Exhibit 10.1
August 7, 2002
Xx. Xxxxxxx Xxxxxx
000 Xxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Dear Xxxxxxx:
This letter (the "AGREEMENT") shall serve to set forth our mutual
understanding and agreement as at August 7, 2002 (the "EFFECTIVE DATE")
regarding your continued employment with Zemex Corporation (the "CORPORATION"),
pursuant to the following terms and conditions:
1. DEFINITIONS. In this Agreement, unless the context otherwise requires,
the following terms shall have the following meanings:
"BOARD" shall mean the board of directors of the Corporation.
"BUSINESS DAY" means a day other than a Saturday, Sunday, statutory
holiday or other day on which banks are generally closed in Toronto.
"CAUSE" shall mean any act or omission by you which would in law permit
the Corporation to, without notice or payment in lieu of notice,
terminate your employment.
"CONFIDENTIAL INFORMATION" means non-public information not generally
known about the Corporation and/or its affiliates, which the
Corporation and/or any of its affiliates desires to protect and keep
secret and confidential (including information and trade secrets
conceived, originated, discovered or developed by the officers,
executives or consultants either employed by or retained by the
Corporation or its affiliates) concerning the business and affairs of
the Corporation and/or its affiliates including, without limitation:
(a) knowledge of all business or financial opportunities which are
or may be available to the Corporation and/or its affiliates;
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(b) all inventions and product enhancements and developments; or
(c) the present and contemplated plans, strategies, costs, prices,
systems, pricing policies and financial information used by
the Corporation or its affiliates in connection with its
business and client lists and information concerning the
customers of the Corporation and/or its affiliates, their
names, addresses, needs and preferences.
It is understood, however, that Confidential Information shall not
include Confidential Information that becomes part of the public domain
by publication or otherwise, not due to any unauthorized act or
omission by you.
"DISABILITY" shall mean your inability to substantially fulfil your
duties on behalf of the Corporation such that you have been approved
for and have been in receipt of long term disability benefits for a
period of six (6) consecutive months pursuant to the Corporation's long
term disability plan.
"ESPP" means the Corporation's employee stock purchase plan as the same
is in effect at any relevant time.
"OPTIONS" means those options granted to you pursuant to the Stock
Option Plan.
"SHARES" means those shares granted to you pursuant to the ESPP.
"STOCK OPTION PLAN" means the Corporation's stock option plan as the
same is in effect at any relevant time.
"ZEMEX EXECUTIVE RETIREE ACCOUNT" means the Corporation's retiree
benefit plan.
2. TERM. Subject to the provisions for termination hereinafter stated,
your term of employment will continue from the date hereof until
January 15, 2004, (the "EMPLOYMENT TERM") in the following manner:
(a) from the Effective Date until January 15, 2003 (the "PRESIDENT
TERM"), you shall continue your employment as President and
Chief Executive Officer of the Corporation pursuant to the
terms of this Agreement including the terms and conditions as
contained in Schedule A and excluding those in Schedule B;
and,
(b) for the period from January 16, 2003 until January 15, 2004
(the "CONSULTANT TERM"), you shall assume and be employed in
the position of Consultant to the Corporation pursuant to the
terms of this Agreement
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including the terms and conditions as contained in Schedule B
and excluding those in Schedule A.
For greater certainty, your employment with the Corporation, in any
manner whatsoever, shall, unless earlier terminated as herein provided,
terminate on January 15, 2004.
3. EXPENSES. The Corporation shall reimburse you for all out-of-pocket
expenses reasonably and properly incurred by you in connection with
your duties hereunder, provided that you shall furnish in a timely
manner to the Corporation statements and reports for all such expenses.
4. STOCK OPTIONS. In addition to any Options and Shares held by you as at
the Effective Date, you shall be eligible for consideration to
participate in and receive Options and acquire Shares pursuant to the
Stock Option Plan and the ESPP and, any other share compensation
arrangements of the Corporation in effect from time to time in which
senior management of the Corporation are generally eligible to
participate for the duration of the Employment Term. You shall have
until December 31, 2004 to exercise any unexercised Options or purchase
any Shares.
5. VESTED STOCKS AND LOANS. The parties agree that any outstanding loan
obligations, common shares held by you in the capital of the
Corporation, and any unexercised stock options will be subject to the
terms and conditions contained in the agreement attached as Schedule
"C" to this Agreement. In addition, you shall be entitled to receive a
lump sum payment of US$885,000.00 to be paid on the Effective Date.
6. PENSION AND RETIRING ARRANGEMENTS. Until the termination of your
employment, you will continue to participate in and accrue pension
under the Corporation's pension plan, in accordance with the terms
thereof, as such may be amended from time to time. In addition, the
Corporation shall use its best efforts to increase your existing U.S.
pension limit from U.S.$43,000.00 to the newly revised limit of
U.S.$55,000.00 per annum. Should this not be possible the parties agree
to share the costs equally of an annuity to provide for the difference
between the limits on a per annum basis. For greater certainty, each
party shall bear its own costs related to the purchase of its portion
of the annuity including, but not limited to, any tax consequences
incurred as a result of the purchase of this annuity.
7. TERMINATION. Your employment hereunder may be terminated by either the
Corporation or by you prior to the end of the Employment Term, as the
case may be, exercised by notice in writing at any time upon the
happening of any of the
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following events, in which event your employment shall terminate upon
the date specified in such notice:
(a) by the Corporation for Cause;
(b) by the Corporation in the event of your death;
(c) by the Corporation without Cause (and other than for the
circumstances in paragraph 7(b), 7(d) or 7(e)), in which case
you will receive the following:
(i) a lump sum equivalent to the base salary that you
would have earned for the remainder of the Employment
Term (the "NOTICE PERIOD") or at your option, salary
continuation in accordance with the Corporation's
payroll practices for the remainder of the Employment
Term;
(ii) if such termination occurs prior to January 15, 2003,
an amount in lieu of the value of any bonus
contemplated under paragraph A.3(b) that you would
have earned had you been employed until the end of
the President Term (such amount to be calculated as
the average of the bonus payments received by you for
the 3 years prior to the termination of your
employment);
(iii) continuation, during the Notice Period, of your
participation in the benefit plans referenced in
paragraph B.4 (excluding short-term disability,
long-term disability and current life insurance
benefits which shall cease at the end of the
statutory notice period,) or if a plan or program
does not permit the continuance of all or some of the
benefits for some or all of the Notice Period, the
Corporation shall make other arrangements at its own
expense to make substantially similar benefits
available to you, it being understood that you and
your wife shall participate in the Zemex Executive
Retiree Account commencing at the end of the Notice
Period for your life; and
(iv) all Options and Shares will vest immediately upon the
Effective Date; and the Options shall cease to be
exercisable at the later of their respective expiry
date and December 31, 2004, provided that the maximum
term of any such Option or Share shall not exceed the
period permitted by the Stock Option Plan or the
ESPP, as the case may be.
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(d) by the Corporation, in the event of your Disability, in which
case, you shall be entitled, to the extent you continue to
qualify, to receive the long term disability benefits for
executives of the Corporation in effect at such time in lieu
of any other compensation whatsoever, together with all
amounts owing to the effective date of termination; or
(e) by you, by giving three (3) month's written notice to the
Corporation.
8. MITIGATION. You shall not be required to mitigate the amount of any
payments provided for under paragraph 7(c) by seeking other employment
or otherwise, nor shall the amount of any payment provided for in such
paragraph be reduced by any compensation earned by you as a result of
employment by another employer during the Employment Term.
9. RELEASE. Each of the Corporation and you confirm that the provisions of
paragraph 7(c) are reasonable and the total amount payable as outlined
therein is an amount which has been agreed between them to be payable
hereunder and is a reasonable estimate of the damages which will be
suffered by you in the event of a termination without Cause and shall
not be construed as a penalty. Except as provided herein, you agree to
accept the payment provided for in paragraph 7(c) in full satisfaction
of any and all claims you have or may have against the Corporation with
the exception of any pension benefits owing pursuant to the
Corporation's pension plan, any pension or retirement arrangements in
accordance with paragraph 6 of this Agreement and any benefits pursuant
to the Executive Retiree Account and you agree to release the
Corporation with respect to same upon payment of said sum.
10. CONFIDENTIAL INFORMATION. You agree that all right, title and interest
in and to the Confidential Information shall remain the exclusive
property of the Corporation and the Confidential Information shall be
held in trust by you for the benefit of the Corporation. You shall not,
directly or indirectly, use or exploit the Confidential Information for
any operational, commercial or other purpose whatsoever or in any
manner detrimental to the Corporation or disclose, disseminate, impart
or grant access to the Confidential Information to any person for any
purpose.
You shall not copy, reproduce in any form or store any retrieval system
or database the Confidential Information without the prior written
consent of the Corporation, except for such copies, reproductions and
storage as may be reasonably required internally by you for the purpose
for which you receive the Confidential Information. You shall return
all Confidential Information to the Corporation on the termination of
your employment or at any other time as may be requested.
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11. NON-SOLICITATION. You shall not during the term of this Agreement and
for a period of twelve (12) months following termination of employment
for any reason on your own behalf or on behalf of any Person, whether
directly or indirectly, in any capacity whatsoever, alone or through or
in connection with any Person:
(a) contact, deal with, pursue, accept, receive or solicit any
business from any person who you know to be a prospective,
current or former client (a "CLIENT") of the Corporation for
the purpose of selling to the Client any products or services
that are the same as or substantially similar to, or in any
way competitive with, the products or services sold or
intended to be sold by the Corporation, to your knowledge;
(b) solicit the employment or engagement of or otherwise entice
away from the employment of the Corporation or any affiliate
any individual who is employed by the Corporation or any
affiliate at the relevant time;
(c) procure or assist any Person to solicit the employment or
engagement of or otherwise entice away from the employment of
the Corporation or any affiliate any individual who is
employed by the Corporation. It is understood, however, that
the giving of a reference, whether verbal or written, by you
to a potential third party, on behalf of an employee will not
constitute a breach of paragraph 11(b).
12. SURVIVAL. Notwithstanding the termination of this Agreement, (a)
neither party shall be released from any obligation that accrued prior
to the date of termination and (b) each party shall remain bound by the
provisions of this Agreement which by their terms impose obligations
upon that party that extend beyond the termination of this Agreement
and more particularly, but not limited to, paragraphs 7, 10, 11 and B.4
hereof.
13. ASSIGNMENT. Except as otherwise expressly provided herein, neither this
Agreement nor any rights or obligations shall be assignable by either
party without the prior written consent of the other party hereto.
14. AMENDMENT AND WAIVER. No supplement, modification, amendment or waiver
of this Agreement shall be binding unless executed in writing by both
parties. No waiver of any of the provisions of this Agreement shall
constitute a waiver of any other provision (whether or not similar) nor
shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
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15. SUCCESSORS AND ASSIGNS. This Agreement shall enure to the benefit of
and be binding upon the parties and their respective heirs, executors
and administrators or successors and permitted assigns, as the case may
be.
16. SEVERABILITY. If any provision in this Agreement is determined to be
invalid, void or unenforceable by the decision of any court of
competent jurisdiction, which determination is not appealed or
appealable for any reason whatsoever, the provision in question shall
not be deemed to affect or impair the validity or enforceability of any
other provision of this Agreement and such invalid or unenforceable
provision or portion thereof shall be severed from the remainder of
this Agreement.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter contemplated
herein and supersedes and replaces any provision of any other document
heretofore entered into by them with respect to the subject matter of
this Agreement, including but not limited to the Supplemental
Retirement Plan for key employees dated January 1, 2001 and the Change
in Control Agreement dated October 1, 1999.
18. INDEPENDENT LEGAL ADVICE. You acknowledge that you have been advised to
obtain, and that you have obtained or have been afforded the
opportunity to obtain, independent legal advice with respect to this
Agreement and that you understand the nature and consequences of this
Agreement.
19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of
Canada applicable therein.
20. INDEMNIFICATION. If, at any time, a dispute arises between the parties
regarding the interpretation of this Agreement, all reasonable legal
fees and expenses incurred by you relating to this dispute shall be
reimbursed by the Corporation upon receipt of proof of payment.
21. COUNTERPARTS. This Agreement may be executed by the parties in one or
more counterparts, each of which when so executed and delivered shall
be deemed to be an original and such counterparts shall together
constitute one and the same instrument.
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If the foregoing correctly sets forth your understanding with respect to your
employment by the Corporation, please so indicate by signing where indicated
below.
ZEMEX CORPORATION
By: /s/ Xxxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Director and Officer of the
Board of Directors and Chair of the
Compensation Committee
AGREED AND ACCEPTED
as of the date first written above.
/s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx Xxxxxx
SCHEDULE "A"
Further to Article 2 of the Agreement, your employment as President and
Chief Executive Officer with the Corporation shall continue pursuant to the
following terms and conditions:
A.1 TERM. Subject to the provisions for termination contained in Article 7
of the Agreement, from the Effective Date to January 15, 2003 (the
"President Term"), you shall continue your employment as President and
Chief Executive Officer of the Corporation.
A.2 DUTIES. Subject always to the control and direction of the Board in
accordance with the Corporation's corporate governance practices from
time to time, you shall:
(a) faithfully serve the Corporation and carry out those
responsibilities as are necessary to perform the functions
associated with the position of President and Chief Executive
Officer;
(b) devote all of your working time, skill, experience and
attention to carry out the responsibilities consistent with
the position of President and Chief Executive Officer and not
at any time engage in conduct which would significantly
interfere with the performance of your duties or which would
constitute a conflict with the interest of the Corporation or
its affiliates;
(c) use your best efforts to promote the success and the best
interests of the Corporation and its affiliates;
(d) not incur any debt, liability or obligation, or enter into any
contract or agreement for, or on behalf of, or in the name of
the Corporation except in the ordinary course of business
unless duly authorized by the Corporation; and
(e) follow the lawful policies and procedures established by the
Board from time to time and which have been documented in
writing.
A.3 REMUNERATION. As compensation for the performance of your duties during
the President Term:
(a) the Corporation shall pay to you a salary at the rate of
U.S.$300,000.00 per annum, payable bi-weekly in arrears less
those deductions, withholdings or contributions which are
required by law; and
(b) you shall be entitled to participate in any incentive
compensation plan which is implemented by the Corporation in
the manner and to the extent
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that senior executives of the Corporation are permitted to
participate as determined by the Board, in its sole
discretion.
A.4 BENEFITS. Subject to Section 7(c) of the Agreement, throughout the
President Term, you shall be entitled to continue to participate in all
of the employee benefit plans for senior management of the Corporation
resident in Canada in effect from time to time (the "BENEFIT PLANS") in
accordance with the terms of such Benefit Plans. It is understood and
agreed that the Benefit Plans may be amended by the Corporation from
time to time. Your vacation entitlement will continue to be covered by
company policy in effect as of the Effective Date. Subject to the
provisions contained in Schedule B, upon completion of the President
Term, any entitlement to the above Benefit Plans and vacation shall
cease.
SCHEDULE "B"
Further to Article 2 of the Agreement, your employment as President and
Chief Executive Officer shall cease upon completion of the President Term and on
January 15, 2003 you shall assume the position of Consultant to the Corporation
pursuant to the following terms and conditions:
B.1 TERM. Subject to the provisions for termination contained Article 8 of
the Agreement, from January 16, 2003 until January 15, 2004 (the
"Consultant Term"), you shall continue your employment as Consultant to
the Corporation.
B.2 DUTIES. Subject always to the control and direction of the Board in
accordance with the Corporation's corporate governance practices from
time to time, you shall:
(a) provide consulting services and special projects for the
Corporation as may be assigned from time to time, for a
maximum of one hundred (100) days for the duration of the
Consultant Term, such services to be performed during normal
business hours, Monday through Friday, holidays excepted;
(b) faithfully serve the Corporation and carry out those
responsibilities as are necessary to perform the services as
may be assigned from time to time;
(c) not incur any debt, liability or obligation, or enter into any
contract or agreement for, or on behalf of, or in the name of
the Corporation unless duly authorized by the Corporation in
writing; and,
(d) follow the lawful policies and procedures established by the
Board from time to time and which have been documented in
writing.
B.3 REMUNERATION. As compensation for the performance of your duties during
the Consultant Term, the Corporation shall pay to you a salary at the
rate of U.S.$210,000.00 per annum, payable bi-weekly in arrears less
those deductions, withholdings or contributions which are required by
law. At your request, the salary shall be paid by either of the
Corporation or Zemex U.S.
B.4 BENEFITS. Subject to Section 7(c) of the Agreement, throughout the
Consultant Term you shall be entitled to continue to participate in the
Benefit Plans in accordance with the terms of such Benefit Plans
provided that if you are no longer eligible to participate in any of
such plans, you and your wife will immediately be covered by the Zemex
Executive Retiree Account and for greater certainty, and
notwithstanding anything in this Section B.4, you and your wife will be
covered by the Zemex Retiree Account for the length of your life
commencing at the end of the Consultant Term.
EXECUTION COPY
SCHEDULE "C"
AGREEMENT
Agreement dated August 7, 2002 (the "AGREEMENT") among Xxxxxxx X.
Xxxxxx ("XXXXXX"), Zemex Corporation ("ZEMEX") and The Dundee Bank ("DUNDEE").
RECITALS:
(a) Lister is the beneficial owner of 534,402 issued and
outstanding common shares in the capital of Zemex;
(b) Lister and Zemex have entered into an employment agreement
dated as of the date hereof (the "EMPLOYMENT AGREEMENT")
whereby Lister and Zemex have agreed to enter into this
Agreement;
(c) Lister is eligible to exercise options to purchase common
shares in the capital of Zemex ("OPTIONS") pursuant to Zemex's
1999 stock option plan (the "STOCK OPTION PLAN");
(d) Lister is indebted to the Bank of America for US$600,000 plus
interest (the "BANK LOAN");
(e) Lister is indebted (i) to Zemex for US$500,000 plus interest
(the "RECEIVABLE DEBT"), and (ii) to Zemex U.S. Corporation
("ZEMEX U.S.") for US$1,259,000 evidenced by a promissory note
(the "EXISTING NOTE LOAN");
(f) Zemex U.S. has guaranteed Lister's obligations under the Bank
Loan (the "GUARANTEE"); and
(g) Lister, Zemex and Dundee intend to complete various
transactions relating to (i) the common shares held by Lister
in the capital of Zemex, and (ii) the repayment of the
Existing Note Loan, the Bank Loan and the Receivable Debt.
In consideration of the foregoing and the mutual agreements contained
herein (the receipt and adequacy of which are hereby acknowledged), the parties
agree as follows:
SECTION 1 CLOSING DATE.
Lister, Zemex and Dundee hereby agree that the transactions
contemplated in this Agreement shall be completed on August 7, 2002, or such
earlier or later date as the parties may agree in writing (the "CLOSING DATE").
EXECUTION COPY
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SECTION 2 THE TRANSACTIONS.
22. Lister hereby agrees to sell, assign and transfer to Dundee and Dundee
agrees to purchase from Lister on the Closing Date, 100,000 common
shares held by Lister in the capital of Zemex (the "DUNDEE SHARES") for
US$6.96 per share. The aggregate purchase price of US$696,000 shall be
payable as directed by Lister.
23. Lister hereby agrees to sell, assign and transfer to Zemex and Zemex
agrees to purchase from Lister on the Closing Date, 340,000 common
shares held by Lister in the capital of Zemex (the "ZEMEX SHARES") for
US$6.96 per share. The aggregate purchase price of US$2,366,400 shall
be payable as directed by Lister.
24. Zemex hereby agrees to pay to Lister on the Closing Date, the aggregate
amount of US$256,800 in connection with the election by Lister, as of
June 28, 2002, to require Zemex to purchase for cancellation 120,000
Options exercisable at US$6.26 and 100,000 Options exercisable at
US$5.21 (collectively, the "REPURCHASED OPTIONS") pursuant to Section
6(5) of the Stock Option Plan. The aggregate proceeds for the exercise
of the Repurchased Options shall be payable as directed by Lister.
25. Lister hereby agrees, on the Closing Date:
(a) to use US$613,588.34 from the proceeds of the purchase and
sale of the Zemex Shares to repay the principal amount plus
interest outstanding under the Bank Loan;
(b) to use US$1,259,000 from the proceeds of the purchase and sale
of the Zemex Shares to repay the principal amount outstanding
under the Existing Note Loan; and
(c) to use US$511,136.11 from the proceeds of the purchase and
sale of the Zemex Shares and from the proceeds of the purchase
for cancellation of the Repurchased Options to repay the
principal amount outstanding under the Receivable Debt.
26. Zemex hereby agrees to issue on the Closing Date, Options to purchase
165,000 common shares in the capital of Zemex to Lister. Such Options
shall vest as of the Closing Date and be exercisable at US$6.96 per
common share.
27. Zemex hereby agrees to grant on the Closing Date, a bonus of US$885,000
(the "BONUS") as set out in the Employment Agreement. The Bonus shall
be paid on August 15, 2002.
EXECUTION COPY
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DELIVERIES.
Subject to the other provisions of this Agreement:
(a) Lister hereby agrees to deliver on the Closing Date:
(i) to Dundee, share certificates representing, in the
aggregate, the Dundee Shares;
(ii) to Zemex, share certificates representing, in the
aggregate, the Zemex Shares;
(iii) to cause the Bank of America to deliver a release by
the Bank of America, in favour of Lister of all
obligations under the Bank Loan, and a release by the
Bank of America, in favour of Zemex U.S. of the
Guarantee; and
(iv) such other documents as may be reasonably requested
by Zemex or Dundee, as the case may be, to give
effect to the transactions contemplated herein.
(b) Zemex hereby agrees to deliver to Lister on the Closing Date,
payment for the proceeds payable to Lister for the purchase
and sale of the Zemex Shares and the Repurchased Options as
set out in Section 2 above, and such documents as may be
reasonably required to give effect to the transactions
contemplated herein, including, without limitation a release
by Zemex, and to cause Zemex U.S. to deliver a release by
Zemex U.S., in favour of Lister of all obligations of Lister
under the Receivable Debt and Existing Note Loan; and
(c) Dundee hereby agrees to deliver to Lister on the Closing Date
payment for the proceeds payable to Lister for the purchase
and sale of the Dundee Shares as set out in Section 2 above,
and such documents as may be reasonably requested by Lister to
give effect to the transactions contemplated herein.
LISTERS' REPRESENTATIONS AND WARRANTIES.
Lister hereby represents and warrants as follows to each of Zemex and
Dundee with respect to himself only and acknowledges and confirms that Zemex and
Dundee are relying upon such representations and warranties in connection with
the closing of the transactions contemplated herein:
(h) QUALIFICATION. Lister has all necessary power to enter into
and perform his obligations under this Agreement;
EXECUTION COPY
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(i) VALIDITY OF AGREEMENT. The execution, delivery and performance
by Lister of this Agreement:
(i) do not (or would not with the giving of notice, the
lapse of time or the happening of any other event or
condition) result in a breach or a violation of, or
conflict with, or allow any other party to exercise
any rights under any material contracts or
instruments to which he is a party or pursuant to
which any of his assets or property may be affected;
and
(ii) will not result in the violation of any law;
(j) EXECUTION AND BINDING OBLIGATION. This Agreement has been duly
executed and delivered by Lister and constitutes a legal,
valid and binding obligation of Lister enforceable against him
in accordance with its terms;
(k) NO OTHER AGREEMENTS TO PURCHASE. Except for Zemex's or
Dundee's rights under this Agreement, no other party has any
written or oral agreement, option or warrant or any right or
privilege (whether by law, pre-emptive or contractual) capable
of becoming such for the purchase or acquisition from Lister
of any of the Zemex Shares or the Dundee Shares;
(l) TITLE TO THE ZEMEX SHARES AND THE DUNDEE SHARES. The Zemex
Shares and Dundee Shares held by Lister are owned by Lister as
the registered owner with good title, free and clear of all
liens. Upon completion of the transactions contemplated by
this Agreement, each of Zemex and Dundee will have good and
valid title to the Zemex Shares and Dundee Shares,
respectively, free and clear of all liens; and
(m) RESIDENCE. Lister is not a non-resident of Canada for the
purposes of the Income Tax Act (Canada).
DUNDEE'S REPRESENTATIONS AND WARRANTIES.
Dundee hereby represents and warrants as follows to each of Lister and
Zemex and acknowledges and confirms that Lister and Zemex are relying upon such
representations and warranties in connection with the closing of the
transactions contemplated herein:
(d) QUALIFICATION. Dundee has all necessary power to enter into
and perform its obligations under this Agreement;
EXECUTION COPY
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(e) VALIDITY OF AGREEMENT. The execution, delivery and performance
by Dundee of this Agreement;
(i) has been duly authorized by all necessary action on
the part of Dundee;
(ii) does not (or would not within the giving of notice,
the lapse of time or the happening of any other event
or condition) result in a breach or a violation of,
or conflict with, or allow any other party to
exercise any rights under any material contracts or
instruments to which it is a party or pursuant to
which any of its assets or property may be affected;
and
(iii) will not result in the violation of any law; and
(f) EXECUTION AND BINDING OBLIGATION. This Agreement has been duly
executed and delivered by Dundee and constitutes a legal,
valid and binding obligation of Dundee enforceable against it
in accordance with its terms.
ZEMEX'S REPRESENTATIONS AND WARRANTIES.
Zemex hereby represents and warrants as follows to each of Lister and
Dundee and acknowledges and confirms that Lister and Dundee are relying upon
such representations and warranties in connection with the closing of the
transactions contemplated herein:
(g) QUALIFICATION. Zemex has all necessary power to enter into and
perform its obligations under this Agreement;
(h) VALIDITY OF AGREEMENT. The execution, delivery and performance
by Zemex of this Agreement;
(i) have been duly authorized by all necessary action on
the part of Zemex;
(ii) do not (or would not with the giving of notice, the
lapse of time or the happening of any other event or
condition) result in a breach or a violation of, or
conflict with, or allow any other party to exercise
any rights under any material contracts or
instruments to which it is a party or pursuant to
which any of its assets or property may be affected;
(iii) will not result in the violation of any law; and
EXECUTION COPY
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(i) EXECUTION AND BINDING OBLIGATION. This Agreement has been duly
executed and delivered by Zemex and constitutes a legal, valid
and binding obligation of Zemex enforceable against it in
accordance with its terms.
CONDITIONS FOR THE BENEFIT OF ZEMEX AND DUNDEE.
The closing of the transactions contemplated in this Agreement are
subject to the following conditions to be fulfilled or performed prior to the
closing of the transactions contemplated in this Agreement, which conditions are
for the exclusive benefit of Zemex or Dundee and may be waived, in whole or in
part, by Zemex or Dundee in their sole discretion:
(n) TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Lister contained in this Agreement shall
have been true and correct as of the date of this Agreement
and shall be true and correct as of the Closing Date with the
same force and effect as if such representations and
warranties had been made on and as of such date;
(o) PERFORMANCE OF COVENANTS. Lister shall have fulfilled or
complied with all covenants contained in this Agreement to be
fulfilled or complied with by him at or prior to the closing
of the transactions contemplated in this Agreement; and
(p) REPAYMENT OF EXISTING DEBT. The Bank Loan, the Receivable Debt
and the Existing Note Loan shall have been repaid in full and
all security related thereto shall have been released.
CONDITIONS FOR THE BENEFIT OF LISTER.
The closing of the transactions contemplated in this Agreement are
subject to the following conditions to be fulfilled or performed prior to the
closing of the transactions contemplated in this Agreement, which conditions are
for the exclusive benefit of Lister may by waived, in whole or in part, by
Lister in his sole discretion:
(j) TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of each of Zemex and Dundee contained in this
Agreement shall have been true and correct as of the date of
this Agreement and shall be true and correct as of the Closing
Date with the same force and effect as if such representations
and warranties have been made on and as of such date; and
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(k) PERFORMANCE OF COVENANTS. Dundee and Zemex shall have
fulfilled or complied with all covenants contained in this
Agreement to be fulfilled or complied with by each of them at
or prior to the closing of the transactions contemplated in
this Agreement.
NO REPRESENTATION RESPECTING SECURITIES LAWS.
Lister and Zemex hereby acknowledge and agree:
(q) that Dundee has retained and sought the advice of counsel with
respect to this Agreement and the transactions contemplated
herein; and
(r) that Dundee makes no representations herein respecting
compliance with any securities laws applicable to this
Agreement and the transactions contemplated herein.
Dundee hereby acknowledges that Lister and Zemex make no representations herein
respecting the applicability of any securities laws to the purchase and sale of
the Dundee Shares.
MATTERS RELATED TO VOTING.
Lister and Dundee hereby agree as follows:
(s) Lister shall cast the votes attached to the common shares held
by Lister in the capital of Zemex on the Closing Date, or such
common shares that may be purchased by Lister pursuant to
Options held by him on the Closing Date, with the exception of
any common shares in the capital of Zemex purchased or
otherwise acquired by Lister after the Closing Date (the
"REMAINING LISTER Shares") in person or by proxy at any
meeting of the shareholders of Zemex or by written resolution
of all of the shareholders of Zemex in accordance with the
written direction of Dundee in respect of any item of
business, resolution, matter, question or proposition
concerning Zemex that may come before a meeting of the
shareholders of Zemex or may require the authorization of all
of the shareholders of the Corporation by written resolution;
and
(t) Lister shall incur no personal or other liability under this 0
save and except for those which arise by reason of his acting
otherwise than in accordance with this 0.
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RIGHT OF FIRST REFUSAL ON THE REMAINING LISTER SHARES.
28. Lister hereby agrees, and Dundee hereby acknowledges that if at any
time after the Closing Date Lister wishes to sell or transfer all or a
portion of the Remaining Lister Shares then held by him whether
pursuant to an offer received by Lister from a third party or
otherwise, then he shall first offer to sell (the "OFFER") such shares
to Dundee upon the same terms and conditions as the offer from such
third party or otherwise.
29. The Offer shall be sent by notice in writing to Dundee and shall be
open for acceptance by Dundee for three (3) days (the "OFFER PERIOD")
from the receipt of the Offer by Dundee.
30. Dundee shall be obliged by notice in writing to Lister received within,
but not after the expiration of, the Offer Period at its sole option to
either:
(u) accept the Offer, or
(v) reject the Offer, in which case the Offer Period with respect
to the Remaining Lister Shares that are the subject of the
Offer shall expire on the date the Offer is rejected.
31. If Dundee does not accept the Offer by notice in writing by the expiry
of the Offer Period, then it shall be deemed to have rejected the Offer
on such date.
32. If Dundee shall have accepted the Offer, then Lister shall sell to
Dundee, and Dundee shall purchase from Lister, the Remaining Lister
Shares that are the subject of the Offer, all in accordance with the
terms and conditions established with respect to the Offer.
33. If, after having exhausted the above procedures, Dundee has rejected
the Offer or if less than all of the Remaining Lister Shares that are
the subject of the Offer will be purchased by Dundee, then Lister shall
be free to sell all of the Remaining Lister Shares that are the subject
of the Offer or those Remaining Lister Shares that are the subject of
the Offer that Dundee has refused to purchase. For greater certainty,
such Remaining Lister Shares shall no longer be subject to Section 10
and this Section 11.
NOTICES.
Any notice, direction or other communication to be given by Dundee or
by Lister under Sections 10 or 11 herein shall be in writing and given by
delivering it or sending it by facsimile or other similar form of recorded
communication addressed:
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(a) to Lister at:
000 Xxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 (call ahead)
(b) to Dundee at:
Scotia Plaza
Suite 5500
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxxx Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Any such communication shall be deemed to have been validly and effectively
given if (i) personally delivered, on the date of such delivery if such date is
a business day and such delivery was made prior to 4:00 p.m. (Toronto time),
otherwise on the next business day, (ii) transmitted by facsimile or similar
means of recorded communication on the business day following the date of
transmission. Any party may change its address for service from time to time by
notice given in accordance with the foregoing and any subsequent notice shall be
sent to the party at its changed address.
EXPENSES.
Except as otherwise expressly provided in this Agreement all costs and
expenses (including the fees and disbursements of legal counsel) incurred in
connection with this Agreement and the transactions contemplated therein shall
be paid by the party incurring such expenses.
SURVIVAL.
Lister, Zemex and Dundee hereby agree that the covenants,
representations and warranties of each party contained in this Agreement and in
any certificates or documents delivered pursuant to or in connection with the
transactions herein provided for shall survive the closing of such transactions
and, notwithstanding
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such closing, and regardless of any investigation by or on behalf of Lister,
Zemex or Dundee with respect thereto, shall continue in full force and effect
for the benefit of such party, as applicable, without limitation of time,
subject only to applicable limitation periods imposed by law, if any.
TIME OF THE ESSENCE.
Time shall be of the essence of this Agreement.
ENUREMENT.
This Agreement shall become effective when executed by Lister, Zemex
and Dundee and after that time shall be binding upon and enure to the benefit of
the parties, their respective heirs, executors, legal personal representatives,
successors and assigns.
WAIVER.
34. No waiver of any of the provisions of this Agreement shall be deemed to
constitute a waiver of any other provision (whether or not similar),
nor shall such waiver be binding unless executed in writing by the
party to be bound by the waiver.
35. No failure on the part of Lister, Zemex or Dundee to exercise, and no
delay in exercising any right under this Agreement shall operate as a
waiver of such right; nor shall any single or partial exercise of any
such right preclude any other or further exercise of such right or the
exercise of any other right.
ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties with respect to the subject matter hereof. There are no representations,
warranties, covenants, conditions or other agreements, express or implied,
collateral, statutory or otherwise, among the parties in connection with the
subject matter of this Agreement except as specifically set forth herein and no
party has relied or is relying on any other information, discussion or
understanding in entering into and completing the transactions contemplated in
this Agreement.
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FURTHER ASSURANCES.
Each of the parties covenants and agrees to do such things, to attend
such meetings and to execute such further documents and assurances as may be
deemed necessary or advisable from time to time in order to carry out the terms
and conditions of this Agreement in accordance with their true intent.
SEVERABILITY.
If any provision of this Agreement shall be determined by an arbitrator
or any court of competent jurisdiction to be illegal, invalid or unenforceable,
that provision shall be severed from this Agreement and the remaining provisions
shall continue in full force and effect.
GOVERNING LAW.
This Agreement shall be governed by and interpreted and enforced in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.
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COUNTERPARTS.
This Agreement may be executed in any number of counterparts (including
counterparts by facsimile) and all such counterparts taken together shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF the parties have executed this Agreement.
XXXXXXX X. XXXXXX
/s/ Xxxxx Xxxxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------------------- ------------------------------------
Witness
ZEMEX CORPORATION
By: /s/ Xxxxxxxx Xxxxxxx
--------------------------------
Authorized Signing Officer
THE DUNDEE BANK
By: /s/ D.K. Charter
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Authorized Signing Officer
