THIS AGREEMENT made the 2nd day of November, 0000
X X X X X X X:
XXXXXXX X. XXXXXX,
a businessman residing in Burnaby, British Columbia,
(hereinafter referred to as "XXXXXX"),
OF THE FIRST PART,
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3546373 CANADA INC. ,
(formerly Xxxxxx Financial Inc.),
a company existing under the laws of Canada,
(hereinafter referred to as "LFI")
OF THE SECOND PART,
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XXXXXX FINANCIAL LIMITED PARTNERSHIP,
a limited partnership existing under the laws of
the Province of Alberta acting through its General
Partner, 3546373 CANADA INC.
(hereinafter referred to as "LFLP")
OF THE THIRD PART,
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XXXXXX LIMITED PARTNERSHIP,
a limited partnership existing under the laws
of the Province of British Columbia acting
through its General Partner, XXXXXXX X. XXXXXX,
(hereinafter referred to as "LLP")
OF THE FOURTH PART,
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CANADIAN IMPERIAL BANK OF COMMERCE,
a Canadian chartered bank, acting through its
CIBC Capital Partners Division,
(hereinafter referred to in such capacity as the "CIBCCP"),
OF THE FIFTH PART.
WHEREAS Xxxxxx and CIBCCP are parties to a Second Amended and Restated
Credit Agreement made as of November 2, 1998 (the "Loan Agreement");
AND WHEREAS prior to the execution and delivery of this Agreement:
(i) LLP transferred to Xxxxxx all of the right, title and interest
of LLP to 239,200 common shares (the "Common Shares") in the
capital of The Xxxxxx Group Inc., the certificates for which
are set forth in Part I of Schedule A hereto (the "LLP
Transfer");
(ii) thereafter, LFI transferred to Xxxxxx all of the right, title
and interest to 5,107,600 Common Shares, the certificates for
which are set forth in Part II of Schedule A hereto (the "LFI
Transfer"); and
(iii) thereafter, LFLP transferred to LFI all of the right, title
and interest of LFLP to 3,879,325 Common Shares, the
certificates for which are set forth in Part III of Schedule A
hereto and thereafter, LFI transferred to Xxxxxx all of LFI's
right, title and interest to such Common Shares (such
transfers referred to collectively as the "LFLP Transfer")
(the LLP Transfer, the LFI Transfer and the LFLP Transfer
being collectively referred to as the "Affiliate Transfers").
AND WHEREAS Xxxxxx wishes to sell, and CIBCCP wishes to purchase, an
aggregate of 10,062,125 Common Shares (collectively, the "Purchased Shares") on
the terms and subject to the conditions set forth herein;
AND WHEREAS the Purchased Shares, details of which are set forth in
Schedule A hereto, are currently held by CIBCCP pursuant to the Continuing Loan
Documents;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
covenants and agreements herein contained and for other good and valuable
consideration, the parties hereto agree as follows:
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ARTICLE I
INTERPRETATION
1.1 DEFINITIONS. In this Agreement, unless something in the subject matter or
context is inconsistent therewith:
"ADDITIONAL CONSIDERATION" shall be calculated on the Sale Date (or if there is
more than one on the last Sale Date) and means the lesser of:
(i) the amount, if any, by which (A) the Sale Price shall exceed
(B) the Initial Consideration together with an amount equal
to interest that would accrue on the Initial Consideration
at the rate of 5.27% per annum calculated from and including
the date hereof to but excluding the Sale Date and
compounded quarterly; and
(ii) the aggregate amount of the Obligations on that date
(including accrued and unpaid interest), less the amount
then credited to the Cash Security Account;
"AFFILIATE TRANSFERS" has the meaning ascribed thereto in the recitals to this
Agreement;
"COMMON SHARES" has the meaning ascribed thereto in the recitals to this
Agreement;
"CURRENT OBLIGATIONS" means the amount of US$144,949,603, such amount being the
aggregate amount of the Obligations outstanding as at the date hereof before
giving effect to this Agreement consisting of (i) US$144,303,715 (such amount
being the principal amount of the indebtedness of Xxxxxx under the Loan
Agreement) and (ii) US$645,888 (such amount being equal to the accrued but
unpaid interest under the Loan Agreement to the date hereof);
"INITIAL CONSIDERATION" has the meaning ascribed thereto in Section 2.1(b)(i);
"LOAN AGREEMENT" has the meaning ascribed thereto in the recitals to this
Agreement;
"XXXXXX AFFILIATES" means, collectively, LFI, LFLP and LLP;
"XXXXXX PARTIES" means, collectively, Xxxxxx and the Xxxxxx Affiliates;
"PURCHASED SHARES" has the meaning ascribed thereto in the recitals to this
Agreement;
"RELATED PARTY" means a person not dealing at arm's length with CIBCCP for the
purposes of the INCOME TAX ACT (Canada);
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"SALE DATE" means the date, if any, on which a Sale of the Purchased Shares
shall be completed;
"SALE PRICE" means the aggregate amount or value of consideration received by
CIBCCP (or a Related Person as provided in Section 1.5) for the Purchased Shares
as a result of the Sale of the Purchased Shares net of all fees, expenses and
commissions paid or incurred by CIBCCP or such Related Person in connection
therewith; and
"SALE OF THE PURCHASED SHARES" means a bona fide sale or sales of the Purchased
Shares made by CIBCCP (or a Related Person as provided in Section 1.5)
subsequent to the date hereof and on or prior to November 1, 2000 to a person or
persons other than a Related Person;
1.2 OTHER DEFINITIONS. Capitalized terms used but not defined herein shall
have the respective meanings ascribed to them in the Loan Agreement.
1.3 SECTIONS AND HEADINGS. The division of this Agreement into Articles and
Sections and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation of this Agreement. The
terms "this Agreement", "hereof", "hereunder" and similar expressions refer to
this Agreement and not to any particular Article, Section or other portion
hereof and include any agreement or instrument supplemental or ancillary hereto.
Unless something in the subject matter or context is inconsistent therewith,
references herein to Articles and Sections are to Articles and Sections of this
Agreement.
1.4 NUMBER. Words importing the singular number only shall include the plural
and VICE VERSA, words importing the masculine gender shall include the feminine
and neuter genders and VICE VERSA and words importing persons shall include
individuals, partnerships, associations, trusts, unincorporated organizations
and corporations and VICE VERSA.
1.5 TRANSFERS TO RELATED PERSONS. For the purposes of this Agreement, a sale
or other transfer of any of the Purchased Shares by CIBCCP to a Related Person
or by a Related Person to another Related Person shall be deemed not to be a
Sale of the Purchased Shares; provided that any sale of Purchased Shares by any
such Related Person to a person which is not a Related Person completed on or
prior to November 2, 2000 shall be deemed to be a Sale of the Purchased Shares
by CIBCCP for the purposes of the calculation of the Additional Consideration;
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ARTICLE II
SALE OF PURCHASED SHARES
2.1 PURCHASE AND SALE OF PURCHASED SHARES.
(a) Subject to the terms and conditions hereof, Xxxxxx hereby sells,
assigns and transfers to CIBCCP, and CIBCCP hereby purchases from
Xxxxxx, all of the Purchased Shares.
(b) The aggregate purchase price (the "Purchase Price") for the Purchased
Shares shall be the aggregate of:
(i) US$91,188,008 (the "Initial Consideration") which shall be
paid and satisfied as provided in Section 2.2; and
(ii) the Additional Consideration, if any, which shall be paid and
satisfied as provided in Section 2.3.
2.2 PAYMENT OF INITIAL CONSIDERATION.
The Initial Consideration shall be paid and satisfied
contemporaneously with the execution and delivery of this Agreement as follows:
(a) as to US$86,606,996 by applying thereto an equal amount of the
Obligations and, it is hereby agreed that by reason of such
application the Obligations are reduced by the amount so applied; and
(b) as to US$4,581,012 by crediting such amount to the Cash Security
Account.
2.3 PAYMENT OF ADDITIONAL CONSIDERATION. The Additional Consideration, if any,
shall only be payable on the Sale Date (or if there is more than one on the last
Sale Date) if a Sale of the Purchased Shares occurs on or prior to November 1,
2000 and shall be satisfied by CIBCCP applying thereto an equal amount of the
Obligations then outstanding such that the aggregate amount of the Obligations
shall be reduced by the amount of the Additional Consideration.
2.4 DELIVERY OF PURCHASED SHARES. It is hereby agreed that the Purchased
Shares shall be deemed to be delivered to CIBCCP as the buyer thereof
contemporaneously with the execution and delivery of this Agreement free and
clear of all Liens (including the Lien of the Security Documents).
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ARTICLE III
REPRESENTATIONS AND DELIVERIES
3.1 REPRESENTATIONS OF XXXXXX PARTIES. Each Xxxxxx Party, jointly and
severally, represents and warrants as follows to CIBCCP and acknowledges and
confirms that CIBCCP is relying upon such representations and warranties:
(a) AUTHORIZATION. This Agreement and the Affiliate Transfers have been
duly authorized (in the case of each Xxxxxx Affiliate in relation to
the Agreement), executed and delivered by each Xxxxxx Party and
constitutes the legal, valid and binding obligation of each Xxxxxx
Party enforceable against such Xxxxxx Party in accordance with its
terms.
(b) CONFLICT WITH CONSTATING DOCUMENTS AND AGREEMENTS. Neither the
execution and delivery by a Xxxxxx Party of this Agreement nor the
consummation by any such Xxxxxx Party of any of the transactions
contemplated hereby nor the compliance by any such Xxxxxx Party with
the terms, conditions and provisions hereof nor the consummation by
any Xxxxxx Party of the Affiliate Transfers, conflicts with or results
in a breach of any of the terms, conditions or provisions of:
(i) in the case of a Xxxxxx Affiliate, the partnership agreement
or constating documents or by-laws of any such Xxxxxx
Affiliate;
(ii) any agreement, instrument or arrangement to which any such
Xxxxxx Party is now a party or by which it, or its properties
are, or may be, bound, or constitutes a default thereunder;
(iii) any judgment or order, writ, injunction, decree or ruling of
any Official Body; or
(iv) any applicable law.
(c) NO OTHER AUTHORIZATION NECESSARY. No action of, or filing with, any
Official Body is or was required to authorize, or is or was otherwise
required in connection with, the Affiliate Transfers or the execution,
delivery and performance by any Xxxxxx Party of this Agreement or the
completion of any transaction contemplated thereby.
(d) STATUS AND POWER. LFI is a company duly continued and validly
subsisting under the CANADA BUSINESS CORPORATIONS ACT; LLP is a
limited partnership duly constituted and organized and validly
subsisting under the laws of the Province of British Columbia; LFLP is
a limited partnership duly constituted, organized and validly
subsisting under the laws of the Province of Alberta; each Xxxxxx
Affiliate has adequate and sufficient power and authority to execute,
deliver and perform its obligations under
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this Agreement and to undertake any transaction contemplated thereby
(including the Affiliate Transfers).
(e) PURCHASED SHARES. The Purchased Shares are beneficially owned by
Xxxxxx and Xxxxxx has good and marketable title thereto, free and
clear of all Liens other than Liens created by the Security Documents.
(f) CONTROL. The Xxxxxx Parties, together with the Associates of the
Xxxxxx Parties and any other Person with whom the Xxxxxx Parties or
their Associates are acting jointly or in concert or who is part of a
group established for the purpose of holding, disposing, acquiring or
voting of any securities of the Corporation (or securities convertible
into or exchangeable or exercisable for securities of the Corporation)
do not own more than 20% of the issued and outstanding Voting
Securities of the Corporation.
(g) NO MATERIAL FACTS. None of the Xxxxxx Parties has knowledge of any
material fact or material change (as such terms are defined under
applicable Canadian securities laws) relating to the Corporation or
the Purchased Shares that has not been generally disclosed.
3.2 NATURE OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties set out in Section 3.1 shall survive the execution and delivery of
this Agreement and CIBCCP shall be deemed to have relied on the making of such
representations and warranties.
3.3 DELIVERIES. Contemporaneously with the execution and delivery of this
Agreement, the Xxxxxx Parties shall deliver to CIBCCP the following, in form and
terms reasonably satisfactory to CIBCCP:
(a) copies of all agreements, documents and corporate and partnership
proceedings, authorizing the implementation by any of the Xxxxxx
Parties, or otherwise relating to, the Affiliate Transfers and this
Agreement; and
(b) a legal opinion or legal opinions as to the due authorization,
execution and delivery of this Agreement by the Xxxxxx Parties and as
to the legality, validity, binding nature and enforceability of this
Agreement against each of the Xxxxxx Parties.
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ARTICLE IV
GENERAL
4.1 COSTS AND EXPENSES. The Xxxxxx Parties agree that CIBCCP may deduct from
the amount held in the Cash Security Account an amount equal to all reasonable
costs and expenses incurred by the CIBCCP in connection with negotiation,
preparation, execution, delivery and administration of this Agreement including,
without limitation, the fees and out-of-pocket expenses of counsel to CIBCCP.
4.2 INDEMNIFICATION BY THE XXXXXX PARTIES. Each Xxxxxx Party, jointly and
severally, shall indemnify CIBCCP from and against all losses, liabilities,
damages, penalties, costs and expenses (excluding consequential damages and loss
of profits) ("Losses"), imposed on or incurred or suffered by CIBCCP or any of
its directors, officers, employees or agents as a consequence of or relating to
or arising out of any inaccuracy or breach by any Xxxxxx Party of its
representations and warranties or any of its covenants contained herein,
including Losses arising under any applicable securities laws or stock exchange
rules, or in relation to any investigation or proceeding thereunder, as a result
of CIBCCP's reliance upon any such representations, warranties or covenants in
connection with any disposition of any Purchased Shares.
4.3 SURVIVAL. All covenants, agreements, representations and warranties made
herein shall survive the execution and delivery of this Agreement and shall
continue in full force and effect without limitation in time.
4.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.
4.5 COURTS. Any legal action or proceeding with respect to this Agreement may
be brought in the courts of the Province of Ontario or British Columbia which
courts the parties hereto acknowledge irrevocably to be a convenient forum for
the resolution of any such legal action or proceeding. Each Xxxxxx Party hereby
accepts, for himself or itself and in respect of his or its assets and revenues,
generally and unconditionally, the non-exclusive jurisdiction of the aforesaid
courts.
4.6 FURTHER ASSURANCES. Each Xxxxxx Party, at its expense, will promptly
execute and deliver, to CIBCCP, upon request, all such other and further
documents, agreements, certificates and instruments in compliance with, or
accomplishment of the covenants, and agreements of the Xxxxxx Parties under this
Agreement or more fully to state the obligations of the Xxxxxx Parties as set
out therein or to make any recording, file any notice or obtain any consents,
all as may be necessary or appropriate in connection therewith.
4.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be considered an original and all of which counterparts
taken together shall constitute a single agreement.
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4.8 ASSIGNMENTS AND TRANSFER. This Agreement shall be binding upon and enure
to the benefit of Xxxxxx and his heirs, representatives and executors and on
each Xxxxxx Affiliate and its successors. This Agreement shall be binding upon
and enure to the benefit of CIBCCP and its successors and assigns. No Xxxxxx
Party shall have the right to assign its rights or obligations hereunder.
CIBCCP may from time to time may assign all of or any undivided portion of its
rights and obligations under this Agreement to any Person on such terms and
conditions as CIBCCP shall approve in its sole discretion.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed on November 2, 1998.
SIGNED, SEALED AND )
DELIVERED in the )
presence of: ) -----------------------------------
) Xxxxxxx X. Xxxxxx
)
3546373 CANADA INC.
by
-------------------------------------
Xxxxxxx X. Xxxxxx
President
3546373 CANADA INC. in its capacity as
general partner of and on behalf of XXXXXX
FINANCIAL LIMITED PARTNERSHIP
by
-------------------------------------
Xxxxxxx X. Xxxxxx
President
XXXXXXX X. XXXXXX, in his capacity as general
partner of and on behalf of XXXXXX LIMITED
PARTNERSHIP
--------------------------------
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CANADIAN IMPERIAL BANK OF COMMERCE (acting
through CIBC CAPITAL PARTNERS DIVISION)
By:
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