<Page>
EXHIBIT 10.54
RGG ACQUISITION, INC.
365 South Street
Morristown, New Jersey 07960
April 9, 2002
Ms. Janice Wadge
Regal Greetings & Gifts Corporation
7035 Ordan Drive
Mississauga, Ontario L5G 1T1
Mr. Silvio Marsili
RoyNat Capital, Inc.
Scotia Plaza, 26th Floor
40 King Street West
Toronto, Ontario M5H 1H1
Mr. Mark Shoniker
Bank of Montreal Capital Corporation
302 Bay Street, 7th Floor
Toronto, Ontario
Canada M5X 1A1
Mr. Steven Marshall
MDC Corporation, Inc.
45 Hazelton Avenue
Toronto, Ontario M5R 2E3
Re: Unanimous Shareholders Agreement
Dear Madame & Messrs. Wadge, Marsili, Shoniker, and Marshall:
Reference is made to that certain Unanimous Shareholder Agreement (the
"Shareholders Agreement") dated December 14, 2001 and amended and restated as of
February 19, 2002 by and among MDC Corporation, Inc. ("MDC"), RGG Acquisition
Inc. ("RGG"), RoyNat Capital Inc. ("RoyNat"), Bank of Montreal Capital
Corporation ("BMOCC") and Regal Greetings & Gifts Corporation ("Regal"; with
MDC, RGG, RoyNat, BMOCC and Regal, collectively, the "Parties"). Capitalized
terms not specifically defined herein, have the meanings provided in the
Shareholders Agreement. The following applies effective as of December 14, 2001.
The undersigned agree that:
1. If a particular Investing Shareholder elects to sell to the
Corporation all of its Warrants and Common Shares pursuant to Section 4.5.1 of
the Shareholders Agreement as a result of the occurrence of a transaction
identified in Section 4.5.1.9, 4.5.1.10, 4.5.1.11 or 4.5.1.12 of the
Shareholders Agreement (each a "Transaction"), then, with respect to the
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April 9, 2002
Page 2
particular Investing Shareholder, the reference to "Formula Price" for purposes
of the corresponding provision of Section 4.5.2 relating to the particular
Transaction(1), shall mean the greatest of shall mean:
(i) the quotient of (a) five (5) times the average of the Earnings
before Interest, Taxes, Depreciation and Amortization of the
Corporation for the two (2) most recently completed fiscal
years of the Corporation prior to the notice date
PLUS cash on hand immediately prior to the particular
Transaction ("Cash on Hand")
MINUS (A) the principal amount outstanding immediately prior
to the particular Transaction under the BMOCC Debenture, the
RoyNat Capital Debenture, the promissory note issued by the
Corporation in favour of MDC in the principal amount of $6
million dated December 14, 2001 and the loan made to the
Corporation by Bank of Nova Scotia in the principal amount of
$13 million on December 14, 2001 and (B) any additional long
term debt of the Corporation immediately prior to the
particular Transaction as determined by the firm of
independent certified public accountants then engaged to audit
the Corporation, provided that the particular Investing
Shareholder had agreed in writing that the Corporation may
incur such additional long term debt prior to it being
incurred (collectively (A) and (B) is the "Long Term Debt")
divided by (b) the number of Common Shares of the Corporation
outstanding on the notice date;
(ii) the quotient of (a) five (5) times the Earnings Before
Interest, Taxes, Depreciation, and Amortization of the
Corporation for the most recently completed 12 month period of
the Corporation prior to the notice date plus Cash on Hand
minus the Long Term Debt, divided by (b) the number of Common
Shares of the Corporation outstanding on the notice date; and
(iii) the quotient of (a) the Fair Market Value divided by (b) the
number of Common Shares of the Corporation outstanding on the
notice date.
- ----------
(1) i.e. Section 4.5.2.1 corresponds to Section 4.5.1.9, Section 4.5.2.2
corresponds to Section 4.5.1.10, Section 4.5.2.3 corresponds to Section 4.5.1.11
and Section 4.5.2.4 corresponds to Section 4.5.1.12.
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April 9, 2002
Page 3
The undersigned agree that the Corporation shall not, and shall not permit, any
of the Transactions to occur without the prior written approval of each of the
Investing Shareholders and the foregoing shall not be applicable without such
prior written approval.
2. If MDC elects to sell to the Corporation all of its Common Shares
pursuant to Section 4.9.1 of the Shareholders Agreement as a result of the
occurrence of a transaction identified in Section 4.9.1.3 as an event described
in Section 4.5.1.10, 4.5.1.11 or 4.5.1.12 of the Shareholders Agreement (each a
"MDC Transaction"), then the reference to the "MDC Formula Price" for purposes
of the corresponding provision of Section 4.9.2 relating to the particular MDC
Transaction(2), shall mean the greater of shall mean:
(i) the quotient of (a) 5.5 times the average of EBITDA of the
Corporation for the then most recently completed two fiscal
years of the Corporation plus Cash on Hand minus the Long Term
Debt, divided by (b) the total number of outstanding Common
Shares outstanding on the notice date (determined on a Fully
Diluted basis and for purposes of greater certainty,
determined as if all rights, options or warrants under any
ESOP have been fully exercised or converted), prior to the
exercise of MDC's rights under the Shareholders Agreement
(calculated on a pro rata basis so as to reflect, in the
calculation of results for the two fiscal years, any
acquisitions or other income generating subsequent to any
period with respect to which a calculation is required to be
made); and
(ii) the quotient of (a) the Fair Market Value divided by (b) the
number of Common Shares of the Corporation outstanding on the
notice date.
Please signify your agreement with the foregoing by executing the
enclosed copy of this letter and returning it to me. This letter may be executed
in counterparts.
Very truly yours,
Anthony Calandra
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(2) i.e. Section 4.9.2.1 corresponds to Section 4.5.1.10, Section 4.9.2.2
corresponds to Section 4.5.1.11 and Section 4.9.2.3 corresponds to Section
4.5.1.12.
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April 9, 2002
Page 4
President
Approved and Agreed to
this ___ day of April 2002
Regal Greetings & Gifts Corporation
By:
---------------------
Janice Wadge
Approved and Agreed to
this ___ day of April 2002
RoyNat Capital Inc.
By:
---------------------
Silvio Marsili
Approved and Agreed to
this ___ day of April 2002
Bank of Montreal Capital Corporation
By:
---------------------
Mark Shoniker
Approved and Agreed to
this ___ day of April 2002
MDC Corporation
By:
---------------------
Steven Marshall
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CONFIDENTIAL
MDC CORPORATION INC.
-and-
RGG ACQUISITION INC.
-and-
ROYNAT CAPITAL INC.
-and-
BANK OF MONTREAL CAPITAL CORPORATION
-and-
REGAL GREETINGS & GIFTS CORPORATION
- --------------------------------------------------------------------------------
UNANIMOUS SHAREHOLDERS AGREEMENT
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February 19, 2002
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TABLE OF CONTENTS
<Table>
<Caption>
PAGE
ARTICLE 1
INTERPRETATION
1.1 Definitions ................................................................. 3
1.2 Schedules ................................................................... 10
1.3 Headings and Table of Contents .............................................. 11
1.4 Gender and Number ........................................................... 11
1.5 Currency .................................................................... 11
1.6 Invalidity of Provisions .................................................... 11
1.7 Entire Agreement ............................................................ 11
1.8 Waiver ...................................................................... 12
1.9 Severability ................................................................ 12
1.10 Governing Law ............................................................... 12
1.11 Accounting Principles ....................................................... 12
1.12 Time of Essence ............................................................. 12
1.13 Calculation of Time ......................................................... 13
1.14 Further Assurances .......................................................... 13
1.15 Unanimous Shareholders Agreement ............................................ 13
1.16 Powers of the Directors and Shareholders .................................... 13
1.17 Conflict .................................................................... 14
1.18 Statute References .......................................................... 14
1.19 Calculation of Outstanding Shares ........................................... 14
1.20 Amendments .................................................................. 15
1.21 Recitals .................................................................... 15
ARTICLE 2
BUSINESS AND AFFAIRS OF THE CORPORATION
2.1 Business and Affairs of the Corporation ..................................... 15
2.2 Certain Matters Requiring Special Approval of MDC ........................... 22
2.3 Financial Statements ........................................................ 22
2.4 Budgets and Business Plan ................................................... 24
2.5 Life Insurance .............................................................. 24
2.6 Shareholders Meetings ....................................................... 25
2.7 Books and Records ........................................................... 25
</Table>
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<Table>
2.8 Employment of Wadge and Watkinson ........................................... 25
2.9 Change in Management of Corporation ......................................... 25
2.10 Committees .................................................................. 26
2.11 Rights on a Qualifying Public Offering ...................................... 26
ARTICLE 3
GENERAL MATTERS RELATING TO THE
HOLDING OF SHARES AND PERMITTED TRANSFERS
3.1 Representations and Warranties by Shareholders .............................. 27
3.2 General Prohibition on Transfer ............................................. 28
3.3 Permitted Transfers by RoyNat Capital and MDC ............................... 28
3.4 Permitted Transfers by Shareholders ......................................... 29
3.5 No Registration of Transfer Unless Transferee is Bound ...................... 29
3.6 Notation on Share Certificates .............................................. 29
3.7 Shareholders to Facilitate Permitted Transfers .............................. 30
ARTICLE 4
MATTERS RELATING TO THE
DISPOSITION AND ACQUISITION OF SHARES
4.1 Right of First Refusal ...................................................... 30
4.2 Piggy-Back Right ............................................................ 33
4.3 Intentionally Deleted ....................................................... 34
4.4 Applicability of Sections 4.1 and 4.2 ...................................... 34
4.5 Put Right in Favour of Investing Shareholders ............................... 34
4.6 Dreamlife Put ............................................................... 37
4.7 Completion .................................................................. 39
4.8 Default of Investing Shareholder Put ........................................ 39
4.9 Put Right in favour of MDC .................................................. 41
4.10 Corporation Buy-Back ........................................................ 43
4.11 Follow-On Obligations ....................................................... 44
4.12 Pre-Emptive Right ........................................................... 44
4.13 Exceptions to Pre-Emptive Rights ............................................ 46
4.14 Distribution of Proceeds From Sale of Shares or Assets of the Corporation ... 46
</Table>
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<Table>
ARTICLE 5
CLOSING PROCEDURES
5.1 Determination of Amount of Indebtedness ..................................... 47
5.2 Closing Procedures .......................................................... 47
ARTICLE 6
NON-COMPETITION AND CONFIDENTIALITY
6.1 Non-Competition ............................................................. 50
6.2 Non-Solicitation of Employees ............................................... 51
6.3 Non-Solicitation of Customers ............................................... 52
6.4 Confidentiality ............................................................. 53
6.5 Obligations Not Exhaustive .................................................. 54
6.6 Remedies .................................................................... 54
ARTICLE 7
GENERAL PROVISIONS
7.1 All Shares Subject to this Agreement ........................................ 54
7.2 Indemnity by the Corporation ................................................ 54
7.3 Business and Directors' Insurance ........................................... 55
7.4 Term ........................................................................ 56
7.5 Termination Not to Affect Rights or Obligations ............................. 56
7.6 Arbitration ................................................................. 56
7.7 Notices ..................................................................... 57
7.8 Amendments .................................................................. 59
7.9 Counterparts ................................................................ 59
7.10 Enurement ................................................................... 59
</Table>
SCHEDULE A - Arbitration Procedures (section 7.6)
SCHEDULE B - Certificate and Articles of Incorporation
SCHEDULE C - Calculation of Fair Market Value
SCHEDULE D - Participation Agreement
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AMENDED AND RESTATED UNANIMOUS SHAREHOLDERS AGREEMENT
THIS AGREEMENT is made as of the 19th day of February, 2002.
AMONG:
MDC CORPORATION INC., a corporation incorporated under the
laws of the province on Ontario
("MDC")
-and-
RGG ACQUISITION INC., a corporation incorporated under
the laws of the state of Delaware
("RGGA")
-and-
ROYNAT CAPITAL INC., a corporation incorporated under the
laws of Canada
("ROYNAT CAPITAL")
-and-
BANK OF MONTREAL CAPITAL CORPORATION, a
corporation incorporated under the laws of Canada
("BMOCC")
-and-
REGAL GREETINGS & GIFTS CORPORATION, a corporation
incorporated under the laws of Canada
(the "CORPORATION")
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RECITALS:
A. The parties hereto (other than BMOCC) entered into a Unanimous
Shareholders Agreement made the 14th day of December, 2001;
B. RoyNat Capital has, amongst other things, partially assigned its
interest in the debenture and warrants issued to RoyNat Capital by the
Corporation the 14th day of December, 2001;
C. The parties to the aforementioned Unanimous Shareholders Agreement have
agreed to enter into this Amended and Restated Unanimous Shareholders
Agreement to reflect BMOCC as a holder of equity securities of the
Corporation;
D. The authorized capital of the Corporation consists of an unlimited
number of common shares, of which 100,000 common shares are issued and
outstanding;
E. RGGA is the registered and beneficial owner of 75,650 issued and
outstanding common shares of the Corporation;
F. Dreamlife, Inc. is the registered and beneficial owner of all of the
issued and outstanding of RGGA;
G. MDC is the registered and beneficial owner of 13,350 issued and
outstanding common shares of the Corporation;
H. RoyNat Capital is entitled, pursuant to the terms of the RoyNat
Warrants, to be issued 5,500 common shares of the Corporation, subject
to adjustment in accordance with the terms thereof;
I. BMOCC is entitled, pursuant to the terms of the BMOCC Warrants, to be
issued 5,500 common shares of the Corporation, subject to adjustment in
accordance with the terms thereof;
J. The Corporation has not reserved any additional common shares to be
distributed to employees pursuant to the terms of any employee stock
option or purchase plan;
K. The parties hereto wish to enter into this Agreement to provide for the
conduct of the business and affairs of the Corporation, to provide for
restrictions on the transfer and ownership of shares in the capital of
the Corporation and to govern their relationship as shareholders of the
Corporation, with the intent that it shall constitute a unanimous
shareholder agreement; and
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L. In the event of a conflict between this Agreement and any other
agreement now or hereafter entered into among the shareholders of the
Corporation, the provisions of this Agreement shall prevail.
NOW THEREFORE in consideration of the mutual covenants and agreements
contained in this Agreement and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged by each of the
parties), the parties hereto agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Agreement,
(a) "ACCEPTANCE NOTICE" has the meaning given to it in Section 4.1;
(b) "ACT" means the Canada Business Corporations Act, as the same may be
amended, restated or replaced from time to time and any successor
legislation thereto, except where otherwise expressly provided;
(c) "ADDITIONAL BONUS INTEREST PAYMENT" has the meaning given to it in
Section 4.10;
(d) "AFFILIATE" means an affiliate within the meaning of the Act;
(e) "AFFECTED SECURITIES" has the meaning set forth in Section 4.7;
(f) "AGREEMENT" means this Agreement and all schedules, if any, attached to
this Agreement, in each case as they may be supplemented or amended
from time to time, and the expressions "HEREOF", "HEREIN", "HERETO",
"HEREUNDER", "HEREBY" and similar expressions refer to this Agreement,
and unless otherwise indicated, references to Articles and sections are
to the specified Articles and sections in this Agreement;
(g) "APPROVED BUSINESS PLAN" means the Business Plan approved pursuant to
Section 2.4;
(h) "ARMS LENGTH" has the meaning attributed to such term in the Income Tax
Act (Canada), as the same may be amended from time to time;
(i) "AUDITORS" means the firm of chartered accountants referred to in
Section 2.1.8;
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(j) "BMOCC WARRANTS" means the five thousand five hundred (5,500) warrants
to purchase Common Shares evidenced by Class A Warrant Certificate No.
A-3 of the Corporation issued to BMOCC and dated as of December 14,
2001;
(k) "BMOCC DEBENTURE" means the debenture dated December 14, 2001 in the
principal amount of Three Million Five Hundred Thousand Dollars
($3,500,000) issued by the Corporation to BMOCC;
(l) "BUSINESS DAY" means any day, other than Saturday, Sunday or any
statutory holiday in the Province of Ontario or the State of Delaware;
(m) "BUSINESS PLAN" means a detailed financial and cash forecast of the
projected business activities and operations of the Corporation,
including estimates of proposed and committed expenditures (capital or
otherwise) and the subject matter of each expenditure and all sources
of revenue, cash and financing of the Corporation for the subject
period and shall include a statement of objectives and detailed plans
with respect to each of research and development, manufacturing,
marketing, distribution and licensing and plans with respect to the
formation of subsidiaries and the activities thereof and any proposed
acquisitions or divestitures, and which shall include complete
financial statement format information (including balance sheet and
income statement by month) for the next fiscal year and financial
statement format in summary form prepared on an annual basis for the
next five (5) fiscal years;
(n) "BY-LAWS" means the by-laws of the Corporation from time to time in
force and effect;
(o) "CLOSING DATE" means the date of closing of any transaction of purchase
and sale set out herein;
(p) "COMMON SHARES" means the common shares of the Corporation as the same
are constituted at the date hereof, together with any other class or
classes of shares in the capital of the Corporation, whether now
existing or hereafter created, entitling the holder to share in the
final distribution of the property and assets of the Corporation upon
liquidation, dissolution or winding-up after any fixed payments to the
holders of any other class or classes of shares, and includes any
shares or securities into which such shares may be converted or changed
or which result from a consolidation, subdivision, reclassification or
redesignation of Common Shares or other such shares or securities which
are received as a stock dividend or distribution payable in Common
Shares or other such shares or securities of the Corporation or Common
Shares or other such shares or securities received on the exercise of
any option, warrant or other similar right and any Common Shares or
other such shares or
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securities which may be received by the parties hereto or bound hereby
as a result of an amalgamation, merger, arrangement or other
reorganization of or including the Corporation, and where the context
permits, includes any Common Shares issuable pursuant to any instrument
of the Corporation that is convertible or exchangeable into Common
Shares or evidences the right to acquire Common Shares;
(q) "CONDITIONS" has the meaning given to it in Section 4.1;
(r) "CONFIDENTIAL INFORMATION" means all confidential or proprietary
information, intellectual property (including trade secrets) and
confidential facts relating to the business and affairs of the
Corporation;
(s) "CONTROL" means, when applied to the relationship between a Person and
a corporation, the beneficial ownership by such Person at the relevant
time of shares of such corporation carrying more than the greater of
50% of the voting rights ordinarily exercisable at meetings of
shareholders of such corporation and the percentage of voting rights
ordinarily exercisable at meeting of shareholders of such corporation
that are sufficient to elect a majority of the directors of such
corporation and "CONTROLLED" has a corresponding meaning;
(t) "CONVERTIBLE SECURITY" means any security which may be converted into
or exchanged for an Equity Security or which carries a right to
purchase an Equity Security;
(u) "CORPORATION" includes any successor to the Corporation resulting from
any amalgamation, merger, arrangement or other reorganization of or
including the Corporation or any continuance under the laws of another
jurisdiction;
(v) "DIRECTORS", "BOARD OF DIRECTORS" and "BOARD" means the persons who
are, from time to time, duly elected or appointed as directors of the
Corporation;
(w) "DISABILITY" means the mental or physical state of an individual such
that:
(i) such individual has been unable, in the opinion of a
qualified medical practitioner (who shall be
satisfactory to RoyNat Capital, BMOCC and to the
directors of the Corporation, other than such
individual) due to illness, disease, mental or
physical disability or similar cause, to fulfil his
or her obligations as an employee or officer or
director of the Corporation either for any
consecutive six (6) month period or for any period of
six (6) months (whether or not consecutive) in any
consecutive twelve (12) month period; or
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(ii) a court of competent jurisdiction has declared such
individual to be mentally incompetent or incapable of
managing his or her affairs;
and "DISABLED" has a corresponding meaning;
(x) "DREAMLIFE" has the meaning given to it in Section 4.6;
(y) "DREAMLIFE RELATED ENTITY" has the meaning given to it in Section 4.6;
(z) "DREAMLIFE TRANSACTION" has the meaning given to it in Section 4.6;
(aa) "DREAMLIFE TRANSACTION EFFECTIVE DATE" has the meaning given to it in
Section 4.6;
(bb) "EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION" or
"EBITDA" of the Corporation for a particular period of the Corporation
means the consolidated income (or loss) of the Corporation and its
Subsidiaries before deductions of interest, taxes, depreciation and
amortization and before any payments on account of capital or financial
leasing (and before deducting any research and development expenditures
that were capitalized during the period) for such period as determined
by the Auditors from the audited financial statements of the
Corporation and its Subsidiaries for such period prepared in accordance
with generally accepted accounting principles which have been reported
on without material qualification by the Auditors, after provision for
matters and adjustments not otherwise contemplated herein as the
Auditors consider advisable to arrive at a fair determination for the
purposes hereof, but without taking into account:
(i) extraordinary items of income or expense;
(ii) prior period adjustments;
(iii) any refinancing charge or any transaction or
financing costs related to the acquisition of the
Regal Greetings and Gifts division of MDC (including
the shares of Primes de Luxe and MDC Regal Inc.) or
any refinancing thereof or any management or other
fees paid or payable to any direct or indirect
Shareholder or Affiliate of the Corporation; or
(iv) any proceeds of insurance on the life of Janice Wadge
or Kevin Watkinson which has been assigned to RoyNat
Capital or BMOCC as security for the performance of
the obligations of the Corporation hereunder or under
the RoyNat Capital Debenture or BMOCC Debenture, as
the case may be;
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(cc) "EQUITY SECURITY" means any security of any class of shares of the
Corporation and any rights, warrants, options or other instruments
entitling the holder, whether or not on a contingency, to acquire from
the Corporation Shares, and any instruments convertible or
exchangeable, whether or not on a contingency, into any of the
foregoing;
(dd) "ESOP" means a stock option or purchase plan of the Corporation
approved by the Board of Directors of the Corporation and RoyNat
Capital and BMOCC, which shall be limited to the issuance of not more
than twenty percent (20%) of the issued and outstanding Common Shares
(not determined on a Fully Diluted basis):
(ee) "FAIR MARKET VALUE" means, for the purpose of valuation hereof of the
Shares, as determined by the Auditors or the Valuator, the highest cash
price in terms of money which would be obtained as of the date
specified in the applicable section hereof, if all the Shareholders of
the Corporation sold all of their respective Shares in an open and
unrestricted market (recognizing that the Shares are securities of a
corporation which cannot offer securities to the public) without
compulsion to act to a Willing and knowledgeable purchaser acting at
Arm's Length and where, in determining such Fair Market Value;
(i) the value of each Common share is based on the value
of all Common Shares;
(ii) no diminution or no accretion in value is
attributable to any majority or minority interest;
(iii) the value of any insurance on the life of Janice
Wadge or Kevin Watkinson and the proceeds of such
insurance shall be excluded; and
(iv) the value of all intangible and unrecorded assets is
included.
In determining the Fair Market Value of the Shares, such Auditors or
Valuator shall be considered as an expert and shall not be construed as
acting as an arbitrator within the meaning of the ARBITRATION ACT,
(1991) (Ontario);
(ff) "FIRST REFUSAL NOTICE" has the meaning attributed to such term in
Section 4.1.2;
(gg) "FORMULA PRICE" has the meaning given to it in Section 4.5;
(hh) "FULLY DILUTED" means the number of Common Shares outstanding at any
time including any stock dividends which have been declared but not
issued and assuming
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all securities which are convertible or exchangeable directly or
indirectly into such Common Shares are converted or exchanged into
Common Shares and all options, warrants or rights to acquire directly
or indirectly such Common Shares shall be treated as if exercised;
(ii) "GOVERNMENTAL APPROVAL" means the consent of any Governmental Authority
which may be required at any time and from time to time to ensure that
the purchase by a Shareholder of all or any part of the Shares of
another Shareholder is not in contravention of any law, regulation or
published policy of, or administered by, a Governmental Authority or
which may be required in order to ensure that, notwithstanding the
purchase by a Shareholder of all or any part of the Shares of another
Shareholder, the holding or continued holding by the Corporation of any
franchise, license, permit or other permission or authority required to
carry on its business is unaffected;
(jj) "GOVERNMENTAL AUTHORITY" means Investment Canada, the Director under
the COMPETITION ACT (Canada) and the Competition Tribunal established
thereunder and any other Person exercising regulatory jurisdiction over
the Corporation or its Shareholders;
(kk) "INVESTING SHAREHOLDER DEBENTURES" means collectively, the RoyNat
Capital Debenture and the BMOCC Debenture and "INVESTING SHAREHOLDER
DEBENTURE" means the RoyNat Capital Debenture or the BMOCC Debenture,
as the context requires;
(ll) "INVESTING SHAREHOLDERS" means collectively, RoyNat Capital and BMOCC
and "INVESTING SHAREHOLDER" means any RoyNat Capital or BMOCC;
(mm) "OFFEREES" has the meaning given to it in Section 4.1.2;
(nn) "OFFERED SHARES" has the meaning given to it in Section 4.1.2;
(oo) "PERSON" means any individual, partnership, limited partnership, joint
venture, syndicate, sole proprietorship, company or corporation with or
without share capital, unincorporated association, trust, trustee,
executor, administrator or other legal personal representative,
regulatory body or agency, government or governmental agency, authority
or entity however designated or constituted;
(pp) "PIGGY-BACK OFFER" has the meaning attributed to such term in Section
4.2;
(qq) "PROPOSED PURCHASER" has the meaning given to it in Section 4.1.2;
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(rr) "PROSPECTIVE CUSTOMERS" shall mean Persons actively and directly
solicited by the Corporation at any time during the last twelve (12)
months up to the date upon which a Person ceases to be a Shareholder,
officer, director or an employee of the Corporation or a Subsidiary;
(ss) "QUALIFYING PUBLIC OFFERING" means the completion of a public offering
of Common Shares by the Corporation pursuant to:
(i) a final prospectus for which a receipt is issued by
the Ontario Securities Commission, or
(ii) a registration statement which has been filed with
the United States Securities and Exchange Commission
and is declared effective to enable the sale of
Common Shares by the Corporation to members of the
public,
which results in the Common Shares being listed and posted for
trading on the Canadian Venture Exchange, The Toronto Stock
Exchange or the New York Stock Exchange or quoted on the
NASDAQ National Market;
(tt) "ROYNAT CAPITAL DEBENTURE" means the debenture dated December 14, 2001
in the principal amount of Seven Million Dollars ($7,000,000) issued by
the Corporation to RoyNat Capital, of which, one-half has been assigned
to BMOCC;
(uu) "ROYNAT CAPITAL WARRANTS" means the five thousand five hundred (5,500)
warrants to purchase Common Shares evidenced by Class A Warrant
Certificate No. A-2 of the Corporation issued to RoyNat Capital and
dated as of December 14, 2001.
(vv) "SECURITIES LAWS" means the securities laws of the provinces of Canada
and the SECURITIES ACT of 1933 of the United States of America, as any
of them may be amended or replaced by similar legislation from time to
time, and includes the regulations and rules under any such laws and
all policy statements, blanket orders and interpretation notes adopted
or applied by the Securities Commission of each such province and the
Securities and Exchange Commission of the United States of America;
(ww) "SELLING PRICE" has the meaning given to it in Section 4.1;
(xx) "SELLING SHAREHOLDER" has the meaning attributed to such term in
Section 4.1.2;
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(yy) "SHAREHOLDERS" means the shareholders of the Corporation from time to
time who are parties to this Agreement and "SHAREHOLDER" means any one
of them;
(zz) "SHAREHOLDER DEBT" means indebtedness which is owed by the Corporation
to a Shareholder for advances or loans made by such Shareholder to the
Corporation at the request of the Corporation and with the consent of
all the other Shareholders, but does not include the RoyNat Capital
Debenture or BMOCC Debenture;
(aaa) "SHARES" means the shares of the Corporation at the date hereof and
includes any shares or securities into which such shares may be
converted or changed or which result from a consolidation, subdivision,
reclassification or redesignation of share, any shares or securities
which are received as a stock dividend or distribution payable in
shares or securities of the Corporation, any shares of the Corporation
received on the exercise of any option, warrant or other similar right
and any shares or securities which may be received by the parties
hereto or bound hereby as a result of an amalgamation, merger,
arrangement or other reorganization of or including the Corporation,
and where the context permits, including without limitation in Articles
2,3 and 4, includes any instrument of the Corporation that is
convertible or exchangeable into shares of the Corporation or evidences
the right to acquire shares of the Corporation including, the Warrants;
(bbb) "SUBSCRIPTION AGREEMENT" means the agreement dated December 14, 2001
between the Corporation and RoyNat Capital;
(ccc) "SUBSIDIARY" means a subsidiary within the meaning of the Act;
(ddd) "THIRD PARTY OFFER" has the meaning attributed to such term in Section
4.1.2;
(eee) "TRANSFER" includes any sale, exchange, assignment, gift, bequest,
disposition, mortgage, charge, pledge, encumbrance, grant of security
interest or other arrangement by which possession, legal title or
beneficial ownership passes, directly or indirectly, 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 any agreement to effect any
of the foregoing; and the words "TRANSFERRED", "TRANSFERRING" and
similar words have corresponding meanings;
(fff) "VALUATOR" has the meaning ascribed thereto in Schedule "C" annexed
hereto;
(ggg) "WARRANTS" means collectively, the RoyNat Capital Warrants and the
BMOCC Warrants and "INVESTING SHAREHOLDER WARRANTS" means any of the
RoyNat Warrants or the BMOCC Warrants, as the context requires;
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1.2 SCHEDULES
The following are the schedules attached to this Agreement:
Schedule A - Arbitration Procedures
Schedule B - Certificates and Articles of Incorporation
and Amendment.
Schedule C - Fair Market Value
Schedule D - Agreement to be Bound
Schedule 2.4 - Initial Approved Business Plan
Schedule 3.1.2 - Beneficial Ownership
1.3 HEADINGS AND TABLE OF CONTENTS
The inclusion of headings and a table of contents in this Agreement are
for convenience of reference only and shall not affect the construction or
interpretation hereof.
1.4 GENDER AND NUMBER
In this Agreement, unless the context otherwise requires, words
importing the singular include the plural and vice versa and words importing
gender include all genders.
1.5 CURRENCY
Except as expressly provided in this Agreement, all payments
contemplated pursuant to this Agreement are stated and shall be paid in Canadian
currency, in cash, by bank draft or by certified cheque or any other method that
provides immediately available funds.
1.6 INVALIDITY PROVISIONS
Each of the provisions contained in this Agreement is distinct and
severable and a declaration of invalidity or unenforceability of any such
provision by a court of competent jurisdiction shall not affect the validity or
enforceability of any other provision hereof.
1.7 ENTIRE AGREEMENT
This Agreement, and any agreements an documents to be delivered
pursuant to the terms of this Agreement, constitutes the entire agreement among
the Parties pertaining to dealings with
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investments in the Corporation and management of the affairs of the Corporation
and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written. There are no conditions, representations,
warranties or other agreements in connection with dealings with investments in
the Corporation and management of the affairs of the Corporation, whether oral
or written, express or implied, statutory or otherwise, except as specifically
set out in this Agreement and any agreements and documents to be delivered
pursuant to the terms of this Agreement.
1.8 WAIVER
A waiver of any default, breach or non-compliance under this Agreement
is not effective unless it is in writing and signed by the Party to be bound by
the waiver. No waiver shall be inferred from or implied by any failure to act or
delay in acting by a Party in respect of any default breach or non-compliance or
by anything done or omitted to be done by that Party. The waiver by a Party of
any default, breach or non-compliance under this Agreement shall not operate as
a waiver of that Party's rights under this Agreement in respect of any
continuing or subsequent default, breach or non-compliance, whether of the same
or any other nature.
1.9 SEVERABILITY
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such prohibition or unenforceability and shall be severed from the balance of
this Agreement, all without affecting the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
1.10 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with,
and the rights of the parties shall be governed by, the laws of the Province of
Ontario and the laws of Canada applicable therein, without regard to any
conflict of law principles. Each Party irrevocably submits to the exclusive
jurisdiction of the courts of the Province of Ontario and all courts competent
to hear appeals from those courts with respect to any matter related to this
Agreement.
1.11 ACCOUNTING PRINCIPLES
References in this Agreement to generally accepted accounting
principles ("GAAP") shall be to the generally accepted accounting principles
from time to time established by the Canadian Institute of Chartered
Accountants, or any successor institute, in the "CICA HANDBOOK" applicable as of
the date on which such calculation is made or required to be made in accordance
with generally accepted accounting principles consistently applied.
1.12 TIME OF ESSENCE
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Time shall be of the essence of this Agreement and of every part hereof
and no extension or variation of this Agreement shall operate as a waiver of
this provision.
1.13 CALCULATION OF TIME
Whenever any payment to be made hereunder shall be stated to be due,
any period of time hereunder shall be stated to end, any calculation shall be
stated to be made hereunder or any other action to be taken hereunder shall be
stated to be required to be taken on or as of a day other than a Business Day,
such payment shall be due, such period of time shall end, such calculation shall
be made or such action shall be required to be taken on or as of the next
succeeding Business Day, unless the next succeeding Business Day shall fall in
the next calendar month, in which case such payment shall be due, such period of
time shall end, such calculation shall be made or such action shall be required
to be taken on or as of the next preceding Business Day and, in the case of any
payment of interest pursuant to the terms of this Agreement any such adjustment
shall be taken into account in determining the amount of such interest payment.
1.14 FURTHER ASSURANCES
The Parties hereto and their respective directors, officers and
employees, to the extent applicable, agree to execute and deliver such further
and other documents, cause such meetings to be held, resolutions passed and
by-laws enacted, exercise their votes and influence, and perform and cause to be
performed such further and other acts and things, including authorizing any
transfer of Shares, as may be necessary or desirable in order to give full
effect to this Agreement and every part hereof. Each of the parties to this
Agreement agrees that violation on its part of this covenant in respect of the
voting of Shares of the Corporation would result in irreparable harm remediable
only by an injunction for specific performance and the parties hereby agree that
in the event of such a violation, the Shareholders not in violation shall be
entitled to the remedy of specific performance to cause such voting to take
place in conformity with this Agreement and to an injunction out of any court of
competent jurisdiction to prevent any breach of this covenant or any other
covenant contained in this Agreement and to restrain any further violation of
such covenant.
1.15 UNANIMOUS SHAREHOLDERS AGREEMENT
This Agreement constitutes a unanimous shareholders agreement within
the meaning of the Act, and is not intended to, and shall not be construed so as
to create or give rise to a general partnership, limited partnership or joint
venture.
1.16 POWERS OF THE DIRECTORS AND SHAREHOLDERS
The directors of the Corporation shall have all the rights, powers,
duties and liabilities arising under the Act or otherwise except to the extent
that the provisions of this Agreement restrict the discretion and powers of the
board of directors to manage or to supervise the management of the
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business and affairs of the Corporation. The Shareholders shall have all the
rights, powers, duties and liabilities of the directors of the Corporation,
whether arising under the Act or otherwise, with respect to all matters governed
by this Agreement to the extent that this Agreement restricts the discretion or
powers of the directors to arrange or supervise the management of the business
and affairs of the Corporation. Any matter requiring the approval of directors
or holders of a class of shares shall be evidenced by an instrument or
instruments in writing signed by all the directors or all the required
Shareholders, as the case may be, or by a resolution duly passed by such
directors or Shareholders at a meeting called and held in accordance with the
provisions of the by-laws of the Corporation and the provisions of this
Agreement.
1.17 CONFLICT
Subject to the provisions of the Act, in the event of any conflict
between the provisions of this Agreement and the articles and by-laws, the
provisions of this Agreement shall govern. The parties hereto acknowledge and
agree that as of the date hereof, conflicts may exist between this Agreement and
the articles and the by-laws. Each of the Shareholders agrees to vote or cause
to be voted the Shares owned by it so as to cause the articles or the by-laws to
be amended to resolve each such conflict and any other conflicts in favour of
the provisions of this Agreement.
1.18 STATUTE REFERENCES
Unless otherwise expressly stated, any reference in this Agreement to
any statute or any section of the statute shall be deemed to be a reference to
such statute or section as amended, restated or re-enacted from time to time.
1.19 CALCULATION OF OUTSTANDING SHARES
For all purposes of this Agreement, including determining the number of
Shares outstanding from time to time and the pro rata holdings of Shares of
parties hereunder pursuant to this Agreement, (a) the RoyNat Capital Warrants
shall be deemed to have been exercised and the Shares issuable on exercise
thereof shall be deemed to be outstanding as of the date hereof and RoyNat
Capital shall be deemed to be the holder thereof and RoyNat Capital shall have
all the rights and obligations of a Shareholder, with respect to the RoyNat
Capital Warrants, as it would have if the RoyNat Capital Warrants had been
issued and exercised on the date hereof and (b) the BMOCC Warrants shall be
deemed to have been exercised and the Shares issuable on exercise thereof shall
be deemed to be outstanding as of the date hereof and BMOCC shall be deemed to
be the holder thereof and BMOCC shall have all the rights and obligations of a
Shareholder, with respect to the BMOCC Warrants, as it would have if the BMOCC
Warrants had been issued and exercised on the date hereof; provided that nothing
in this Section 1.19 shall be construed to give RoyNat Capital or BMOCC a right
to vote as a Shareholder at a meeting of Shareholders or to receive any
dividends or other distribution prior to exercise of the Investing Shareholder
Warrants of which it is a holder.
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1.20 AMENDMENTS
This Agreement may be amended by the consent in writing of the holders
of ninety per cent (90%) of the outstanding Shares held by the Shareholders and
of RoyNat Capital and BMOCC provided, however, that no amendment may be made
which:
(a) adversely affects the holders of any class of Shares
differently from the holders of the remaining classes of
Shares; or
(b) changes any of the percentage thresholds contained in this
Agreement,
without the consent in writing of the holders of ninety per cent (90%) of each
of class of the outstanding Shares held by the Shareholders and of RoyNat
Capital and BMOCC.
1.21 RECITALS
The parties hereto do hereby mutually covenant and agree that the
statements set forth in the foregoing recitals of this Agreement with respect to
their share ownership are true in substance and are correct in all respects.
ARTICLE 2
BUSINESS AND AFFAIRS OF THE CORPORATION
2.1 BUSINESS AND AFFAIRS OF THE CORPORATION
The Shareholder shall cause such meetings to be held, votes to be cast,
resolutions to be passed, By-Laws to be made and confirmed, documents to be
executed and all other things and acts to be done to ensure that, at all times,
the following provisions are in effect or are complied with:
2.1.1 BOARD OF DIRECTORS. There shall be seven (7) directors of the
Corporation, who shall be nominated by RGGA and RoyNat Capital
and BMOCC.
For so long as RGGA holds Shares, it shall be
entitled to nominate five (5) persons as directors of the
Corporation.
For so long as RoyNat Capital holds Shares it shall
be entitled to nominate one (1) person as director of the
Corporation and, at its option, to have one (1) representative
attend meetings of the board of directors as an observer. For
so long as BMOCC holds Shares it shall be entitled to nominate
one (1) person as director of the Corporation and, at its
option, to have one (1) representative attend meetings of the
board of directors as an observer. For so long as MDC holds
Shares, MDC
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shall be entitled to have one(1) representative attend
meetings of the board of directors as an observer. If RoyNat
Capital, BMOCC or MDC chooses to have representatives attend
meetings of the board of directors, it shall notify the
Corporation of the identity of its representatives, and such
Persons shall thereafter be entitled to attend meetings of the
board of directors as observes and to participate in
discussions at such meetings, but shall not be entitled to
vote on any resolution of the board of directors. Such Persons
shall be sent notices of meetings of the board of directors
and copies of all other material provided to the directors,
including material relating to financial performance review,
business proposals and budgets of the Corporation, at the same
time as such documents are sent to the directors. Such Persons
shall also receive copies of minutes of all meetings of the
board of directors and of all resolutions passed by the board
of directors within five (5) Business Days of such meeting
being held or resolution being passed, as the case may be.
All directors and any RoyNat Capital, BMOCC or MDC
representative attending a meeting of the board of directors
shall be entitled to be reimbursed for all reasonable out or
pocket travel, accommodation and subsistence expenses properly
incurred in connection with such meeting.
If a director ceases to be a director for any reason
(a "retiring director"), the Shareholders shall fill the
vacancy thereby created by appointing as soon as reasonably
possible that individual who is nominated by the Shareholder
or Shareholders who nominated the retiring director. Until the
vacancy is filled, the directors shall not transact any
business or exercise any of their powers or duties. If the
Shareholder entitled to do so fails for any reason to nominate
an individual to fill the vacancy within thirty (30) days
after the vacancy arises, the remaining directors or the other
Shareholders shall appoint an individual to fill the vacancy.
In the event of the proposed removal of any director, each
Shareholder agrees to vote for such removal if, and against
such removal unless, it has been proposed or approved by the
Shareholder of Shareholders who nominated such director.
For so long as RoyNat or BMOCC holds Shares, RGGA
shall include William Walsh and Anthony Calandra among its
nominees to the board of directors of the Corporation. The
board of directors of the Subsidiaries of the Corporation
shall be composed of the same individuals as are directors of
the Corporation unless the Shareholders agree otherwise.
2.1.2 MEETINGS OF DIRECTORS. The board of directors of the
Corporation shall meet at least once monthly for the first six
(6) months from the date hereof and quarterly thereafter, in
such place as the directors may agree from time to time and
otherwise at the registered office of the Corporation.
Meetings of the directors may be called by any director or the
President of the Corporation upon not less than five (5)
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Business Day's notice, which notice shall contain a statement
as to the business proposed to be transacted at such meeting.
A director may waive his right to receive notice of any
meeting of the directors, both prospectively and
retrospectively, but such waiver must be in writing, or by
participation in the meeting, unless that director's
participation is for the express purpose of objecting to the
transacting of any business without proper notice. Any or all
directors may participate in a meeting of the board by means
of such telephone, electronic or other communication
facilities enabling all persons participation in the meeting
to communicate with each other simultaneously and
instantaneously, and a director participating in such meeting
by such means is deemed to be present at that meeting.
2.1.3 QUORUM. Unless otherwise agreed to in writing by all the
directors, but subject to the Act, a quorum for a meeting of
directors shall be four (4) directors and if RoyNat Capital or
BMOCC has nominated a Person as a director of the Corporation,
such quorum shall be four (4) directors and shall include the
person(s) so nominated. except as hereinafter provided. If at
any meeting of directors (the "FIRST MEETING"), a quorum shall
not be present, then, notwithstanding anything herein
contained, the director or directors present at such meeting
may call a supplementary meeting of the board of directors on
not less than five (5) Business Days' notice to each director,
which notice shall describe with particularity the business
proposed to be transacted at such meeting. If the directors
who did not attend the First Meeting do not attend the
supplementary meeting, the directors present at the
supplementary meeting in person or by teleconference shall
constitute a quorum for the transaction of the business
referred to in the notice of meeting and any business relating
thereto which may come before the meeting. If RoyNat Capital
or BMOCC has not nominated a Person as a director of the
Corporation but has chosen to have a representative attend
meetings of the board of directors, the board of directors
shall not transact any business unless such Person(s) is
present in person or by teleconference or has waived in
writing his right to attend the meeting prior to the meeting;
provided that RoyNat Capital or BMOCC, as the case may be,
representative is not present in person or by teleconference
and has not waived his right to attend a particular meeting,
the directors of such meeting may call a supplementary meeting
of the board of directors on not less that five(5) Business
Day's notice to each director and to such person, and the
directors present in person or by teleconference at the
supplementary meeting, providing they constitute a quorum, may
transact the business referred to in the notice of meeting,
regardless of whether RoyNat Capital or BMOCC, as the case may
be, representative is present in person or by telephone,
electronic or other communication facilities or has waived his
right to attend.
2.1.4 MEETINGS OF SHAREHOLDER. Meetings of Shareholders shall be
held at least once in each calendar year at the registered
office of the Corporation, or at such other place within or
outside Ontario as the directors determine and may be called
by any
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director or Shareholder of the Corporation upon not less than ten (10)
days, nor more than fifty (50) days, notice. A Shareholder may waive
his right to receive notice of any meeting of the shareholders, both
prospectively and retrospectively.
A quorum for a meeting of Shareholders shall be at least one
individual present in person and holding or representing by valid proxy
at least not less than fifty percent (50%) of the outstanding Shares
entitled to vote at such meeting and if any particular Investing
Shareholder is a holder of Shares, one individual present in person
representing the particular Investing Shareholder or representing by
valid proxy the particular Investing Shareholder's Shares. If at any
meeting of Shareholders (the "FIRST SHAREHOLDER MEETING"), a quorum
shall not be present, then, notwithstanding anything herein contained,
the Shareholders present at such meeting may call a supplementary
meeting of the Shareholders on not less than five (5) Business Days'
notice to each Shareholder, which notice shall describe with
particularity the business proposed to be transacted at such meeting.
If the Shareholders who did not attend the First Shareholder Meeting do
not attend the supplementary meeting, the Shareholders present at the
supplementary meeting in person or by teleconference shall constitute a
quorum for the transaction of the business referred to in the notice of
meeting and any business relating thereto which may come before the
meeting. Meetings may validly be held by teleconference provided all
Shareholders can hear each other and Shareholders participating by
teleconference shall have the right to vote at such meeting.
2.1.5 DECISIONS OF DIRECTORS. In order to be effective, a decision of the
board of directors must be approved either by a resolution passed by
the affirmative vote of a simple majority of the directors present at a
meeting of directors duly called and at which a quorum is present or by
an instrument signed by all the directors.
2.1.6 CASTING VOTE. The Chairman of any meeting of the directors or
shareholders shall not have a second or casting vote.
2.1.7 OFFICERS. Unless otherwise determined by the board of directors and
approved in writing by RoyNat Capital and BMOCC, and subject to Section
2.8 hereof, Janice Wadge ("WADGE") shall be the President and Chief
Executive Officer of the Corporation and Kevin Watkinson ("WATKINSON")
shall be the Vice-President and Chief Financial Officer of the
Corporation. The board of directors may appoint other officers of the
Corporation from time to time.
2.1.8 AUDITORS. Subject to Section 2.1.10.7, BDO Dunwoody, Chartered
Accountants, shall be the auditors of the Corporation.
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2.1.9 FISCAL YEAR. Subject to Section 2.1.10.7, the fiscal year of the
Corporation shall end on June 30 in each year.
2.1.10 CERTAIN MATTERS REQUIRING SPECIAL APPROVAL OF INVESTING SHAREHOLDERS.
Unless approved by the directors of the Corporation in accordance with
Section 2.1.5 and approved in writing by RoyNat Capital and BMOCC, the
Corporation shall not:
2.1.10.1 make any payments or distributions to or confer any benefits
upon any of Wadge or Watkinson, MDC or RGGA or to their
respective spouse, parents or children or upon any parties
with whom any of them does not deal at Arm's Length in any
manner or form whatsoever (including any payments by way of
salary, bonus, management fees, interest or dividends) which
would exceed an amount equal to the aggregate compensation
provided for in the employment agreements between the
Corporation and each of Wadge and Watkinson in the aggregate
for all such Persons; except pursuant to the Management
Agreement between the Corporation and McGuggan LLC dated as
of December 14, 2001 and except pursuant to an ESOP.
2.1.10.2 make or incur any capital expenditures, determined in
accordance with GAAP, except as contemplated by the Approved
Business Plan then in effect, in any fiscal year of the
Corporation, which individually exceeds $50,000, and in any
fiscal year of the Corporation, which in the aggregate,
exceeds $250,000;
2.1.10.3 invest in, make loans to, give any financial assistance (by
way of guarantee or otherwise) to or become liable, directly
or indirectly, in respect of any security, indebtedness or
obligation of any Person;
2.1.10.4 except as currently exists, create any Subsidiary, Affiliate
or Person with whom the Corporation would not have an Arm's
Length relationship or permit to exist any Subsidiary;
2.1.10.5 enter into any business acquisitions or divestitures;
2.1.10.6 make a Qualifying Public Offering;
2.1.10.7 change its bankers, fiscal year end, its Auditors or any
change of a material nature in its accounting principles it
applies in preparing its financial statements other than as
required by any change in GAAP or required by the Auditors
to issue the audited financial statements without adverse
note or comment;
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2.1.10.8 amend its articles or other constating documents or make,
amend or repeal any By-Law in such a manner as to adversely
affect the rights and privileges of the Shareholders
including any change in the number of members of the Board
of Directors from that provided for herein and any action
which would derogate from the right of Shareholders to
nominate directors;
2.1.10.9 issue, or enter into any agreement to issue, any shares of
any class or any securities convertible into or exchangeable
for shares of any class or grant any option or other right
to purchase any such shares or securities convertible into
or exchangeable for any such shares, except for the issuance
of Common Shares pursuant to the exercise of the Warrant and
except of the issuance of common Shares pursuant to an ESOP;
2.1.10.10 redeem, purchase for cancellation or otherwise retire or pay
off any of its outstanding shares of any class except for
the purchase of Common Shares pursuant to Sections 4.5, 4.6,
4.9 or 4.10;
2.1.10.11 declare or pay any dividends or make any distribution,
whether in cash, in stock or in specie, on any of its
outstanding Shares of any class;
2.1.10.12 enter into any contract, agreement or commitment out of the
ordinary course of business or acquire or establish any
additional business or make any material change in, or
terminate or suspend any material part of, its existing
business or sell or dispose of fixed assets in excess of
amounts contemplated by the Approved Business Plan then in
effect;
2.1.10.13 enter into any contract, agreement or commitment with Wadge
or Watkinson or RGGA or MDC or any of their respective
Affiliates or with any Person who does not deal at Arm's
Length with the Corporation except for: an employment
contract with Wadge or Watkinson which provides for
remuneration or compensation within the limit established in
Section 2.1.10.1; the Management Agreement between the
Corporation and Dreamlife, Inc. dated as of December 14,
2001 which provides for compensation not to exceed $500,000
annually for a period of ten (10) years; any such contract,
agreement or commitment the terms of which are no less
favourable to the Corporation than those which could be
obtained from a Person who deals at Arm's Length with
Corporation; and an ESOP;
2.1.10.14 repay any principal outstanding on any loan made to the
Corporation by Wadge or Watkinson or RGGA or MDC or any of
their respective Affiliates or by any Person who does not
deal at Arm's Length with Wadge or Watkinson or RGGA or MDC,
or pay interest on any such loans, except for
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payments permitted pursuant to the Amended and Restated
Subordination and Postponement from MDC in favour of RoyNat
Capital, BMOCC and the Bank of Nova Scotia dated as of
February 19, 2002;
2.1.10.15 create or suffer to exist any validly perfected mortgage,
hypothec, charge, security interest or other encumbrance,
created, assumed or arising by operation of law after the
date hereof, other than validly perfected security given by
the Corporation (i) to its bankers on its general security
agreement or (ii) permitted encumbrances pursuant to the
RoyNat Capital Debenture and the BMOCC Debenture.
2.10.16 sell or otherwise dispose of, by conveyance, transfer, lease
or otherwise, assets (other than inventory) with a fair
market value in the aggregate in excess of Twenty-Five
Thousand Dollars ($25,000) in any fiscal year, except in the
ordinary course or as permitted by the Approved Business
Plan then in effect;
2.1.10.17 amalgamate or merge with or into any other corporation or
carry out any reorganization or arrangement or apply to be
continued as a corporation under the laws of any
jurisdiction;
2.1.10.18 institute proceedings for a statutory arrangement;
2.1.10.19 take or institute any proceedings for the winding-up,
reorganization or dissolution of the Corporation;
2.1.10.20 appoint a managing director or create any committees of the
board of directors of the Corporation;
2.1.10.21 adopt or amend, alter, vary or rescind, any employee stock
option, stock purchase or performance based
employee/shareholder/directors compensation plans for the
Corporation;
2.1.10.22 issue any stock options or shares under an employee stock
option and/or stock purchase plan or other employee equity
incentive or compensation arrangement;
2.1.10.23 approve the operating and capital expenditure budgets
submitted to the board of directors pursuant to Section 2.4;
2.1.10.24 incur any funded debt beyond the amounts advanced or lines
of credit made available by its lenders as of the date
hereof;
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2.1.10.25 terminate the employment with the Corporation of
Wadge or Watkinson;
2.1.10.26 take any action to become a "reporting issuer" within
the meaning of the SECURITIES ACT (Ontario) or other
similar legislation in any other jurisdiction;
2.1.10.27 depart from any of the provisions of Sections
2.1.10.1 to 2.1.10.26; or
2.1.10.28 permit or suffer any Subsidiary of the Corporation to
do any of the matters contemplated by Sections
2.1.10.1 to 2.1.10.27.
2.2 CERTAIN MATTERS REQUIRING SPECIAL APPROVAL OF MDC
Unless approved by the directors of the Corporation in accordance with
Section 2.1.5 and approved in writing by MDC, the Corporation shall not permit
any of the events, transmissions or matter described in Sections 2.1.10.1,
2.1.10.8 and 2.1.10.13 to occur.
2.3 FINANCIAL STATEMENTS
2.3.1 The Corporation shall cause to be prepared and delivered to
the board of directors and to RoyNat Capital and BMOCC as soon
as reasonably practicable and in no event later than ninety
(90) days after the end of each fiscal year of the Corporation
audited financial statements (prepared in accordance with
GAAP) for such fiscal year consisting of at least a balance
sheet, income statement, statement of changes in financial
position and statements of cash flow, together with all
supporting schedules and notes, prepared in accordance with
GAAP on a consistent basis and accompanied by a report of the
Auditors and a management report, and such other information
as may be requested by RoyNat Capital or BMOCC, acting
reasonably.
2.3.2 The Corporation shall cause to be prepared and delivered to
the board of directors and all parties hereto as soon as
reasonably practicable and in no event later than thirty (30)
days after the end of each calendar month a financial
statement (prepared in accordance with GAAP) for such month
consisting of at least a balance sheet, income statement,
statement of changes in financial position and statements of
cash flow, together with all supporting schedules and notes,
prepared in accordance with generally accepted accounting
principles consistent with prior years without adjusting
entries or review by accountants and signed by an authorized
officer of the Corporation, together with such other
information as may be reasonably requested by RoyNat Capital.
2.3.3 The financial statements referred to herein shall be prepared
in accordance with GAAP (except in the case of monthly
financial statements, which are not required to
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be adjusted for year-end adjustments, accruals and other
matters as would normally be included as part of a year-end
audit) and certified to be so by the Chief Financial Officer
of the Corporation.
2.3.4 Within thirty (30) days of the end of each month, evidence
satisfactory to RoyNat Capital and BMOCC, that (unless
otherwise agreed to in the sole discretion of RoyNat Capital
and BMOCC, acting reasonably) the Corporation shall have
complied with and fulfilled all requirements under the INCOME
TAX ACT (Canada) and the regulations thereto, the Canada
Pension Plan and the EMPLOYMENT INSURANCE ACT, and equivalent
legislation in other jurisdictions for withholding of amounts
for employees and has remitted all amounts withheld to the
appropriate authorities within the prescribed time, has
complied with and fulfilled all requirements under the
WORKPLACE SAFETY AND INSURANCE ACT (Ontario) and paid all
amounts due thereunder and all assessments thereunder and
under any equivalent applicable legislation in other
jurisdictions and paid all amounts to the appropriate
authorities within the prescribed time with respect to income,
capital, sales, excise, business and property taxes and all of
the tax and duties which are required to be filed by the
Corporation and paid all taxes and duties as shown on such
reports or returns to the extent that such taxes and duties
become due and payable and paid all assessments received by
the Corporation in respect thereof.
2.3.5 The Corporation shall provide to the board of directors and
RoyNat Capital and BMOCC annually a compliance report of the
Chief Financial Officer of the Corporation confirming the
amount of remuneration paid by the Corporation to those
Persons referred to in Section 2.1.10.1 during the
Corporation's immediate prior fiscal year.
2.3.6 The Chief Financial Officer of the Corporation shall deliver
to each of the Shareholders:
2.3.6.1 upon becoming aware of any legislation, regulation,
policy or act that is introduced or applied by any
Governmental Authority or of any other information
which in the view of the Corporation will or could have
a material adverse effect on the business, assets,
liabilities, financial condition, results or operations
or business prospects of the Corporation;
2.3.6.2 a copy of any notice or statement given by the
Corporation to its lenders, or received by the
Corporation from its lenders, in connection with a
breach of, or failure to perform, any covenant in
relation to indebtedness of the Corporation for
borrowed money, which copy shall be given
contemporaneously with the giving of such notice or
statement to the lenders; and
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2.3.6.3 upon becoming aware that the same may be threatened or
pending, and in any case immediately after the
commencement thereof, a notice of any dispute,
litigation or arbitration or other proceedings before
or of any Governmental Authority which might have a
material adverse effect on the business, assets,
liabilities, financial condition, results of operations
or business prospects of the Corporation; and such
other information, accounts, data and projections as
any Shareholder may reasonably request from time to
time.
2.3.7 The Corporation shall provide to the board of directors and
RoyNat Capital and BMOCC a copy of such policies and
procedures to be adhered to, and as may be necessary for
compliance by the Corporation and its Subsidiaries with
applicable environmental laws.
2.4 BUDGETS AND BUSINESS PLAN
The Corporation shall prepare and submit to the board of directors for
approval in accordance with Section 2.1.10.23 not later than thirty (30) days
prior to the commencement of each fiscal year of the Corporation commencing with
the calendar year beginning January 1, 2003, in reasonable detail, the annual
Business Plan, which shall include details of all management salaries and
bonuses, together with such other information as may be requested by any
director, RoyNat Capital or BMOCC, in each case, acting reasonably. Operating
and capital expenditure budgets with the information described above for the
2003 calendar year shall be prepared and submitted to the board of directors for
approval on or not less than thirty (30) days prior to the first day of each
fiscal year. The annual Business Plan approved in writing by the Corporation's
board of directors is herein called the "Approved Business Plan". The initial
Approved Business Plan is attached as Schedule 2.4.
2.5 LIFE INSURANCE
2.5.1 The Corporation shall obtain and maintain in force insurance
on the life of each of Wadge and Watkinson in the amount of
$1,000,000. The Corporation shall assign such insurance to
RoyNat Capital and BMOCC as security for the obligations of
the Corporation to each of RoyNat Capital and BMOCC under this
Agreement and under their respective debentures. The
Corporation acknowledges that it has obtained insurance on the
life of each of Wadge and Watkinson as contemplated by this
section.
2.5.2 If at any time the Corporation has failed to maintain in full
force the policy or policies of insurance which it has agreed
to maintain pursuant to Section 2.5.1, any Shareholder shall
have the right to make the payments that are necessary to put
such policies in good standing if the Corporation has not
corrected such default within ten (10) days after notice
thereof by such Shareholder. All payments so made shall be
deemed to have been made for the account of the Corporation
and the Corporation
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shall forthwith reimburse the Shareholder therefor. If the
Corporation becomes obligated to purchase the Shares of the
Shareholder who made any such payment and notwithstanding any
other provision of this Agreement, the aggregate amount of
such payments, together with interest thereon from the
respective dates of payment to the date of completion of the
transaction of purchase and sale at a rate per annum equal to
the prime rate charged from time to time during such period by
the Corporation's bankers, shall be added to the purchase
price which the Corporation is required to pay for the Shares.
2.6 SHAREHOLDER MEETINGS
RoyNat Capital and BMOCC shall be sent copies of minutes of all
meetings of Shareholders and of all resolutions passed by Shareholders with
fifteen (15) Business Days of such meeting being held or resolution being
passed, as the case may be.
2.7 BOOKS AND RECORDS
The Corporation shall maintain books and records which shall disclose
all financial transactions of the Corporation in accordance with generally
accepted accounting principles, consistently applied. Employees or authorized
agents of any particular Investing Shareholder will be permitted at any
reasonable time to enter the premises of the Corporation to inspect the books
and records of the Corporation and to make extracts therefrom and to have access
to such persons as the particular Investing Shareholder deems necessary or
desirable for the purpose of inspecting or verifying such books and records.
2.8 EMPLOYMENT OF WADGE AND WATKINSON
The Corporation shall continue to employ Wadge as President and Chief
Executive Officer and Watkinson as Vice-President and Chief Financial Officer,
subject to the provisions of Sections 2.1.7 and 2.8 hereof, with remuneration
payable to him within the limit established by Section 2.1.10.1.
2.9 CHANGE IN MANAGEMENT OF CORPORATION
In the event that the Corporation defaults in (i) payment of the
principal of or interest on any secured financing, or (ii) performance or
observance of any material covenant or condition or any secured financing, or
(iii) the performance or observance of any material covenant or condition under
this Agreement or under the Subscription Agreement or under any of the Warrants,
and such default shall continue for sixty (60) days after written notice thereof
to the Corporation by RoyNat Capital or BMOCC, each of RoyNat Capital and BMOCC,
in addition to, and not in substitution for, any other rights granted to RoyNat
Capital or BMOCC under this Agreement, shall be constituted the agent for each
of the other Shareholders (other than an Investing Shareholder) for the limited
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purposes set out herein. Such right to remove management shall be without
prejudice to any rights of management under any other agreement with the
Corporation or under statute. Each of RoyNat Capital and BMOCC shall have the
right and be entitled (and is hereby irrevocable appointed as the true and
lawful attorney in fact of the other Shareholders to do so) to take such steps
and to vote all of the voting Shares of each other Shareholder (other than an
Investing Shareholder) to elect new nominees to the board of directors of the
Corporation, notwithstanding Section 2.1.1, 2.1.7 and 2.1.10.25 hereof, for the
sole purpose of removing the existing officers of the Corporation and appointing
new officers in their place and stead, which new officers shall be acceptable to
RoyNat Capital and BMOCC in their sole and unfettered discretion.
2.10 COMMITTEES
Provided the consent of RoyNat Capital and BMOCC is obtained pursuant
to Section 2.1.10.20, in addition to any committees formed at the discretion of
the board, the board shall establish:
2.10.1 a Compensation Committee, prepare and adopt terms of reference
for the Compensation Committee and shall delegate to such
Committee the responsibility for making decisions regarding
the compensation of management and officers of the Corporation
and oversee the management of the benefit and stock option
plans of the Corporation. The Compensation Committee shall
consist of three (3) members. RoyNat Capital shall be entitled
to appoint one (1) nominee(s) to the Compensation Committee,
and RGGA shall be entitled to appoint two (2) nominee(s) to
the Compensation Committee, provided, however, that no member
of management or officer of the Corporation shall act as a
nominee to the Compensation Committee. In order to be
effective, all decisions of the Compensation Committee shall
be made by a majority of its members at a meeting or in
writing; and
2.10.2 an Audit Committee, prepare and adopt terms of reference for
the Audit Committee and shall delegate the responsibility for
making decisions relating to recommending the approval of the
financial statements of the Corporation, approve accounting
policies and perform such other functions as the board of
directors shall determine. The Audit Committee shall consist
of three (3) members, comprised of one (1) representative of
RoyNat Capital and two (2) representatives of RGGA. In order
to be effective, all decisions of the Audit Committee shall be
make by a majority vote of its members at a meeting or in
writing.
2.11 RIGHTS ON A QUALIFYING PUBLIC OFFERING
If the Corporation makes a Qualifying Public Offering in Canada or the
United States, the Corporation shall use its best efforts at its expense to file
and qualify a prospectus and/or file a registration statement, as the case may
be, in order to permit RoyNat Capital, BMOCC and MDC
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to distribute by way of the prospectus or registration statement, as the case
may be, one hundred percent (100%) of the Equity Securities of RoyNat Capital,
BMOCC and MDC subject to the Corporation reasonably determining that the number
of Equity Securities that it wishes to issue and the number of Equity Securities
that RoyNat Capital, BMOCC and MDC wishes to include in such offering does not
exceed the number of securities that can be sold without adversely affecting the
marketability of the offering. If the Corporation determines that the
marketability of the offering will not be adversely affected, the Corporation
shall include in the offering up to one hundred per cent (100%) of RoyNat
Capital's Equity Securities, BMOCC's Equity Securities and MDC's Equity
Securities, as each of RoyNat Capital, BMOCC and MDC shall so request. The terms
of the registration rights shall include typical registration, indemnification
and other provisions.
ARTICLE 3
GENERAL MATTERS RELATING TO THE
HOLDING OF SHARES AND PERMITTED TRANSFERS
3.1 REPRESENTATIONS AND WARRANTIES BY SHAREHOLDERS
Each Shareholder represents, warrants and covenants to each of the
other Shareholders with regard to itself as follows:
3.1.1 if such Shareholder is a corporation, it is a valid and
subsisting corporation;
3.1.2 except as disclosed in Schedule 3.1.2, that such Shareholder
owns beneficially and of record the number of Shares which are
expressed to be owned by him or it in the recitals to this
Agreement and that such Shares are not subject to any
mortgage, lien, charge, pledge, encumbrance, security interest
or adverse claim and that no Person has any rights to become a
holder or possessor of any of such Shares or of the
certificates representing the same;
3.1.3 that such Shareholder has the capacity to enter into and give
full effect to this Agreement;
3.1.4 that this Agreement constitutes a valid and binding obligation
enforceable against it in accordance with its terms, subject
to the usual exceptions as to bankruptcy and the availability
of equitable remedies;
3.1.5 except for RGGA, that such Shareholder is not a non-Canadian
under the Investment Canada Act (Canada); and
3.1.6 that all of the foregoing representations and warranties will
continue to be true and correct during the continuance of this
Agreement.
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RGGA represents, warrants and covenants to each of the other
Shareholders with regard to itself that the acquisition of and holding of Shares
by it is in compliance with the INVESTMENT CANADA ACT.
3.2 GENERAL PROHIBITION ON TRANSFER
3.2.1 During the continuance of this Agreement, none of the
Shareholders shall deal with any Shares or any interest
therein or Transfer any Shares now or hereafter held by such
Shareholder except in accordance with this Agreement. A
purported Transfer of any Shares in violation of this
Agreement shall not be valid and the Corporation shall not
register, nor permit any transfer agent to register, any such
Shares on the securities register of the Corporation, nor
shall any voting rights attaching to or relating to such
Shares be exercised, nor shall any purported exercise of such
voting rights be valid or effective, nor shall any dividend or
distribution be paid or made on such Shares. Each Shareholder
who purports to make a Transfer of any Shares in violation of
this Agreement agrees to donate and hereby donates to the
Corporation all dividends and distributions paid or made on
such Shares during the period of such prohibited Transfer.
The provisions of the immediately preceding sentence are in
addition to, and not in lieu of, any other remedies to enforce
the provisions of this Agreement.
3.2.2 There Corporation hereby represents and warrants that (a)
James Liati, Frank Adubato, Anthony Calandra, Frank Calabrese
and William Walsh collectively are the registered or
beneficial owners of more shares in the capital of Dreamlife,
Inc. than any other shareholder or shareholder group of
Dreamlife, Inc. acting in concert and will continue to do so
for so long as RoyNat Capital or BMOCC holds Shares, (b) each
of James Liati, Frank Adubato and Frank Calabrese shall, for
so long as RoyNat Capital or BMOCC holds Shares, be the
registered or beneficial owner of not less than 2,000,000
shares in the capital of Dreamlife, Inc. and (c) William Walsh
shall, for so long as RoyNat Capital or BMOCC holds Shares, be
the registered or beneficial owner of not less than 3,000,000
shares in the capital of Dreamlife, Inc.
3.3 PERMITTED TRANSFERS BY ROYNAT CAPITAL AND MDC
Any particular Investing Shareholder may at any time transfer all or
part of the Shares held by it at that time:
(a) to any Affiliate of the particular Investing Shareholder;
(b) to any Person in connection with the sale of all or
substantially all of the assets of the particular Investing
Shareholder;
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(c) to any Person or Persons in connection with the dissolution of
the particular Investing Shareholder and the liquidation of
its assets; or
(d) to a financial institution or any Affiliate thereof or any
other Person which carries on the business of providing debt
and/or equity financing.
At any time after the date seven (7) months from the date hereof, MDC
may at any time transfer all or part of the Shares held by it at that time:
(a) to any Affiliate of MDC;
(b) to any Person in connection with the sale of all or
substantially all of the assets of MDC; or
(c) in connection with a pledge of the Shares to its senior lender
which is a Schedule I bank pursuant to the BANK ACT (Canada).
3.4 PERMITTED TRANSFERS BY SHAREHOLDERS
With the prior approval of the board of directors of the Corporation
and RoyNat Capital and BMOCC, which shall not be unreasonably withheld, any
Shareholder may Transfer or otherwise deal with its interest in Common Shares of
the Corporation owned by it from time to time.
3.5 NO REGISTRATION OF TRANSFER UNLESS TRANSFEREE IS BOUND
If pursuant to any provision of this Agreement, a Shareholder (a
"TRANSFEROR") Transfers any of such Shareholder's Shares to any other Person (a
"TRANSFEREE") no Transfer of such Shares shall be made nor shall it be effective
and no application shall be made to the Corporation to register the Transfer and
the Corporation shall not register any such Transfer, on the securities register
of the Corporation until the proposed Transferee or Subscriber and the Person,
if any, who controls, directly or indirectly, such Transferee becomes subject to
all of the obligations of the Transferor under this Agreement (in which case the
proposed Transferee shall become entitled to exercise all the rights of the
Transferor under this Agreement) and agrees to be bound by all of the provisions
hereof as if it was an original signatory hereto pursuant to an agreement in
writing, in substantially the form of Schedule D or in form and substance
satisfactory to the other parties then bound by this Agreement, acting
reasonably, including in the form set out in Schedule D. The foregoing does not
apply to a Transfer of Shares by a Shareholder to another Shareholder pursuant
to Article 4.
3.6 NOTATION ON SHARE CERTIFICATES
All share certificates representing Shares shall have the following
statement conspicuously noted thereon:
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"There are restrictions on the right to transfer the shares represented
by this certificate. In addition, such shares are subject to an amended
and restated unanimous shareholder agreement dated as of February 19,
2002 between the Corporation, RGG Acquisition Inc., MDC Corporation
Inc., BMOCC and RoyNat Capital Inc, as the same may be amended from
time to time, and may not be pledged, sold or otherwise transferred
except in accordance with the provisions thereof."
All certificates representing securities issued by the Corporation
which are convertible into or exchangeable for Shares of evidencing a right to
acquire Shares shall contain a statement substantially to the same effect.
3.7 SHAREHOLDERS TO FACILITATE PERMITTED TRANSFERS
Each of the Shareholders agrees that he or it shall give and execute
all necessary consents and approvals to a Transfer of Shares which is permitted
under this Agreement as soon as the relevant provisions of this Agreement
relating to such Transfer have been compiled with.
ARTICLE 4
MATTERS RELATING TO THE
DISPOSITION AND ACQUISITION OF SHARES
4.1 RIGHT OF FIRST REFUSAL
4.1.1 For the purposes of Sections 4.1 and 4.2, references relating
to Shares held by any particular Investing Shareholder shall
be deemed to include any Shares which the particular Investing
Shareholder has the right to be issued under any Investing
Shareholder Warrants. Accordingly, for purposes of determining
the purchase price of such Investing Shareholder Warrants for
purposes of Sections 4.1 and 4.2, the purchase price for any
such Investing Shareholder Warrants shall be equal to the
product of the applicable Selling Price multiplied by the
number of common Shares which the particular Investing
Shareholder is entitled to upon fully exercising such
Investing Shareholder Warrants.
4.1.2. SELLING SHAREHOLDER TO GIVE FIRST REFUSAL NOTICE
4.1.2.1 In the event that any Shareholder hereto (hereinafter in
Sections 4.1.2 and 4.2 referred to as the "SELLING
SHAREHOLDER") receives a bona fide offer from an Arm's
Length Person (the "THIRD PARTY OFFER") to purchase all of
the Shares of the Corporation beneficially owned or
controlled by it (the "OFFERED SHARES") which it is
willing and able to accept, then the Selling Shareholder
shall forthwith give notice in writing (hereinafter in
Sections 4.1.2 and 4.2 referred to as the
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"FIRST REFUSAL NOTICE") to the other Shareholders
(hereinafter in Sections 4.1.2 and 4.2 referred to as the
"OFFEREES") irrevocably offering to sell the Offered
Shares to the Offerees and specifying therein the
particulars of the Third Party Offer received by the
Selling Shareholder including the name of the third party
(hereinafter in Sections 4.1.2 and 4.2 referred to as the
"PROPOSED PURCHASER") from whom the Selling Shareholder
has received a Third Party Offer, the selling price per
share for such Offered Shares (hereinafter in Sections
4.1.2 and 4.2 referred to as the "SELLING PRICE") and the
terms and conditions relating to the proposed sale to the
Proposed Purchaser, such as the proposed date of sale
(which shall not conflict with any exercise of rights by
any Offerees or Declining Offerees under Sections 4.1 or
4.2) (hereinafter in Sections 4.1.2 and 4.2 referred to as
the "Conditions")]. If, as a result of a sale of the
Offered Shares to the Proposed Purchaser, the Proposed
Purchaser would own at least fifty percent (50%) of the
Common Shares then outstanding, then the First Refusal
Notice shall be accompanied by a Piggyback Offer referred
to in Section 4.2. If the Selling Shareholder is an
Investing Shareholder, the Third Party Offer shall also
include an offer to purchase from the Investing
Shareholder, the relevant Investing Shareholder Debenture
if then outstanding, on such terms as the Proposed
Purchaser and the Investing Shareholder may agree,
provided that the purchase price therefor shall not be
greater than the amount of principal then outstanding
thereunder plus all other amounts which are unpaid and due
and payable thereunder. A Third Party Offer shall (a) not
provide for any consideration other than cash
consideration, which shall be paid in full on the closing
of the purchases and sale transaction and (b) provide for
a closing of the purchase and sale transaction of not more
than one hundred and twenty (120) days after acceptance.
The Selling Shareholder shall provide the Offerees with a
copy of the Third Party Offer. Within thirty (30) days
from the receipt of a copy of the First Refusal Notice,
each Offeree may give to the Selling Shareholder a notice
of Acceptance (as "ACCEPTANCE NOTICE") which sets forth
the number of Offered Shares which such Offeree agrees to
purchase from the Selling Shareholder.
4.1.2.2 If the Offerees collectively agree to purchase all or more
than all of the offered Shares, then the Offerees shall be
entitled to purchase the Offered Securities as nearly as
may be in proportion to the number of Shares then held by
them respectively (calculated on a Fully Diluted basis).
If all of the Offerees do not claim their respective
proportions, the unclaimed Offered Shares shall be
allocated so as to satisfy the unsatisfied claims of
Offerees for Offered Shares in excess of their proportions
and, if the claims in excess are more than sufficient to
exhaust such unclaimed Offered Shares, the unclaimed
Offered Shares shall be divided among the remaining
Offerees in proportion to their holdings of Shares
immediately before the delivery of the First Refusal
Notice (calculated on
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a Fully Diluted Basis) relative to one another. If, upon
the completion of the foregoing process, there remains a
balance of unclaimed Offered Shares, the Selling
Shareholder shall within two (2) Business Days of
completion of the foregoing process provide notice to the
Offerees of same, the number of unclaimed Offered Shares
and the then allocation of the Offered Shares. The
Offerees may within five (5) days of such notice, give the
Selling Shareholder an Acceptance Notice and such
unclaimed Offered Shares shall be allocated based upon the
method set out in this paragraph, MUTATIS MUTANDIS. If the
Offered Shares are not capable, without division into
fractions, of being offered to or allocated among the
Offerees as nearly as may be in the proportions referred
to above, any balance shall be offered to or allocated
among such Offerees or some of them in such manner as the
board of directors determine to be equitable. The
allocation method set out in this paragraph shall be, if
necessary, repetitively applied until either (i) all
Offered Shares are accepted, or (ii) all claims of the
Offerees for Offered Shares are satisfied. An Offeree
shall not be bound to purchase any Offered Shares in
excess of the number which it agreed to purchase in its
acceptance Notice;
4.1.2.3 If none of the Offerees accepts the offer or the Offerees
collectively do not agree to purchase all of the Offered
Shares, then the Selling Shareholder may, but need not,
sell all or only some of the offered Shares to the
Offerees as they may agree and may, but need not, sell all
or only some of the Offered Shares to the Proposed
Purchaser within the period of sixty (60) days immediately
following the expiry of the last date for delivery by
Offerees of an Acceptance Notice at a price per Share not
less than the price per Share and on terms and conditions
not more favourable to the Selling Shareholder than were
specified in the First Refusal Notice to the Offerees. If
the Selling Shareholder proposes to sell any Offered
Shares to the Proposed Purchaser pursuant to this Section
and as a result of such sale of Offered Shares to the
Proposed Purchaser, the Proposed Purchaser would own at
least fifty percent (50%) of the Common Shares then
outstanding, then the Selling Shareholder shall give
written notice of same (the "PIGGYBACK NOTICE") to the
Offerees which shall not be purchasing the Offered Shares
pursuant hereto (the "DECLINING OFFEREES"). In the event
that the Selling Shareholder does not sell the Offered
Shares to a third party within such sixty (60) day period,
then the provisions of this Agreement shall once again
apply thereto and so on from time to time.
4.1.2.4 If any Shareholder Debt is outstanding to the Selling
Shareholder at the time it obtains a Third Party Offer,
such offer must contain in addition to an offer to
purchase the Shares held by the Selling Shareholder, an
offer to purchase all (but not less than all) of the
Shareholder Debt of the Selling Shareholder for cash. If
the Third Party offer contains such an offer to purchase
Shareholder Debt, then,
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notwithstanding anything herein contained, the Offerees
shall have the right to purchase both the Shares and the
Shareholder Debt, but not the Shares alone or the
Shareholder Debt alone.
4.1.2.5 RGGA shall not be entitled to deliver a First Refusal
Notice during the period from the date on which an event
specified in Section 4.5.1 or 4.9.l has occurred to the
date which is one hundred eighty (180) days thereafter.
After the expiry of such period, RGGA shall be entitled to
deliver a First Refusal Notice so long as the provisions
of Section 4.5 and 4.9, as applicable, have been complied
with and the Shares are not being purchased pursuant to
that section.
4.2 PIGGY-BACK RIGHT
If, as a result of a sale of the Offered Shares to the Proposed
Purchaser, the Proposed Purchaser would own at least fifty percent (50%) of the
Common Shares then outstanding, then a Selling Shareholder shall not be entitled
to deliver a First Refusal Notice unless the Third Party Offer contains, or is
accompanied by, an irrevocable offer by the Proposed Purchaser to the Offerees
to purchase all the Shares and Shareholder Debt, if applicable, held by the
Offerees (the "PIGGY-BACK OFFER"). The Piggy-Back Offer shall contain only terms
and conditions which are the same as, MUTATIS MUTANDIS, to those contained in
the Third Party Offer, except that (a) the obligations of the Proposed Purchaser
under the Piggy-Back Offer may be conditional upon completion of the transaction
contemplated by the Third Party offer and (b) if an Offeree is an Investing
Shareholder (i) the Piggy-Back Offer shall also include an irrevocable offer to
purchase, to the extent then outstanding, the relevant Investing Shareholder
Debenture for a purchase price equal to the aggregate of: the then outstanding
principal amount under the relevant Investing Shareholder Debenture; and all
accrued and unpaid interest thereunder, all amounts other than principal and
interest payable thereunder (whether or not then due); (ii) no representations
and warranties will be required to be given to the Proposed Purchaser in
connection with such purchase of the relevant Investing Shareholder Debenture
and (iii) the purchase price for the relevant Investing Shareholder Debenture
shall be paid by certified cheque to the Investing Shareholder upon delivery to
the Proposed Purchaser of the relevant Investing Shareholder Debenture and an
assignment therefor at such time and place as is referred to in Section 5.2.2,
MUTATIS MUTANDIS, without any other term or condition relating to the purchase
and sale of the relevant Investing Shareholder Debenture. The Proposed Purchaser
shall be deemed to warrant to the Offerees, and the Proposed Purchaser shall be
required to make in writing in its Piggy-Back Offer, a representation and
warranty that no direct indirect collateral benefit or supplementary
consideration (whether or not in the nature of a tangible or intangible asset,
money, property, security or other benefits or opportunities) has been or is to
be paid or received by the Selling Shareholder, or any other Person not at Arm's
Length with it, in connection with such Piggy-Back Offer is not made as party of
or in connection with any other transaction. The Piggy-Back Offer shall be
irrevocable and shall be open for acceptance by the Declining Offerees for a
period of ten (10) days from the date of receipt of a Piggyback Notice. The
Selling Shareholder shall not complete the sale to the Proposed Purchaser
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unless the purchase and sale of the Declining Offerees' Shares and Shareholder
Debt (and in the case of an Investing Shareholder, to the extent applicable, the
relevant Investing Shareholder Debenture) pursuant to the Piggyback Offer are
completed contemporaneously therewith.
4.3 Intentionally Deleted
4.4 APPLICABILITY OF SECTIONS 4.1 AND 4.2
Notwithstanding anything to the contrary contained herein, the provisions of
Sections 4.1 and 4.2 shall not apply to any Transfer permitted pursuant to
Article 3 or Sections 4.5, 4.8, 4.9, 4.10 and 4.12 or any Transfer of any Shares
issued in connection with and governed by an ESOP, when implemented.
4.5 PUT RIGHT IN FAVOUR OF INVESTING SHAREHOLDERS
4.5.1 With respect to any particular Investing Shareholder, if the
particular Investing Shareholder is not then obligated to sell
Shares held by it pursuant to Section 4.1, the particular
Investing Shareholder may, in priority to any other repurchase
of Shares by the Corporation, at any time or from time to time
after any of the following dates or events:
4.5.1.1 January 15, 2007;
4.5.1.2 the Corporation defaulting in the payment of principal or
interest on any secured financing;
4.5.1.3 INTENTIONALLY DELETED;
4.5.1.4 INTENTIONALLY DELETED;
4.5.1.5 the occurrence of an event of default under the RoyNat
Capital Debenture or BMOCC Debenture, or the Corporation
fails to perform or is otherwise in breach in any material
respect its obligations under this Agreement, under any
instrument or document delivered pursuant to this
Agreement at any time hereafter, under the Subscription
Agreement and, any Transaction Agreement (as defined in
the Subscription Agreement), and the failure or breach is
not cured within thirty (30) days after receipt by the
Corporation of notice of the failure or breach from any
Investing Shareholder;
4.5.1.6 any action referred to in Section 2.1.10 is taken by the
Corporation without obtaining the approval required by
that section;
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4.5.1.7 any representation and warranty of the Corporation
contained in this Agreement or in the Subscription
Agreement is or becomes untrue or incorrect in any
material respect and such Person has not taken all
necessary steps, to the satisfaction of RoyNat Capital and
BMOCC, acting reasonably, to ensure that the
representation and warranty becomes true and correct no
later than thirty (30) days after receipt by such Person
of notice from any Investing Shareholder that the
representation and warranty is not true and correct;
4.5.1.8 the Corporation becomes insolvent or bankrupt or makes an
assignment for the benefit of its creditors generally or
files a petition or makes a proposal under the BANKRUPTCY
AND INSOLVENCY ACT (Canada) or a receiving order is made
or a petition is filed under the BANKRUPTCY AND INSOLVENCY
ACT (Canada) against the Corporation;
4.5.1.9 the date on which Dreamlife or RGGA, directly or
indirectly Transfers any Shares now or hereafter held by
it otherwise than in accordance with this Agreement;
4.5.1.10 the date on which the Corporation sells or otherwise
disposes of, by conveyance, transfer, lease or otherwise,
all or substantially all of its assets, unless such
transaction is approved in advance in writing by RoyNat
Capital and BMOCC;
4.5.1.11 the date on which the Corporation amalgamates or merges
with or into any other corporation or completes a
reorganization or arrangement, unless such transaction is
approved in advance in writing by RoyNat Capital and
BMOCC;
4.5.1.12 subject to regulatory approval, on or before thirty (30)
days prior to a primary or secondary public offering of
Common Shares of the Corporation to the public being
proposed to be completed pursuant to a prospectus,
registration statement or similar document filed with
appropriate securities regulatory authorities in any
province of Canada or the United States of America;
4.5.1.13 the date on which the Corporation pays all amounts owing
to the particular Investing Shareholder under the relevant
Investing shareholder Debenture;
4.5.1.14 the date on which (a) James Liati, Frank Adubato, Anthony
Calandra, Frank Calabrese and William Walsh collectively
are not the registered or beneficial owners of more shares
in the capital of Dreamlife, Inc. than any other
shareholder or shareholder group of Dreamlife, Inc. acting
in concert, or (b) any of James Liati, Frank Adubato and
Frank Calabrese is the registered or
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beneficial owner of less than 2,000,000 shares in the
capital of Dreamlife, Inc. or (c) William Walsh is the
registered or beneficial owner of less than 3,000,000
shares in the capital of Dreamlife, Inc.; or
4.5.1.15 MDC exercises its right to cause the Corporation to
purchase any of its Shares pursuant to Section 4.9.1.
by notice to the Corporation (the date of such notice in this Section 4.5 herein
referred to as the "NOTICE DATE") elect to sell to the Corporation all of the
relevant Investing Shareholder Debenture, the relevant Investing Shareholder
Warrants and Common Shares of the Corporation then held by the particular
Investing Shareholder and any Common Shares which the particular Investing
Shareholder subsequently acquires pursuant to the exercise of any of the
relevant Investing Shareholder Warrants. Such notice shall specify the event
referred to above which has occurred to entitle the particular Investing
Shareholder to deliver the notice and shall constitute the irrevocable election
by the particular Investing Shareholder to sell the relevant Investing
Shareholder Debenture and number of Common Shares and/or relevant Investing
Shareholder Warrants specified in the notice to the Corporation and, upon the
giving of such notice, the Corporation shall thereupon the obligated to purchase
from the particular Investing Shareholder all such Common Shares and/or relevant
Investing Shareholder Warrants and the relevant Investing Shareholder Debenture.
4.5.2 Subject to Section 4.5.3, the purchase price for the purchase
and sale of Common Shares and/or relevant Investing
Shareholder Warrants pursuant to this Section 4.3 shall be
payable in cash and shall be an amount per Common Share and/or
relevant Investing Shareholder Warrant equal to:
4.5.2.1 after the occurrence of an event specified in section
4.5.1.9 and such event is specified in the notice, the
greater of (a) the Formula Price and (b) the price per
Common Share paid for the Common Shares in the relevant
transaction;
4.5.2.2 after the occurrence of an event specified in Section
4.5.1.10 and such event is specified in the notice, the
greater of (a) the Formula Price and (b) the net value of
the consideration received for the assets sold or
otherwise disposed of, divided by the number of Common
Shares of the Corporation outstanding on the notice date;
4.5.2.3 after the occurrence of an event specified in Section
4.5.1.11 and such event is specified in the notice, the
greater of (a) the Formula Price and (b) the value of the
Corporation as established by the terms of the
amalgamation, merger, reorganization or arrangement,
divided by the number of Common Shares of the Corporation
outstanding on the notice date;
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4.5.2.4 after the occurrence of an event specified in Section
4.5.1.12, the greater of (a) the Formula Price and (b) the
price per Common Share to be paid pursuant to the public
offering, and
4.5.2.5 in any other case, the greatest of (which greatest amount
is referred to herein as the "FORMULA PRICE"):
(i) five (5) times the average of the Earnings before
Interest, Taxes, Depreciation and Amortization of
the Corporation for the two (2) most recently
completed fiscal years of the Corporation prior to
the notice date, divided by the number of Common
Shares of the Corporation outstanding on the notice
date; and
(ii) five (5) times the Earnings Before Interest, Taxes,
Depreciation, and Amortization of the Corporation
for the most recently completed 12 month period of
the Corporation prior to the notice date, divided by
the number of Common Shares of the Corporation
outstanding on the notice date.
4.5.3 If more than one of Section 4.5.2.1, Section 4.5.2.2, Section
4.5.2.3, Section 4.5.2.4 and Section 4.5.2.5 apply to a
particular purchase and sale, the applicable purchase price
per Common Share shall be the highest price which would be
payable pursuant to the applicable provisions.
4.5.4 The purchase price for the purchase and sale of the relevant
Investing Shareholder Debenture pursuant to this Section 4.5
shall be payable in cash and shall be an amount equal to the
aggregate of; the then outstanding principal amount under the
relevant Investing Shareholder Debenture; and all accrued and
unpaid interest thereunder and all amounts other than
principal and interest payable thereunder (whether or not then
due).
4.5.5 The Corporation and RGGA shall give notice to the other
parties bound by this Agreement that an event specified in
Section 4.5.1 has occurred forthwith after the occurrence of
the particular event.
4.6 DREAMLIFE PUT
4.6.1 In the event that at any time after the date hereof (a) the
Corporation or any of its Subsidiaries effects or agrees to
effect any transaction (whether by way of reorganization,
consolidation, amalgamation, merger, transfer, sale, lease,
disposition or otherwise) whereby fifty (50%) percent or more
of its undertaking or assets would become the property of
Dreamlife, Inc. (or any successor thereof) ("DREAMLIFE") or
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any Affiliate or Dreamlife or any Affiliate of the Corporation
or any Person not dealing at Arm's length with any of the
foregoing (a "DREAMLIFE RELATED ENTITY"), calculated by and
according to their then fair market value, (b) the Corporation
or any of its Subsidiaries effects or agrees to effect any
merger, acquisition, amalgamation or other form of corporate
reorganization in which outstanding shares of the Corporation
or any of its Subsidiaries are exchanged for or converted into
securities or other consideration issued, or caused to be
issued, by a Dreamlife Related Entity and pursuant to which
the holders of the outstanding equity securities (on a Fully
Diluted basis) of the Corporation or any of its Subsidiaries
immediately prior to such consolidation, merger, amalgamation
or other transaction fail to hold equity securities
representing a majority of the voting power of the corporation
or surviving entity immediately following such consolidation,
merger, amalgamation or other transaction; or (c) a majority
of the Shareholders (excluding RoyNat Capital) effect or agree
to effect the direct or indirect sale, transfer, assignment or
other disposition of any kind of all or substantially all of
the Equity Securities of the Corporation (excluding Equity
Securities held by RoyNat Capital and BMOCC) or of any of its
Subsidiaries to a Dreamlife Related Entity (the foregoing
transactions are hereinafter referred to as "DREAMLIFE PUT
EVENTS"), the Corporation shall provide RoyNat Capital and
BMOCC with reasonable prior written notice of same and all
material particulars relating to same.
4.6.2 The Corporation shall request that RoyNat Capital and BMOCC
consent to the transaction or arrangement which is the subject
of any particular Dreamlife Put Event (a "DREAMLIFE
TRANSACTION") at least sixty (60) days prior to the particular
Dreamlife transaction being effected ("DREAMLIFE TRANSACTION
EFFECTIVE DATE"). The Corporation shall promptly provide
RoyNat Capital and BMOCC with such information as it may
reasonably request relating to the particular Dreamlife
Transaction including the Dreamlife Transaction Effective
Date. If any particular Investing Shareholder elects not to
consent to the particular Dreamlife Transaction it shall (a)
provide the Corporation with notice of same at least thirty
(30) days prior to the particular Dreamlife Transaction
Effective Date and (b) provided the particular Dreamlife
transaction is effected, be obliged to sell, and the
Corporation shall be obliged to purchase, all of the
particular Investing Shareholder's Investing Shareholder
Warrants and Common Shares and the relevant Investing
Shareholder Debenture.
4.6.3 The purchase price for the purchase and sale of (a) Common
Shares and/or Warrants pursuant to this Section 4.6 shall be
payable in cash and shall be an amount per Common Share and/or
Warrant equal to the Fair Market Value divided by the number
of Common Shares of the Corporation outstanding (determined on
a Fully Diluted basis) as at the date which the Fair Market
Value determination is made in respect of and (b) the relevant
Investing Shareholder Debenture pursuant to this
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Section 4.6 shall be payable in cash and shall be an amount
equal to the aggregate of: the then outstanding principal
amount under the relevant Investing Shareholder Debenture; and
all accrued and unpaid interest thereunder and all amounts
other than principal and interest payable thereunder (whether
or not then due). The purchase price shall be paid on the
Dreamline Transaction Effective Date or such other date as may
be agreeable by the particular Investing Shareholder.
4.6.4 No Dreamlife Transaction Event shall be effected without the
consent of the Investing Shareholders or if any particular
investing Shareholder has not given such consent, completion
of the purchase and sale of the particular Investing
Shareholder's Common Shares, the relevant Investing
Shareholder Warrants and the relevant Investing Shareholder
Debenture pursuant to this Section 4.6.
4.6.5 No Dreamlife Transaction Event shall be effected for twelve
(12) months from the date hereof.
4.6.6 If any particular Investing Shareholder has elected not to
consent to any particular Dreamlife Transaction pursuant to
Section 4.6.2., the Corporation may proceed with the
particular Dreamlife Transaction notwithstanding that but for
this section the approval of the particular Investing
Shareholder may be required pursuant to Section 2.1.10 in
connection with the particular Dreamlife Transaction; provided
that provisions of Section 4.6.4 have been complied with.
4.7 COMPLETION
The purchase and sale of the relevant Investing Shareholder Debenture
of the relevant Investing Shareholder and its Common Shares and/or the relevant
Investing Shareholder Warrants pursuant to Section 4.5 and 4.9 shall be
completed thirty (30) days after the particular Investing Shareholder or MDC, as
the case may be, has given notice of its election to sell the particular
Investing Shareholder Debenture and its Common Shares and/or the relevant
Investing Shareholder Warrants, in the manner contemplated by section 5.2. If
the purchase and sale is not completed on the date provided for herein, interest
shall accrue on the price payable for such Common Shares and/or the relevant
Investing Shareholder Warrants at the rate of 15% per annum until such time as
the price is paid in full. Any amounts to be paid to the particular Investing
Shareholder pursuant to Section 4.5 or 4.6 shall be paid in priority to any
amounts to be paid to MDC pursuant to Section 4.9.
4.8 DEFAULT OF INVESTING SHAREHOLDER PUT
If any particular Investing Shareholder exercises its right to put some
or all of its Common Shares to the Corporation in accordance with Section 4.5 or
4.6 and if the Corporation defaults in its obligation to purchase such Common
Shares on the date specified in Section 4.6 or 4.7, as the case may be.
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4.8.1 on thirty (30) days' prior written notice from the particular
Investing Shareholder, other than as a result of the exercise
of the put pursuant to Sections 4.5.1.4, 4.5.1.5, 4.5.1.6,
4.5.1.7, 4.5.1.8, 4.5.1.9 or 4.5.1.10, in which case on two
(2) days' prior written notice, all of the Shareholders'
(other than RoyNat Capital and BMOCC) nominees to the board of
directors of the Corporation shall be removed as directors and
RoyNat Capital and BMOCC shall have the right to nominate and
appoint five (5) additional directors so that the board of
directors of the Corporation shall consist of seven (7)
directors, seven (7) of which shall be nominees of RoyNat and
BMOCC;
4.8.2 if default in payment to the particular Investing Shareholder
continues for ninety (90) days in the aggregate, the
particular Investing Shareholder shall be constituted the
agent for each of the other Shareholders (other than the other
Investing Shareholder) and the Corporation to sell or
otherwise dispose of all the Shares held by them in the
capital of the Corporation or to agree to the terms of an
amalgamation or merger between the Corporation and one or more
third parties or to agree to any other transaction with a
third party which involves the sale of the Shares of the
Corporation or the sale of the assets of the Corporation. In
addition, the particular Investing Shareholder shall be
entitled (and is hereby irrevocably appointed as the true and
lawful attorney in fact of the other Shareholders (other than
the other Investing Shareholder to do so) to vote all of the
votes of each such other Shareholder on all matters at any
meeting of the Shareholders of the Corporation including,
without limitation, matters relating to the composition of the
board of directors, the transfer of Shares, the winding-up or
dissolution of the corporation, the appointment of a receiver
or receiver and manager or a trustee in bankruptcy, or the
sale of all of substantially all of the Corporation's assets.
Upon the completion of any such sale, disposition,
amalgamation, merger or other transaction, any proceeds which
are payable in respect of any Shares held by the Shareholders
or in respect of all or any part of the assets of the
Corporation shall be paid to the Investing Shareholders until
all amounts owing to the Investing Shareholders pursuant to
Section 4.5 or 4.6, as the case may be, have been satisfied in
full. Each of the shareholders (other than the Investing
Shareholders) and the Corporation hereby appoints, in the
event that the default in payment referred to above to the
particular Investing Shareholder continues for ninety (90)
days, the particular Investing Shareholder as his or its
attorney, with full power of substitution, in the name of and
on behalf of such Person, to negotiate the terms of any
transaction referred to above involving the Shares held by the
Shareholders (other than the Investing Shareholders) or the
assets of the Corporation and to execute and deliver all
deeds, transfers, assignments, agreements, instruments and
assurances as may, in the opinion of the particular Investing
Shareholder, be necessary or desirable to effectively complete
the transaction. Such appointment, being coupled with an
interest, is irrevocable by each of the Shareholders (other
than the Investing Shareholders) and the Corporation and shall
not be revoked by the
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insolvency, bankruptcy, death, incapacity, dissolution,
liquidation or other termination of the existence of any such
Person and the Shareholders (other than the Investing
Shareholders) and the Corporation agree to ratify and confirm
all that the particular Investing Shareholder may do or cause
to be done pursuant to the foregoing. Each Shareholder (other
than the Investing Shareholders) consents to any transfer of
Shares made pursuant to the foregoing.
4.8.3 If the default referred to in the preamble of this Section 4.8
exists at any time in respect of each of the Investing
Shareholders, the Investing Shareholders may elect to act in
concert as agents and attorneys for the other Shareholders for
purposes of this Section 4.8.
4.9 PUT RIGHT IN FAVOUR OF MDC
4.9.1 In the event that MDC is not then obligated to sell Common
Shares held by it pursuant to Section 4.1, and so long as an
Exchange Notice (as described in Section 4.9.4) has not been
delivered to MDC, MDC may:
4.9.1.1 at any time after March 31, 2005 but prior to March 31,
2006, provided that RoyNat or BMOCC is not then a
shareholder,
4.9.1.2 at any time after February 1, 2007,
4.9.1.3 upon any of the events described in Sections 4.5.1.8,
4.5.1.10, 4.5.1.11, 4.5.1.12 or 4.5.1.14,
by notice to the Corporation (the date of such notice in this
Section 4.9 herein referred to as the "MDC notice date") elect
to sell to the Corporation all of the Common Shares then held
by it. Such notice shall constitute the irrevocable election
by MDC to sell the Common Shares held by MDC and, upon the
giving of such notice, the Corporation shall thereupon be
obligated to purchase from MDC all such Common Shares.
4.9.2 The purchase price for the purchase and sale of the Common
Shares held by MDC pursuant to Section 4.9.1 shall be payable
in cash and shall be an amount per Common Share equal to:
4.9.2.1 after the occurrence of an event specified in Section
4.5.1.10 and such event is specified in the notice, the
greater of (a) the MDC Formula Price and (b) the net value
of the consideration received for the assets sold or
otherwise disposed of, divided by the number of Common
Shares outstanding on the MDC notice date;
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4.9.2.2 after the occurrence of an event specified in Section
4.5.1.11 and such event is specified in the notice, the
greater of (a) the MDC Formula Price and (b) the value of
the Corporation as established by the terms of the
amalgamation, merger, reorganization or arrangement,
divided by the number of Common Shares of the Corporation
outstanding on the MDC notice date;
4.9.2.3 after the occurrence of an event specified in section
4.5.1.12, the greater of (a) the MDC Formula Price and (b)
the price per Common Share to be paid pursuant to the
public offering.
4.9.2.4 in any other case, an amount (the "MDC Formula Price")
equal to 5.5 times the average of EBITDA of the
Corporation for the then most recently completed two
fiscal years of the Corporation, divided by the total
number of outstanding Common Shares as at the end of the
most recently completed fiscal year of the Corporation
(determined on a Fully Diluted basis and for purposes of
greater certainty, determined as if all rights, options or
warrants under any ESOP have been fully exercised or
converted), prior to the exercise of MDC's right hereunder
(calculated on a pro rata basis so as to reflect, in the
calculation of results for the two fiscal years, any
acquisitions or other income generating transitions
subsequent to any period with respect to which a
calculation is required to be made).
4.9.2.5 If more than one of Sections 4.9.2.1, 4.9.2.2, 4.9.2.3 or
4.9.2.4 apply to a particular transaction, the applicable
purchase price per Common Share shall be the highest price
which would be payable pursuant to the applicable
provisions.
4.9.3 The Corporation agrees to give written notice to MDC (the
"Corporation Notification") promptly upon becoming aware of
any agreement, arrangement or understanding, whether
conditional or otherwise, or a proposed event which would give
rise to the exercise by MDC of its rights under this section
4.9. The corporation Notification shall contain such
particulars as would be reasonably required by MDC in order
for MDC to determine whether to exercise its rights hereunder.
MDC shall exercise its rights hereunder by delivering a
written notice (the "Put Notice") of such exercise: (a) within
60 days of the Corporation Notification; or (b) on any day
after March 31, 2005 but prior to March 31, 2006. If MDC fails
to deliver the Put Notice upon the occurrence of the events
and within the time periods provided in this Section 4.9.3,
then the Put Option shall expire. In the event of delivery of
a Put Notice and the non-completion of such exercise then MDC
shall, in addition to all other remedies available to it at
law, have the ongoing right to deliver a subsequent Put Notice
or Notices upon the terms of this Section 4.9.3.
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4.9.4 RGGA may, at is option, by providing notice (the "Exchange
Notice") to MDC, require MDC to, and MDC shall, exchange all,
but not less than all, of its Common Shares for stock or other
securities of RGGA or any of its direct or indirect parent
corporations ("Parent Stock"), provided that: (i) such Parent
Stock is publicly traded (or will, following a hold period, be
publicly traded); and, (ii) that such Parent Stock have a fair
value equal to the greater of: (A) the MDC Formula price that
would be payable to MDC in accordance with Section 4.9 upon
the exercise of its option contained therein, assuming that
such option was exercised on the date of the Exchange Notice;
or (B) one million Canadian dollars (C$1,000,000) for all such
Common Shares; and, (iii) if the Parent Stock is stock of
Dreamlife Inc., MDC receives not less than 220,000 Common
Shares of Parent Stock. For purposes of this Section 4.9.4,
the fair value of each Common Share of Parent Stock shall
equal the average price (the "Average Trading Price") at which
such Parent Stock traded during the five (5) most recent days
before the date of the Exchange Notice. In the event that the
Parent Stock did not trade during such period, or that MDC
takes the position that the Average Trading Price did not
represent the fair value of the Parent Stock, then the fair
value of the Parent Stock shall be agreed between the Company
and MDC or, failing agreement, be determined by the Valuator
in accordance with procedures described in Schedule C.
4.10 CORPORATION BUY-BACK
Provided that:
(a) the Corporation is not, and after making an Additional Bonus
Interest Payment pursuant hereto will not be, in default of
any of its covenants under this Agreement, the Warrants, the
RoyNat Capital Debenture, the BMOCC Debenture or any related
security or any covenants to third party lenders, and
(b) the Corporation on the Anniversary Date (as defined below)
makes a payment to each Investing Shareholder in the amount of
Three Hundred Thousand Dollars ($300,000) (the "ADDITIONAL
BONUS INTEREST PAYMENT") from internally generated funds.
the Corporation shall be entitled in each year on the Anniversary date of the
issuance of the RoyNat Debenture and BMOCC Debenture and for a period of fifteen
(15) days thereafter (the "Anniversary Date") commencing December 31, 2003 to
and including December 31, 2006 to either; and
(c) in the event that any particular Investing Shareholder has
exercised its Investing Shareholder Warrants, purchase for
cancellation such number of Common Shares as are equal to the
number of Common Shares which results in the particular
Investing Shareholder's relative percentage of shareholding in
the Corporation outstanding as of
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the date of payment of the applicable Additional Bonus
Interest Payment, determined on a Fully Diluted basis, being
reduced by 6.25% or
(d) in the event that any particular Investing Shareholder has not
exercised its Investing Shareholder Warrants, purchase for
cancellation such number of the relevant Investing Shareholder
Warrants as are equal to the number of Common Shares which
results in the particular Investing Shareholder's percentage
of shareholding in the Corporation outstanding as of the date
of payment of the applicable Additional Bonus Interest
Payment, determined on a Fully Diluted basis, being reduced by
6.25%.
The aggregate reduction of each particular Investing Shareholder's
shareholdings in the Corporation pursuant to this Section 4.10 shall not exceed
50% of each particular Investing Shareholder's shareholdings. For purposes of
greater certainty, if the rights under this Section 4.10 are exercised on each
of the four Anniversary Dates of June 30, 2003, 2004, 2005 and 2006, each
particular Investing Shareholder's shareholdings of the Corporation shall be
reduced, in aggregate, by 50%, reducing its current 5.5% of all issued and
outstanding Shares (determined on a Fully Diluted basis) to 2.75% of all issued
and outstanding Shares (determined on a Fully Diluted basis) (i.e. a reduction
of 6.25% on each such Anniversary Date).
4.11 FOLLOW-ON OBLIGATIONS
Notwithstanding the provisions of Section 4.5, in the event that the
Corporation sells all, or substantially all, of its assets or the Shareholders
sell in the aggregate more than fifty per cent (50%) of the issued and
outstanding Common Shares in the capital of the Corporation, or a primary or
secondary public offering of Shares of the Corporation is completed pursuant to
a prospectus, registration statement or similar document filed with appropriate
securities regulatory authorities in any province in Canada or state of the
United States of America, within twelve (12) months following the repurchase of
Shares held by any particular Investing Shareholder pursuant to Section 4.5,
hereof, the Corporation and the other Shareholders jointly and severally
covenant and agree to pay, or in the event of a sale of assets, cause the
Corporation to pay, to the particular Investing Shareholder an additional
amount equal to the difference (if positive) between (i) the particular
Investing Shareholder's proportionate share of the primary or secondary public
offering of Shares or the proceeds from the sale of assets or Shares in a
non-public offering transaction, as if the particular Investing Shareholder had
not sold its Shares to the Corporation under Section 4.5 and (ii) the actual
amount received by The particular Investing Shareholder on a per share basis
from the Corporation pursuant to Section 4.5 hereof.
4.12 PRE-EMPTIVE RIGHT
Subject to Section 2.1.10, Shares may be issued by the Corporation and
options and other rights for the purchase of or subscription for any Equity
Securities or Convertible Securities may be granted at any time after the date
hereof only upon compliance with the following provisions.
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4.12.1 If the Corporation proposes to issue any Equity Securities or
Convertible Securities (the "AFFECTED SECURITIES"), the
Corporation shall first offer the Affected Securities for
subscription by the Shareholders in accordance with the
following terms:
4.12.1.1 The offer to issue Affected Securities shall be made by
notice given to each Shareholder. The notice shall set out
a description of the Affected Securities to be offered,
the proposed use of the proceeds of the issue, the
purchase price and the purchase date which shall be a date
not earlier than ten (10) days after the date of such
notice.
4.12.1.2 Each Shareholder shall have the right to subscribe for and
purchase up to that number of the Equity Securities
mentioned in the notice (referred to in this Section 4.12
as such Shareholder's "PROPORTION") which is equal to the
number determined by multiplying the total number of
Affected Securities offered by the following (unless
otherwise agreed): (i) in the case of each Investing
Shareholder, five and one-half percent (5.5%); (ii) in the
case of MDC, thirteen and thirty-five one-hundredths per
cent (13.35%); and in the case of RGGA, seventy-five and
sixty-five one hundredths percent (75.65%). A Shareholder
may also subscribe for a number of such Affected
Securities in excess of its Proportion (an
"OVERSUBSCRIPTION") but shall have no right to purchase
Affected Securities in excess of its Proportion except as
provided in this Sections 4.12.1.2 and 4.12.1.3. If all of
the Shareholders subscribe for all of their respective
Proportions, then the Affected Securities shall be
allocated accordingly. The subscription rights provided
for in this Section 4.12.1.2 shall be exercised by the
Shareholder by giving notice of acceptance to the
Corporation within ten (10) days after the receipt of the
notice from the Corporation. If the Shareholder does
exercise such subscription rights, it shall subscribe,
purchase and pay for such Affected Securities on the
purchase date set forth in the notice of the Corporation.
4.12.1.3 If all the Shareholders do not subscribe for any or all of
their respective Proportions, then the Affected Securities
not subscribed for shall be used to satisfy the
Oversubscriptions, but no Shareholder shall be bound to
take any such Equity Securities in excess of the amount it
so desires. If the Oversubscriptions are more than
sufficient to exhaust the unsubscribed Affected Securities
shall be allocated pro rata (determined on a Fully Diluted
basis) among the Shareholders who wish to purchase such
Affected Securities in excess of their respective
Proportion.
4.12.2 If any of the Affected Securities are not subscribed for
within the period provided in Section 4.12.1., the Corporation
may offer such unsubscribed Affected Securities to
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other Persons within the period of sixty (60) days after the
expiration of the offer to the Shareholders, but the price at
which such Affected Securities may be issued shall not be less
than the subscription price offered to the Shareholders and
the terms of payment for such Affected Securities shall not be
more favourable to such Person than the terms of payment
offered to the Shareholders. Such offer shall also be
conditional on such Person agreeing to be bound by all the
provisions of this Agreement as if it were an original
signatory hereto pursuant to an agreement in writing, in form
and substance satisfactory to the other parties then bound by
this Agreement, acting reasonably.
4.12.3 If the Corporation proposes to grant an option or other right
for the purchase of or subscription for Affected Securities,
such option or other right shall also be made available to
Shareholders as nearly as may be possible in accordance with
the foregoing.
4.13 EXCEPTIONS TO PRE-EMPTIVE RIGHTS
Section 4.12 shall not be applicable in respect of:
(a) any Shares issued as of the date of this Agreement;
(b) any Shares issued upon the exercise of any rights attached to
the Warrants;
(c) the grant of any option pursuant to the Corporation's stock
option or purchase plan or any Shares issuable upon the
exercise of such options including, without limitation,
pursuant to an ESOP; and
(d) a Qualifying Public Offering
4.14 DISTRIBUTION OF PROCEEDS FROM SALE OF SHARES OR ASSETS OF THE
CORPORATION
Upon a sale of all, or substantially all, of the assets of the
Corporation or upon a sale of more than fifty per cent (50%) of the issued and
outstanding Common Shares in the capital of the Corporation, all proceeds
received by the Corporation in the case of a sale of assets or all proceeds to
be received by the Shareholders in the case of a sale of Common Shares, shall be
paid and distributed, unless otherwise agreed to by the board of directors and
approved in writing by The particular Investing Shareholder, in the following
order:
4.14.1 if required by the purchaser of such assets or shares, the
payment of all debts and liabilities of the Corporation which
are due and payable from time to time to Persons dealing at
Arm's Length with the parties to this Agreement;
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4.14.2 repayment of all debts and liabilities of the Corporation
(including all principal and interest) owing to each Investing
Shareholder;
4.14.3 the payment of all amounts owing to each Investing
Shareholder, if any, in connection herewith including pursuant
to Section 4.5 or 4.6 or 4.10.
4.14.4 payment to each Investing Shareholder for its shares interest
in the Corporation (in the form of Common Shares) as if all
shareholder loans and advances had been converted to equity;
4.14.5 repayment of principal and interest owing for any loans
advanced by the other Shareholders to the Corporation pro rata
in accordance with the principal amount and accrued interest
owing; and
4.14.6 the balance to be paid to the Shareholders (other than the
Investing Shareholders) pro rata to their share interest in
the Corporation.
The foregoing shall apply without regard to any matter or thing including
priorities otherwise granted to the Shareholders' respective security interests
under applicable law, at the time of creating, granting, execution and delivery,
attachment, registration (to the extent registration is required), perfection or
enforcement of their respective security interests, the time of any loan or
advance or any other extensions of credit made to the Corporation by any of the
Shareholders.
ARTICLE 5
CLOSING PROCEDURES
5.1 DETERMINATION OF AMOUNT OF INDEBTEDNESS
The price for any indebtedness to be purchased and sold or discharged
pursuant to this Agreement shall be the face amount thereof, together with
accrued and unpaid interest thereon, if any, as recorded in the books of account
of the Corporation.
5.2 CLOSING PROCEDURES
If a purchase and sale of Shares is made pursuant to this Agreement,
the following shall apply, subject to any express provisions to the contrary:
5.2.1 PAYMENT OF PURCHASE PRICE AND DELIVERY OF CERTIFICATES,
RESIGNATIONS AND RELEASES. The purchase price shall be paid on
closing by negotiable cheque certified by a Canadian chartered
bank or trust company or official bank draft drawn on a
Canadian chartered bank against receipt by the purchaser of
the share certificate or
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certificates representing the Shares being purchased, duly
endorsed for transfer in blank with signatures guaranteed by a
Canadian chartered bank or trust company, together with
resignations by the vendor and his nominees, if any, as
directors, officers and employees of the Corporation and
releases in favour of the Corporation of all claims which such
directors, officers and employees may have against the
Corporation, other than in respect of accrued and unpaid
compensation to the closing date and accrued vacation pay.
5.2.2 DATE AND TIME OF CLOSING. If the date for completion of any
transaction of purchase and sale falls on a day which is not a
Business Day, the transaction shall be completed on the first
Business Day following such date. Closing shall take place at
11:00 a.m. on the date for completion at the registered office
of the Corporation.
5.2.3 TITLE. The acceptance by the vendor of payment for the Shares
and Shareholder Debt, if any, being purchased and sold shall
constitute a representation and warranty by the vendor that
the vendor has good and marketable title to such Shares and
Shareholder Debt, free and clear of any lien, charge, pledge,
encumbrance, security interest or adverse claim, except the
terms of this Agreement. Notwithstanding the foregoing, the
vendor shall deliver to the purchaser all such documents,
instruments and releases and shall do all such acts and things
as the purchaser may request, acting reasonably, whether
before or after completion of the transaction, to vest such
title in the purchaser.
5.2.4 RESIGNATIONS. The vendor and its nominees, if any, shall
resign in writing the positions which they then hold with the
Corporation and, if applicable, its Subsidiaries, to the
extent that immediately following the completion of the
purchase, the vendor would not be entitled to hold, or to have
its nominees hold, the positions in question;
5.2.5 VENDOR INDEBTED TO CORPORATION. If, at the time of sale, the
vendor is indebted to the Corporation, the purchaser shall
have the right to satisfy such indebtedness out of the
purchase price payable for the Shares and Shareholder Debt, if
any.
5.2.6 ASSIGNMENT OF SHAREHOLDER DEBT. If, at the time of sale, the
Corporation is indebted to the vendor in respect of
Shareholder Debt, the purchaser shall (except in the case of a
purchaser pursuant to Section 4.9), concurrently with the
completion of the sale, purchase such Shareholder Debt from
the vendor and shall pay the price therefor to the vendor on
closing in the manner provided in Section 5.2.1 against
delivery of an assignment to the purchaser of such
indebtedness, such assignment to be without recourse to the
vendor and otherwise to be in form and substance satisfactory
to the purchaser, acting reasonably. Notwithstanding the
foregoing, if the purchaser is the Corporation, the
Corporation shall concurrently with the completion of the
sale, pay the amount of the Shareholder Debt owed to the
vendor on closing in the manner provided in Section 5.2.1
against delivery of a release in favour of the Corporation of
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such indebtedness, such release to be in form and substance
satisfactory to the Corporation, acting reasonably.
5.2.7 LIABILITY AS GUARANTOR. If, at the time of sale, the vendor is
liable or responsible as a guarantor for any debts,
liabilities or obligations of the Corporation, the purchaser
shall use reasonable efforts to cause all such guarantees to
be released at or before the time of sale and, if the
purchaser is unable to effect the release of such guarantees,
the purchaser shall execute and deliver in favour of the
vendor an indemnity, in form and substance satisfactory to the
vendor, acting reasonably, whereby the purchaser indemnifies
and saves harmless the vendor from all claims arising out of
such guarantees. If the purchaser is the Corporation, the
other Shareholders shall execute and deliver in favour of the
vendor an indemnity in form and substance and to the same
effect as provided in the immediately preceding sentence.
5.2.8 FAILURE TO COMPLETE SALE. If, at the time of closing, the
vendor shall not complete the sale for any reason, the
purchaser shall have the right to deposit the purchase price
for the Shares and Shareholder Debt, if any, to be purchased
and sold for the account of the vendor in an account with the
bankers of the Corporation and such deposit shall constitute
valid and effective payment of the purchase price to the
vendor. Thereafter the purchaser shall have the right to
execute and deliver any deeds, stock transfers, assignments,
resignations, acting reasonably, releases and other documents
as may, in the opinion of the purchaser, be necessary or
desirable in order to complete the transaction. If payment of
the purchase price is so deposited, then from and after the
date of deposit, notwithstanding that certificates or
instruments evidencing the Shares or Shareholder Debt may not
have been delivered to the purchaser, the purchase of the
Shares and Shareholder Debt, if any, shall be deemed to have
been fully completed and the records of the Corporation shall
be amended accordingly and all right, title, benefit and
interest, both at law and in equity, in and to the Shares and
Shareholder Debt shall be conclusively deemed to have been
transferred and assigned to and become vested in the purchaser
and all right, title, benefit and interest of the vendor and
of any other Person (other than the purchaser) having any
interest therein, legal or equitable, in any capacity
whatsoever shall cease.
5.2.9 PURCHASER APPOINTED AS ATTORNEY. Each Shareholder hereby
appoints, in the event that such Shareholder is a vendor of
Shares or Shareholder Debt hereunder, each other Shareholder
who may from time to time be a purchaser of Shares or
Shareholder Debt hereunder, as the vendor's attorney, with
full power of substitution, in the name of the vendor but on
behalf of and at the expense of the purchaser, to execute and
deliver all deeds, transfers, assignments and assurances
necessary to effectively transfer the interest being sold to
the purchaser or its nominees. Such appointment, being coupled
with an interest, is irrevocable by each Shareholder and shall
not be revoked by the insolvency, bankruptcy, death,
incapacity, dissolution, liquidation or other termination
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of the existence of such Shareholder and each Shareholder
agrees to ratify and confirm all that a purchaser may do or
cause to be done pursuant to the foregoing. Each Shareholder
consents to any transfer of Shares made pursuant to the
foregoing.
5.2.10 TAXES. At the time of the sale, the vendor shall provide to
the purchaser either:
5.2.10.1 a statutory declaration of the owner(s) of the Shares
being sold that such owner(s) is not a non-resident of
Canada for purposes of the INCOME TAX ACT (Canada); or
5.2.10.2 a certificate from Canada Customs and Revenue Agency under
Section 116 of the INCOME TAX ACT (Canada) or any
successor provision certifying that all taxes payable in
connection with the transaction have been paid or that no
taxes are payable in respect of the transaction,
provided that if no declaration or certificate is delivered by
the vendor, the purchaser shall be entitled to deduct from the
purchase price payable to the vendor an amount equal to the
amount of tax for which the purchaser may be liable (as
determined solely by the purchaser) under the INCOME TAX ACT
(Canada).
5.2.11 TRANSFEREE SHAREHOLDERS. In the event that, pursuant to any
provisions of this Agreement, a Shareholder shall be permitted
to sell, assign, transfer or convey any of its Shares to any
person other than any one or more of the other Shareholders,
no such transfer shall be made or shall be effective and no
application shall be made to the Corporation to register any
such transfer until the proposed transferee becomes a party to
this Agreement or enters into a participation agreement in
favour of the other parties agreeing to be bound as a
Shareholder to the same effect as this Agreement and any
further agreement with respect to the Corporation to which the
transferor is then, or is then required to be, a party.
ARTICLE 6
NON-COMPETITION AND CONFIDENTIALITY
6.1 NON-COMPETITION
In consideration of the entering into of this Agreement, RoyNat Capital
and BMOCC making an equity investment in loan to the Corporation and for other
good and valuable consideration, the receipt and sufficiency of which is
acknowledged by MDC, for so long as MDC holds any Shares and for a period of
three (3) years from the date on which MDC ceases to hold any Shares or shares
of a Dreamlife Entity (whichever is later), MDC shall not, directly or
indirectly, in any manner
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whatsoever including, without limitation, either individually, or in
partnership, jointly or in conjunction with any other Person, or as employee,
principal, agent, director or shareholder:
6.1.1 be engaged in any undertaking;
6.1.2 have any financial or other interest (including an interest by
way of royalty or other compensation arrangements) in or in
respect of the business of any Person which carries on a
business; or
6.1.3 advise, lend money to or guarantee the debts or obligations of
any Person which carries on a business;
in the designated area the principal activity of which is the
sale and distribution principally through its independent
selling representatives or fund-raising
activities/representatives of consumer merchandise that is the
same as or substantially similar to or which competes with the
business carried on by the Corporation or any of its
Subsidiaries during the relevant period or on the date on
which MDC ceases to hold any Shares or shares of a Dreamlife
Entity (whichever is later), as the case may be.
For the purposes of this Agreement, "DESIGNATED AREA" means Canada.
Nothing in this section shall prevent MDC, after the date on which it
ceases to hold any Shares or shares of a Dreamlife Entity (whichever is later)
from owning not more than 5% of the issued shares of a corporation, the shares
of which are listed on a recognized stock exchange or traded in the over the
counter market in Canada or the United States, which carries on a business which
is the same as or substantially similar to or which competes with the business
of the Corporation or any of its Subsidiaries.
Each of the parties to this Agreement agrees that all restrictions in
this Agreement are necessary and fundamental to the protection of the business
carried on by the Corporation and that all such restrictions are reasonable and
valid, and all defenses to the strict enforcement thereof by any of the parties
hereto are hereby waived.
6.2 NON-SOLICITATION OF EMPLOYEES
For a period of three (3) years from the date on which MDC ceases to
hold any Shares or shares of a Dreamlife Entity (whichever is later), MDC shall
not:
(a) hire, offer employment to or solicit the employment or
engagement of or otherwise entice away from the employment of
the Corporation or any of its Subsidiaries any individual who
is employed by the Corporation or any of its Subsidiaries at
the time
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that such person ceases to be an employee of the Corporation
or any of its Subsidiaries, whether or not such individual
would commit any breach of his contract or terms of employment
by leaving the employee of the Corporation or any of its
Subsidiaries; or
(b) procure or assist any Person to employ, offer employment or
solicit the employment or engagement of or otherwise entice
away from the employment of the Corporation or any of its
Subsidiaries any individual who is employed by the Corporation
or any of its subsidiaries at the time that such Person ceases
to be an employee of the Corporation or any of its
Subsidiaries whether or not such individual would commit any
breach of his contract or terms of employment by leaving the
employ of the Corporation or any of its Subsidiaries.
6.3 NON-SOLICITATION OF CUSTOMERS
For a period of three (3) years from the date on which MDC ceases to
hold any Shares, or shares of a Dreamlife Entity (whichever is later), MDC shall
not, on his or her own behalf or on behalf of or in connection with any other
Person, directly or indirectly, in any capacity whatsoever including as an
employer, employee, principal, agent, joint venturer, partner, shareholder or
other equity holder, independent contractor, licensor, licensee, distributor,
supplier, partnership, trust, unincorporated association, or otherwise in
connection with the Corporation's or any of its Subsidiaries' business:
(a) canvass or visit the business of (or procure or assist the
canvassing or soliciting of the customer of) any customer of
the Corporation or any of its Subsidiaries;
(b) accept (or procure or assist the acceptance of) any business
from any customer of the Corporation's or any of its
Subsidiaries' business;
(c) canvass or solicit the business of (or procure or assist the
canvassing or soliciting of the custom of) any Prospective
Customers;
(d) accept (or procure or assist the acceptance of) any business
from any Prospective Customers;
(e) supply (or procure or assist the supply of) any goods or
services to any customer; or
(f) supply (or procure or assist the supply of) any goods or
services to any Prospective Customer.
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6.4 CONFIDENTIALITY
6.4.1 Each shareholder agrees that it shall not, without the prior
written consent of the Corporation, directly or indirectly
communicate or disclose to any Person, or use for any purpose
other than in furtherance of the Corporation's business (or
the Shareholder's own internal and non-competitive business
purposes, and then only to its own employees or advisors), any
knowledge or information acquired by such Shareholder relating
to or concerning the technology, trade secrets, systems or any
other confidential information regarding the property,
business or affairs of the Corporation or any Subsidiaries,
nor shall it utilize or make available any such knowledge or
information, directly or indirectly, in connection with the
Transfer or proposed Transfer of any of its Shares (except as
permitted pursuant to this Section) or in connection with the
solicitation or acceptance of employment with any competitor
of the Corporation. Each Shareholder who is (or whose
Controlling shareholder is) a Corporation employee, agrees to
deliver to the Corporation all documents and other media
containing any confidential or proprietary information of the
Corporation without retaining any copies thereof upon ceasing
to be employed by the Corporation. For greater certainty, the
foregoing obligations are in addition to any other
confidentiality obligations under any employment or other
agreement;
6.4.2 In connection with any Transfer or proposed Transfer of its
Shares, a Shareholder may disclose confidential information
described above only after (i) obtaining the consent of a
majority of the board of directors of the Corporation, and
(ii) the execution by the Shareholder and proposed transferee
and the Corporation of a suitable non-disclosure agreement
protecting the Corporation from any subsequent disclose of
such information on a basis inconsistent with this paragraph
by the Person to whom such information is proposed to be
disclosed;
6.4.3 The foregoing provisions shall not apply to information: (i)
which is in the public domain; (ii) which is disclosing party
can demonstrate through appropriate documentation was
previously known to the disclosing party; (ii) which the
disclosing party learned from the source other than the
Corporation or a Shareholder, and without violation of this or
any other non-disclosure obligation; or (iv) which is required
to be disclosed by operation of law or the decision or order
of a court or tribunal of valid jurisdiction.
6.4.4 Each party acknowledges that disclosure of any confidential
information regarding the Corporation in contravention of this
Section may cause significant harm to the Corporation and that
remedies at law may be inadequate to protect against a breach
of this Section. Accordingly, each party agrees that the
Corporation shall be entitled, in addition to any other relief
available to it, to the granting of injunctive relief without
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proof of actual damages or the requirement to establish the
inadequacy of any of the other remedies available to it. Each
party covenants not to assert any defence in proceedings
regarding the granting of an injunction or specific
performance based on the availability to the Corporation of
any other remedy.
Each Shareholder acknowledges and agrees that the obligations under
this Section 6.5 are to remain in effect in perpetuity.
6.5 OBLIGATIONS NOT EXHAUSTIVE
Each Shareholder acknowledges that the obligations contained in this
Article are not in substitution for any obligations which such Shareholder may
now or hereafter owe to the Corporation or any Shareholder and which other
obligations exist apart from this Article and that the obligations contained in
this Article do not replace any rights of the Corporation or any Shareholder
with respect to any such other obligation.
6.6 REMEDIES
Each Shareholder acknowledges that a breach or threatened breach by
such Shareholder of any provision of this Article 6 will result in the
Corporation and the other Shareholders suffering irreparable harm which cannot
be calculated or fully or adequately compensated by recovery of damages alone.
Accordingly, each Shareholder agrees that the Corporation and any other
Shareholder shall be entitled to interim and permanent injunctive relief,
specific performance and other equitable remedies, in addition to any other
relief to which the Corporation or any other Shareholder may become entitled.
ARTICLE 7
GENERAL PROVISIONS
7.1 ALL SHARES SUBJECT TO THIS AGREEMENT
Each of the Shareholders agrees that he shall be bound by the terms of
this Agreement with respect to all Shares held by him from time to time.
7.2 INDEMNITY BY THE CORPORATION
To the fullest extent permitted by law, the Corporation shall indemnify
all directors, officers, former directors and former officers of the
Corporation, the Shareholders of the Corporation to the extent that such
Shareholders exercise the rights, powers, duties and liabilities of a director
of the Corporation and all persons who act or acted at the Corporation's request
as a director or officer of a body corporate of which the Corporation is or was
a shareholder or creditor, and his heirs and legal personal representatives,
against all costs, charges and expenses, including any amount paid to settle
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any action or satisfy a judgment, reasonably incurred by him in respect of any
civil, criminal or administrative action or proceeding to which he is made a
party of reason of being or having been a director or officer of the Corporation
or such body corporate or by reason of acting or having acted as a director of
the Corporation if,
7.2.1 he acted honestly and in good faith with a view to the best
interests of the Corporation; and
7.2.2 in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he had
reasonable grounds for believing that his conduct was lawful.
The intention of this section is that all persons referred to in this
section shall have all benefits provided under the indemnification provisions of
the Act to the fullest extent permitted by law and the Corporation shall
forthwith pass all resolutions and take such other steps as may be required to
give full effect to this section.
7.3 BUSINESS AND DIRECTORS' INSURANCE
The Corporation and its Subsidiaries shall obtain and maintain
insurance upon all of its property and assets subject to those terms and
conditions and against those risks and losses and including such coverage as
hereinafter set out:
(a) "ALL RISKS" coverage including fire, extended coverage,
business interruption, vandalism or malicious mischief are as
usual and customary for the industry in which the Corporation
and its Subsidiaries carry on business and for a corporation
of similar size;
(b) broad from boiler and machinery insurance on all buildings
where such pressure vessels exist extending to and including
all air conditioning and miscellaneous electrical equipment
and apparatus; and
(c) comprehensive director's and officer's insurance for an amount
not less than ten million Dollars ($10,000,000) for any one
(1) occurrence and general liability insurance for an amount
not less than five million Dollars ($5,000,000) for any one
(1) occurrence and including all required extension of
liability.
In addition to the insurance required to be obtained and maintained by
the Corporation pursuant to this Section 7.3, the Corporation shall also effect
and maintain directors' and officers' liability insurance in such amount as may
be mutually agreed upon by the Shareholders for an amount of not less than five
million Dollars ($5,000,000) for any one occurrence and fifteen million Dollars
($15,000,000) in the aggregate and including all required extensions of
liability or such greater amount and for such other or additional perils as is
determined by the board of directors.
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7.4 TERM
This Agreement shall come into force and effect as of the date set out
on the first page of this Agreement and, except as provided below, shall
continue in force until the earlier of.
(a) the date on which one Shareholder holds all the Shares;
(b) the winding up or dissolution of the Corporation;
(c) the date on which this Agreement is terminated by written
agreement of all the Shareholders; and
(d) later of the date of the completion of a Qualifying Public
Offering and the date on which the Shares are listed and
posted for trading on The Toronto Stock Exchange, the Canadian
Venture Exchange, the New York Stock Exchange, Nasdaq National
Market or any other recognized stock exchange in North
America.
For greater certainty, the provisions of Article 6 shall not terminate
upon the termination of this Agreement.
7.5 TERMINATION NOT TO AFFECT RIGHT OR OBLIGATIONS
A termination of this Agreement shall not affect or prejudice any
rights or obligations which have accrued or arisen under this Agreement prior to
the time of termination and such rights and obligations shall survive the
termination of this Agreement.
7.6 ARBITRATION
If any dispute or question (a "DISPUTE") shall arise between the
parties hereto or any of them concerning the interpretation of this Agreement or
any part thereof, such parties shall attempt in good faith to resolve such
dispute. If the parties have not agreed to a settlement of the dispute within
thirty (30) days from the date on which the dispute first became known to all
the parties, then the parties agree that the dispute shall be submitted to
arbitration pursuant to the ARBITRATION ACT, 1991 (Ontario). Such dispute shall
not be made the subject matter of an action in any court by any party unless the
dispute has been first submitted to arbitration and finally determined in
accordance with the provisions of Schedule A. Any such action commenced
thereafter shall only be for the purpose of enforcing the decision of the
arbitrators and the costs incidental to the action. In any such action, the
decision of the arbitrators shall be conclusively deemed to determine the rights
and liabilities as between the parties to the arbitration in respect of the
matter in dispute.
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7.7 NOTICES
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall by given by prepaid first-class mail, by
facsimile or other means of electronic communication or by delivery as hereafter
provided. Any such notice or other communication. If mailed by prepaid
first-class mail at any time other than during a general discontinuance of
postal service due to strike, lockout or otherwise, shall be deemed to have been
received on the fourth Business Day after the post-marked date thereof, or if
sent by facsimile or other means of electronic communication, shall be deemed to
have been received on the Business Day following the sending, or if delivered by
hand shall be deemed to have been received at the time it is delivered to the
applicable address noted below either to the individual designated below or to
an individual at such address having apparent authority to accept deliveries on
behalf of the addressee. Notice of change of address shall also be governed by
this section. In the event of a general discontinuance of postal service due to
strike, lock-out or otherwise, notices or other communications shall be
delivered by hand or sent by facsimile or other means of electronic
communication and shall be deemed to have been received in accordance with this
section. Notices and other communications shall be addressed as follows:
(a) if to MDC
45 Hazelton Avenue
Toronto, Ontario
M5R 2E3
Facsimile number: (416) 960-9555
with a copy to MDC's counsel at;
Lang Michener
BCE Place, P.O. Box 747
Suite 2500
181 Bay Street
Toronto, Ontario
M5J 2T7
Attention: Patrick J. Phelan
Facsimile number: (416) 365-1719
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(b) if to RoyNat Capital:
RoyNat Capital Inc.
26th Floor, Scotia Plaza
40 King Street West
Toronto, Ontario
M5H 1H1
Attention: Silvio Marsili
Director of Merchant Banking
Facsimile number: (416) 933-3238
with a copy to RoyNat Capital's counsel at:
Chaiton & Cahiton LLP
185 Sheppard Avenue West
Toronto, Ontario
M2N 11M9
Attention: Harvey Tanzer
Facsimile number: (416) 218-1838
(c) if to the Corporation:
365 South Street
Morristown, New Jersey
USA, 07962
Attention: Anthony R. Calandra
Facsimile number: (973) 644-4551
with a copy to the Corporation's counsel at:
Goodmans LLP
250 Yonge Street
Suite 2400
Toronto, Ontario
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Attention: Neill May
Fax: (416) 979-1234
(d) if to BMOCC:
Bank of Montreal Capital Corporation
302 Bay Street
7th Floor
Toronto, Ontario
M5X 1A1
Attention: Mark Shoniker
Facsimile number: (416) 867-4108
Notwithstanding the foregoing, any notice or other communication
required or permitted to be given by any party pursuant to or in connection with
any arbitration procedures contained in any Schedule hereto may only be
delivered by hand or facsimile or other means of electronic communication.
The failure to send or deliver a copy of a notice or other
communication to counsel to each of the parties hereto, as the case may be,
shall not invalidate any notice given under this section.
7.8 AMENDMENTS
This Agreement may only be amended by an agreement in writing between
all the parties hereto. All legal costs associated with any such amendment shall
be borne by the Corporation.
7.9 COUNTERPARTS
This Agreement may be signed in counterparts and each of such
counterparts shall constitute an original document and such counterparts, taken
together, shall constitute one and the same instrument. Counterparts may be
executed either in original or faxed form and the parties adopt any signatures
received by a receiving fax machine as original signatures of the parties;
provided, however, that any party providing its signature in such manner will
promptly forward to the other party an original of the signed copy of this
Agreement which was so faxed.
7.10 ENUREMENT
This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. The
Shareholders acknowledge that any particular
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Investing Shareholder may assign all or part of its interest in the relevant
Investing Shareholder Warrants and the relevant Investing Shareholder Debenture
to another financial institution or an Affiliate thereof or other Person in the
business or providing debt and/or equity financing and if so assigned, the
assignee shall have and be entitled to exercise any and all discretions, rights
and powers hereunder which are for the benefit of the particular Investing
Shareholder, and all references herein to the particular Investing Shareholder
shall include such assignee. At the request of the particular Investing
Shareholder or the Assignee, a revised form of this Agreement shall be prepared
specifically reflecting and referencing the assignee's entitlement to such
discretion, rights and powers and the parties hereto shall execute same and in
particular conforming this Agreement to reflect the name of the assignee in
addition to that where the particular Investing Shareholder appears, as the
context requires.
IN WITNESS WHERE OF the parties have executed this Agreement.
MDC CORPORATION INC.
By:
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RGGA ACQUITION INC.
By:
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ROYNAT CAPITAL INC.
By:
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REGAL GREETINGS & GIFTS CORPORATION
By:
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BANK OF MONTREAL CAPITAL CORPORATION
By:
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SCHEDULE A
ARBITRATION PROCEDURES (SECTION 7.6)
1. As used in this Schedule, the term "Arbitrators" means the Sole Arbitrator
appointed pursuant to section 3 of this Schedule or the Arbitration Board
appointed pursuant to section 4 of this Schedule, as the case may be.
2. Where any dispute, which, pursuant to Section 7.6 of the Agreement, is to be
settled by arbitration (the "MATTER"), the provisions of this Schedule shall
govern the arbitration of the Matter exclusively and shall constitute a
submission for the purposes of the Arbitration Act (Ontario).
3. Arbitration shall be commenced by a Shareholder (the "COMPLAINANT")
delivering a written complaint (the "COMPLAINT") to the other Shareholders and
the Corporation describing the Matter and appointing an arbitrator. Within five
(5) days of the receipt of the Complaint, the other Shareholders may, by notice
to the Complainant, concur in the appointment of that arbitrator or may appoint
an additional arbitrator, and failing the delivery of such notice by the other
Shareholders, the other Shareholders shall be deemed to have concurred in the
appointment of the arbitrator appointed by the Complainant and such arbitrator
shall determine the Matter acting along (the "SOLE ARBITRATOR").
4. If the other Shareholders appoint an additional arbitrator pursuant to
section 3 of this Schedule, then, within five (5) days of the appointment of
such additional arbitrator, the arbitrators so appointed shall agree on the
appointment of an additional arbitrator as chairperson (the "CHAIRPERSON"), and
they shall forthwith notify the Complainant and the other Shareholders of such
appointment, failing which the Chairperson may be appointed by a judge of the
Superior Court of Justice on the application of either the Complainant or the
other Shareholders, on notice to the other. Upon such appointment of the
Chairperson, the Chairperson and the other arbitrators previously appointed
shall constitute the Arbitration Board.
5. Any decision of the Arbitrators made with respect to the Matter or with
respect to any aspect of, or any matter related to, the arbitration hereunder
(including, without limitation, the procedures of the arbitration) shall be made
by either the Sole Arbitrator or by the majority of the Arbitration Board (or in
default of agreement by such majority, then by the Chairperson), as the case may
be. All decisions of the Arbitrators with respect to the Matter shall be
rendered in writing and shall contain a brief recital of the facts upon which
the decision is made and the reasons therefor.
6. The following shall apply to the arbitration of any Matter:
(a) within ten (10) days of the appointment of the Arbitrators,
the Complainant shall deliver to the other Shareholders and
the Arbitrators a written statement (the "CLAIM") concerning
the matter setting forth, with particularity, its position
with respect to the Matter and the material facts upon which
it intends to rely;
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(b) within five (5) days after the delivery of the Claim, the
other Shareholders shall deliver to the Complainant and the
Arbitrators a written response (the "ANSWER") to the
Complainant setting forth, with particularity, its position on
the Matter and the material facts upon which it intends to
rely;
(c) if the other Shareholders fail to deliver an Answer within the
time limit referred to in (b) above, the other Shareholders
shall be deemed to have admitted the Claim;
(d) Within five (5) days after the delivery of the Answer, the
Complainant may deliver to the other Shareholders and the
Arbitrators a written reply (the "REPLY") to the Answer,
setting forth, with particularity, its response, if any, to
the Answer;
(e) Within the time provided for the delivery of the Answer to the
Claim, the other Shareholders may also deliver to the
Complainant and the Arbitrators a counter-complaint (the
"Counter-Complaint") setting forth, with particularity, any
additional Matter for the Arbitrators to decide. Within five
(5) days of the delivery of a Counter-Complaint, the
Complainant shall deliver to the other Shareholders and the
Arbitrators an Answer to such Counter-Complaint. If the
Complainant fails to deliver an Answer to the
Counter-Complaint with such five (5) day period, the
Complainant will be deemed to have admitted the
Counter-Complaint. Within five (5) days after the delivery of
an Answer to the Counter-Complaint, the other Shareholders may
deliver to the Complainant and the Arbitrators a Reply to such
Answer. Any Matter submitted to arbitration in accordance
with this subsection (e) shall be governed by, and dealt with
as if it were the subject of a Complaint in accordance with,
this Schedule, except that it shall be deemed a submission to
the Arbitrators already appointed, and shall be determined by
the Arbitrators accordingly;
(f) the time limits set for the delivery of the documents referred
to in subsections (a) to (e) inclusive of this section 6 may
be extended by the Arbitrators for such period and for such
reasons as they in their discretion may determine upon
application made to them by either the Complainant or the
other Shareholders, as the case may be, on notice to the
other, either before the expiry of the time limit in issue or
within two (2) days thereafter and, in the event that the
other wishes to oppose the application, it or they shall be
given an opportunity to make submissions on the application;
(g) upon completion of the foregoing steps in this section 6 or
upon the expiry of the time limit provided therefor if a step
provided for in this section 6 is not taken by such time,
either the Complainant or the other Shareholders may make
application to the Arbitrators to convene a preliminary
hearing for determination of the following:
(i) appointing the time, date and place in Ontario for the
hearing (the "HEARING") of the Matter;
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(ii) arranging for the production of documents pertaining to
the Matter as between the Complainant and the other
Shareholders;
(iii) arranging for the delivery of and answers to written
interrogatories pertaining to the Matter as between the
Complainant and the other Shareholders; and
(iv) prescribing such additional rules and procedures
considered by the Arbitrators to be necessary or
desirable for the conduct of the arbitration (including,
without limitation, compulsion of witnesses and discovery
under oath); and
(h) the Arbitrators shall at the time and place appointed by the
Arbitrators pursuant to subsection (g) of this section 6 or as
they may subsequently direct, convene the Hearing and shall,
after the Hearing, determine the Matter or Matters submitted
to them and make their award.
7. Every claim or award of the Arbitrators made pursuant hereto shall be final
and binding upon the Complainant, the Corporation and the other Shareholders and
there shall be no appeal therefrom. The Arbitrators shall have jurisdiction to
award the costs of the arbitration, including the fees of the Arbitrators, as
between the Complainant, the Corporation and the other Shareholders and as among
the other Shareholders as the Arbitrators see fit, and to direct the payment of
interest in respect of any award at such rates and from and to such dates as are
determined by the Arbitrators to be appropriate.
8. Each of the Arbitrators shall be paid their normal professional fees for
their time and attendances in dealing with the Matter, which fees, unless
otherwise directed by the Arbitrators in accordance with section 7 of this
Schedule, shall be paid equally by the Complainant and the other Shareholders.
9. All notices and all other documents required or permitted by this Schedule to
be given by the Complainant or the other Shareholders to the other of them or to
the Corporation shall be given in accordance with Section 7.6 of the Agreement.
All notices and all other documents required or permitted by this Schedule to be
given by the Complainant, the Corporation or the other Shareholders to the
Arbitrators shall be given in accordance with the Arbitrators' instructions.
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SCHEDULE B
[ATTACH ARTICLES OF INCORPORATION AND ANY ARTICLES OF AMENDMENT.]
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SCHEDULE C
CALCULATION OF FAIR MARKET VALUE
1. Immediately following the receipt of a notice under Section 4.6.2 from any
particular Investing Shareholder that it elects not to consent to any particular
Dreamlife Transaction, the Corporation shall instruct the Auditors to prepare
and deliver to the vendor and purchaser under the sale transaction, within a
period of 45 days from the date of its appointment by the Corporation, a draft
report setting forth the auditor's estimate as to the Fair Market Value of the
Common Shares and the basis upon which such estimate has been calculated
("AUDITORS'S REPORT").
2. If the estimate of the Fair Market Value of the Common Shares set forth in
the Auditor's Report is acceptable to the vendor and purchaser and agreed to in
writing within a period of thirty (30) days following delivery of the draft
Auditor's report to the vendor and purchaser, the Auditor's shall deliver the
Auditor's Report in final form and it shall become the Fair Market Value of the
Common Shares for the purposes of the sale transaction to which it relates.
3. If the statement of the Fair Market Value set forth in the Auditor's Report
is unacceptable to the vendor or the purchaser, they shall negotiate
expeditiously and in good faith during such 30-day period to arrive at a
mutually agreeable Fair Market Value. If such agreement is reached, the amount
so determined and agreed shall become the Fair Market Value of the Common Shares
for purposes of the sale transaction to which it relates.
4. If the vendor and purchaser are unable to agree as to the Fair Market Value
of the Common Shares within such 30-day period, the vendor and purchaser shall
immediately thereafter designate a Person who is at Arm's Length to the parties
as their representative and the Person shall select an independent, qualified
business valuator (who holds the designation of a Chartered Business Valuator)
by a majority decision (the "VALUATOR") for a final determination as to the Fair
Market Value of the Common Shares.
5. The Valuator so selected shall determine the Fair Market Value of the Common
Shares as quickly as practicable after the date of his selection. The Valuator
may also have regard to any representations which either the vendor or the
purchaser wish to make. The Valuator shall deliver its report concerning the
Fair Market Value of the Common Shares to the vendor and purchaser ("VALUATOR'S
REPORT") and such report shall be conclusive and binding on the seller and
purchaser. The Fair Market Value so determined shall become the Fair Market
Value of the Common Shares for purposes of the sale transaction. In determining
the Fair Market Value of the Common Shares, the Valuator shall also be
considered as an expert and shall not be construed as acting as an arbitrator
within the meaning of the ARBITRATIONS ACT, 1991 (Ontario).
6. The costs and expenses of the Auditor incurred in connection with
preparation of the Auditor's Report shall be paid by the Corporation. The costs
and expenses of the Valuator incurred in connection with preparation of the
Valuator's Report shall be shared equally by the vendor and
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the purchaser, unless the Fair Market Value of the Common Shares, as calculated
by the Valuator, differs by less than 20% from the Fair Market Value of the
Common Shares as determined by the Auditor, in which case the party requesting
the Valuator shall pay the costs and expenses of the Valuator incurred in
connection with preparation of the Valuator's Report.
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SCHEDULE D
PARTICIPATION AGREEMENT
THIS AGREEMENT made as of the _ day of _____, 200_, by and between __,
having its principal place of business at __ (the "CORPORATION"), and ______
[of/having ____________ [OF HAVING A PRINCIPAL PLACE OF BUSINESS AT]
__________________ (the "NEW SHAREHOLDER") _______.
All capitalized terms herein have the meanings ascribed thereto in the Amended
and Restated Unanimous Shareholders' Agreement dated as of o, 200o among o (the
"AGREEMENT").
WHEREAS the New Shareholder wishes to purchase Shares and become a
Shareholder in the Corporation;
AND WHEREAS pursuant to Section 3.5 of the Agreement, each additional
Shareholder must become a party to the Agreement hereby;
NOW THEREFORE, in consideration of the transfer and sale of Shares to
the New Shareholder by o and the acceptance and recognition thereof by the
Corporation to the New Shareholder, the mutual covenants contained herein and
other good and valuable consideration, the parties agree as follows:
1. STATUS OF SHAREHOLDER: the New Shareholder agrees and acknowledges that
he is a Shareholder, as such term is defined in the Agreement, and has
all the general rights, privileges, restrictions and obligations of a
Shareholders under the Agreement.
2. AGREEMENT TO BE BOUND: Pursuant to Section 3.5 of the Agreement, the
New Shareholder agrees to be bound by all of the terms, conditions and
provisions of the Agreement and hereby agrees to become party thereto.
3. GENERAL: The provisions of Article 7 of the Agreement apply to this
agreement mutatis mutandis (with necessary changes in details).
IN WITNESS WHEREOF, the parties have caused this agreement to be
signed, sealed and delivered as of the first date written above.
By:
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Name:
Title:
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By:
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Name:
Title:
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Witness [Name]
By:
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Name:
Title: