INVESTMENT AGREEMENT THIS AGREEMENT is made as of April 26, 2019.
Exhibit 10.3
THIS AGREEMENT is made as of
April 26, 2019.
AMONG:
INDUS HOLDINGS, INC., a company
incorporated under the laws of the Province of British Columbia,
having its registered office in care of Xxxxxxx Xxxxx, Suite 2200,
HSBC Building, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0 (the “Company”);
-
and -
Xxxxxx Xxxxxxx, an individual
having an address at 00 Xxxxx Xxx Xxxxxx, Xxxx X, Xxxxxxx, XX 00000
(“Xxxxxxx”);
RECITALS:
A.
The Shareholders collectively own all of the
issued and outstanding Super Voting Shares in the capital of the
Company (the “Super Voting
Shares”);
B.
The
parties have entered into this Agreement to record their agreement
as to the manner in which the issue, redemption and transfer from
time to time of the Super Voting Shares shall be effected, and as
to certain rights and obligations with respect to their ownership
of the Super Voting Shares.
THEREFORE, the parties agree as
follows:
ARTICLE 1
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1
Definitions
Whenever used in this Agreement, the following terms shall have the
meanings set out below:
“Act” means the Business Corporations
Act (British Columbia);
“Affiliate” means with respect to any Person, any
other Person Controlling, Controlled by or under common Control
with such Person;
“Agreement” means this Investment Agreement, including
all schedules, and all amendments or restatements as permitted, and
references to “Article”, “Section”, “Exhibit” or “Schedule” mean the specified Article, Section,
Exhibit or Schedule of this Agreement;
“Articles” means the Articles of the Company and all
amendments thereto;
“Business
Combination” means
the business combination which resulted in the reverse
takeover of the Company by the security holders of Indus
Holding Company;
“Business Day” means a day, other than a Saturday or
Sunday, on which the principal commercial banks are open for
business during normal banking hours in Toronto, Ontario,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx xxx Xxx Xxxxxxx,
Xxxxxxxxxx;
“Change of Control
Transaction” means
either (i) the sale, lease, license, transfer, conveyance or
other disposition, in one transaction or a series of related
transactions, of all or substantially all of the assets of the
Company, or (ii) a transaction or a series of related
transactions (including by way of merger, consolidation,
recapitalization, reorganization or sale of securities by the
holders of securities of the Company) the result of which is that
shareholders of the Company immediately prior to such transaction
or series of related transactions are (after giving effect to such
transaction or series of related transactions) no longer, in the
aggregate, the beneficial owners, directly or indirectly through
one or more intermediaries, of more than 50% of the Subordinate
Voting Shares and Convertible Shares on a combined basis (giving
effect to any adjustment to the Convertible Shares that would
result in a change in the 1-for-1 redemption ratio of Convertible
Shares to Subordinate Voting Shares). Notwithstanding the
foregoing, (a) no such transaction or series of related
transactions (including by way of merger, consolidation,
recapitalization, reorganization or sale of securities by the
holders of securities of the Company) in connection with an
underwritten public offering of the Company (or a corporate
successor thereto) shall be deemed a Change of Control Transaction
and (b) a Change of Control Transaction shall not include any such
transaction or series of related transactions effected by the
issuance of equity securities by the Company, unless in connection
with such issuance the Company either (x) redeems securities of the
Company outstanding immediately prior to such issuance having a
redemption price equal to more than 50% of the total equity value
of the Company immediately prior to such issuance (as determined by
the board of directors of the Company) or (y) makes a
distribution upon the securities of the Company outstanding
immediately prior to such issuance (exclusive of distributions made
in cash out of earnings or earned surplus) in an amount equal to
more than 50% of the total equity value of the Company immediately
prior to such issuance (as determined by the board of directors of
the Company).
“Control” means:
(a)
in relation to a
Person that is a corporation, limited liability company or
unlimited liability company, the beneficial ownership at the
relevant time of shares or units of such entity carrying more than
50% of the voting rights ordinarily exercisable at meetings of
shareholders or unitholders of the entity where such voting rights
are sufficient to elect a majority of the directors (or the
equivalent) of the entity; and
(b)
in relation to a
Person that is a partnership, the beneficial ownership at the
relevant time of partnership interests in such partnership carrying
more than 50% of the voting rights under the terms of the
partnership agreement that influence the conduct of the business of
such partnership; and
(c)
in relation to a
Person that is a trust or similar entity, being or exercising
Control over a majority of the trustees or the equivalent governing
authority of such trust or similar entity,
and the words “Controlled
by”,
“Controlling” and similar words have corresponding
meanings;
“Convertible
Shares” means the Class B
Common Shares in the capital of Indus Holding
Company;
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“Good
Reason”
means
(a)
a material breach by the Company of any provision of the employment
agreement between the Company and Xxxxxxx, including, without
limitation, the Company’s failure to pay any portion of
Xxxxxxx’x compensation when due or to include Xxxxxxx in any
bonus or incentive plan that applies to similarly situated senior
executives of the Company, or a reduction in compensation for
Xxxxxxx, which material breach or reduction is not cured to the
reasonable satisfaction of Xxxxxxx within 10 Business Days
following written notice from Xxxxxxx to the Company describing
such breach in reasonable detail;
(b)
the Company’s failure to provide, or continue to provide,
Xxxxxxx with either the perquisites or employee health and welfare
benefits (including, without limitation, life insurance, medical,
dental, vision, long-term disability and similar benefits)
generally provided to senior executives of the Company, which
failure is not cured to the reasonable satisfaction of Xxxxxxx
within 10 Business Days following written notice from Xxxxxxx to
the Company describing such breach in reasonable
detail;
(c)
(1) change in Xxxxxxx’x duties and responsibilities such that
Xxxxxxx is no longer an executive officer and director of the
Company or (2) a material adverse change occurring in the nature or
scope of Xxxxxxx’x authorities or duties or in
Xxxxxxx’x title or status, which change or material adverse
change is not cured to the reasonable satisfaction of Xxxxxxx
within 10 Business Days following written notice from Xxxxxxx to
the Company describing such change or material adverse change in
reasonable detail;
(d)
the headquarters of the Company’s principal operating
subsidiaries or the location to which Xxxxxxx is required to report
is relocated beyond a reasonable commuting distance for Xxxxxxx;
or
(e)
the disability of Xxxxxxx.
“Holding
Company” means a
corporation, limited liability company, unlimited liability company
or partnership that is (a) Controlled by a Shareholder or is
Controlled by any of the Shareholder’s Immediate Family
Members, or (b) a Shareholder from time to
time;
“Immediate
Family Members” means, in respect of a Shareholder,
that Shareholder’s spouse, child (natural, adopted or step),
sibling (natural, adopted or step), spouse’s sibling
(natural, adopted or step), parent, spouse’s parent,
grandparent, spouse’s grandparent, other lineal ascendant or
descendant or spouse’s other lineal ascendant or
descendant;
“Person” means any individual, sole proprietorship,
partnership, firm, entity, unincorporated association,
unincorporated syndicate, unincorporated organization, trust, body
corporate, limited liability company, unlimited liability company,
government, government regulatory authority, governmental
department, agency, commission, board, tribunal, dispute settlement
panel or body, bureau, court and, where the context requires, any
of the foregoing when they are acting as trustee, executor,
administrator or other legal representative;
“permitted
transferee” means a Person who holds Super Voting
Shares who acquired such Super Voting Shares in a transaction
permitted by Section 5.1 of this Agreement (whether from Xxxxxxx or
another Person to whom such Super Voting Shares were subsequently
Transferred in compliance with Section 5.1). Notwithstanding the
foregoing, a “permitted transferee” shall not include a
Person who is not described in one or more of clauses (a) through
(c) of Section 5.1 unless in conjunction with the Transfer of Super
Voting Shares to such Person the Company and such Person shall have
agreed to such Person’s status as a permitted
transferee;
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“Permitted
Transferee Group” means Xxxxxxx and each Shareholder
holding Super Voting Shares;
“Principal” means the applicable individual(s) that
directly or indirectly Control a Holding Company that is or becomes
party to this Agreement as a Shareholder;
“Shareholders” means Xxxxxxx and any permitted transferee
who holds Super Voting Shares from time to
time;
“Subordinate Voting
Shares” means the
subordinate voting shares in the capital of the Company;
and
“Transfer” means any sale, exchange, assignment,
gift, bequest, disposition or other arrangement by which legal
title or beneficial ownership passes from one Person to another, or
to the same Person in a different capacity, whether or not
voluntary and whether or not for value, and the words
“Transferred”, “Transferring” and similar words have corresponding
meanings.
1.2
Certain
Rules of Interpretation
In this Agreement:
(a)
Consent –
Whenever a provision of this Agreement requires an approval or
consent and such approval or consent is not delivered within the
applicable time limit, then, unless otherwise specified, the party
whose approval or consent is required shall be conclusively deemed
to have withheld its approval or consent.
(b)
Currency –
Unless otherwise specified, all references to money amounts are to
lawful currency of the United States of America.
(c)
Applicable Law
– This Agreement shall be governed by and construed in
accordance with the laws of the Province of British Columbia and
the laws of Canada applicable therein and shall be treated, in all
respects, as a British Columbia contract.
(d)
Headings –
Headings of Articles and Sections are inserted for convenience of
reference only and shall not affect the construction or
interpretation of this Agreement.
(e)
Including –
Where the word “including” or “includes” is
used in this Agreement, it means “including (or includes)
without limitation”.
(f)
No Strict
Construction – The language used in this Agreement is the
language chosen by the parties to this Agreement to express their
mutual intent, and no rule of strict construction shall be applied
against any party.
(g)
Number and Gender
– Unless the context otherwise requires, words importing the
singular include the plural and vice versa and words importing
gender include all genders.
(h)
Statutory
references – A reference to a statute includes all
regulations made pursuant to such statute and, unless otherwise
specified, the provisions of any statute or regulation which
amends, supplements or supersedes any such statute or any such
regulation.
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(i)
Time Periods
– 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 Business Day.
1.3
Invalidity
of Provisions
If, in any jurisdiction, any provision of this Agreement or its
application to any party or circumstance is restricted, prohibited
or unenforceable, such provision shall, as to such jurisdiction, be
ineffective only to the extent of such restriction, prohibition or
unenforceability without invalidating the remaining provisions of
this Agreement and without affecting the validity or enforceability
of such provision in any other jurisdiction or without affecting
its application to other parties or circumstances.
1.4
Entire
Agreement
This Agreement constitutes the entire agreement between the parties
and sets out all the covenants, promises, warranties,
representations, conditions, understandings and agreements between
the parties in connection with the subject matter of this Agreement
and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written, pre-contractual or
otherwise. There are no covenants, promises, warranties,
representations, conditions, understandings or other agreements,
whether oral or written, pre-contractual or otherwise, express,
implied or collateral between the parties in connection with the
subject matter of this Agreement except as specifically set forth
in this Agreement and any document required to be delivered
pursuant to this Agreement.
ARTICLE 2
COMPLIANCE
2.1
Representations
and Warranties
(a)
Each Shareholder
hereby represents and warrants on a several (and not joint and
several) basis to each of the other parties that this Agreement is
enforceable against such Shareholder in accordance with its
terms.
(b)
The Company
represents and warrants to each Shareholder that:
(i)
the Company is not
a party to, bound by or subject to any indenture, mortgage, lease,
agreement, instrument, statute, regulation, order, judgment, decree
or law which would be violated, contravened or breached by, or
under which any default would occur as a result of the execution,
delivery or performance by the Company of this Agreement;
and
(ii)
this Agreement is
enforceable in accordance with its terms against the
Company.
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2.2
Ownership
of Shares
(a)
Each Shareholder
represents and warrants on a several (and not joint and several)
basis to each of the other parties that it is the legal and
beneficial owner of the Super Voting
Shares set forth beside his name in Schedule 2.2 hereof; and
(b)
The Company
represents and warrants that the shareholder register of the
Company reflects the ownership of the Super Voting Shares as set forth in
Schedule 2.2 hereof and that
there are no other Super Voting
Shares outstanding.
2.3
Information
to be Provided
Each
Shareholder shall, from time to time upon the request of the
Company, provide to the Company evidence as to such
Shareholders’ direct and indirect beneficial ownership (and
that of its permitted transferees and permitted successors
hereunder) of Super Voting Shares,
Subordinate Voting Shares and Convertible
Shares.
If a
Shareholder Transfers Subordinate Voting Shares or Convertible
Shares, such Shareholder shall promptly provide to the Company
evidence of such Shareholders’ direct and indirect beneficial
ownership (and that of its permitted transferees and permitted
successors hereunder) of its Subordinate Voting Shares and
Convertible Shares after effecting such Transfer.
2.4
Beneficial
Ownership under Certain Circumstances
A
Shareholder shall be deemed to beneficially own Super Voting
Shares, Subordinate
Voting Shares or Convertible Shares held by an
intermediate company or fund in proportion to its equity ownership
of such company or fund.
2.5
Agreement
respecting Voting
Each of the Shareholders covenants and agrees that he or she or it
shall vote or cause to be voted the shares in the capital of the
Company owned by him, her or it to accomplish and give effect to
the terms and conditions of this Agreement and that he, she and it
shall otherwise act in accordance with the provisions and intent of
this Agreement.
2.6
Additional
securities in Holding Companies
No Holding Company that is a party shall issue any additional
securities (except to the Principal(s) thereof who Control it as of
the date on which it becomes a party hereto) if, after the issuance
of such securities or the conversion into voting securities of any
outstanding convertible securities in the capital of such
Shareholder, such Shareholder would no longer be Controlled by such
Principal(s).
2.7
Actions
by the Company
The Company shall at all times and from time to time act in a
manner that is consistent, and shall not take any action that is
inconsistent, with this Agreement.
-7-
2.8
Guarantee
by Principals
Each of the Principals, if any, severally, and not jointly and
severally, covenants with each of the other Principals and each of
the other parties to take such actions as may be necessary to cause
the Shareholder that he Controls to, at all times, fully and
faithfully perform and discharge its obligations under this
Agreement and to comply with the terms and conditions of this
Agreement. The foregoing covenants and obligations of the
Principals are absolute, unconditional, present and continuing and
are in no way conditional or contingent upon any event or
circumstance, action or omission which might in any way discharge a
guarantor or surety.
ARTICLE 3
REDEMPTION
OF SUPER VOTING SHARES
3.1
Redemption
The
Company may only redeem the Super Voting Shares (i) if Xxxxxxx
resigns as an executive officer and director of the Company and its
operating subsidiaries, other than for Good Reason, in which event
all of the Super Voting Shares then outstanding that are held by
any member of the Permitted Transferee Group may be redeemed by the
Company for the original issue price, (ii) if Xxxxxxx and the other members of the Permitted
Transferee Group hold less than 50% of the total number of
Convertible Shares and Subordinate
Voting Shares held by Xxxxxxx and the other members of the
Permitted Transferee Group as of the closing of the Business
Combination (giving effect to any adjustment to the
Convertible Shares that would result in a change in the 1-for-1
redemption ratio of Convertible Shares to Subordinate Voting
Shares), in which event all of the Super Voting Shares then
outstanding that are held by any member of the Permitted Transferee
Group may be redeemed by the Company for the original issue price
or (iii) as provided in Section 5.3. The Shareholder or
Shareholders subject to such redemption shall comply in all
respects with the redemption procedures set out in the Articles.
The Company shall amend Schedule
2.2 hereof to reflect the ownership of the Super Voting Shares following such
redemption.
ARTICLE 4
[RESERVED]
ARTICLE 5
TRANSFER OF SUPER VOTING SHARES
The
parties acknowledge that pursuant to Section 27.2(7) of the
Articles no Super Voting Shares
may be Transferred by the holder thereof without the prior written
consent of the Company. As a condition of any proposed Transfer,
the transferee (and as applicable the Principal(s) thereof) shall
sign an accession agreement and shall be bound by the terms of this
Agreement as if the transferee was originally a party hereto. The
Company hereby covenants and agrees with the Shareholders that the
Company shall provide its written consent to any proposed Transfer
of Super Voting Shares by a
Shareholder in connection with a Transfer:
(a)
to a Holding
Company or other entity that is Controlled by the Shareholder or is
Controlled by any of the Shareholder’s Immediate Family
Members, or to a trust, the sole beneficiaries of which are such
Shareholder and/or such Shareholder’s Immediate Family
Members, and which Holding Company (and the Principal(s) thereof)
or trust or other entity becomes a party hereto by written
accession;
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(b)
to one or more of
the Shareholder’s Immediate Family Members who become a party
hereto by written accession; or
(c)
in relation to any
Shareholder that is not an individual, to an Affiliate of such
Shareholder (other than, for the avoidance of doubt, a Transfer to
any Affiliate that is the Company or a subsidiary of the
Company).
5.2
Transfer
Process
Should
a Shareholder wish to cause some or all of its Super Voting Shares to be Transferred in
accordance with the provisions of this Article 5 the Shareholder
shall provide to the Company all information necessary as requested
by the Company to ensure that the proposed transferee of the
Super Voting Shares is a Person
contemplated under the provisions of Section 5.1, and upon the
Company’s determination in its sole discretion that the
proposed Transfer is permitted under the provisions of Section 5.1,
the Company shall provide its written approval of such transfer as
soon as practicable, and shall upon delivery of all necessary share
certificates and instruments of transfer and accession agreements
hereto in form and content satisfactory to the Company, shall cause
such Transfer to be effected and reflected in the Company’s
central securities register. The Company shall also amend
Schedule 2.2 hereof to
reflect the ownership of the Super
Voting Shares arising from such Transfer.
5.3
Change
of Control Transactions
The
Company will not consent to a Transfer of Super Voting Shares in
connection with a Change of Control Transaction. In the event of a
Change of Control Transaction, all of the Super Voting Shares then
outstanding that are held by any member of the Permitted Transferee
Group shall be redeemed by the Company for the original issue
price.
5.4
Non-Permitted
Transferees
The
parties agree that should a Shareholder Transfer any Super Voting Shares in a manner
inconsistent with the provisions of Section 5.1 the Company shall
without further notice to the Shareholder cause such Super Voting Shares to be redeemed in
accordance with Section 27.2(8) of the Articles and shall pay the
redemption price therefor to the Shareholder without regard to any
asserted rights of the purported transferee. The Company shall
amend Schedule 2.2 hereof to
reflect the ownership of the Super
Voting Shares following such redemption.
ARTICLE 6
ENDORSEMENT OF CERTIFICATES
Any
certificate representing a Super Voting Shares shall bear a legend
substantially in the form as follows:
“The shares represented by this
certificate are subject to the terms and conditions of an
investment agreement between the holder and the Company made
[______], 2019, as it may be amended, which agreement contains,
among other things, restrictions on the right of the holder hereof
to transfer or sell the shares.”
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ARTICLE 7
GENERAL
7.1
Application
of this Agreement
The terms of this Agreement shall apply mutatis mutandis
to any shares:
(a)
resulting from the
conversion, reclassification, redesignation, subdivision or
consolidation or other change of the Super Voting Shares; and
(b)
of the Company or
any successor body corporate that are received by the Shareholders
on a merger, amalgamation, arrangement or other reorganization of
or including the Company, and prior to any such action being taken
the parties to this Agreement shall give due consideration to any
changes that may be required to this Agreement in order to give
effect to the intent of this Section 7.1 and the successor body
corporate, if any, shall become bound by this
Agreement.
7.2
Assignment
Except as expressly provided in this Agreement, no party may assign
its rights or obligations under this Agreement without the prior
written consent of all of the other parties.
7.3
Enurement
This Agreement shall enure to the benefit of and be binding upon
the parties and their respective heirs, attorneys, guardians,
estate trustees, executors, administrators, trustees, successors
(including any successor by reason of amalgamation or merger of any
party) and permitted assigns.
7.4
Notices
Any notice, consent or approval required or permitted to be given
in connection with this Agreement (a “Notice”) shall be in writing and shall be
sufficiently given if delivered (whether in person, by courier
service or other personal method of delivery), or if transmitted by
electronic mail, provided that proof of electronic receipt is
obtained:
(a)
in the case of any
Shareholder, at the physical address or email address of such
Shareholder on the Company’s share register; and
(b)
in the case of the
Company at:
Indus
Holding Company
00
Xxxxx Xxx Xxxxxx
Xxxx
X
Xxxxxxx,
XX 00000
Xxxxxx
Xxxxxx
Attention:
Chief Executive Officer
E-mail: xxxxxx@xxxxxxxxxxxxxx.xxx
Any Notice delivered or transmitted to a party as provided above
shall be deemed to have been given and received on the day it is
delivered or transmitted, provided that it is delivered or
transmitted on a Business Day prior to 5:00 p.m. local time in the
place of delivery or receipt. However, if the Notice is delivered
or transmitted after 5:00 p.m. local time or if such day is not a
Business Day then the Notice shall be deemed to have been given and
received on the next Business Day. Any party may, from time to
time, change its address by giving Notice to the other parties in
accordance with the provisions of this Section 7.4.
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7.5
Termination
This Agreement shall terminate upon:
(a)
no Super Voting Shares being held by any
member of the Permitted Transferee Group; or
(b)
the written
agreement of all of the parties.
7.6
Amendments
This Agreement may only be amended, varied or modified by written
agreement of all of the parties, other than an amendment to
Schedule 2.2
hereof to reflect ownership of the
Super Voting Shares, which may be amended from time to time by the
Company without the need for written agreement by the
parties.
7.7
Specific
Performance
The rights of the parties under this Agreement are unique and,
accordingly, the parties shall, in addition to such other remedies
as may be available to any of them at law or in equity, have the
right to enforce their rights hereunder by actions for specific
performance to the extent permitted by law.
7.8
Independent
Legal Advice
The parties acknowledge that they have entered into this Agreement
willingly with full knowledge of the obligations imposed by the
terms of this Agreement. Each Shareholder further acknowledges that
he has been afforded the opportunity to obtain independent legal
advice and confirms by the execution of this Agreement that he has
either done so or waived his right to do so, and agrees that this
Agreement constitutes a binding legal obligation and that he is
estopped from raising any claim on the basis that he has not
obtained such advice.
7.9
Further
Assurances
Each of the parties covenants and agrees to take all such action
and to execute all such documents as may be necessary or advisable
to implement the provisions of this Agreement fully and effectively
and to make them binding on the parties hereto.
7.10
Execution
and Delivery
This Agreement may be executed by the parties in counterparts and
may be executed and delivered by facsimile or other electronic
means (including “.pdf” format) and all such
counterparts shall together constitute one and the same
agreement.
IN WITNESS WHEREOF the parties
have duly executed this Agreement effective as of the date first
written above.
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INDUS HOLDINGS, INC.
By:
/s/ Xxxxxx
Xxxxxxx
Authorized
Signatory
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/s/ Xxxxxx
Xxxxxxx
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Witness
signature
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Xxxxxx Xxxxxxx
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Name:
(please print)
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Address:
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SCHEDULE 2.2
SECURITIES OWNERSHIP
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Shareholder
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Number of Super Voting Shares
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Xxxxxx
Xxxxxx
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207,584
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