EXHIBIT 4.5
KWIKSTAR COMMUNICATIONS LTD. SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT is made as of April 4, 1996.
AMONG:
MPR TELTECH LTD.
(hereinafter referred to as "MPR")
OF THE FIRST PART
AND:
CIBC WOOD GUNDY CAPITAL (SFC) INC.
(hereinafter referred to as "CWG")
OF THE SECOND PART
AND:
945 INVESTMENTS LTD.
(hereinafter referred to as "945")
OF THE THIRD PART
WHEREAS:
A. MPR, CWG and 945 are each major shareholders in the Corporation; and
B. The parties wish to enter into this Shareholders' Agreement to secure
continuity of management and policy of the business and affairs of the
Corporation.
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THIS AGREEMENT WITNESSES that the parties agree as follows:
ARTICLE 1
INTERPRETATION
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1.1 DEFINITIONS. The following words shall have the following meanings in
this Agreement:
(a) "ACT" means the Alberta Business Corporations Act, S.A. 1981, c. B-15,
as amended from time to time and any successor legislation;
(b) "AFFILIATE" means:
(i) with respect to a natural person, the spouse of such person, any
corporation that is directly or indirectly controlled by such
person and any corporation that employs such person as a
director, officer or employee; and
(ii) with respect to a corporation an affiliate of such corporation
within the meaning of "affiliated" under Section 2(1) of the Act;
(c) "AGREEMENT" means this Agreement, its schedules and exhibits, and any
amendments or modifications to this Agreement; references to Sections
are to Sections in this Agreement;
(d) "ARTICLES" means the Articles of Incorporation of the Corporation,
including all amendments and restatements thereto;
(e) "BUSINESS DAY" means any day other than Saturday, Sunday or any
statutory holiday in either of the Provinces of British Columbia,
Alberta, or Ontario, Canada.
(f) "COMMON SHARES" means the common shares of any series in the capital
of the Corporation, as set forth in the Articles;
(g) "CONTROL" of any entity by any Person shall be deemed to exist if such
entity would be deemed to be controlled directly or indirectly by such
Person or Persons pursuant to the terms of the Act;
(h) "CORPORATION" means Kwikstar Communications Ltd.;
(i) "DCI" means Digital Courier International Inc.;
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(j) "DIRECTORS" means the directors from time to time of the Corporation;
(k) "DISABILITY" means the mental or physical state of an individual such
that:
(i) the Directors, other than such individual, determine that such
individual has been unable, due to mental or physical
disability or similar cause, to fulfil his or her obligations
as an employee, officer or director of the Corporation either
for any consecutive 6 month period or for any period of eight
months (whether or not consecutive) in any consecutive twelve
month period;
(ii) if such individual is a Director, such individual would be
disqualified under the Act from acting as a Director; or
(iii) a court has declared such individual to be mentally incompetent
or incapable of managing his or her affairs;
(l) "EQUITY SECURITY" has the meaning ascribed thereto in Part 13 of the
Securities Act (Alberta) and also means any right to convert into,
exchange for, or subscribe for any equity security directly or
indirectly;
(m) "FISCAL YEAR END" means September 30 in each year, and "Fiscal Year"
means the period starting the day after a Fiscal Year End and ending
on the next Fiscal Year End;
(n) "OUTSIDE DIRECTOR" means a natural person who is not:
(i) an officer or employee of the Corporation or any of its
Affiliates;
(ii) a Shareholder; or
(iii) a shareholder, director, officer or employee of a Shareholder
or of any of its Affiliates;
(o) "PERFORMANCE INCENTIVE PLAN" means the performance incentive plan
established by DCI pursuant to which employees of DCI hold a
beneficial interest in Common Shares of the Corporation;
(p) "PERSON" means any individual, partnership, corporation, trust,
trustee, executor, administrator or other legal personal
representatives;
(q) "PREFERRED SHARES" means the Preferred Shares, Series 1, in the
capital of the Corporation, as described in the Articles;
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(r) "PRINCIPAL OFFICERS" means the Corporation's Chairman and Chief
Executive Officer and Vice President of Finance, which shall be E. Lynn
Patterson and Edward Ford on the date of this Agreement and such other
principal officers of the Corporation as the Board of Directors of the
Corporation may from time to time determine for purposes of this
Agreement;
(s) "SHAREHOLDERS" means MPR, CWG and 945 collectively, and "Shareholder"
means any of MPR, CWG, and 945;
(t) "SHARES" means the Common Shares and the Preferred Shares and includes
(1) any securities into which such Shares may be converted or which
result from a consolidation, subdivision, reclassification or
redesignation of the Shares, (2) any securities received as a dividend
or distribution, or on the exercise of any option, warrant or other
similar right, (3) any securities received as a result of an
amalgamation, consolidation, arrangement, merger, or other
reorganization of the Corporation and (4) any instrument of the
Corporation that is convertible into or exercisable for Shares; and
(u) "SPECIAL PERIOD" means any period or periods of time commencing on any
of the following dates:
(i) December 31, 1996, in the event that DCI shall service less
than 1,200 radio stations by such date; and
(ii) December 31, 1997, in the event that DCI shall have had non-
consolidated pre-tax losses in 1996 of $2,000,000 or greater
(excluding amortization of deferred costs at DCI's start-up and
financing charges) and shall have had any (non-consolidated)
pre-tax loss or losses in 1997, all as determined in accordance
with generally accepted accounting principles;
provided that any Special Period shall terminate upon the achievement
by DCI of pre-tax profits in any two consecutive quarters after the
commencement of such Special Period, such termination to be effective
as of the first day of the next succeeding quarter.
1.2 PERIOD TERMINATING ON A NON-BUSINESS DAY. In the event that a period
of time permitted under this Agreement to take any action shall terminate on a
day other than a Business Day, then such period shall be extended to the next
following Business Day.
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ARTICLE 2
BUSINESS AND AFFAIRS OF THE CORPORATION
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2.1 VOTING GENERALLY. Each of the Shareholders covenants and agrees at
all times to vote its Common Shares and use its best efforts and take all such
steps as may be reasonably required so as to cause the Corporation to act in the
manner contemplated by the provisions of this Agreement and to implement fully
the provisions of this Agreement and to the extent permitted by law, cause the
Board of Directors of the Corporation to so act.
2.2 CONSTITUTION OF BOARD OF DIRECTORS. Subject to Article 3 and Section
2.4, the Shareholders shall vote their Common Shares to elect two Directors as
nominated by MPR, two Directors as nominated by 945, one Director as nominated
by CWG and one Outside Director, who shall be nominated by majority resolution
of the other five nominees, provided that the size of the Board of Directors
shall not exceed six Directors.
2.3 REPLACEMENT AND REMOVAL OF DIRECTORS. If a Director (a "Retiring
Director") ceases to be a Director for any reason, other than pursuant to
Section 2.4, including Disability, the Shareholders shall use their best efforts
to cause their nominee Director(s) to vote to fill the resulting vacancy as soon
as reasonably possible, by electing a nominee of the party that originally
nominated that Retiring Director. Each Shareholder shall vote their Common
Shares for removal of a Director if proposed by the party who nominated such
Director. Each Shareholder shall vote their Common Shares against removal of a
Director unless the removal has been approved in writing by the party who
nominated such Director.
2.4 REDUCED BOARD REPRESENTATION. Notwithstanding Section 2.2, in the
event that any Shareholder's holdings of Common Shares shall be reduced so that
such Shareholder shall own:
(a) less than 15% of the Common Shares, but not less than 10% of the
Common Shares, such Shareholder shall only be entitled to nominate one
Director for election to the Board of Directors pursuant to this
Agreement; or
(b) less than 10% of the Common Shares, such Shareholder shall not be
entitled to nominate any Directors for election to the Board of
Directors pursuant to this Agreement.
Upon the occurrence of either of the events set out in subsections (a) and (b)
above, any Shareholder may request, and each Shareholder agrees to vote for, the
removal of the number of the Directors nominated by the Shareholder referred to
in such subsections that is required to reduce the number of nominees of such
Shareholder on the Board of Directors of the Corporation to the representation
set out in such subsections. In the event that Directors shall be removed
pursuant to this Section, such Directors shall not be replaced, and the size of
the Board of Directors and the entitlement of the Shareholder referred to in
subsections (a) and (b)
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above to nominate Directors pursuant to this Agreement shall be permanently
reduced by the number of Directors so removed and the Shareholders shall vote to
pass all resolutions necessary to give effect to this Section 2.4.
2.5 BY-LAWS GOVERN. Unless otherwise provided herein the conduct of the
business of the Corporation shall be governed in accordance with the By-laws of
the Corporation as amended from time to time.
2.6 QUORUM. The following provisions shall apply with respect to the
following matters:
(a) The Shareholders shall vote their Common Shares, and use their best
efforts to cause their nominee Directors to vote, to amend the By-laws
of the Corporation to provide that:
(i) a quorum required for the transaction of business, at a meeting
of the Board of Directors or any committee of the Board of
Directors, shall be at least three; and
(ii) where a quorum is not present within one hour of the time of
the meeting or ceases to be present at a duly called meeting or
adjourned meeting of the Board of Directors or any committee
thereof, or such meeting is adjourned as set out in the
preceding sentence, then such meeting shall be deemed to be
adjourned or further adjourned, for two weeks, to reconvene at
the same time and place; and
(b) Any meeting of the Board of Directors or any committee of the Board of
Directors shall require the attendance of at least one of the
Directors nominated by MPR, one of the Directors nominated by 945 and
one of the Directors nominated by CWG and where such Directors are not
present at any meeting the Shareholders shall use their best efforts
to cause their nominee Directors to vote to adjourn such meeting in
the manner set out above. Any adjourned or further adjourned meeting
of the Board of Directors or any committee of the Board of Directors
shall require the attendance of at least two Directors, nominated by
at least two of the three Shareholders, and where such Directors are
not present at any such meeting, the Shareholders shall use their best
efforts to cause their nominee Directors to vote to further adjourn
such meeting.
2.7 SPECIAL APPROVALS BY BOARD. The Shareholders shall vote their Common
Shares, and use their best efforts to cause their nominee Directors to vote, to
amend the By-laws of the Corporation to provide that, in addition to any other
approval that may be required at law or pursuant to the Articles, By-laws or
resolutions of the Corporation, the affirmative approval by
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express resolution of a 2/3 majority of the Directors shall be required for any
decision in respect of any of the following matters:
(a) any matter where the Corporation shall borrow any funds, or enter into
any capital lease;
(b) the issuance of any Equity Securities or any form of debt securities,
including any grant of options or sale of Shares pursuant to an
incentive plan of any kind and the terms applicable to such options
and/or incentive plans and any material amendment to a previously
granted option or right under an incentive plan but excluding any
issuance of Common Shares to MPR pursuant to any conversion of
Preferred Shares arising out of any redemption or retraction of the
Preferred Shares;
(c) any material change in the nature of the Corporation's business or the
entering into of any material contract other than in the ordinary
course of business;
(d) any amendment, alteration, variation in, addition to or any attempt to
repeal or restate the Articles or the By-laws of the Corporation;
(e) any amalgamation, arrangement, consolidation, merger or
reorganization, statutory or otherwise, or any transaction or scheme
outside the ordinary course of business, including the sale of all or
substantially all of the assets of the Corporation;
(f) any proceedings with respect to the winding-up, dissolution and/or
liquidation of the Corporation; and
(g) any redemption, repurchase, retraction or purchase for cancellation of
any Shares, excluding any redemption or redemptions of Preferred
Shares by the Corporation, any exercise by MPR of its right of
retraction of the Preferred Shares, and any repurchase of Common
Shares pursuant to the Performance Incentive Plan.
(h) approval of the annual operating budget plans established for the
Corporation in respect of any Fiscal Year;
(i) any capital or other expenditures that deviate from the annual
operating budget in respect of any Fiscal Year; and
(j) any matter dealing with a greater than 10% increase in annual
compensation payable to any Director, officer or employee of the
Corporation earning in excess of $100,000 per annum, including,
without limitation, salaried employees, contract employees and the
Principal Officers.
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No committee of Directors shall have authority to approve any matter set out in
this Section 2.7.
2.8 UNANIMOUS APPROVALS BY BOARD. The Shareholders shall vote their
Common Shares, and use their best efforts to cause their nominee Directors to
vote, to amend the By-laws of the Corporation to provide that, in addition to
any other approval that may be required at law or pursuant to the Articles, By-
laws or resolutions of the Corporation, any decision in respect of the payment
of any dividends or the making of any other distributions to shareholders of the
Corporation, except for any redemption of Preferred Shares by the Corporation or
any exercise by MPR of its right of retraction of the Preferred Shares, shall,
in each case, require the affirmative approval, by express resolution, of all of
the Directors. No committee of Directors shall have authority to approve any
matter set out in this Section 2.8.
2.9 DURATION OF EFFECTIVENESS OF BY-LAW AMENDMENTS. The amendments to the
By-Laws of the Corporation set out in Sections 2.6, 2.7 and 2.8 shall be
effective until the termination of this Agreement.
2.10 CWG APPROVALS. MPR and 945 will each use their best efforts to cause
their nominee Directors to vote to ensure that no resolutions will be passed
pursuant to subsections 2.7(a) to (g) without the affirmative vote of the
Director nominated by CWG.
2.11 COMMITTEES. If the Directors of the Corporation shall appoint any
committees of Directors, the Shareholders will use their best efforts to cause
their nominee Directors to vote such that one Director nominated by each of MPR,
CWG and 945 shall be appointed to each such committee.
2.12 MANAGEMENT. Immediately after the date of this Agreement, the
Principal Officers will continue to serve in such capacity, although this
obligation will not constitute an employment commitment or contract for any such
officer. The Shareholders will use their best efforts to cause their nominee
Director(s) to vote such that:
(a) the term of office of the Principal Officers and any other officers
appointed by the Board of Directors shall be one year, commencing on
the date of appointment of such officers; and
(b) the Board of Directors of the Corporation shall annually vote on the
election of the Principal Officers and any additional officers as it
may from time to time appoint, such election to be decided by majority
vote.
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ARTICLE 3
SPECIAL PERIODS
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3.1 APPLICATION OF ARTICLE 3. Section 2.2 shall not apply during Special
Periods. In addition, during any Special Period, the Shareholders shall use
their best efforts to cause their nominee Director(s) to vote to adjourn any
meeting of the Board of Directors or any committee of Directors unless at least
four Directors are in attendance at such meeting.
3.2 CHANGE IN DIRECTORS. During a Special Period, CWG may require the
Directors nominated by 945 and the Outside Director nominated by the other
Directors to resign and failing such resignations, the Shareholders shall vote
their Common Shares to remove such Directors. In such event, the Shareholders
shall vote their Common Shares for the election of replacement Directors
nominated by CWG.
3.3 SHAREHOLDERS' MEETING. A meeting for the purposes of nominating
replacement Directors under Section 3.2 and voting under Section 3.3 may be
called by CWG in accordance with the Act, the Corporation's By-laws, the
Securities Act (Alberta) and all other applicable laws.
3.4 SPECIAL VOTING PROVISION. Upon request by CWG, each Shareholder shall
vote its Shares, at any special or ordinary meeting of the shareholders of the
Corporation, in favour of any special resolution proposed by CWG to sell, lease
or exchange all or substantially all of the property of the Corporation.
ARTICLE 4
REMEDIES FOR DEFAULT
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4.1 REMEDIES. Each Shareholder acknowledges and agrees that damages may
not be an adequate remedy for any breach of this Agreement. If a Shareholder
breaches its obligations under this Agreement, the other Shareholders will have
all rights and remedies available at law or in equity, may bring any proceedings
in law or equity to remedy the breach(es), and may seek orders for specific
performance, an injunction or any other equitable remedy.
ARTICLE 5
GENERAL PROVISIONS
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5.1 ARTICLES OF THE CORPORATION. Each of the parties to this Agreement
shall take all such actions necessary to amend or alter the Articles or By-laws
of the Corporation to the extent necessary to make them consistent with the
provisions of this Agreement.
5.2 TERM. This Agreement shall continue in force until the earlier of:
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(a) the date of listing of the Common Shares on either The Toronto Stock
Exchange or the NASDAQ National Market; and
(b) November 15, 1998.
5.3 TERMINATION NOT TO AFFECT RIGHTS 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.
5.4 NOTICES. Any notice or other writing required or permitted to be
given hereunder or for the purpose hereof to any of the Shareholders shall be
sufficiently given if delivered personally, or if sent by prepaid courier or if
transmitted by facsimile to such party:
(a) in the case of a notice to MPR, at:
MPR Teltech Ltd.
8999 Nelson Way
Burnaby, British Columbia
V5A 4B5
Facsimile No.: (604) 293-6161
Attention: Ian Bardsley, President
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with a copy to:
Farris, Vaughan, Wills & Murphy
2600 - 700 West Georgia Street
P.O. Box 10026
Pacific Centre South
Vancouver, British Columbia
V7Y 1B3
Facsimile No.: (604) 661-9349
Attention: R. Hector MacKay-Dunn
---------------------------------
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(b) in the case of notice to CWG, at:
CIBC Wood Gundy Capital (SFC) Inc.
c/o CIBC Wood Gundy Capital Inc.
BCE Place
P.O. Box 500, 161 Bay Street
Toronto, Ontario
M5J 2S8
Facsimile: (416) 594-8037
Attention: Sam Duboc
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(c) in the case of a notice to 945, at:
945 Investments Ltd.
Suite 106 - 1008 Beach Avenue
Vancouver, British Columbia
V6E 1T7
Facsimile No.: (604) 685-2533
Attention: Ed Ford and Len Fowler
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5.5 TIME OF ESSENCE. Time shall be of the essence hereof.
5.6 FURTHER ASSURANCES. Each of the Shareholders, and any Person who
shall acquire any Common Shares or other Equity Securities of the Corporation
and who agrees to be bound by the terms of this Agreement, shall use all
reasonable efforts to take all such steps, execute all such documents and do all
such acts and things as may be reasonably within its power, including voting
those Common Shares held by such Shareholder or Person (where such Shareholder
or Person has the right to vote pursuant to this Agreement), to implement to
their full extent the provisions of this Agreement and to cause the Corporation
to act in the manner contemplated by this Agreement.
5.7 SEVERABILITY. In the event that any provision of this Agreement is
deemed to be unenforceable, illegal, void or voidable, this Agreement shall
continue in full force and effect without such provision and the parties shall
take further actions and make additional arrangements to carry out the intended
transactions contemplated herein.
5.8 NO STRICT CONSTRUCTION. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any Person.
5.9 HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
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5.10 ENTIRE AGREEMENT. Except as otherwise expressly set forth herein,
this Agreement embodies the complete agreement and understanding among the
parties hereto and thereto with respect to the subject matter hereof and thereof
and supersedes and preempts any prior understandings, agreements or
representations by or among the parties or any other shareholder, written or
oral, which may have related to the subject matter hereof in any way.
5.11 GOVERNING LAW. The laws of the Province of British Columbia and the
federal laws of Canada applicable therein shall govern all issues and questions
concerning the relative rights of the Shareholders and the construction,
validity, interpretation and enforceability of this Agreement.
5.12 AMENDMENTS AND WAIVERS. Any amendment, modification or termination of
any provision of this Agreement or consent to any departure by any party
therefrom may be made only by agreement of each of the parties hereto in
writing. The waiver, express or implied, by any party hereto of any right
hereunder or of any failure to perform, or breach hereof, by any other party
hereto shall neither constitute nor be deemed to constitute a waiver of any
other right hereunder or of any claims or remedies available under applicable
laws in respect of any other failure to perform, or breach hereof, by any party
hereto, whether of a similar or dissimilar nature thereto.
5.13 ASSIGNABILITY. Each of CWG and 945 acknowledge that they have been
advised by MPR that Control of MPR may change during the term of this Agreement
and agree that such a change of Control of MPR shall not constitute an
assignment hereunder or affect this Agreement in any way. Except for the
foregoing, this Agreement and the rights and obligations under this Agreement
are not assignable. This Agreement shall bind and benefit any successor, heir,
executor or permitted assignee of the parties.
5.14 REMEDIES CUMULATIVE. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, whether by law or in
equity, upon such party and the exercise by a party of any one remedy will not
preclude the exercise of any other remedy.
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5.15 COUNTERPARTS. This Agreement may be signed in one or more
counterparts, which together shall constitute one instrument. Delivery of
counterparts may be effected by facsimile transmission thereof.
IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the
date first above written.
MPR TELTECH LTD. CIBC WOOD GUNDY CAPITAL (SFC) INC.
/s/ I. R. Bardsley /s/ Samuel Duboc
By: _____________________________ By: _____________________________
/s/ James W. Peters
By: _____________________________ By: _____________________________
945 INVESTMENTS LTD.
/s/ Douglas E. Ford
By: _____________________________
By: _____________________________