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Exhibit 10.30
SHARE SUBSCRIPTION AND DEBENTURE PURCHASE AGREEMENT
entered into as of February 1, 1999
BETWEEN: GILDAN ACTIVEWEAR INC., a corporation duly constituted
under the laws of Canada having its registered office at
725 ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇-▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
herein acting and represented by H. ▇▇▇▇ ▇▇▇▇▇▇▇▇, its
Chairman and Chief Executive Officer, duly authorized;
(hereinafter the "Corporation")
AND: CAPITAL D'AMERIQUE CDPQ INC., a corporation duly
constituted under the laws of the Province of Quebec
having its head office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ herein acting and represented
by ▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇;
(hereinafter ("Capital d'Amerique")
WHEREAS Capital d'Amerique submitted to the Corporation a financing offer under
letter agreement dated December 17, 1998 and accepted by the Corporation on
December 18, 1998 (the "Financing Offer");
WHEREAS the Financing Offer provides that Capital d'Amerique is to subscribe for
444,444 Class A Subordinate Voting Shares ("Class A Shares") of the share
capital of the Corporation for a subscription price of $4,999,995 and to
purchase at par a debenture having a principal amount of $15,000,000, the whole
in accordance with the terms and conditions contained therein; and
WHEREAS the parties hereto wish to give effect to such Financing Offer;
ACCORDINGLY, the parties hereto have agreed as follows:
1. Preamble and Schedules
The preamble hereof and the schedules hereto form part of this Agreement.
2. Share Subscription, Purchase of Debenture and Payment
2.1 Share Subscription and Payment
2.1.1 Subject to the terms and conditions contained herein, Capital d'Amerique
hereby subscribes for 444,444 Class A Shares of the share capital of the
Corporation in
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[LETTERHEAD OF ▇▇▇▇, SAINT-PIERRE]
TELECOPY TRANSMISSION
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DATE: February 3, 1999
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Name Office Telecopier Number
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▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 416/977-5239
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▇▇▇ ▇▇▇▇▇▇ Bank of America Canada 312/974-8780
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▇▇▇ ▇▇▇▇▇▇, CA Gildan Activewear Inc. 728-2269
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FROM: ▇▇▇▇ ▇▇▇▇▇▇
NUMBER OF PAGES: 26 (Including this page)
RE: Gildan Activewear Inc. - CDPQ
Our file no.: 11002-097
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CONFIDENTIALITY CAUTION: This message is intended only for the use of the
individual or person to which it is addressed and contains information that is
privileged and confidential. If the reader of this message is not the intended
recipient, or the employee or agent responsible for delivering the message to
the intended recipient, you are hereby notified that any dissemination,
distribution or copying of this communication is strictly prohibited. If you
have received this communication by error, please notify us immediately by
telephone and return the original message to us at the above address at our
cost.
================================================================================
MESSAGE:
Enclosed please find an English translation of the Subscription Agreement and
Debenture that was signed in French by Gildan and CDPQ on February 1, 1999.
You may presume that this English translation is a true and complete translation
of the French documents.
If you have any questions with respect to the foregoing, please do not hesitate
to contact the undersigned.
Yours truly,
/s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
GM:sdp
Encl.
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consideration of a total subscription price of $4,999,995, being a
subscription price of $11.25 per share, such subscription price being paid
to the Corporation at the date hereof by cheque and receipt thereof being
acknowledged by the Corporation.
2.12 The Corporation hereby confirms having accepted this share subscription
and has caused the registrar to issue as of the date hereof a share
certificate representing 444,444 Class A Shares of the share capital of
the Corporation registered in the name of "Capital d'Amerique CDPQ Inc.".
2.2 Debenture Purchase and Payment
2.2.1 Subject to the provisions hereof and the adjustments contemplated herein
or in any document incorporated by reference, Capital d'Amerique hereby
purchases from the Corporation, in consideration for the payment of a
principal amount of $15,000,000, a debenture identified as "Debenture A-6"
and having the form and content of the debenture reproduced as Schedule
2.2 hereof and having a principal amount of $15,000,000.
2.2.2 Capital d'Amerique hereby pays to the Corporation, as of the date hereof,
by cheque, an amount of $15,000,000 as the aggregate purchase price of
▇▇▇▇▇▇▇▇▇ ▇-▇, the Corporation acknowledging receipt of payment thereof in
full and issuing as of the date hereof Debenture A-6 registered in the
name of "Capital d'Amerique CDPQ Inc.".
2.3 Use of Proceeds by the Corporation
The Corporation hereby represents and declares that the proceeds derived
by the Corporation from the share subscription and purchase of the
debenture by Capital d'Amerique shall be added to the general funds of the
Corporation to improve its working capital.
3. Representations and Warranties
The Corporation hereby represents and warrants to Capital d'Amerique as
follows, and acknowledges that Capital d'Amerique is relying upon the
accuracy and completeness of each of such representations and warranties
in connection with its share subscription and its purchase of Debenture
A-6 and the completion of the other transactions hereunder.
3.1 Status and Corporate Authority
The Corporation and its subsidiaries ("Subsidiaries") are duly
incorporated and organized and validly exist under the laws of their
respective jurisdiction of incorporation and are duly qualified to carry
on their respective businesses as presently conducted and, further, the
Corporation has full corporate power and authority to enter into this
Agreement and to issue to Capital d'Amerique 444,444 Class A Shares and
Debenture A-6 in the manner contemplated herein and to perform all of its
obligations under this Agreement.
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3.2 Authorization
The Corporation has taken all necessary actions, steps and corporate and
other proceedings to approve or authorize, validly and effectively, the
entering into of, and the execution, delivery and performance of, this
Agreement and the issuance of 444,444 Class A Shares and the sale to
Capital d'Amerique of Debenture A-6. This Agreement and Debenture A-6 as
well as any other agreement executed in favour of Capital d'Amerique
pursuant to the Financing Offer or this Agreement, constitute legal, valid
and binding obligations of the Corporation enforceable against the
Corporation in accordance with their respective terms and conditions,
except as enforcement may be limited by bankruptcy, insolvency and other
laws affecting the enforcement of rights of creditors generally and except
that equitable remedies may only be granted in the discretion of a court
of competent jurisdiction.
3.3 Necessary Licences
To the best of the Corporation's knowledge and save and except for
omissions or errors which do not have a material adverse effect on the
Corporation nor prevent the Corporation from operating in the normal
course, the Corporation and each of its Subsidiaries hold all necessary
licenses, registrations and qualifications in each Jurisdiction in which
they own or lease any property or the nature or conduct of their
respective businesses or any part thereof, makes such qualification
necessary or desirable to enable their respective businesses to be carried
on as now conducted or to enable the businesses to be owned, leased and
operated.
To the best of the Corporation's knowledge and save and except for
omissions or errors which do not have a material adverse effect on the
Corporation and its Subsidiaries nor prevent the Corporation and its
Subsidiaries from operating in the normal course, all of the Corporation's
and its Subsidiaries' licenses, registrations and qualifications to carry
on their respective businesses are valid and subsisting and the
Corporation and such Subsidiaries are in compliance with all the material
terms and conditions of such licenses, registrations and qualifications to
allow them to carry on business in the ordinary course. There are no
proceedings in progress, pending or, to the best of the knowledge of the
Corporation, threatened, which could result in the revocation,
cancellation or suspension of any such licenses, registrations or
qualifications.
3.4 Authorized and Issued Share Capital
The authorized share capital of the Corporation is reproduced at Schedule
3.4 hereto. Such schedule also provides for the name of all shareholders
of the Corporation who own 10% or more shares of any one class of shares
of the Corporation and for the number of shares of each class held by such
shareholders in the share capital of the Corporation. Except as disclosed
in Schedule 3.4 (A) attached hereto, no person holds any share or purchase
option, warrant, right of first refusal, pre-emptive right conversion
right or any other right whatsoever in connection with the share capital
of the Corporation or
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any of its Subsidiaries. The minute books of the Corporation and of its
Subsidiaries are true, accurate and complete.
All issued and outstanding shares of the share capital of the Corporation
and of each of its Subsidiaries have been duly authorized and issued as
fully paid and non assessable and are not subject to any statutory
transfer restrictions other than those contained in the articles of the
Corporation or of its Subsidiaries and, in the case of the issued and
outstanding Class B Multiple Voting Shares, those further restrictions set
forth in Schedule 3.4(B) hereto.
3.5 Constating Documents, Subsidiaries and Investments
The Corporation has no subsidiaries other than the Subsidiaries listed in
Schedule 3.5 hereto and does not have any direct or indirect equity or
convertible into equity investments of a material nature in any other
entitles or businesses. The constating documents of the Corporation are
attached hereto as Schedule 3.5 (A).
3.6 Financial Information
The Corporation has, prior to the date hereof, provided Capital d'Amerique
with copies of certain audited and unaudited financial statements of the
Corporation and its Subsidiaries. Such financial statements are attached
as Schedule 3.6. The documents contained in Schedule 3.6 are herein
referred to as the "Financial Statements". The Financial Statements
disclose adequately and accurately the financial condition of the
Corporation and its Subsidiaries as well as the results of their
operations on the date and for the periods covered by such Financial
Statements. Such Financial Statements have been prepared in accordance
with generally accepted accounting principles applied on a basis
consistent with prior periods, are correct and complete and present fairly
the assets, liabilities (whether accrued, absolute, contingent or
otherwise) and financial condition of the Corporation and its Subsidiaries
as of the respective dates of the Financial Statements and earnings and
results of operations of the Corporation and its Subsidiaries for the
respective periods covered by the Financial Statements. The financial
position and condition of the Corporation and its Subsidiaries is now as
good as that shown on or reflected in the Financial Statements; the
Corporation and its Subsidiaries have carried on business and continued
their operations only in the ordinary and normal course of business
consistent with past practice and them has not been: (i) any material
adverse change in the condition (financial or otherwise), assets,
liabilities, operations, earnings, business or prospects of the
Corporation or any of its Subsidiaries; (ii) except as set out in Schedule
3.6 (B), any obligation or liability (whether absolute, accrued,
contingent or otherwise and, whether due or to become due) incurred by the
Corporation or any of its Subsidiaries other than those incurred in the
ordinary and normal course and consistent with past practice; (iii) any
declaration, setting aside or payment of any dividend or other
distribution with respect to any shares in the capital of the Corporation
or of any of its Subsidiaries or any direct or indirect redemption,
purchase. or other acquisition of any such shares; or (iv) any issuance or
sale by the Corporation or any of its Subsidiaries or undertaking by the
Corporation or any of its Subsidiaries, for the issuance or sale by the
Corporation or any of its Subsidiaries, of any shares in
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the share capital or securities convertible into or exercisable for shares
in the share capital of the Corporation or of any of its Subsidiaries.
3.7 Tax Reporting
a) Save and except as set forth in Schedule 3.7 hereto, the Corporation
and its Subsidiaries have duly filed on a timely basis all tax
returns required to be filed by them and have paid all taxes that am
due and payable, and all assessments, reassessments, governmental
charges, penalties, interest and fines due and payable by them.
b) The Corporation and its Subsidiaries have made adequate provision
for taxes payable by them for the current period and any previous
period for which tax returns are not yet required to be filed. There
are no actions, suits, proceedings, investigations or claims pending
or, to the knowledge of the Corporation, threatened against the
Corporation or any of its Subsidiaries in respect of taxes,
governmental charges or assessments, nor are any material matters
under discussion with any governmental authority with respect to any
charges or assessments asserted by such authority.
c) The Corporation and its Subsidiaries have withheld from each payment
made to any of their past or present employees, officers or
directors, and to any non-resident of Canada, the amount of all
taxes and other deductions required to be withheld therefrom and has
paid the same to the proper tax or other receiving officers within
the time required under any applicable legislation. The Corporation
has remitted to the appropriate tax authority when required by law
to do so all amounts collected by it on account of GST or any other
goods and services taxes.
d) Save and except as set forth in Schedule 3.7 hereto, the income tax
liability of the Corporation and its Subsidiaries have been assessed
by the appropriate tax authorities for all fiscal years up to and
including the fiscal year ended [October 5, 1997] and there are no
agreements, waivers or other arrangements providing for an extension
of time with respect to the filing of any tax return by, or payment
of any tax, governmental charge or deficiency against the
Corporation or any of its Subsidiaries. The Corporation has provided
to Capital d'Amerique a true copy of all tax returns filed by the
Corporation and each of its Subsidiaries in respect of the five last
completed fiscal years of the Corporation and of each of its
Subsidiaries.
3.8 Intellectual Property
Attached hereto as Schedule 3.8 is a complete and accurate list of all
trade marks, trade names, business names, patents, inventions, know-how,
copyrights, service marks, brand names, industrial designs and all other
industrial or intellectual property owned or used by the Corporation and
its Subsidiaries in carrying on the business in Canada and all
applications therefor and all goodwill connected therewith, including,
without limitation, all licenses, registered user
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agreements and all like rights used by or granted to the Corporation or to
its Subsidiaries in connection with the business and all right to register
or otherwise apply for the protection of any of the foregoing
(collectively the "Intellectual Property"). The Corporation is the
beneficial owner of the Intellectual Property, free and clear of all
encumbrances. The Corporation is not aware of a claim of any infringement
or breach of any industrial or intellectual property rights of any other
person by the Corporation, nor has the Corporation or any of its
Subsidiaries received any notice that the conduct of the business,
including the use of the Intellectual Property, infringes upon or breaches
any industrial or intellectual property rights of any other person, and
the Corporation, after due inquiry, has no knowledge of any infringement
or violation of any of the rights of the Corporation or any of its
Subsidiaries in the Intellectual Property. The conduct of the business of
the Corporation and its Subsidiaries does not infringe upon the patents,
trade marks, licences, trade names, business names, copyright or other
industrial or intellectual property rights, domestic or foreign, of any
other person.
3.9 Insurance
(a) The Corporation and its Subsidiaries have all of their property and
assets insured against loss or damage by all hazards or risks on a
replacement cost basis. The Corporation and its Subsidiaries are not
in default in respect to any of the provisions contained in any such
insurance policy and have not failed to give any notice or present
any claim under any such insurance policy in a due and timely
fashion.
(b) The Corporation has directors' and officers' liability insurance
providing for a minimum coverage of $50 million and subject to a
deductible of $250,000 for security claims and $50,000 for other
claims per occurrence.
(c) The Corporation has taken necessary steps to subscribe life
insurance policies over the life of H. ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, on a "last to die" basis for an amount of at least $15
million with terms and conditions to be agreed to by Capital
d'Amerique. The Corporation shall provide Capital d'Amerique within
sixty (60) days from the date hereof with acceptable evidence that
such life insurance has been subscribed and is in full force and in
effect.
(d) Until all sums due under Debenture A-6 have been paid in full, the
Corporation shall maintain the above mentioned insurance policies in
force and effect and shall provide to Capital d'Amerique from time
to time, at its request, with confirmation that such insurance
coverages are in force. In addition, such insurance coverages shall
not be amended or changed without Capital d'Amerique prior written
consent, not to be unreasonably withheld or delayed.
3.10 Consents and Approvals
3.10.1 Except for the filing of a notice pursuant to section 46 of the
Securities Act (Quebec) with the Quebec Securities Commission within
10 days hereof, the Corporation has made and/or obtained all
necessary filings,
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approvals, consents and acceptances of appropriate regulatory
authorities (including the Montreal and Toronto exchanges) in order
to permit Capital d'Amerique to purchase the Class A Shares as
contemplated hereby, to permit the Corporation to sell the Class A
Shares as herein provided.
3.10.2 Promptly following the consummation of the transactions
contemplated herein, the Corporation shall effect such filings as
may be required by the Montreal and Toronto exchanges in order that
the Class A Shares may be listed and posted for trading on such
exchanges.
3.10.3 The Corporation confirms that immediately after the date hereof,
the hold period applicable to the alienation (first trade) in the
Class A Shares by Capital d'Amerique under the securities laws of
the Province of Quebec will be 12 months from the date hereof.
3.10.4 Except as previously made and/or obtained and as set forth in
paragraph 3.10.1, there is no additional requirement to make any
filing with, give any notice to or obtain any licence, permit
certificate, registration, authorization, consent or approval of,
any governmental or regulatory authority as a condition to the
lawful consummation of the transactions contemplated by this
Agreement. Additionally, there is no requirement under any contract
relating to the business or the Corporation or any of is
Subsidiaries to which the Corporation or any of its Subsidiaries is
a party or by which it is bound to give any notice to, or to obtain
the consent or approval of, any party to such agreement, instrument
or commitment relating to the consummation of the transactions
contemplated by this Agreement.
3.11 Litigation
There are no actions, suits or proceedings pending or, to the knowledge of
the Corporation, after due inquiry, threatened against or affecting, the
Corporation or any of its Subsidiaries at law or in equity, or before or
by any federal, provincial, municipal or other governmental department
court, commission, board, bureau, agency or instrumentality, domestic or
foreign or by or before an arbitrator or arbitration board. The
Corporation is not aware of any ground on which any such action, suit or
proceeding might be commenced with any reasonable likelihood of success
against the Corporation or any of its Subsidiaries.
3.12 No Violation
The execution and delivery of this Agreement by the Corporation and the
consummation of the transactions herein provided for will not result in
either: (a) the breach or violation of any of the provisions of, or
constitute a default under, or conflict with or cause the acceleration of
any obligation of the Corporation under: (i) any contract to which the
Corporation or any of its Subsidiaries is a party or by which any of them
is bound; (ii) any provision of the constating documents, by-laws or
resolutions of the board of directors (or any committee thereof) or
shareholders of the Corporation or any of its Subsidiaries; (iv) any
material licence, permit, approval, consent or authorization held by the
Corporation or any
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of its Subsidiaries or (v) any applicable law, statute, ordinance,
regulation or rule; or (b) the creation or imposition of any charge on any
of the property or assets of the Corporation or any of its Subsidiaries.
3.13 Non-Arm's Length Transactions
The Corporation has not since October 4, 1998 made any payment or loan to,
or borrowed any money from or is otherwise indebted to, any officer,
director, employee, shareholder or any other person not dealing at arm's
length with the Corporation or any of its Subsidiaries (within the meaning
of the Tax Act), except as disclosed in the Financial Statements and in
Schedule 3.13 (A) and except for usual employee reimbursements and
compensation paid in the ordinary and normal course of business. Except as
disclosed in the Corporation's proxy circular for the 1998 year end and
for contracts of employment and for the agreements described in Schedule
3.13 (B), the Corporation or any of its Subsidiaries are not a party to
any contract with any officer, director, employee, shareholder or any
other person not dealing at arm's length with the Corporation or any of
its Subsidiaries and no entity that is an affiliate or associate of one or
more of such individuals: (a) owns, directly or indirectly, any interest
in, or is an officer, director, employee or consultant of, any person
which is, or is engaged in business as, a competitor of the Corporation or
any of its Subsidiaries or a lessor, lessee, supplier, distributor, sales
agent or customer of the Corporation of any of its Subsidiaries; (b) owns,
directly or indirectly, in whole or in part, any property that the
Corporation or any of its Subsidiaries uses in the operation of their
respective businesses; or (c) has any cause of action or other claim
whatsoever against, or owes any amount to, the Corporation or any of its
Subsidiaries, except for any liabilities reflected in the Financial
Statements and claims in the ordinary and normal course of business, such
as for accrued vacation pay and accrued benefits under any applicable
employee plans.
3.14 Environmental Matters
To the best of the Corporation's knowledge except for matters which,
singly or in the aggregate, would not have a material adverse impact on
the business or financial condition of the Corporation:
(a) The Corporation and its Subsidiaries have been and are in compliance
with all applicable federal, provincial and municipal laws,
statutes, ordinances, by-laws and regulations and orders, directives
and decisions rendered by any ministry, department or administration
or regulatory agency ("Environmental Laws") relating to the
protection of the environment, occupational health and safety or the
manufacture, processing, distribution, use, treatment, storage,
disposal, discharge, transport or handling of any pollutants,
contaminants, chemicals or industrial, toxic or hazardous wastes or
substances ("Hazardous Substances") necessary to carry on business
in the normal course;
(b) Except as disclosed in Schedule 3.14 (B) hereto, the Corporation and
its Subsidiaries have obtained all licences, permits, approvals,
consents, certificates, registrations and other authorizations under
Environmental Laws (the "Environmental Permits") required for the
operation of their
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respective businesses. Each Environmental Permit is valid,
subsisting and in good standing and the Corporation and its
Subsidiaries are not in default or breach of any Environmental
Permit and no proceeding is pending, or threatened, to revoke or
limit any Environmental Permit;
(c) The Corporation and its Subsidiaries have not used or permitted to
be used, except in compliance with all Environmental Laws, any of
their property or facilities or any property or facility that they
previously owned or leased, to generate, manufacture, process,
distribute, use, treat, store, dispose of, transport or handle any
Hazardeous Substance;
(d) Except as disclosed in Schedule 3.14 (D) hereto, The Corporation and
its Subsidiaries have never received any notice of, nor been
prosecuted for an offence alleging, non-compliance with any
Environmental Laws, and neither the Corporation nor any of its
Subsidiaries has settled any allegation of non-compliance short of
prosecution. There are no orders or directions relating to
environmental matters requiring any work, repairs, constructions or
capital expenditures with respect to any property of the Corporation
or any of its Subsidiaries nor has the Corporation or any of its
Subsidiaries received notice of any of the same;
(e) Neither the Corporation nor any of its Subsidiaries has caused or
permitted, or does it have any knowledge of, the release, in any
manner whatsoever, of any Hazardous Substance on or from any of its
properties or assets or any property or facility that it previously
owned or leased, or any such release on or from a facility owned or
operated by third parties but with respect to which the Corporation
or any of its Subsidiaries is or may reasonably be alleged to have
liability.
(f) Neither the Corporation nor any of its Subsidiaries has received any
notice that it is potentially responsible for a federal, provincial,
municipal or local clean-up site or corrective action under any
Environmental Laws.
3.15 Reporting Issuer
The Corporation is a reporting issuer not in default for the purposes of
the Securities Act (Quebec), the Securities Act (Ontario) and similar
securities legislation of all the provinces of Canada.
3.16 Covenant to maintain status The Corporation shall use its best efforts to
maintain its status as a reporting issuer not in default for the purpose
of the Securities Act (Quebec) and similar securities legislation in all
provinces of Canada at least until such time the principal amount of
Debenture A-6 has been paid in full.
3.17 Full Disclosure
Neither this Agreement nor any document to be delivered pursuant to this
Agreement by the Corporation nor any certificate, report, statement or
other document furnished by the Corporation in connection with the
negotiation of this Agreement contains any untrue statement of a material
fact or omits to state a
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material fact necessary to make the statements contained herein not
misleading. To the best of the knowledge of the Corporation, after due
enquiry, there has been no event, transaction or information that has come
to the attention of the Corporation that has not been disclosed to Capital
d'Amerique in writing that could reasonably be expected to have a material
adverse effect on the assets, business, earnings, prospects, properties or
condition (financial or otherwise) of the Corporation and its Subsidiaries
on a consolidated basis.
4. Additional Conditions in favour of Capital d'Amerique
The purchase of Debenture A-6 and the share subscription provided herein
are subject to the following additional terms and conditions for the
exclusive benefit of Capital d'Amerique, to be fulfilled no later than on
the date of execution hereof.
4.1 The Corporation shall have executed a certificate addressed to Capital
d'Amerique stating that all terms and conditions contemplated by the
Financing Offer referred to in the preamble or contained in this Agreement
have been satisfied or met and confirming that there have been no material
adverse changes in the condition (financial or otherwise), assets,
liabilities, operations, earnings, business or prospects of the
Corporation and its Subsidiaries since October 4, 1998.
4.2 The Corporation shall deliver to Capital d'Amerique favourable legal
opinion of ▇▇▇▇, Saint-Pierre, Counsel to the Corporation and of ▇▇▇▇▇▇
▇▇▇▇▇▇▇, special counsel to the Corporation, in the foam of the draft
attached hereto as Schedule 4.2.
4.3 The appropriate parties shall have executed contemporaneously with the
execution of this Agreement a Non-Competition and Non-Diversion Agreement
in the form of the final draft of such agreement attached hereto as
Schedule 4.3.
4.4 The Corporation hereby grants the right to Capital d'Amerique to appoint
from time to time a representative to act as an observer at all meetings
of the board of directors of the Corporation and of committees thereof for
as long as Capital d'Amerique is the holder of Debenture A-6 or Capital
d'Amerique or any affiliate thereof holds at least 222,222 Class A Shares
of the Corporation, as adjusted to take into account any share
reorganization. Such representative shall also be entitled to receive, on
a timely basis, all notices, communications and material sent to directors
of the Corporation. Such representative shall not be paid any fees but all
pre-approved costs incurred in connection with the attendance at meetings
shall promptly be reimbursed by the Corporation upon presentation of
vouchered expenses.
5. Representations and Warranties of Capital d'Amerique
Capital d'Amerique hereby represents and warrants to the parties hereto as
follows:
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a) Capital d'Amerique is a corporation duly constituted and subsisting
under the laws of the Province of Quebec.
b) Capital d'Amerique has the corporate power and necessary authority
to enter into and perform its obligations under this Agreement.
c) This Agreement and the Financing Offer and all agreements executed
by Capital d'Amerique in favour of the Corporation pursuant thereto,
have been duly authorized, executed and delivered by Capital
d'Amerique and constitute legal, valid and binding obligations of
Capital d'Amerique, enforceable against Capital d'Amerique in
accordance with their respective terms, except as enforcement may be
limited by bankruptcy, insolvency and other laws affecting the
enforcement of rights of creditors generally and except that
equitable remedies may only be granted in the discretion of a court
of competent jurisdiction.
d) The information supplied, or to be supplied, by Capital d'Amerique
to the Corporation in connection with the transactions herein
contemplated, including, without limitation, the information
provided to the Montreal and Toronto exchanges, is true and correct
in all material respects.
6. Covenants of Capital d'Amerique
6.1 Capital d'Amerique shall prepare and deliver to the Corporation, no later
than the date hereof, the private placement questionnaires and
undertakings required by the Montreal and Toronto exchanges.
6.2 Capital d'Amerique shall provide and/or deliver, in timely fashion, all
such documents, and information as may be reasonably requested by the
Corporation in connection with the transactions contemplated by this
Agreement.
6.3 Capital d'Amerique shall not offer, sell, distribute or otherwise transfer
the Class A Shares, or agree to do any of the foregoing, during the period
of forty (40) days from the date hereof, except in compliance with the
United States Securities Act of 1933, as amended. Capital d'Amerique
hereby acknowledges that:
6.3.1 the Class A Shares covered by this Agreement have not been
registered under the United States Securities Act of 1933 (the
"Securities Act") and many not be offered or sold in the United
States or to, or for the account or benefit of, a U.S. person (as
defined in Regulation S of the Securities Act), unless such
securities are registered under such Act, or an exemption from the
registration requirements of such Act is available;
6.3.2 a legend to that effect shall be placed on the certificate(s)
representing the Class A Shares; and
6.3.3 the Corporation is relying upon the covenants set forth in this
section 6 when making the representations on its part set forth in
Subsection 3.10 hereof.
13
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7. Indemnification
7.1 Each of the parties hereto (the "Indemnifying Party"), agrees to indemnify
and save harmless the other party hereto (the "Indemnified Party") from
all claims, demands, proceedings, losses, damages, liabilities,
deficiencies, reasonable costs and expenses (including, without
limitation, all legal and other professional fees and disbursements,
interest, penalties and amounts paid in settlement), suffered or incurred
by the Indemnified Party as a result of or arising directly or indirectly
out of or in connection with:
7.1.1 any breach by the Indemnifying Party of or any inaccuracy of any
representation or warranty of the Indemnifying Party contained in
this Agreement or in any agreement, certificate or other document
delivered pursuant hereto;
7.1.2 any breach or non-performance by the Indemnifying Party of any
covenant to be performed by it that is contained in this Agreement
or in any agreement, certificate or other document delivered
pursuant hereto;
7.2 The Indemnified Party shall give the Indemnifying Party prompt written
notice of any claim, assertion, event or proceeding concerning any
liability or damage as to which it may request indemnification from the
Indemnifying Party hereunder. Upon written notice to the Indemnified Party
given by the Indemnifying Party after receipt of notice of any such action
or proceedings, the Indemnifying Party may assume the defense thereof at
its own expense with counsel chosen by the Indemnifying Party.
Notwithstanding the foregoing, with respect to any action, suit proceeding
or investigation for which the Indemnified Party may request
indemnification hereunder, the Indemnified Party may assume the defense
thereof with counsel chosen by the Indemnified Party and approved by the
Indemnifying Party, at the expense of the Indemnifying Party. In the
circumstances referred to in the immediately preceding sentence, if the
Indemnified Party does not assume such defense, the Indemnifying Party
shall not, without the prior written consent of the Indemnified Party,
which consent shall not be unreasonably withheld, settle or compromise any
claim, or permit a default or consent to the entry of any judgement in
respect thereof, unless such settlement, compromise or consent includes,
as an unconditional term thereof, the giving by the claimant to the
Indemnified Party, of an unconditional release from all liability in
respect of such claim. If the Indemnified Party assumes the defense of any
such claim or proceeding prior to such a final judgement thereon or to
forego appeal with respect thereto, then the Indemnified Party shall give
the Indemnifying Party prompt written notice thereof and the Indemnifying
Party shall have the right to participate in the settlement or assume the
defense of such claim or proceedings.
14
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8. General Provisions
8.1 Notices
8.1.1 Any notice, designation, communication, request, demand or other
document, required or permitted to be given or sent or delivered
hereunder to any party hereto shall be in writing and shall be
sufficiently given or sent or delivered if it is:
(a) delivered personally to an officer or director of such party;
(b) sent to the party entitled to receive it by registered mail,
postage prepaid, mailed in Canada, or
(c) sent by telecopy machine.
8.1.2 Notices shall be sent to the following addresses or telecopy
numbers:
(a) In the case of the Corporation,
Gildan Activewear Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇-▇▇▇▇▇▇▇ (▇▇▇▇▇▇)
▇▇▇ ▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Mr. H. ▇▇▇▇ ▇▇▇▇▇▇▇▇. Chairman
With a copy to:
▇▇▇▇, Saint-Pierre
▇ ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇)
▇▇▇ ▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
(b) in the case of Capital d'Amerique,
Capital d'Amerique CDPQ Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇) ▇▇▇ ▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Vice-President, Legal Affairs
15
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or to such other address or telecopier number as the party entitled to or
receiving such notice, communication, request, demand or other document
shall, by a notice given in accordance with this section, have
communicated to the party giving or sending or delivering such notice,
communication, request demand or other document.
8.1.3 Any notice, communication, request demand or other document given or
sent or delivered as aforesaid shall:
(a) If delivered as aforesaid, be deemed to have been given, sent,
delivered and received on the date of delivery;
(b) if sent by mail as aforesaid, be deemed to have been given,
sent delivered and received (but not actually received) on the
third business day following the date of mailing, unless at
any time between the date of mailing and the third business
day thereafter there is a discontinuance or interruption of
regular postal service, whether due to strike or lockout or
work slowdown, affecting postal service at the point of
dispatch or delivery or any intermediate point, in which case
the same shall be deemed to have been given, sent, delivered
and received in the ordinary course of the mails, allowing for
such discontinuance or interruption of regular postal service;
and
(c) if sent by telecopy machine, be deemed to have been given,
sent, delivered and received on the date the sender receives
the telecopy answer back confirming receipt by the recipient.
8.2 Counterparts
This Agreement may be executed in several counterparts, each of which so
executed shall be deemed to be an original, and such counterparts together
shall constitute but one and the same instrument.
8.3 Announcements
No announcement with respect to this Agreement will be made by any party
hereto without the prior approval of the other party. The foregoing will
not apply to any announcement by any party required in order to comply
with laws pertaining to timely disclosure or the requirements of the
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and American exchanges, provided that such party
consults with the other party before making any such announcement.
8.4 Assignment
The rights of Capital d'Amerique hereunder may not be assigned without the
prior written consent of the other party unless such assignment is in
favour of the Caisse de depot et placement du Quebec or an affiliate
thereof, in which case no consent shall be required.
16
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8.5 Successors and Assigns
This agreement shall be binding on and enure to the benefit of the parties
hereto and their respective successors and permitted assigns. Nothing
herein, express or implied, is intended to confer on any person, other
than the parties hereto and their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities under or by
reason of this agreement.
8.6 Defined Terms and Interpretation
Any terms used herein without being defined herein shall have the meaning
ascribed to them in Debenture A-6.
For the purposes of this Agreement material adverse effect" shall mean any
one or more fact(s) or situation(s) involving on an aggregate basis
expenses or liabilities in excess of $750,000. In addition, any reference
herein to "the best of the Corporation's knowledge" shall be deemed to
mean the actual knowledge of the Corporation and the knowledge it would
have had if they had conducted a diligent enquiry into the relevant
subject-matter.
8.7 Entire Agreement
This Agreement and the Schedules referred to herein constitute the entire
agreement between the parties hereto and supersede all prior agreements.
representations, warranties, statements, promises, information,
arrangements and understandings, whether oral or written, express or
implied, with respect to the subject matter hereof, including the
Financing Offer which is attached hereto as Schedule 8.7, except with
respect to fees and disbursements (and all applicable taxes) of Counsel to
Capital d'Amerique which the Corporation acknowledges being responsible
for.
8.8 Applicable Laws
This Agreement shall be construed with and be governed by the laws of the
Province of Quebec.
17
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IN WITNESS WHEREOF the parties hereto have duly executed this agreement under
seal as of the day and year first above written.
Gildan Activewear Inc.
by:
------------------------------
H. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chairman
Chief Executive Officer
Capital d'Amerique CDPQ Inc.
by:
------------------------------
by:
------------------------------
18
GILDAN ACTIVEWEAR INC.
(Incorporated under the laws of Canada)
DEBENTURE No. A-6
Principal Amount: $15,000,000
Issue date: February 1, 1999
Maturity date: June 25, 2004
A. Interpretation
1. Whenever used in this debenture, unless there is something in the subject
matter or context inconsistent therewith, the following words and phrases
shall have the respective meanings ascribed to them as follows:
(a) "Corporation" means Gildan Activewear Inc., a corporation
incorporated under the laws of Canada, and its successors and
assigns and in the context of the calculation of the Current Assets,
Current Liabilities, Debt, Debt to EBITDA, Ratio and the Working
Capital Ratio, means Gildan Activewear Inc. and the subsidiaries
thereof included in the formulation of Gildan Activewear Inc.'s
consolidated financial statements pursuant to GAAP.;
(b) "Current Assets" means, on any date, the current assets of the
Corporation as at such date determined in accordance with GAAP and
on a consolidated basis;
(c) "Current Liabilities" means, on any date, the current liabilities of
the Corporation as at such date determined in accordance with GAAP
and on a consolidated basis;
(d) "Debt" of the Corporation means any indebtedness or liability (other
than trade payables, income taxes payable and future income taxes)
which, in accordance with GAAP, would be classified as a liability
on the consolidated balance sheet of the Corporation, but in any
event including, without limitation or duplication:
(i) all indebtedness of the Corporation for or in respect of
borrowed money, credit or other financial accommodation;
including the indebtedness of the Corporation under this
debenture bankers' acceptances and, in the case of bank
borrowings under operating lines of credit, the monthly
average of amounts drawn under bank facilities during the
preceding twelve (12) months;
(ii) all indebtedness of the Corporation for or in respect of the
purchase or acquisition price of property or services, unless
19
2
recourse is limited to the repossession and sale of any such
property and in the opinion of the auditors of the Corporation
the recording of such debt on the balance sheet of the
Corporation is not required (provided, however, that debt on
account of an equipment purchase shall not be included as Debt
until the earlier of the date of receipt of such equipment or
the date of payment for same);
(iii) all obligations under any lease entered into by the
Corporation as lessee which would be classified as a capital
lease in accordance with GAAP;
(iv) all obligations under or in respect of performance bonds, bid
bonds, letters of credit, letters of guarantee issued by
financial institutions and similar instruments; and
(v) all indebtedness which is directly or indirectly guaranteed by
the Corporation (in favour of third parties other than for the
benefit of Affiliates of the Corporation) or which the
Corporation has agreed (contingently or otherwise) to purchase
or otherwise acquire or in respect of which the Corporation
has otherwise assured a creditor against loss;
(e) "Debt to EBITDA Ratio" means, at any time, the ratio of (i) the Debt
of the Corporation at such time; to (ii) EBITDA of the Corporation
at such time;
(f) "EBITDA" means, in respect of any twelve month period, the net
earnings of the Corporation before deduction of interest expense,
income taxes and depreciation and amortization expense based on the
most recent audited or unaudited financial statements of the
Corporation, as the case may be, and determined on a consolidated
basis in accordance with GAAP for the twelve month period
immediately preceding the date of the calculation;
(g) "Event of Default" means any one or more of the events listed in
Section 7 herein, the occurrence of which entitles the Holder to
accelerate the Corporation's obligation to make payment of the Debt
evidenced by this debenture;
(h) "GAAP" means, at any time, Canadian generally accepted accounting
principles and practice then in effect applied on a basis consistent
with prior years;
(i) "Holder" means Capital d'Amerique CDPQ Inc. and its successors and
any assigns permitted pursuant to the provisions hereof;
(j) "Maturity Date" means June 25, 2004;
(k) "Working Capital Ratio" means, at any time, the ratio of (i) the
amount equal to the Current Assets of the Corporation at such time;
to (ii) the amount equal to the Current Liabilities of the
Corporation at such time.
20
3
B. Promise to Pay
2. For value received, the Corporation hereby promises to the Holder that it
will on the Maturity Date pay to the Holder at its place of business
indicated herein the principal sum of $15,000,000 in lawful money of
Canada. Interest on the said principal sum shall accrue at the rate of
12.5% per annum calculated daily and compounded and be payable quarterly
on the 1st day of May, August, November and January of each year
thereafter not in advance, and interest on all overdue interest at the
same rate, calculated daily and compounded quarterly. The Corporation
shall pay interest on any amounts in default after the Maturity Date at
the same rate and compounded quarterly.
C. Prepayment of Principal
3. Except as permitted below, the Corporation may not prepay in whole or in
part the principal amount of this debenture prior to February 1, 2002. The
Corporation may at its option, prepay to the Holder the full principal
amount of this debenture, plus accrued interest, prior to such date in the
event the Corporation has at any time prior to such date been the target
of a public offer to purchase accepted by holders of securities
representing more than 50% of the votes attached to securities outstanding
of the Corporation and that the accepted offer price was higher than
$16.875 per share, as adjusted to reflect any share reorganization. In
such case, the whole principal amount of this debenture, with accrued
interest, plus a prepayment penalty equal to three percent (3%) of the
principal amount prepaid shall be paid to the Holder within thirty (30)
days from the date the public offer shall have been closed.
4. On and after February 1, 2002, the Corporation shall be entitled to prepay
all or any portion of the principal amount of this debenture in tranches
of at least $1,000,000 principal amount plus accrued interest if the Class
A Subordinate Voting Shares of the Corporation have traded on The Toronto
Stock Exchange at a weighted average closing price of at least $16.875 per
share, as adjusted to reflect any share reorganization, during a period of
twenty (20) consecutive trading days ending no more than five (5) trading
days before notice of the prepayment is given to the Holder. In such case,
a prepayment penalty equal to three percent (3%) of the principal amount
prepaid shall then be paid to the Holder with the prepaid amount with
accrued interest thereon until the date of payment within five (5) days of
the giving of the notice of prepayment.
D. Agreements of the Corporation
5. The Corporation covenants and agrees with the Holder that, until all
indebtedness and liability owing by the Corporation to the Holder
evidenced by and payable pursuant to this debenture is paid in full:
21
4
(a) it will:
(i) and shall cause each of its Subsidiaries which the
Corporation shall reasonably deem necessary for its
consolidated operations to preserve and maintain its
corporate existence and to qualify and remain duly qualified
to carry on business and own property in each jurisdiction in
which such qualification is necessary;
(ii) maintain and preserve in good working order and condition all
of its properties that are useful and necessary in the
conduct of the business of the Corporation and its
Subsidiaries, ordinary wear and tear excepted;
(iii) maintain key man life insurance on the life of H. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ on a "last to die" basis in an
amount of at least $15 million with the Holder hereof being
the designated loss payee to the extent of the amount
remaining unpaid under this debenture it being understood,
however, that such policy is currently being negotiated and
shall only be in force and effect within sixty (60) days of
the date of this debenture;
(v) maintain (A) property and liability insurance with
responsible and reputable insurance companies in such amounts
and covering such risks as are usually carried by companies
engaged in similar businesses and owning similar properties
in the same general areas in which the Corporation and its
Subsidiaries operate; and (B) directors' and officers'
liability insurance with minimum coverage of $30,000,000;
(v) comply and ensure that its Subsidiaries (subject to the
qualification contained in paragraph (i) above) comply in all
respects with all applicable laws, rules, regulations and
orders to enable the Corporation and its Subsidiaries to
carry on business as is currently the case;
(vi) strictly comply with every covenant and undertaking
heretofore or hereafter given by it to the Holder whether
contained herein or not;
(vii) at all times maintain Working Capital Ratio at not less than
1.2 to 1;
(viii) at all times maintain the Debt to EBITDA Ratio at no greater
than 4.0 to 1 as at the last day of each month until June 30,
1999 and 3.5 to 1 as at the last day of each month
thereafter.
(ix) deliver to the Holder as soon as practicable and in any event
within 140 days after the end of each fiscal year of the
Corporation the audited consolidated financial statements of
the Corporation and of its Subsidiaries included in the
consolidated financial statements together with any and all
notes thereto, consisting, in each case, of at least a
balance sheet, statement of changes in
22
5
financial position and statements of earnings and retained
earnings (in each case howsoever designated) together with
the applicable report and opinion of the Corporation's
auditors as well as the annual audited or unaudited, as the
case may be, unconsolidated financial statements of the
Corporation and of its Subsidiaries;
(x) deliver to the Holder as soon as practicable and in any event
within 45 days after the end of each quarter of each fiscal
year, the unaudited consolidated financial statements of the
Corporation as at the end of such quarter, consisting in each
case of at least a balance sheet, income statement and
statement of changes in financial position.
(xi) deliver or cause to be delivered to the Holder, concurrently
with delivery thereof for approval to the Corporation's board
of directors, the annual budget for itself and for its
Subsidiaries for the then coming fiscal year. Each such
budget shall include the anticipated capital and operating
expenditures in respect of the Corporation and any such
subsidiary on a consolidated basis;
(xii) to the extent permitted by applicable law, deliver or cause
to be delivered to the Holder such other information relating
to the conduct of the business and affairs or the financial
position of the Corporation as the Holder may reasonably
request from time to time; and
(xiii) without duplication of the rights granted to the Holder under
that certain Share Purchase and Debenture Purchase Agreement
entered into as of February 1, 1999 between the Corporation
and Capital d'Amerique CDPQ Inc. grant the right to the
Holder to appoint from time to time a representative to act
as an observer at all meetings of the board of directors of
the Corporation and of committees thereof for as long as the
Holder or any affiliate thereof is the holder of this
debenture. Such representative shall also be entitled to
receive, on a timely basis, all notices, communications and
material sent to directors of the Corporation.
(b) It will not without the prior written consent of the Holder:
(i) incur or create any secured long term indebtedness which,
including existing secured long term indebtedness, would
aggregate more than $60,000,000;
(ii) substantially change the nature of the business of the
Corporation and its Subsidiaries as it exists as of the date
hereof;
(iii) incur any additional unsecured debt in excess of $15 million
having a maturity date earlier than the Maturity Date of this
debenture; such consent not to be reasonably withheld by the
Holder hereof in such instance; or
23
6
(iv) issue securities if such issuance would effect a change in the
effective control of the Corporation; such consent not to be
unreasonably withheld by the Holder hereof in such instance.
E. Default
6. All indebtedness and liability owing by the Corporation to the Holder
hereunder shall, at the option of the Holder, become immediately payable
in each and every of the events following:
(a) If the Corporation is in default in the observance or performance of
any written agreement or undertaking given by the Corporation to the
Holder and such default continues for more than thirty (30) days
after written notice by the Holder of such default is received by
the Corporation;
(b) if the Corporation is in default in making payment of any amount due
hereunder;
(c) if any representation or warranty made by the Corporation in this
debenture or in any other agreement outstanding between the
Corporation and the Holder proves to have been incorrect in any
material respect when made;
(d) if a default or an event of default under any one or more
agreements, indentures or instruments under which the Corporation or
any of its Subsidiaries have at the time of this debenture or shall
thereafter have outstanding indebtedness shall happen and be
continuing, or if any indebtedness of the Corporation or any of its
Subsidiaries which is payable on demand is not paid on demand;
provided, however that if such default and event of default under
such agreement, indenture or instrument shall be remedied or cured
as provided in such agreement or waived by the holder or holders of
such indebtedness, or if such demand for payment has been rescinded
or such default waived then the Event of Default hereunder by ▇▇▇▇▇
thereof shall be deemed likewise to have been thereupon remedied,
cured or waived without further action;
(e) if an order is made or a resolution passed for the winding-up of the
Corporation, or if a petition is filed for the winding-up of the
Corporation;
(f) If the Corporation ceases or threatens to cease to carry on business
or if the Corporation commits or threatens to commit any act of
bankruptcy or if the Corporation becomes insolvent or makes an
assignment or proposal in bankruptcy or makes a bulk sale of its
assets or if a bankruptcy petition is filed or presented against the
Corporation; or
(g) if any proceedings with respect to the Corporation are commenced
under the Companies' Creditors Arrangement Act or the Bankruptcy and
insolvency Act and such proceedings are not successfully contested
by the Corporation within 60 days from the commencement thereof or
if the
24
7
Corporation shall seek relief or consents to the filing of a
petition against it under any law which involves any compromise of
any creditors rights against the Corporation or if the Corporation
shall file a notice of intention to make a proposal under any such
statute or law.
7. The Holder may in writing (and not otherwise) waive any breach by the
Corporation of any of the provisions contained in this debenture or any
default by the Corporation in the observance or performance of any
provision of this debenture; provided always that no waiver by the Holder
shall extend to or be taken in any manner whatsoever to affect any
subsequent breach or default, whether of the same or a different nature,
or the rights resulting therefrom.
8. No remedy herein conferred upon or reserved to the Holder is intended to
be exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder
or now existing or hereafter to exist by law or by statute.
9. The delay or omission of the Holder to exercise any recourse mentioned
above shall not invalidate any such recourse nor be interpreted as a
waiver or any default hereunder.
10. The Corporation shall assume and pay all reasonable costs, charges and
expenses including reasonable solicitors' fees and disbursements as
between solicitor and his own client which may be incurred by the Holder
in respect of any proceedings taken or things done by the Holder or on its
behalf in connection with this debenture to collect all amounts due
hereunder or otherwise exercise its rights. and the Corporation shall
consent to those costs, charges and expenses being reasonably charged.
F. Rights of the Holder
11. The Holder, without exonerating in whole or in part the Corporation, may
grant time, renewals, extensions, releases and discharges to, may take
securities from and give the same and any or all existing securities up
to, may abstain from taking securities from or from perfecting securities
of, may accept compositions from, and may otherwise deal with the
Corporation and all other persons and securities as the Holder (and the
Corporation if its consent thereto is required) may see fit.
12. The Holder may not assign any of its rights hereunder without the prior
written consent of the Corporation unless such assignment is in favour of
the Caisse de depot et placement du Quebec or an affiliate thereof, in
which case no consent shall be required. The Corporation may not assign
any of its obligations hereunder without the prior written consent of the
Holder.
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G. Miscellaneous
13. If one or more of the provisions contained herein shall be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in
any way be affected or impaired thereby.
14. Upon payment by the Corporation, its successors or permitted assigns, of
all indebtedness and liability of the Corporation to the Holder evidenced
hereby and the fulfilment of all other obligations of the Corporation to
the Holder hereunder, the Holder shall release and surrender this
debenture to the Corporation for cancellation.
15. This debenture shall be construed in accordance with and be governed by
the laws of the Province of Quebec. For the purpose of legal proceedings,
this debenture shall be deemed to have been made in the said Province and
to be performed there and the courts of that Province shall have
jurisdiction over all disputes which may arise under this debenture. The
Corporation hereby irrevocably and unconditionally submits to the
non-exclusive jurisdiction of such courts, provided always that nothing
herein contained shall prevent the Holder from proceeding at its election
against the Corporation in any other province, country or jurisdiction.
16. The headings in this debenture are included for convenience of reference
only, and shall not constitute a part of this debenture for any other
purpose.
17. This debenture and all its provisions shall enure to the benefit of the
Holder, its successors and permitted assigns, and shall be binding on the
Corporation, its successors and permitted assigns.
18. Any demand or notice by the Holder in connection with this debenture may
be made or given by delivering or mailing or sending the same to the
Corporation at 725 ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇-▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇ to
the attention of Mr. H. ▇▇▇▇ ▇▇▇▇▇▇▇▇ with a copy to ▇▇▇▇, Saint-Pierre, ▇
▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, to the attention
of ▇▇▇▇ ▇▇▇▇▇▇ and by the Corporation to the Holder in the same fashion at
1981 avenue ▇▇▇▇▇▇ College, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, to the attention of
Vice-President, Legal Affairs, shall be deemed to have been received by
the Corporation or the Holder, as the case may be, on the date of delivery
or the third business day following the date of such mailing.
19. In construing this debenture, the term "successors" shall include, without
limiting its meaning, any corporation resulting from the amalgamation of a
corporation with another corporation.
26
IN WITNESS WHEREOF the Corporation has executed this debenture as of the 1st day
of February, 1999.
GILDAN ACTIVEWEAR INC.
by:
------------------------------
Chairman and Chief Executive
Officer