Time of the Offer to no earlier
than 12:01 a.m. on the 10th day after
the mailing of the Offer as varied as
provided herein (subject to further
extension of the Offer Period by AOD in
accordance with applicable laws);
(c) to forthwith prepare, file and deliver
such notices of change or variation,
reports or circulars as may be required
under all applicable securities
legislation to give notice of the Offer,
as varied; and
2.2 AOD shall have the right to further vary
the Offer from time to time, provided such variation is carried out in
compliance with all applicable laws, does not result in a decrease in
the price offered for the Common Shares and is not inconsistent with
any of the provisions of this Agreement. For greater certainty, in
the event the consideration offered under the Offer is increased,
Xxxxxxx shall be entitled to be paid such higher price for the Subject
Shares deposited and taken up by AOD. The Offer, as varied pursuant
to Section 2.1 or as subsequently varied pursuant to this Section 2.2,
is hereinafter referred to as the "Varied Offer".
3.0 TERMINATION
3.1 The obligations of the parties hereunder
shall terminate:
(1) at Xxxxxxx'x election at any time after
5:00 p.m. (Vancouver time) on October
29, 1996, if AOD has not satisfied the
conditions set out in Section 1.2 by
such time;
(2) at AOD's election at any time after 8:00
p.m. (Vancouver time) on October 29,
1996 if Xxxxxxx has not deposited the
Subject Shares by such time under the
Offer;
(3) if any and all of the Subject Shares are
not taken up and paid for prior to the
date which is 46 days after the date of
the Offer; or
(4) on the Varied Offer being withdrawn; or
(5) on the Varied Offer being amended or
varied in a manner that is inconsistent
with the terms hereof.
Upon termination hereof, this Agreement
shall be null and void and of no force or effect and Xxxxxxx shall
thereupon be entitled to the return of all shares previously deposited
by him under the Varied Offer.
4.0 CLOSING ARRANGEMENTS
4.1 Concurrently with AOD taking up and
paying for the Subject Shares deposited under the Offer, in accordance
with the terms and conditions hereof and of the Offer.
(1) all stock options or warrants held by
Xxxxxxx which are not "in the money"
shall be released, surrendered for
cancellation and be of no further force
or effect;
(2) Xxxxxxx shall surrender the certificate
representing Performance Shares, duly
endorsed for cancellation or failing
that, a stock power of attorney to
transfer the shares to HSI, together
with such other documents, if any, as
are required for the cancellation of
such shares; and
(3) AOD and AOD Parent shall execute and
deliver to Xxxxxxx and each of the
officers and directors of HSI and its
subsidiaries a release and indemnity in
a form satisfactory to such releasees
releasing and indemnifying them of and
from any and all actions, suits, claims,
proceedings, liabilities, costs or
expenses, howsoever incurred, arising
out of or in connection with their
acting as a director, officer or
employee of HSI or any of its
subsidiaries except such liability which
a court of competent jurisdiction has
determined to be attributable to the
gross neglect, wilful misconduct or
intentional violation of law.
5.0 ADDITIONAL COVENANTS OF XXXXXXX
5.1 Non-Solicitation and Co-operation
Except as otherwise provided for herein,
Xxxxxxx covenants with AOD that so long as Xxxxxxx is obligated to
deposit any of the Subject Shares pursuant to the Offer or is not
entitled to withdraw any of the Subject Shares from the Offer.
(1) Xxxxxxx will not (unless consented to in
writing by AOD) and will use his
reasonable endeavours to cause HSI to
not, take action of any kind which may
reduce the likelihood of success of the
Offer or the Varied Offer, including but
not limited to, any action to initiate,
encourage, assist or participate in
proposals or offers from, or provide
information relating to HSI or any of
the Subject Shares to any person, entity
or group in connection with the
acquisition or disposition of all or any
substantial part of the HSI's issued and
outstanding securities, or any
amalgamation, merger, arrangement,
private placement of equity or
convertible securities (including any
proposed private placement to British
Columbia Mercantile Corporation and
Venture Management Inc.), sale of all or
any substantial part of the assets of
HSI, take-over bid, reorganization,
recapitalization, liquidation or
winding-up, or other business
combination, similar transaction or any
other transaction which interferes, by
delay or otherwise, with the
transactions contemplated hereby
including the Offer or the Varied Offer;
(2) Xxxxxxx will notify AOD forthwith upon
his becoming award of any proposal or
offer referred to in section 5.1(1) and
inform AOD of all information (including
the identity of any prospective offeror)
known to Xxxxxxx at the time regarding
such proposal or offer;
(3) Other than the matters contemplated
under the Acquisition Agreement, Xxxxxxx
will use his reasonable endeavours to
cause the business and affairs of HSI to
be operated in the normal course and
with a view to the best interests of HSI
and all of its shareholders and, in
furtherance to the foregoing, not to
cause HSI to enter into any agreement,
commitment or understanding to acquire
any material assets or enter into any
agreement, understanding or commitment
to sell any material assets or part
thereof of HSI or to make any other
material change in the business, assets,
liabilities, operations, capital or
affairs of HSI considered as a whole,
unless such agreement, commitment,
understanding or material change is
satisfactory to and is approved in
writing by AOD, acting reasonably;
(4) Xxxxxxx will use all reasonable efforts,
at AOD's expense, to assist AOD to
complete the transactions contemplated
hereby, including the Offer and the
Varied Offer, including cooperating (and
using all reasonable efforts to cause
HSI to cooperate) with AOD in making all
requisite regulatory filings; and
(5) Xxxxxxx agrees not to directly or
indirectly solicit the employment of any
HSI employee for a period of one year
after the date upon which all of the
Subject Shares deposited under the Offer
have been taken-up and paid for.
5.2 Nothing in Section 5.1 shall be
interpreted or construed so as to impose any obligation or duty which
would in any way xxxxxx Xxxxxxx'x discretion in acting as or in
keeping with his fiduciary duties as a director or officer of HSI or
any of its subsidiaries or in a manner contrary to law.
5.3 Xxxxxxx will prior to the Time of Expiry
of the Varied Offer exercise any options or warrants held by Xxxxxxx
which are "in the money" and tender such Common Shares into the Varied
Offer.
6.0 REPRESENTATIONS AND WARRANTIES OF
XXXXXXX
6.1 Xxxxxxx hereby represents and warrants
to AOD as follows:
(1) the Subject Shares and the Performance
Shares are now, or at the time at which
AOD takes up and pays for such shares
will be, registered in the name of
Xxxxxxx or a company controlled by
Xxxxxxx and owned by Xxxxxxx or a
company controlled by Xxxxxxx as the
sole beneficial owner with a good and
marketable title thereto, free and clear
of any and all mortgages, liens,
charges, restrictions, security
interests, adverse claims, pledges,
encumbrances and demands of any nature
of kind whatsoever, other than the
pledge of the Performance Shares to
Federal Business Development Bank
securing not more than $40,000 (which
amount is to be paid from the Completion
Financing provided for in section 1 of
the Acquisition Agreement) the
restrictions contained in HSI's articles
and restrictions imposed on control
block holders by applicable securities
legislation, and to the best of
Xxxxxxx'x knowledge, are issued and
outstanding as fully paid and non-
assessable;
(2) no person, firm or corporation has any
agreement or option, or any right or
privilege (whether by law, pre-emptive
or contractual) capable of becoming an
agreement or option, for the purchase,
acquisition or transfer from Xxxxxxx of
any of the Subject Shares or any
interest therein or right thereto,
except AOD pursuant hereto;
(3) this Agreement has been duly executed
and delivered by and on behalf of
Xxxxxxx and constitutes a valid and
binding obligation of Xxxxxxx
enforceable in accordance with its
terms;
(4) there has been no material adverse
change in the business, results of
operations, assets, liabilities,
financial condition or affairs of HSI
considered as a whole, financial or
otherwise, since June 30, 1996 that has
not been generally disclosed and
reported in accordance with law to the
applicable securities regulatory
authorities and there is not, to the
knowledge of Xxxxxxx, any undisclosed
material adverse information in regard
to the current and prospective
operations of HSI; and
(5) he is not aware of any material fact
concerning the business, operations,
capital or affairs of HSI considered as
a whole which has not previously been
generally disclosed other than the
transaction contemplated by this
Agreement, or any material contractual
right of HSI which may be impaired or
otherwise adversely affected so as to
materially adversely affect HSI
considered as a whole when a change in
control of HSI occurs, or of any
covenant, term or condition of any of
HSI's instruments or agreements that is
or may be materially adverse to HSI
considered as whole when a change in
control of HSI occurs.
7.0 REPRESENTATIONS AND WARRANTIES OF AOD
AND AOD PARENT
7.1 AOD and AOD Parent jointly and severally
represents and warrants to Xxxxxxx as follows:
(1) each of AOD and AOD Parent is a validly
subsisting corporation and has all
necessary corporate power and authority
to execute and deliver this Agreement
and to perform its obligations hereunder
and AOD has all necessary corporate
power and authority to purchase any and
all of the Common Shares tendered under
the Varied Offer, including the Subject
Shares;
(2) this Agreement has been duly executed
and delivered by and on behalf of each
of AOD and AOD Parent and constitutes a
valid and binding obligation of AOD and
AOD Parent enforceable in accordance
with its terms; and
(3) AOD and AOD Parent have made adequate
arrangements to ensure that the required
funds are available to effect payment in
full for any and all Common Shares
tendered under the Offer or the Varied
Offer.
8.0 GENERAL
8.1 Assignment
(1) AOD and AOD Parent may assign their
rights under this Agreement by
instrument in writing to a wholly-owned
(directly or indirectly) subsidiary of
AOD or AOD Parent provided however, if
such assignment takes place, AOD or AOD
Parent, as the case may be, shall
continue to be liable to Xxxxxxx
hereunder and for any default in
performance by the assignee or by any
such subsidiary. This Agreement shall
not otherwise be assignable by any party
hereto.
(2) This Agreement shall be binding upon and
shall enure to the benefit of and be
enforceable by Xxxxxxx, AOD, AOD Parent
and their respective heirs, executors,
administrators, successors and permitted
assigns.
8.2 Time
Time shall be of the essence of this
Agreement.
8.3 Notice
Any notice, document or communication
required or permitted to be given hereunder shall be in writing and
may be given by delivery by hand or by telecopier to the party to
which it is to be given as follows:
(a) if to Xxxxxxx:
#3 - 1225 East Xxxxx Road
North Vancouver, British Columbia
V7J 1J3
Attention: Xx. Xxxx X. Xxxxxxx
Telecopier: (000) 000-0000
(b) if to AOD and AOD Parent:
000 Xxxx Xxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx
00000
Attention: Xx. Xxxxxx Xxx
Telecopier: (000) 000-0000
In the event any notice, document or communication required or
permitted hereunder is delivered by hand or telecopier after 5:00 p.m.
it shall be deemed to have been delivered by 9:00 a.m. on the
following day.
8.4 Governing Law
This Agreement and the rights and
obligations of the parties hereto shall be governed by and construed
and interpreted in accordance with the laws of the Province of British
Columbia and the laws of Canada applicable therein and each of the
parties hereto attorns to the exclusive jurisdiction of the courts of
such Province.
8.5 Shares
References to the Common Shares or the
Performance Shares include any shares into which the foregoing may be
reclassified, sub-divided, consolidated or converted and any rights
and benefits arising therefrom including any extraordinary
distributions of securities which may be declared in respect of the
Common Shares or the Performance Shares.
8.6 Expenses
Except as otherwise provided herein, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring
such expense and each of the parties agrees that except as disclosed
to the other parties hereto, it has not engaged any broker or finder
as to whom the other party would be liable for fees or other amounts.
8.7 Entire Agreement
This Agreement sets forth the entire
Agreement and understanding of the parties hereto in respect of the
transactions contemplated hereby. There are no warranties,
representations, terms, conditions or collateral agreements,
expressed, implied or statutory, between Xxxxxxx, AOD and AOD Parent
other than as expressly set forth in this Agreement, the Varied Offer
and the Acquisition Agreement.
8.8 Business Day
A business day for the purpose of this
Agreement shall mean any day other than Saturday, Sunday or a Canadian
federal holiday or a day on which national banks are open for business
in the City of Vancouver.
8.9 Disclosure
The parties hereto agree not to disclose
or to divulge to any other person, other than their legal, financial
or other advisors, the terms and conditions hereof or of the
negotiations or other matters discussed between the parties prior to
the entering into of this Agreement, except as may be required by
applicable law or pursuant to an order of a court or other competent
authority or as may be approved in writing by each of the parties,
acting reasonably.
IN WITNESS WHEREOF the parties hereto
have set their hands and corporate seals as of the date first above
written.
SIGNED, SEALED AND DELIVERED by XXXX )
X. XXXXXXX in the presence of: )
)
________________________________________ )
Name )
)
________________________________________ ) ________________________
Address ) XXXX X. XXXXXXX
)
________________________________________ )
________________________________________ )
)
)
________________________________________ )
Occupation
THE CORPORATE SEAL OF AOD
ACQUISITION CORP. Was hereunto affixed in )
the presence of: ) C/S
)
)
________________________________________ )
Title: __________________________________ )
(Authorized Signatory) )
THE CORPORATE SEAL OF AMERICAN
OILFIELD DIVERS, INC. was hereunto affixed )
in the presence of: ) C/S
)
________________________________________ )
Title: _________________________________ )
(Authorized Signatory) )
