Exhibit 10.1
THIS SUPPORT AGREEMENT is made this 15th day of February, 2000,
BETWEEN: XXXXXXX XXXXXXXXXX ("L"), 000000 XXXXXX INC., a
corporation incorporated under the laws of Canada ("L
Holdco"), XXXXX XXXXXXXX ("G"), and 000000 XXXXXX INC.,
a corporation incorporated under the laws of Canada ("G
Holdco" and, together with L, L Holdco and G, the
"Shareholders" and each of them a "Shareholder")
AND: IBM CANADA LIMITED, a corporation incorporated
under the laws of Canada ("IBM")
(collectively, the "Parties" and each of them, a
"Party")
RECITALS:
A. The Shareholders collectively are the registered holders of, and
beneficially own, in the aggregate, 305,952 Class A Subordinate Voting
Shares ("Class A Shares") and 2,852,800 Class B Multiple Voting Shares
("Class B Shares") of LGS Group Inc. (the "Corporation"). The 2,852,800
Class B Shares owned by the Shareholders represent all of the issued and
outstanding Class B Shares.
B. The Corporation is a reporting issuer in each of the Provinces of Canada
which have established a reporting issuer regime and the Class A Shares
are listed on The Toronto Stock Exchange and are quoted on the Nasdaq
Stock Market, Inc.
C. IBM, L and G have entered into a confidentiality agreement dated February
11, 2000 (the "Confidentiality Agreement") and now wish to set out the
terms on which IBM, indirectly through a wholly-owned Canadian subsidiary
of IBM or Parent ("Offerco"), would make an offer for all of the
outstanding Class A Shares and Class B Shares and the basis on which the
Shareholders would support such a
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transaction.
D. The Parties are desirous of recording their agreement in respect of the
following matters:
(a) the terms and conditions upon which IBM, through Offerco, would make
an offer for all of the issued and outstanding Class A Shares and
Class B Shares; and
(b) the terms and conditions upon which the Shareholders would
irrevocably and unconditionally deposit to the offer described in
item (a) above, all Class A Shares and Class B Shares owned
beneficially and of record by the Shareholders, including Class A
Shares and Class B Shares issuable upon the exercise of warrants,
options, conversion rights or other rights and entitlements which
are currently exercisable, or which become exercisable at any time
prior to the occurrence of a Termination Event (as such term is
defined herein) (collectively, the "Shareholder Securities").
THEREFORE, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions
Whenever used in this Agreement, unless there is something inconsistent in
the subject matter or context, the following words and terms shall have the
meanings set out below:
"Acquisition Proposal" means any proposal or expression of interest to purchase
all, or
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any portion of the Shareholder Securities or to enter into any voting trust or
proxy arrangements involving Shareholder Securities or any proposal or
expression of interest in any merger, amalgamation, consolidation, business
combination, strategic alliance, plan of arrangement, recapitalization,
reorganization, take-over bid, reverse take-over bid, sale of material assets,
material acquisition of assets, material sale or issuance of treasury shares or
rights or interests therein or thereto in return for any form of consideration,
similar transactions involving either the Shareholders or any of them or the
Corporation;
"Agreement" means this Support Agreement including the Schedules hereto;
"Business Day" means a day, other than a Saturday, a Sunday or a statutory
holiday, on which the commercial banks in both the City of Toronto and the City
of Montreal are open for business during normal banking hours;
"CBCA" means the Canada Business Corporations Act, as constituted on the date
hereof;
"Class A Shares" has the meaning ascribed to it in the recitals to this
Agreement;
"Class B Shares" has the meaning ascribed to it in the recitals to this
Agreement;
"Coattail Agreements" means those certain trust agreements between the Transfer
Agent, Montreal Trust, the Corporation and L, with respect to one agreement and
G with respect to the other agreement, each of which is dated the 14th day of
October, 1999;
"Coattail Provisions" mean the provisions contained in the Corporation's
Articles of Incorporation which provide, inter alia and in certain
circumstances, that the Class B
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Shares are automatically converted into Class A Shares or that the Class A
Shares are convertible, at the election of the holder, into Class B Shares for
certain limited purposes;
"Compulsory Acquisition" means the acquisition of all of the Class A Shares held
by holders who did not deposit their shares under the Offer and by any Person
who subsequently acquires Class A Shares, directly or indirectly, from such a
non-depositing shareholder, pursuant to the compulsory acquisition provisions of
Section 206 of the CBCA;
"Confidentiality Agreement" has the meaning ascribed to it in the recitals to
this Agreement;
"Corporation" has the meaning ascribed to it in recitals to this Agreement;
"Disclosure Schedule" means the Disclosure Schedule of the Shareholders attached
to this Agreement as Schedule "A";
"IBM" has the meaning ascribed to it on the first page of this Agreement;
"Liens" has the meaning ascribed to it in Paragraph 3.1(h) of this Agreement;
"Material Adverse Effect" means any condition, event or development which is, or
could reasonably be expected to result in or represent, a material adverse
effect or material adverse change (or any condition, event or development
involving a prospective material adverse change) individually or in the
aggregate on or in the business, affairs, operations, assets, capitalization,
financial condition, rights, results of operations, or liabilities (including
without limitation any contingent liabilities that may arise through
outstanding, pending or threatened litigation or otherwise), whether contractual
or otherwise, of the Corporation and its subsidiaries considered as a whole,
provided that a
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Material Adverse Effect shall not include any material change or effect on the
information technology industry generally or North American stock markets
generally, and shall also include any material change or effect which occurs
solely as a result of interest rate or exchange rate fluctuations;
"material fact" and "misrepresentation" have the respective meanings ascribed
thereto in the Securities Act (Ontario) as constituted on the date hereof;
"Offer" has the meaning ascribed to it in Section 2.1 of this Agreement;
"Offerco" has the meaning ascribed to it in the recitals to this Agreement;
"Offer Deadline" has the meaning ascribed to it in Paragraph 2.2(b) of this
Agreement;
"Offer Documents" has the meaning ascribed to it in Paragraph 5.1(b) of this
Agreement;
"Option Shares" has the meaning ascribed to it in Paragraph 3.1(c) of this
Agreement;
"Parent" means International Business Machines Corporation, a corporation
incorporated under the laws of the State of New York;
"Person" includes any individual, sole proprietorship, partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, body corporate, and a natural person in his or her capacity
as trustee, executor, administrator, or other legal representative;
"Securities Authorities" has the meaning ascribed to it in Paragraph 5.1(c) of
this Agreement;
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"Securities Laws" means the securities laws, rules, regulations and notices and
policy statements published thereunder, including National Policies and National
Instruments, of each of the Provinces and Territories of Canada and the
applicable securities laws of the United States and the States thereof;
"Shareholders" has the meaning ascribed to it in the recitals to this Agreement;
"Shareholder Securities" has the meaning ascribed to it in the recitals to this
Agreement which securities and the individual ownership thereof are further
described in Schedule "B" hereto; for the purposes of this Agreement,
Shareholder Securities include the Option Shares;
"Subsequent Acquisition Transaction" means an amalgamation, statutory
arrangement or consolidation of Class A Shares and/or Class B Shares and/or
other securities of the Corporation or other transaction involving IBM, Offerco
or another affiliate of IBM and the Corporation for the purposes of enabling IBM
to directly or indirectly acquire all of the Target Shares not deposited under
the Offer other than pursuant to a Compulsory Acquisition;
"subsidiary", "affiliate" and "associate" have the respective meanings ascribed
thereto under the Securities Act (Ontario), as constituted on the date thereof;
"Target Shares" means, collectively, the Class A Shares and the Class B Shares;
"Termination Event" has the meaning ascribed to it in Section 4.1 hereof; and
"Transfer Agent" means Xxxxxxxxxx Trust.
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1.2 Rules of Interpretation
In this Agreement and the Schedules hereto:
(a) Time - time is of the essence in the performance of the Parties'
respective obligations;
(b) Headings - the descriptive headings of Articles and Sections are
inserted solely for convenience of reference and are not intended as
complete or accurate descriptions of the content of such Articles or
Sections;
(c) Singular, etc. - the use of words in the singular or plural, or with
a particular gender, shall not limit the scope of or exclude the
application of any provision of this Agreement to such Person or
circumstances as the context otherwise permits;
(d) Consent - except as expressly provided for herein, whenever a
provision of this Agreement requires an approval or consent by a
Party and notification of such approval or consent is not delivered
within the applicable time limits, then, unless otherwise specified,
the Party whose consent or approval is required shall be
conclusively deemed to have withheld its approval or consent;
(e) Calculation of Time - unless otherwise specified, time periods
within or following which any payment is to be made or act is to be
done shall be calculated by excluding the day on which the period
commences and including the day on which the period ends and by
extending the period to the next Business Day following if the last
day of the period is not a
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Business Day; and
(f) Business Day - whenever any payment is to be made or action to be
taken under this Agreement is required to be made or taken on a day
other than a Business Day, such payment shall be made or action
taken on the next Business Day following such day.
1.3 Applicable Law
This Agreement shall be construed in accordance with the laws of the
Province of Ontario and the federal laws of Canada applicable therein and shall
be treated in all respects as an Ontario contract.
1.4 Entire Agreement
This Agreement, including the Schedules hereto, constitutes the entire
agreement between the Parties with respect to the subject matter of this
Agreement and cancels and supersedes the Confidentiality Agreement and any other
prior understandings and agreements between the Parties with respect to such
subject matter. There are no representations, warranties, terms, conditions,
obligations, undertakings or collateral agreements, express, implied or
statutory, between the Parties with respect to the subject matter of this
Agreement other than those expressly set forth in this Agreement.
1.5 Schedules
The following Schedules are attached hereto and form part of this
Agreement:
Schedule Description
-------- -----------
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Schedule "A" Disclosure Schedule
Schedule "B" Shareholder Securities
Schedule "C" Terms and Conditions of the Offer
Schedule "D" Coattail Notice
Schedule "E" Retention Agreement Term Sheet
Schedule "F" Exchangeable Share Term Sheet
ARTICLE 2
THE OFFER
2.1 Offer
IBM will cause Offerco to make offers for all of the outstanding Class A
Shares and Class B Shares including any Class B Shares issuable upon the
conversion of Class A Shares and any Class A Shares issuable upon the exercise
of stock options and warrants or other convertible securities of the
Corporation, on the terms and subject to the conditions specified in Schedule
"C" to this Agreement (collectively, the "Offer").
2.2 Timing
(a) [Paragraph intentionally deleted]
(b) IBM shall cause Offerco to make the Offer on or before March 15,
2000
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(the "Offer Deadline").
2.3 Conditions Precedent
Notwithstanding Sections 2.1 and 2.2 of this Agreement, IBM shall not be
required to cause Offerco to make the Offer unless each of the following
conditions precedent has been satisfied or waived:
(a) the boards of directors of IBM and Parent shall have, on or prior to
March 1, 2000, approved the making of the Offer.
(b) at the time Offerco proposes to make the Offer:
(i) all of the conditions set forth in Paragraphs (f) to (h)
inclusive of Section 3 of Schedule "C" hereto shall have been
satisfied;
(ii) all representations and warranties of the Shareholders in
Section 3.1 shall, as of such date, be true and correct in all
material respects as if made at such time and IBM shall have
received a certificate from each Shareholder to such effect;
and
(iii) all Shareholders shall have performed in all material respects
all covenants or complied in all material respects with all
agreements to be performed or complied with by such
Shareholder under this Agreement on or prior to the time at
which Offerco proposes to make the Offer.
(c) [Intentionally deleted]
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(d) [Intentionally deleted]
(e) rulings shall have been obtained from all applicable Securities
Authorities providing where required, relief from the collateral
benefit and non-identical consideration prohibitions of applicable
Securities Laws.
The foregoing conditions are for the sole benefit of IBM and may be waived
by IBM in whole or in part at any time or from time to time and shall be deemed
to have been waived by IBM by the making of the Offer.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Shareholders
Each Shareholder hereby jointly and severally represents and warrants to
IBM as follows:
(a) if the Shareholder is:
(i) a corporation, it is a corporation duly incorporated and
validly existing under the laws of its jurisdiction of
incorporation; has all necessary corporate power, authority,
capacity and right, and has received all requisite regulatory
and other approvals other than those approvals described in
Paragraph (d) of Section 3 of Schedule "C", particular to the
character or status of the Shareholder (including any
necessary approval of its respective shareholders) required to
be received by it in order to execute and deliver this
Agreement and to complete the transactions
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contemplated hereby; or
(ii) an individual, he has all necessary capacity to execute and
deliver this Agreement and to complete the transactions
contemplated hereby;
(b) upon the due execution and delivery of this Agreement by IBM this
Agreement shall be a legally valid and binding agreement enforceable
by IBM against the Shareholder in accordance with its terms,
subject, however, to the usual limitations with respect to
enforcement imposed by law in connection with bankruptcy or similar
proceedings and the availability of equitable remedies;
(c) the Shareholder is, and at the time of deposit of the Shareholder
Securities under the Offer, the Shareholder will be, the holder of
record of the Shareholder Securities listed opposite its name in
Schedule "B" hereto, including the Class A Shares or Class B Shares
issuable upon the exercise of options, warrants or other convertible
securities or other rights and entitlements held by the Shareholder
(the "Option Shares"), and at the time of such deposit will have the
unfettered ability, authorization, capacity and the exclusive right
to dispose of all such Shareholder Securities under the Offer;
(d) the Class B Shares owned collectively by all of the Shareholders
represent all of the issued and outstanding Class B Shares. The
votes attached to all
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of the Class A Shares and Class B Shares collectively held by the
Shareholders represent approximately 75% of the votes attached to
all of the outstanding Class A Shares and Class B Shares;
(e) L beneficially owns and is the holder of record of all of the issued
and outstanding securities of L Holdco and G beneficially owns and
is the holder of record of all of the issued and outstanding
preferred shares of G Holdco and La Fiducie Xxxxx Xxxxxxxx is the
holder of record of all of the issued and outstanding common shares
of G Holdco. The voting rights attached to the preferred shares of G
Holdco held by G represent a majority of the voting rights attached
to all of the outstanding securities of G Holdco;
(f) Except for the Escrow Agreement dated November 24, 1986 among LGS
Data Processing Consultants Inc., L Holdco, G Holdco, 133692 Canada
Inc., Xxxxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxx and Xxxxx X. Xxxxxxx (which
agreement the Shareholders have the exclusive authority to terminate
and have mutually agreed to terminate if the Target Shares deposited
under the Offer and not withdrawn are taken up and paid for), the
Shareholder is not a party to, bound or affected by or subject to,
any agreement, charter or by-law provision, statute, regulation,
judgment, order, decree or law which would be violated, contravened,
breached by, or under which a default would occur as a result of,
the execution and delivery or performance of this Agreement by the
Shareholder and which default, violation,
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contravention or breach would materially impair or would prevent the
Shareholder from consummating the transactions contemplated hereby;
(g) the Shareholder Securities listed in Schedule "B" hereto opposite
such Shareholder's name constitute all of the shares or other
securities in the capital of the Corporation owned beneficially and
of record by such Shareholder or which the Shareholder could obtain
upon the exercise of any outstanding warrants, options, or other
convertible securities or other rights and entitlements and all such
warrants, options, convertible securities and other rights and
entitlement, and the details thereof, are also listed in Schedule
"B";
(h) the Shareholder Securities to be deposited by the Shareholder under
the Offer in accordance with this Agreement at the time of deposit,
will be beneficially owned by the Shareholder with good and
marketable title, free and clear of any and all mortgages, liens,
charges, pledges, encumbrances, claims, security interests,
restrictions or rights of others of any nature whatsoever ("Liens"),
except any Lien created hereby or by IBM;
(i) except as set forth in the Disclosure Schedule, the Shareholder has
not previously granted or agreed to grant any ongoing proxy or other
right to vote in respect of the Shareholder Securities or entered
into any voting trust, vote pooling or other agreement with respect
to the right to vote, call meetings of shareholders or give consents
or approvals of any kind as to
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the Shareholder Securities; and
(j) there is no claim, action, lawsuit, arbitration, mediation or other
proceeding pending or, to the best of the knowledge and belief of
the Shareholder, threatened against the Shareholder which could
materially impair the ability of the Shareholder of IBM to
consummate the transactions contemplated hereby.
3.2 Representations and Warranties of IBM
IBM hereby represents and warrants to the Shareholders as follows:
(a) IBM is a corporation duly incorporated and validly existing under
the laws of its jurisdiction of incorporation;
(b) all necessary corporate action has been taken by IBM in order to
authorize the execution, delivery and, upon and subject to the
approval by the boards of directors of IBM and the Parent as
provided in Section 2.3(a), the performance of this Agreement by
IBM, and prior to, or at the time Offerco takes up and pays for any
Target Shares deposited to the Offer, IBM will have obtained all
approvals, including regulatory approvals, required by IBM or
Offerco in order to consummate the Offer on the terms described
herein;
(c) upon the due execution and delivery of this Agreement by the
Shareholders, this Agreement shall be a valid and binding agreement
enforceable by the Shareholders against IBM in accordance with its
terms subject however, to the usual limitations with respect to
enforcement
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imposed by law in connection with bankruptcy or similar proceedings
and the availability of equitable remedies;
(d) IBM is not a party to, bound or affected by or subject to, any
agreement, charter or by-law provision, statute, regulation,
judgment, order, decree or law which would be violated, contravened,
breached by, or under which a default would occur as a result of,
the execution and delivery or performance of this Agreement by IBM
and which default, violation, contravention or breach would
materially impair or would prevent IBM from consummating the
transactions contemplated hereby; and
(e) on any date on which Offerco proposes to make the Offer, Offerco:
(i) will be duly incorporated and validly existing under its
jurisdiction of incorporation;
(ii) will have all necessary corporate authority to make the Offer
on the terms contemplated herein; and
(iii) will have sufficient funds or financing arrangements in place
to provide sufficient funds to purchase all Target Shares
tendered under the Offer.
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ARTICLE 4
COVENANTS OF THE SHAREHOLDERS
4.1 General
Each of the Shareholders hereby covenants and agrees that until the
earliest of the date on which: (i) IBM has taken up and paid for all of the
Target Shares tendered under the Offer and not withdrawn, (ii) the Offer is
terminated, withdrawn or abandoned, or (iii) this Agreement has been terminated
pursuant to Section 7.1 or 7.2 hereof (each a "Termination Event"), the
Shareholder, in its capacity as a shareholder of the Corporation, will:
(a) [Intentionally deleted]
(b) if, and as often as may be requested by IBM, provide to the Transfer
Agent, a notice contemplated by the Coattail Provisions to the
effect that such Person will not be participating in any offer for
Class A Shares and/or Class B Shares (other than the Offer),
substantially in the form of notice attached hereto as Schedule "D";
(c) other than pursuant to the Offer, not sell, transfer, pledge,
encumber, grant a security interest in, hypothecate or otherwise
convey, directly or indirectly, the Shareholder Securities, or any
rights to acquire Shareholder Securities, to any Person, or agree to
any of the foregoing;
(d) not grant or agree to grant any proxy or other right to vote in
respect of the Shareholder Securities, or enter into any voting
trust, vote pooling or other agreement with respect to the right to
vote the Shareholder Securities, in each case, other than pursuant
to the Offer in accordance with the terms of this Agreement;
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(e) not take any action of any kind which may reduce the likelihood of
success of, or delay the completion of, the Offer;
(f) not directly or indirectly through any corporation, representative
or agent:
(i) solicit, initiate, invite, respond to, encourage, entertain or
be a party to any discussions, inquiries or proposals relating
to, or which may reasonably be expected to relate to, an
Acquisition Proposal; or
(ii) furnish any information with respect to, or take any other
action to respond to any inquiries which could in any way
facilitate the making of any proposal that constitutes, or may
lead to an Acquisition Proposal;
(g) assist and facilitate the Corporation and co-operate with IBM and
Offerco in the making of all requisite regulatory filings and
exemption applications, and in connection with any procedural or
other matters that may be necessary to consummate the Offer and to
complete the purchase of the Target Shares; however, the
Shareholders shall not be required to incur the expense in
connection with any such filings, applications or procedural or
other matters;
(h) exercise the voting rights attaching to the Shareholders Securities
and otherwise use its best efforts as a shareholder of the
Corporation to oppose any proposed action by the Corporation, its
shareholders, any of its subsidiaries or any other Person:
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(i) in respect of any merger, amalgamation, consolidation,
business combination, strategic alliance, plan of arrangement,
recapitalization, take-over bid, reverse take-over bid,
reorganization, sale of material assets, material acquisition
of assets, material sale or issuance of treasury shares or
rights or interests therein or thereto, or similar
transactions involving either the Shareholders (or any of
them) or the Corporation, which might reasonably be regarded
as being directed towards or likely to prevent or delay the
successful completion of the Offer, or
(ii) to materially change the business, assets, operations,
capital, affairs, financial condition, licences, permits,
rights or privileges, whether contractual or otherwise, or
prospects of the Corporation or its subsidiaries which could,
individually or in the aggregate, constitute, or which could
reasonably be expected to result in, a Material Adverse
Effect;
(i) not convert any Class B Shares into Class A Shares;
(j) provided that Offerco takes up and pays for Target Shares, enter
into a retention agreement with IBM substantially on the terms and
conditions outlined in Schedule "E"; and
(k) not do indirectly that which it may not do directly in respect of
the restrictions on its rights with respect to the Shareholder
Securities pursuant
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to this Section 4.1 including, without limitation, through the sale
of any direct or indirect holding company or the granting of a proxy
on the shares of any direct or indirect holding company and which
would have, indirectly, any effect prohibited by this Section 4.1.
4.2 Additional Covenants
Each of the Shareholders hereby covenants with IBM that until the
occurrence of a Termination Event, the Shareholder will:
(a) [Paragraph intentionally deleted]
(b) if asked to do so by IBM, request the Corporation or the Transfer
Agent to prepare a list of shareholders of the Corporation in
accordance with Section 21 of the CBCA and a list of holders of
stock options and any other rights, warrants or convertible or
exchangeable securities currently outstanding (with full particulars
as to the purchase, exercise or conversion or exercise price and
expiry date), and to deliver same to IBM upon the request of IBM as
soon as practicable thereafter.
4.3 Party to Agreement in Capacity of Shareholder
The Parties acknowledge that L and G have entered into this Agreement in
their capacities as shareholders of the Corporation. As such, nothing in
this Article 4 or Section 8.2 shall require L and G not to discharge their
fiduciary duties to the Corporation in their capacities as directors and
officers of the Corporation.
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ARTICLES 5
COVENANTS OF IBM
5.1 General
IBM hereby covenants to:
(a) [Paragraph intentionally deleted]
(b) provide each Shareholder and the Corporation: (i) with a draft copy
of the Offer, the takeover bid circular and the related letter(s) of
transmittal and notice(s) of guaranteed delivery, and to the extent
practicable, any amendments thereto (collectively, the "Offer
Documents") not later than four days prior to any proposed mailing
of the Offer Documents so as to provide Shareholders and the
Corporation with an opportunity to review and comment on such
documents, and (ii) provide each Shareholder and the Corporation
with a final copy of the Offer Documents;
(c) cause Offerco to file the Offer Documents on a timely basis with the
appropriate securities commissions and other regulatory authorities
in Canada and in the United States (the "Securities Authorities");
(d) appoint a dealer manager in connection with the Offer to solicit
acceptances of the Offer. The dealer manager will be required to
form a soliciting dealer group comprised of members of the
Investment Dealers Association of Canada and of the stock exchanges
in Canada to solicit acceptance of the Offer in Canada; and
(e) pursue, and cause Offerco to diligently pursue, all of the
regulatory
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approvals and exemption applications referred to or contemplated by
Paragraph 2.3(e) of this Agreement and Paragraphs (c), (d) and (e)
of Section 3 of Schedule "C" hereto which are required in order to
satisfy any conditions to the making of the Offer or to the Offer
not waived by IBM or Offerco.
5.2 Tax Planning Considerations
IBM acknowledges that some or all of the Shareholders may seek a structure
for the Offer which accommodates certain tax planning measures. In that regard,
if requested by a Shareholder, IBM hereby covenants to use its reasonable best
efforts to adjust the structure of the Offer as set forth in Schedule "C" hereto
in such a manner which achieves such tax planning measures provided that IBM
shall not be required to make any change:
(a) to the amount or form of consideration being offered pursuant to the
Offer;
(b) which is inconsistent with or in contravention of any applicable
law;
(c) which would have a material adverse consequence to IBM, Offerco or
the Corporation, tax or otherwise.
ARTICLE 6
ACCEPTANCE OF OFFER
6.1 Deposit
Each of the Shareholders hereby irrevocably and unconditionally agrees to
deposit under the Offer, all Shareholder Securities which the Shareholder
presently owns
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beneficially or is the holder of record, or otherwise acquires at any time prior
to the occurrence of a Termination Event, together with duly completed and
executed letters of transmittal, as soon as practicable after the Offer has been
made and, in any event, on or before the third Business Day after the date of
the Offer.
6.2 No Withdrawal
Subject to Section 6.3, each of the Shareholders hereby irrevocably and
unconditionally agrees that it shall not withdraw or take any action to withdraw
prior to a Termination Event any of the Shareholder Securities deposited under
the Offer pursuant to Section 6.1 notwithstanding any statutory rights or other
rights under the terms of the Offer or otherwise which it might have.
6.3 Coattail Agreement
IBM shall and shall cause Offerco, prior to the taking up or paying for
any Class B Shares, enter into agreements in the form of the Coattail Agreements
whereby IBM and Offerco shall be subject to the same rights and obligations as
the Shareholder thereunder and, notwithstanding anything herein contained or in
any letter of transmittal, the obligation of the Shareholder to sell its Class B
Shares pursuant to the Offer shall be conditional upon IBM entering into such
agreements. In connection with the foregoing obligation of IBM, the Shareholders
shall assign to IBM and Offerco and IBM shall assume and shall cause Offerco to
assume the rights and obligations of the Shareholders under the Coattail
Agreements.
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ARTICLE 7
TERMINATION
7.1 Termination by Shareholders
Any of the Shareholders, when not in default in the performance of its
obligations under this Agreement, may, without prejudice to any other rights,
terminate this Agreement by notice to IBM if:
(a) the condition in Paragraph 2.3(a) has either:
(i) not been waived by IBM; or
(ii) has not been satisfied
on or before the date set out in such Paragraph;
(b) the Offer has not been made by the Offer Deadline;
(c) the Offer (or any amendment thereto, other than as specifically
contemplated by Schedule "C" hereto) does not conform to the
description in Schedule "C" or the provisions of this Agreement; or
(d) Target Shares deposited under the Offer have not, for any reason
whatsoever, been taken up and paid for on or before the "Termination
Date", which shall be April 30, 2000, unless prior to such date
either:
(i) a regulatory authority shall have commenced a formal
investigation or a regulatory authority, shareholder or other
interested Person shall have commenced an action or
proceeding, in either case in connection with securities or
corporate law matters in respect of the Offer; or
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(ii) the board of directors of the Corporation shall have
recommended that holders of Target Shares reject the Offer,
in which event the Termination Date shall be June 30, 2000.
7.2 Termination by IBM
IBM, when not in default in the performance of its obligations under this
Agreement, may, without prejudice to any other rights, terminate this Agreement
by notice to the Shareholders if:
(a) IBM has not been provided with the lists described in Paragraph
4.2(b) by March 11, 2000 or by such later date in March, 2000 as IBM
may, by notice to the Shareholders establish (provided that IBM may
not terminate the Agreement pursuant to this Section 7.2(a) if it
has not requested such lists by February 29, 2000);
(b) the Shareholders have not complied with all conditions precedent set
forth at (ii) and (iii) of Paragraph 2.3(b) by March 15, 2000 other
than those which have been waived by IBM;
(c) the conditions of the Offer are not satisfied or waived by IBM or
Offerco on or prior to the expiry of the Offer; or
(d) the condition in Paragraph 2.3(a) has either:
(i) not been waived by IBM; or
(ii) has not been satisfied
26
on or before the date set out in such Paragraph.
7.3 Effect of Termination
In the event of the termination of this Agreement as provided in Section
7.1 or 7.2:
(a) this Agreement shall forthwith become void; and
(b) there shall be no liability on the part of IBM or the Shareholders
hereunder except that nothing contained in this Section 7.3 shall
relieve any Party from liability for any breach of any provision of
this Agreement which occurred on or prior to the date of such
termination.
ARTICLE 8
GENERAL
8.1 Survival of Representatives and Warranties
Other than as expressly set forth herein, the representations and
warranties of the Shareholders and IBM contained herein shall survive the
consummation of the Offer but only for a period of one year from the date
hereof. Representations and warranties of the Shareholders concerning the
ownership of he Shareholder Securities and the ability to deposit such
securities to the Offer, shall survive for a period of six years following the
date of this Agreement. No investigations made by or on behalf of either the
Shareholders, IBM or Offerco or any of their respective authorized agents at any
time shall have the effect of waiving , diminishing the scope of or otherwise
affecting any
27
representation or warranty or covenant made by the Parties in or pursuant to
this Agreement.
8.2 Confidentiality and Disclosure
Except as required by any competent governmental or judicial authority or
by Securities Laws, and then only after discussing same with the other Parties:
(a) each of the Shareholders agree to keep confidential and not disclose
to any Person the existence or subject matter of this Agreement or
of any discussions between the Parties relating thereto except for
disclosures to affiliates, employees, agents and advisers of the
Shareholders who need to know the information in connection with
this Agreement or the Offer and who are bound by an obligation of
confidentiality; and
(b) IBM agrees to keep confidential and not disclose to any Person
confidential information received from the Shareholders except for
disclosures to affiliates, employees, agents and advisers of IBM who
need to know the information in connection with this Agreement or
the Offer and are who bound by an obligation of confidentiality and
except (i) for information which was in the possession of IBM prior
to February 11, 2000 or information independently discovered or
developed by IBM; and (ii) for information which is publicly
disclosed or is disclosed to IBM other than by a Person who owed a
duty of confidentiality to the Corporation and who breached such
obligation.
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The provisions of this Section 8.2 constitute a further confidentiality
agreement between L, G and IBM and therefore supercede and replace the
provisions of Section 2.1 of the Confidentiality Agreement of February 11, 2000.
8.3 Amendments
This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by al of
the Parties hereto.
8.4 Specific Performance and other Equitable Rights
Each of the Parties recognizes and acknowledges that this Agreement is an
integral part of the transactions contemplated in the Offer, that IBM would not
contemplate causing the Offer to be made and the Shareholders would not agree to
the deposit of Shareholder Securities under the Offer unless this Agreement was
executed, and that a breach by a Party of any covenants, agreements or other
commitments contained in this Agreement will cause the other Parties to sustain
injury for which they would not have an adequate remedy at law for money
damages. Therefore, each of the Parties agrees that in the event of any such
breach, the aggrieved Party shall be entitled to the remedy of specific
performance of such covenants or commitments and preliminary and permanent
injunctive and other equitable relief in addition to any other remedy to which
it may be entitled, at law or in equity, and the Parties further agree to waive
any requirement for the securing or posting of any bond in connection with the
obtaining of any such injunctive or other equitable relief.
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8.5 Assignment
Except as may be expressly provided for in this Agreement, none of the
Parties to this Agreement may assign its rights or obligations under this
Agreement without the prior written consent of all of the other Parties.
8.6 Severability
If any provision of this Agreement is determined to be invalid or
unenforceable in whole or in part, such invalidity or unenforceability shall
attach only to such provision or part of such provision and the remaining part
of such provision and all other provisions of this Agreement shall continue in
full force and effect.
8.7 Notices
Any notice or other writing required or permitted to be given under this
Agreement or for the purposes of this Agreement (referred to in this Section as
a "notice") to any Party shall be sufficiently given if delivered personally, or
if sent by prepaid registered mail or if transmitted by fax, email or other form
of recorded communication tested prior to transmission to such Party:
(a) in the case of a Notice to L or L Holdco to:
Addressee: Xxxxxxx Xxxxxxxxxx
Address: 0000, Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Phone: (000) 000-0000
with a copy to:
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Addressee: Xxx Xxxxxx
Address: 0000 XxXxxx Xxxxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Phone: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxxxx@xxxxxxxxxxxxx.xxx
(b) in the case of a Notice to G or G Holdco to:
Addressee: Xxxxx Xxxxxxxx
Address: 0000 Xxxxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Phone: (000) 000-0000
Fax: (000) 000-0000
Email: Xxxxx_Xxxxxxxx@xxx.xxx.xx
with a copy to:
Addressee: Xxx Xxxxxx
Address: 0000 XxXxxx Xxxxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Phone: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxxxx@xxxxxxxxxxxxx.xxx
31
(c) in the case of a Notice to IBM:
Addressee: Xxxx Xxxxxxx
Address: 0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Phone: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxxxxx@xx.xxx.xxx
with a copy to:
Addressee: Xxxx Xxxxxxxxx
Address: Osler, Xxxxxx & Harcourt LLP
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx X00 0X0
Phone: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxxxxxxx@xxxxx.xxx
8.8 Counterparts
This Agreement may be executed by the Parties in separate counterparts
each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument. Receipt of a
facsimile version of an executed signature page by a Party shall constitute
satisfactory evidence of execution and
32
delivery of this Agreement by such Party.
8.9 Fees and Expenses
The Parties will each pay their respective fees and expenses (including
fees and expenses of legal counsel, investment bankers, brokers or other
representatives or consultants) in connection with the transactions contemplated
hereby.
8.10 Authorship
The Parties hereto agree that the terms and language of this Agreement and
all agreements contemplated hereby were the results of negotiations between the
Parties and, as a result, there shall be no presumption that any ambiguity in
this Agreement shall be resolved against either Party.
8.11 Language
The parties confirm that it is their wish that this Agreement as well as
any other documents relating hereto including notices, have been and shall be
drawn up in English only. Les parties sux presentes confirment leur volonte xx
xxxxxxx exclusivement en langue anglaise la presente convetion ainsi que tous
les documents s'y rapportant.
[The remainder of this page has intentionally been left blank]
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IN WITNESS OF WHICH the Parties have executed this Support Agreement as of
the date first written above.
__________________________ __________________________
Witness XXXXXXX XXXXXXXXXX
115523 CANADA INC.
By:_______________________
Name:
Title:
By:_______________________
Name:
Title:
__________________________ __________________________
Xxxxxxx XXXXX XXXXXXXX
000000 XXXXXX INC.
By:_______________________
Name:
Title:
By:_______________________
Name:
Title:
34
IBM CANADA LIMITED
By:_______________________
Name:
Title:
By:_______________________
Name:
Title:
