Exhibit 10.11
OPTION AGREEMENT
THIS OPTION AGREEMENT (the "AGREEMENT") is entered as of March 15, 2005 to
replace the option agreement dated February 5th , 2005 which is hereby cancelled
BETWEEN: XXXXX XXXXX & SONS INC., / XXXXX XXXXX ET
FILS INC. (the "BORROWER")
AND: GMAC COMMERCIAL FINANCE CORPORATION -
CANADA / SOCIETE FINANCIERE COMMERCIALE
GMAC - CANADA ("GMAC")
AND: XXXXX XXXXX & SONS HOLDINGS INC. / SOCIETE
DE PORTEFEUILLE XXXXX XXXXX ET FILS INC. (the
"PARENT")
WHEREAS, on July 23, 1998, the Borrower, GMAC (then known as BNY Financial
Corporation - Canada / Corporation Financiere BNY - Canada) and the Parent (then
known as Borgosesia Acquisitions Corporation / Corporation d'Acquisitions
Borgosesia) entered into an agreement (the "AMENDMENT AGREEMENT") pursuant to
which the Parent confirmed having irrevocably given and granted to GMAC the
option to purchase 11,896 Common shares (adjusted so as to equal 0.50% of all
then issued and outstanding shares of all classes and categories in the
Borrower's capital stock) for the purchase price of One Dollar (Cdn.$1.00) per
share (to a maximum of Cdn.$12,000) (the "PARENT'S OPTION") exercisable by GMAC
at any time prior to April 30, 2008, subject to certain conditions;
WHEREAS the Borrower, GMAC and the Parent now wish to cancel the Parent's
Option and to replace it by the New Option (as defined below); and
WHEREAS the Borrower and GMAC are party to that certain "Amended and
Restated Accounts Receivable Management, Loan & Security Agreement" bearing
formal date July 1, 2004 (the "Loan Agreement");
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. The Parent's Option is hereby cancelled and replaced by the New Option (as
defined below).
2. The Borrower hereby irrevocably grants to GMAC the option to purchase
46,845 Class A Voting Shares in its share capital for the purchase price
of Cdn.$0.256 per share (the "NEW OPTION"), exercisable, in whole or in
part, by GMAC at any time prior to April 30, 2008 by GMAC sending to the
Borrower, to the address set forth in the Amendment Agreement, one or more
written notices specifying the number of Class A Voting Shares with
respect to which it wishes to exercise the New Option. The written
notice(s) must be accompanied by a certified cheque to the order of the
Borrower, in the amount of the applicable purchase price for such Class A
Voting Shares. Immediately following the
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receipt of such notice(s) and payment(s), the Borrower shall issue the
Class A Voting Shares underlying the New Option (or any portion thereof
being exercised) and shall transmit to GMAC the share certificate(s)
representing such Class A Voting Shares. The number of shares to which
GMAC shall be entitled pursuant to the New Option shall not be adjusted in
the event the Borrower's share capital is increased or decreased, nor
shall the New Option be affected in any way by virtue of any class of
shares of the capital stock of the Borrower becoming listed on a public
securities exchange.
3. The New Option granted hereby is wholly independent, shall function wholly
independently from the Loan Agreement and shall remain in full force and
effect notwithstanding the termination of the Loan Agreement and/or
repayment of all Obligations (as such term is defined in the Loan
Agreement) due under the Loan Agreement. In addition, the failure by the
Borrower to respect the terms of the present Option Agreement shall
constitute a Default under the Loan Agreement.
4. Article 5 of the Amendment Agreement is hereby repealed. All other terms
and conditions of the Amendment Agreement shall remain unchanged.
5. The Borrower hereby represents and warrants that the rights granted under
the present Option Agreement as well as the issue of all shares in its
share capital in favour of GMAC have been duly authorized by all necessary
corporate authorization and that same is not prohibited or restricted in
any way by virtue of the articles of incorporation, by-laws or shareholder
or other agreement relating to the Borrower.
6. The parties hereto acknowledge that they have requested and are satisfied
that the foregoing, as well as all notices, actions and legal proceedings
be drawn up in the English language. Les parties a cette convention
reconnaissent qu'elles ont exige que ce qui precede ainsi que tous avis,
actions et procedures legales soient rediges et executes en anglais et
s'en declarent satisfaites.
IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT AT THE DATE FIRT
MENTIONED ABOVE.
XXXXX XXXXX & SONS INC. /
XXXXX XXXXX ET FILS INC.
/s/ Xxxxxx Xxxxxxxx
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GMAC COMMERCIAL FINANCE
CORPORATION - CANADA /
SOCIETE FINANCIERE COMMERCIALE
GMAC - CANADA
/s/ X. Xxxxxxx
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XXXXX XXXXX & SONS HOLDINGS INC./
SOCIETE DE PORTEFEUILLE XXXXX
XXXXX ET FILS INC.
/s/ Xxxxx Xxxxxxxx
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1.6. Headings
The headings of the Articles and Sections herein are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
1.7. Severability
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall not invalidate the remaining provisions hereof and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
1.8. Governing Law
The parties agree that this Agreement shall be conclusively deemed to be a
contract made under, and shall for all purposes be governed by and construed in
accordance with, the laws of the Province of Quebec and the laws of Canada
applicable therein.
1.9. Jurisdiction
Any suit, action or proceeding against the Borrower with respect to this
Agreement or any judgement entered by any court in respect thereof may be
brought in the courts of the Province of Quebec and the parties hereto hereby
submit to the non-exclusive jurisdiction of such courts for the purposes of any
such suit, action or proceeding.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1. Representations and Warranties of the Borrower
The Borrower represents and warrants to the Lender that, as of the date
hereof:
(a) it is a duly constituted legal person, is validly existing under the laws
of Canada, and it has the power and authority to enter into and perform
its obligations under this Agreement;
(b) the entering into, performance of and compliance with this Agreement (i)
is within its powers and has been duly authorized by all necessary
corporate action on its part, and (ii) will not constitute a material
default under, be in violation of, or be in conflict with, any of its
constating documents or by-laws, or with any other agreement or instrument
to which it is a party or by which it is bound, or of any law, regulation,
ordinance or decree having application within its jurisdiction of
constitution;
(c) this Agreement has been duly authorised, executed and delivered by it and
is binding on it and enforceable against it in accordance with its terms,
subject to (i) any limitation under applicable laws relating to
bankruptcy, insolvency, arrangements or other laws of general application
affecting the enforcement of creditors' rights, and (ii) the discretion
that a court may exercise in the granting of equitable remedies such as
specific performance and injunction; and
(d) there is no litigation and there are no legal proceedings pending or, to
the knowledge of the Borrower, threatened against it or its property
before any court or administrative agency of any country, nor is there any
claim known to it and not disclosed in writing to the Lender, which
materially adversely affects or could so affect its ability to perform its
obligations set forth in this Agreement.
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ARTICLE III
THE LOAN
3.1. Establishment of the Loan
Subject to the terms and conditions of this Agreement, and relying on each
of the representations and warranties set out in Article II hereof, the Lender
hereby establishes the Loan in favour of the Borrower.
3.2. Disbursements by the Lender
(a) The Lender hereby covenants to disburse five hundred thousand dollars
($500,000) of the principal amount of the Loan to the Borrower by no later
than 3:00 p.m. (Montreal time) on February 27, 2004. The Lender and the
Borrower will arrange to have the foregoing sum of money sent by the
Lender and received by the Borrower (by no later than 3:00 p.m. (Montreal
time) on February 27, 2004) by way of wire transfer initiated by the
Lender to an account to be designated by the Borrower.
(b) The Lender hereby agrees to disburse the remaining two million dollars
($2,000,000) of the principal amount of the Loan to the Borrower by no
later than 3:00 p.m. (Montreal time) on March 20, 2004. All such
disbursement(s) shall be made by way of wire transfer initiated by the
Lender to an account to be designated by the Borrower.
ARTICLE IV
INTEREST RATE
4.1. Interest rate
The Principal Amount shall bear interest, before and after maturity,
calculated on a semi-annual basis, from the first date of disbursement of
principal of the Loan, until its repayment in full, at the Interest Rate.
Subject to Section 5.3(a) hereunder, the Borrower will pay accrued interest, if
any, to the Lender on the last day of each successive six-month period, it being
understood that the first such six-month period shall begin on the day upon
which the Lender first disburses money to the Borrower hereunder. Unpaid
interest on the Principal Amount or any unpaid balance thereof will bear
interest at the rate stated hereinabove, the whole compounded semi-annually from
their due date until the date payment is received by the Lender.
ARTICLE V
REPAYMENT OF THE LOAN
5.1. Repayment of the Loan
Subject to Section 5.3(a) hereunder, the Borrower shall repay the
aggregate unpaid Principal Amount of the Loan, as well as all unpaid interest
that has accrued thereon, on February 28, 2005, unless the Borrower has notified
the Lender in writing at least five (5) Business Days prior to February 28, 2005
that it wishes to extend the term of the loan for an additional twelve (12)
months, in which case, subject to Section 5.3(a) hereunder, the Borrower shall
repay the aggregate unpaid principal amount of the Loan, as well as all unpaid
interest that has accrued thereon, on February 28, 2006.
5.2. Prepayment Privilege
Subject to Section 5.3(a) hereunder and notwithstanding any other
provision of this Agreement, the Borrower shall have the right, but not the
obligation, in its sole discretion at any time, to prepay the whole or part of
the Principal Amount as well as any and all interest due thereon to the Lender
without notice, bonus or penalty. Any and all amount repaid upon the Loan cannot
be re-borrowed.
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5.3. Authorization to Effect Repayment
(a) Notwithstanding any other provision of this Agreement, the Borrower's
obligation to pay any amount of the Principal Amount of the Loan and/or
any amount of interest that has accumulated thereon to the Lender, shall
be subject to the Borrower having received all consents necessary so that
the Borrower's payment of such sums to the Lender will not constitute a
default under, be in violation of, or be in conflict with, any of its
constating documents or by-laws, or with any agreement or instrument to
which it is a party or by which it is bound (including, without limitation
(i) any credit or loan agreement, arrangement or facility that it has
entered into prior to this Agreement, or (ii) any agreement, prior to this
Agreement, pursuant to which any party has been granted a hypothec or
other security interest by the Borrower), or of any law, regulation,
ordinance or decree having application within its jurisdiction of
constitution.
(b) Due to Section 5.3(a) above, should the Borrower not repay the aggregate
unpaid Principal Amount of the Loan, as well as all unpaid interest that
has accrued thereon at the expiry of the term of the Loan (as the term of
the Loan is set out at Section 5.1 above), then such term shall be
extended by the Borrower for additional successive twelve (12) month
periods until such time as the Borrower repays (or prepays in accordance
with Section 5.2 above), the whole of the Principal Amount of the Loan as
well as any and all interest due thereon.
5.4. No Set-Off; No Withholding
The Borrower shall make all payments to the Lender pursuant to this
Agreement without set-off, compensation or counterclaim, free and clear of, and
exempt from, and without deduction for or on account of, any Tax under Part XIII
of the ITA (or any successor part) in respect of any such payment ("PART XIII
TAX"). In the event the Borrower is required to deduct or withhold Part XIII
Tax, the Borrower shall:
(a) pay or cause to be paid to the appropriate authority, the amount of the
withholding or deduction (including the full amount of Taxes required to
be deducted or withheld from any additional sums paid by the Borrower to
the Lender under this Section 5.4). The Borrower shall pay such amounts to
such appropriate authority within the time period required by applicable
law;
(b) produce to the Lender not later than 30 days after that payment, the
original receipt of payment thereof or a certified copy of such receipt or
other evidence of such payment reasonably satisfactory to the Lender; and
(c) pay such additional sums to the Lender, as may be necessary so that the
net amount received by the Lender, after all Part XIII Tax, will not be
less than the amount the Lender would have received had no such Part XIII
Tax been applicable, provided that no sum shall be paid by the Borrower
under this paragraph (c) to the extent that the Lender would not have been
subject to such withholding or deduction had the Lender made a declaration
of eligibility for treaty benefit or other similar claim for exemption to
the relevant tax authority or had the Lender taken any action in order to
satisfy any other statutory requirement which would have entitled the
Lender to treaty benefit or other similar claim for exemption but failed
to do so prior to the relevant payment date.
If, as a result of any deduction or withholding, the Borrower makes any
payment of any additional amounts to the Lender and the Lender determines that
it has received or has been granted a credit against or relief or remission for
or repayment of any Tax paid or payable by it in respect of or which takes into
account the deduction or withholding, the Lender will, to the extent it
determines that it can do so without prejudice to the retention of the amount of
such credit, relief, remission or repayment, pay to the Borrower such amount as
the Lender shall determine to be attributable to such Part XIII Tax and which
will leave it (after such payment) in a position which it determines to be no
better and no worse than it would have been if the Borrower had not been
required to make such deduction or withholding.
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5.5. Place of Payment
All payments of principal, interest and other amounts shall be paid by the
Borrower to the Lender by wire transfer to an account to be designated by the
Lender.
ARTICLE VI
HYPOTHEC
6.1. Hypothec
On or prior to February 27, 2004, the Borrower shall have granted to the
Lender a moveable hypothec without delivery in respect of all of its moveable
property, present and future, of whatsoever nature and kind and wheresoever
situated in order to secure the full and final repayment of the Loan. The deed
of moveable hypothec shall be in form and substance satisfactory to both the
Borrower and the Lender acting reasonably.
ARTICLE VII
EVENTS OF DEFAULT
7.1. Events of Default
Each of the following events shall, notwithstanding compliance by the
Borrower with the terms and conditions hereof, constitute an Event of Default by
the Borrower under this Agreement:
(a) the non-payment when due by the Borrower of the Principal Amount or
interest or any portion thereof or any other amount payable hereunder; or
(b) the breach or failure of the Borrower to observe and perform any covenant
or provision of this Agreement; or
(c) the commencement of proceedings for the dissolution, liquidation,
termination, compromise, arrangement or winding-up of the Borrower or for
the suspension of the operations of the Borrower; or
(d) if the Borrower ceases or threatens to cease carrying on its enterprise or
makes or agrees to make a bulk sale of substantially all of its assets
without the written consent of the Lender or if the Borrower is adjudged
or declared bankrupt or insolvent or makes an assignment for the benefit
of its creditors, petitions or applies or allows the petition or
application to any tribunal for the appointment of a receiver,
sequestrator or trustee for it or for substantially all of its property,
or if the Borrower commences any proceedings relating to it under any
reorganisation, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction whether now or hereafter in
effect, or by any act indicates its consent to, approval of, or
acquiescence in, any such proceeding commenced against it or against
substantially all of its property, or suffers the appointment of any such
receiver, sequestrator or trustee.
7.2. Acceleration
Upon the occurrence of any one or more of the Events of Default, but
subject to Section 5.3(a) hereof, (i) the Principal Amount and all accrued and
unpaid interest thereon, all interest on interest and all other amounts owing by
the Borrower to the Lender shall, at the option of the Lender, become due and
payable within ten (10) days of the occurrence of any one or more of the Events
of Default, and this, without presentation, demand, protest or other notice of
any kind, all of which are hereby expressly waived by the Borrower and/or (ii)
the Lender shall thereupon be entitled to enforce its rights under and pursuant
to this Agreement and/or (iii) the Lender may declare any obligation of the
Lender to make any sums available hereunder to the Borrower to be terminated
whereupon the same shall forthwith terminate.
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Any omission by the Lender to notify the Borrower of an Event of Default
shall not be construed as a waiver of such Event of Default or any of the
Lender's rights herein.
ARTICLE VIII
EXPENSES AND INDEMNITY
8.1. Expenses and Indemnity
All statements, reports, certificates, appraisals, examinations and other
documents or information, if any, required to be furnished to the Lender by the
Borrower under this Agreement shall be supplied by the Borrower without cost to
the Lender.
ARTICLE IX
NOTICES AND COMMUNICATIONS
9.1. Notices
Every notice required or permitted to be given hereunder shall, save as
otherwise hereinbefore specifically provided, be in writing to the party for
whom it is intended and such written notice shall be delivered personally, by
messenger or be sent by ordinary mail or by facsimile. The date of receipt of
any such notice shall (i) if delivered personally or by messenger be deemed to
be the date of delivery, (ii) if mailed as aforesaid, be deemed to be the third
(3rd) Business Day next following the date of such mailing, and (iii) if sent by
facsimile shall be deemed to be received on the date of transmission if
transmission occurs prior to 12:00 p.m. (Montreal time) on a Business Day and on
the next Business Day following the date of transmission in any other case.
9.2. Addresses for Notices
The personal delivery, mailing addresses and facsimile number of the
parties hereto for the purposes hereof shall be:
(a) in the case of the Borrower:
XXXXX XXXXX & SONS INC./
XXXXX XXXXX ET FILS INC.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xx. Xxxxxx X. Xxxxxxxxxxxx, President and Chief Executive
Officer
Telecopier number: x0 000 000-0000; and
(b) in the case of the Lender:
REGALUXE INVESTMENT SARL
25A boulevard Royal
Luxembourg 2449
Attention: Xx. Xxxxxxx Recami, Chief Executive Officer, Managing Director
Telecopier number: + 000-000-000-0000
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or such other mailing address or telecopier number as such parties from
time to time may notify the others as aforesaid.
9.3. Election of domicile
The Borrower hereby elects domicile at the address mentioned in Subsection
9.2(a) above for the purposes of receiving notices, demands or other
communications and for the service of legal proceedings. If the Lender is unable
to locate the Borrower at such address, the giving of any notice, demand or
other communication or the service of any legal proceeding may be made at the
office of the clerk of the Superior Court in the district in which the address
of the Borrower referred to in Subsection 9.2(a) is located, at which office, in
such event, the Borrower also elects domicile for purposes of giving any notice,
demand or other communication or the service of any legal proceeding.
ARTICLE X
GENERAL PROVISIONS
10.1. Amendments
No amendment, modification or waiver of any provision of this Agreement or
consent to any departure by the Borrower from any provision of this Agreement
will be effective unless it is in writing and signed by the Lender, and then the
amendment, modification, waiver or consent will be effective only in the
specific instance and for the specific purpose for which it was given.
10.2. Extension of Time
No extension of time given by the Lender to the Borrower or anyone
claiming under the Borrower, shall in any way affect or prejudice the rights of
the Lender against the Borrower or any other person liable for payment of the
moneys owing hereunder or secured by the Security.
10.3. Assignment
No party shall be permitted to assign its rights under this Agreement
without the express written consent of the other party hereto. This Agreement
shall be binding upon, and shall enure to the benefit of each of the parties
hereto and their respective successors and permitted assigns.
10.4. Whole Agreement
This Agreement and the documents contemplated hereby constitutes the whole
and entire agreement among the parties hereto and cancels and supersedes any
prior agreements or undertakings, written or verbal, in respect thereof.
10.5. Counterparts
This Agreement may be executed in one or more counterparts (including
counterparts by facsimile), each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
10.6. Copy received
The Borrower hereby acknowledges receipt of a copy of this Agreement.
10.7. Language
The parties hereby confirm their express wish that this Agreement and all
the documents and agreements directly and indirectly related hereto be drawn up
in English. Les parties reconnaissent leur volonte expresse que la
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presente convention ainsi que tous les documents et conventions qui s'y
rattachent directement ou indirectement soient rediges en langue anglaise.
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IN WITNESS WHEREOF, executed by the parties at the place and date first
mentioned above.
XXXXX XXXXX & SONS INC./XXXXX XXXXX ET FILS INC.
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: Senior Group Vice President and Chief
Financial Officer
XXXXX XXXXX & SONS INC./XXXXX XXXXX ET FILS INC.
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
Title: Group Vice President Finance
REGALUXE INVESTMENT SARL
By: /s/ Filippo Recami
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Name: Filippo Recami
Title: Chief Executive Officer and Managing
Director
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XXXXX XXXXX AND SONS INC.
Att: REGALUXE INVESTMENTS SARL
With reference to the Loan Agreement in the principal amount of CDN $ 2,500,000
executed on February 6th, 2004, hereby we elect to exercise our option to renew
the loan for a period of additional twelve months as per the section 2 "TERM" of
said loan agreement.
Executed this 23rd day of February 0000
XXXXX XXXXX AND SONS INC.
Per:
________________________________
AGREED AND ACCPETED
REGALUXE INVESTMENTS SARL
Per:
_________________________________
