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EXHIBIT 2.1
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COMBINATION AGREEMENT
BY AND BETWEEN
THE MEN'S WEARHOUSE, INC. ("TMW")
AND
GOLDEN MOORES COMPANY ("CANCO"),
A WHOLLY OWNED SUBSIDIARY OF TMW,
AND
▇▇▇▇▇▇ RETAIL GROUP INC. ("MG")
AND
THE SHAREHOLDERS OF MG
NOVEMBER 18, 1998
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TABLE OF CONTENTS
ARTICLE I.
SHARE RESTRUCTURING PLAN.................................................................................1
1.1 SHARE RESTRUCTURING PLAN........................................................................1
1.2 DETERMINATION OF EXCHANGE RATIO.................................................................2
1.3 OTHER EFFECTS OF THE SHARE RESTRUCTURING........................................................3
1.4 CURRENCY........................................................................................3
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF MG.....................................................................3
2.1 ORGANIZATION AND STANDING.......................................................................3
2.2 AGREEMENT AUTHORIZED AND ITS EFFECT ON OTHER OBLIGATIONS........................................4
2.3 GOVERNMENTAL CONSENTS...........................................................................4
2.4 CAPITALIZATION..................................................................................5
2.5 FINANCIAL STATEMENTS............................................................................5
2.6 LIABILITIES.....................................................................................6
2.7 INFORMATION SUPPLIED............................................................................6
2.8 NO DEFAULTS.....................................................................................7
2.9 LITIGATION; INVESTIGATIONS......................................................................7
2.10 ABSENCE OF CERTAIN CHANGES AND EVENTS...........................................................7
2.11 ADDITIONAL MG INFORMATION.......................................................................8
2.12 CERTAIN AGREEMENTS..............................................................................9
2.13 EMPLOYEE BENEFIT PLANS..........................................................................9
2.14 INTELLECTUAL PROPERTY..........................................................................11
2.15 TITLE TO AND CONDITION OF PROPERTIES...........................................................11
2.16 FACTORY OPERATIONS AND CAPACITY................................................................12
2.17 ENVIRONMENTAL MATTERS..........................................................................12
2.18 COMPLIANCE WITH OTHER LAWS.....................................................................14
2.19 TAXES..........................................................................................14
2.20 INVENTORY......................................................................................15
2.21 CREDIT ITEMS...................................................................................15
2.22 VOTE REQUIRED..................................................................................15
2.23 POOLING MATTERS................................................................................15
2.24 BROKERS AND FINDERS............................................................................15
2.25 DISCLOSURE.....................................................................................15
2.26 POOLING OPINION................................................................................15
2.27 RESTRICTIONS ON BUSINESS ACTIVITIES............................................................15
2.28 [INTENTIONALLY OMITTED]........................................................................16
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ARTICLE II-B
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS......................................................16
2.29 NO LIENS.......................................................................................16
2.30 EFFECT OF AGREEMENT ON SHAREHOLDERS............................................................16
2.31 AUTHORIZATION..................................................................................16
2.32 NO UNTRUE STATEMENTS...........................................................................17
2.33 BROKERS........................................................................................17
2.34 NO AFFILIATE OBLIGATIONS.......................................................................17
2.35 INVESTMENT PURPOSE; ACCREDITED INVESTOR........................................................17
2.36 INDEBTEDNESS AND AGREEMENTS....................................................................17
2.37 POOLING MATTERS................................................................................17
2.38 RESIDENCE......................................................................................18
2.39 CAPITAL PROPERTY...............................................................................18
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF TMW...................................................................18
3.1 ORGANIZATION AND STANDING......................................................................18
3.2 AGREEMENT AUTHORIZED AND ITS EFFECTS ON OTHER OBLIGATIONS......................................19
3.3 GOVERNMENTAL CONSENTS..........................................................................19
3.4 CAPITALIZATION.................................................................................20
3.5 LITIGATION; INVESTIGATIONS.....................................................................20
3.6 VOTE REQUIRED..................................................................................20
3.7 BROKERS AND FINDERS............................................................................20
3.8 INFORMATION SUPPLIED...........................................................................21
3.9 AUTHORIZATION FOR TMW COMMON STOCK.............................................................21
3.10 SEC DOCUMENTS..................................................................................21
3.11 DISCLOSURE.....................................................................................21
3.12 POOLING MATTERS................................................................................21
3.13 POOLING OPINION................................................................................22
3.14 NO DEFAULTS....................................................................................22
ARTICLE IV.
OBLIGATIONS PENDING EFFECTIVE DATE......................................................................22
4.1 AGREEMENTS OF TMW, CANCO AND MG................................................................22
4.2 ADDITIONAL AGREEMENTS OF MG....................................................................23
4.3 ADDITIONAL AGREEMENTS OF TMW...................................................................26
4.4 REGISTRATION STATEMENT.........................................................................26
4.5 PUBLIC ANNOUNCEMENTS...........................................................................27
4.6 COMFORT LETTERS................................................................................28
4.7 EXPENSES.......................................................................................28
4.8 ADDITIONAL AGREEMENTS BY SHAREHOLDERS..........................................................28
4.9 INVENTORY RECONCILIATION.......................................................................28
4.10 DEBT REPAYMENT.................................................................................28
4.11 CERTAIN LEASES.................................................................................29
4.12 MG DISCLOSURE LETTER...........................................................................29
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4.13 OPTIONHOLDERS AGREEMENT TO EXCHANGE OPTIONS....................................................29
4.14 TAX CERTIFICATES...............................................................................29
ARTICLE V.
CONDITIONS PRECEDENT TO OBLIGATIONS.....................................................................30
5.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY..............................................30
(a) Consents of Certain Parties in Privity................................................30
(b) No Legal Action.......................................................................30
(c) Commissions, etc......................................................................30
(d) SEC Matters...........................................................................30
(e) Listings..............................................................................30
(f) Optionholders.........................................................................30
(g) Tax Certificates......................................................................30
(h) Authorization for Exchangeable Shares.................................................31
5.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF MG AND THE SHAREHOLDERS.................................31
(a) Representations and Warranties........................................................31
(b) Covenants.............................................................................31
(c) Certificate...........................................................................31
(d) Opinion of TMW Counsel................................................................32
(e) Affiliates Agreements.................................................................32
(f) Certificates and Resolutions..........................................................32
(g) Aggregate Value.......................................................................32
(h) Termination of Employment Agreements..................................................32
5.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF TMW.....................................................32
(a) Representations and Warranties........................................................32
(b) Covenants.............................................................................32
(c) Certificate...........................................................................32
(d) Opinion of MG Counsel.................................................................32
(e) Pooling Matters.......................................................................33
(f) Agreed Upon Procedures Report and Comfort Letter......................................33
(g) Affiliates Agreements.................................................................33
(h) Options Exchanged.....................................................................33
(i) Amounts to be Paid by Zelnik and Kreisler.............................................33
(j) Certificate of the Chief Financial Officer............................................33
(k) Letter Regarding Debt Referred to in Section 2.2(b)...................................33
(l) Certificates and Resolutions..........................................................33
(m) [Intentionally Omitted]...............................................................34
(n) Termination Agreements................................................................34
(o) Resignations..........................................................................34
(p) Non-Competition and Confidentiality Agreements........................................34
(q) Accounts Payable......................................................................34
(r) Repayment of Debt.....................................................................34
(s) Release of Liens......................................................................34
(t) Lease Consents........................................................................34
(u) Union Negotiations....................................................................34
(v) Share Allocation......................................................................35
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(w) ▇▇▇▇▇▇ ▇▇▇▇ Letter....................................................................35
(x) Inventory Levels......................................................................35
(y) Hazardous Materials...................................................................35
(z) Termination of Certain Employees......................................................35
ARTICLE VI.
OBLIGATIONS OF PARTIES AFTER CLOSING....................................................................35
6.1 POST-CLOSING CONFIDENTIALITY...................................................................35
6.2 NO SOLICITATION OF EMPLOYEES...................................................................35
ARTICLE VII.
TERMINATION.............................................................................................36
7.1 TERMINATION....................................................................................36
7.2 NOTICE OF TERMINATION..........................................................................37
7.3 EFFECT OF TERMINATION..........................................................................37
ARTICLE VIII.
ADDITIONAL AGREEMENTS...................................................................................37
8.1 THE CLOSING....................................................................................37
8.2 ANCILLARY DOCUMENTS/RESERVATION OF SHARES......................................................37
8.3 AFFILIATE AGREEMENTS...........................................................................38
8.4 SAFE INCOME CALCULATION........................................................................38
ARTICLE IX.
MISCELLANEOUS...........................................................................................38
9.1 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES..................................................38
9.2 NOTICES........................................................................................39
9.3 ARBITRATION....................................................................................40
9.4 INTERPRETATION.................................................................................42
9.5 KNOWLEDGE......................................................................................42
9.6 WAIVER AND AMENDMENT...........................................................................42
9.7 GOVERNING LAW; LANGUAGE........................................................................42
9.8 SEVERABILITY...................................................................................42
9.9 COUNTERPARTS...................................................................................43
9.10 NUMBER AND GENDER..............................................................................43
9.11 MISCELLANEOUS..................................................................................43
9.12 DIVISIONS, HEADINGS, ETC.......................................................................43
9.13 DATE OF ANY ACTION.............................................................................43
LIST OF EXHIBITS
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Exhibit A -- Share Restructuring Plan
Exhibit B -- MG Comfort Letter
Exhibit C -- Agreement to Exchange Options
Exhibit D -- Optionholder Agreement
Exhibit E -- Termination Agreement (▇▇▇▇▇▇ ▇▇▇▇▇▇)
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Exhibit F -- Termination Agreement (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇)
Exhibit G -- Non-Competition and Confidentiality Agreement (▇▇▇▇▇▇ ▇▇▇▇▇▇)
Exhibit H -- Non-Competition and Confidentiality Agreement (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇)
Exhibit I -- Non-Competition and Confidentiality Agreement (▇▇▇ ▇▇ ▇▇▇▇▇)
Exhibit J -- Non-Competition and Confidentiality Agreement (▇▇▇▇▇ ▇▇▇▇▇▇▇▇)
Exhibit K -- Non-Competition and Confidentiality Agreement (Mario Parzialie)
Exhibit L -- Non-Competition and Confidentiality Agreement (▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇)
Exhibit M -- Termination Agreement (▇▇▇▇▇ ▇▇▇▇▇)
Exhibit N -- Support Agreement
Exhibit O -- Voting Trust Agreement
Exhibit P -- MG Affiliate Agreement
Exhibit Q -- TMW Affiliate Agreement
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DEFINITIONS
Acquisition Proposal....................................................................................Section 4.2
Affiliate ............................................................................................. Section 8.3
Agreement ................................................................................................ Recitals
Agreement to Exchange Options..........................................................................Section 4.13
Applicable Environmental Laws ........................................................................ Section 2.17
Anpro..................................................................................................Section 2.37
Association............................................................................................Section 2.13
Average TMW Stock Price ............................................................................... Section 1.2
Balance Sheet Date .................................................................................... Section 2.5
Business Day...........................................................................................Section 9.13
Can $...................................................................................................Section 1.2
Canco .................................................................................................... Recitals
CDPQ....................................................................................................Section 2.2
Closing ............................................................................................... Section 8.1
Closing Date .......................................................................................... Section 8.1
Code ..................................................................................................... Recitals
Collective Bargaining Plans............................................................................Section 2.13
Confidentiality Agreement ............................................................................. Section 6.2
Credit Agreement.......................................................................................Section 4.10
D&T .................................................................................................. Section 3.13
Disruption..............................................................................................Section 5.3
dollars or $ .......................................................................................... Section 1.4
E&Y .................................................................................................. Section 2.26
Effective Date ........................................................................................ Section 1.1
Effective Time ........................................................................................ Section 1.1
Encumbrance ........................................................................................... Section 2.1
ERISA ................................................................................................ Section 2.13
Exchange Rate ......................................................................................... Section 1.2
Exchangeable Shares.....................................................................................Section 1.2
Financial Statements....................................................................................Section 2.5
Governmental Entity ................................................................................... Section 2.3
Gronbri ..............................................................................................Section 2.37
ITA ...................................................................................................... Recitals
Junior Debt.............................................................................................Section 2.2
Junior Debt Fair Value..................................................................................Section 2.2
Junior Lenders..........................................................................................Section 2.2
Junior Loan Agreement...................................................................................Section 2.2
knowledge ............................................................................................. Section 9.5
Letter Agreement.......................................................................................Section 2.37
Marpro.................................................................................................Section 2.37
material ............................................................................................... Article II
Material Adverse Effect ................................................................................ Article II
MG ....................................................................................................... Recitals
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Definitions (Cont'd)
MG Class B Shares ..................................................................................... Section 2.4
MG Class C Shares ..................................................................................... Section 2.4
MG Class D Shares ..................................................................................... Section 2.4
MG Class E Shares ..................................................................................... Section 2.4
MG Class F Shares ..................................................................................... Section 2.4
MG Comfort Letter ..................................................................................... Section 4.6
MG Common Shares ...................................................................................... Section 2.4
MG Disclosure Letter ................................................................................... Article II
MG Intellectual Property ............................................................................. Section 2.14
MG Plan .............................................................................................. Section 2.13
MG Pooling Opinion ................................................................................... Section 2.26
MG Preferred Shares ................................................................................... Section 2.4
MG Shares ............................................................................................. Section 1.2
MG Subsidiaries ....................................................................................... Section 2.1
NASDAQ ................................................................................................ Section 1.2
NBBCA...................................................................................................Section 1.1
Optionholder Agreement..................................................................................Section 5.1
Optionholders...........................................................................................Section 1.2
Options ............................................................................................... Section 1.2
Option Shares..........................................................................................Section 4.13
Option Value............................................................................................Section 1.2
Prosserman Note 1......................................................................................Section 4.10
Prosserman Note 2......................................................................................Section 4.10
Prosserman Notes.......................................................................................Section 4.10
Reference Balance Sheet ............................................................................... Section 2.5
Registration Statement ................................................................................ Section 4.4
Representatives ........................................................................................Section 4.2
Revised MG Disclosure Letter...........................................................................Section 4.12
Safe Income.............................................................................................Section 8.4
Safe Income Determination Time..........................................................................Section 8.4
SEC ................................................................................................... Section 3.3
SEC Documents ........................................................................................ Section 3.10
Securities Act ....................................................................................... Section 2.35
Securityholders .......................................................................................... Recitals
Share Restructuring.....................................................................................Section 1.1
Share Restructuring Plan .............................................................................. Section 1.1
Shareholders ............................................................................................. Recitals
Societe Generale........................................................................................Section 1.2
Tax .................................................................................................. Section 2.19
TMW ...................................................................................................... Recitals
TMW Common Stock ...................................................................................... Section 3.4
TMW Disclosure Letter ................................................................................. Article III
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Definitions (Cont'd)
TMW Pooling Opinion .................................................................................. Section 3.13
TMW Preferred Stock ................................................................................... Section 3.4
TMW Subsidiaries ...................................................................................... Section 3.1
Union..................................................................................................Section 2.13
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COMBINATION AGREEMENT
THIS COMBINATION AGREEMENT dated as of November 18, 1998 (this
"Agreement"), is made and entered into by and between THE MEN'S WEARHOUSE, INC.,
a Texas corporation ("TMW"), GOLDEN MOORES COMPANY, a Nova Scotia unlimited
liability company and wholly owned subsidiary of TMW ("Canco"), ▇▇▇▇▇▇ RETAIL
GROUP INC., a New Brunswick corporation ("MG"), and MARPRO HOLDINGS INC., MGB
LIMITED PARTNERSHIP, CAPITAL D'AMERIQUE CDPQ INC., CERBERUS INTERNATIONAL, LTD.,
ULTRA CERBERUS FUND, LTD., STYX INTERNATIONAL LTD, THE LONG HORIZONS OVERSEAS
FUND LTD., THE LONG HORIZONS FUND, L.P. AND STYX PARTNERS, L.P.
(collectively, the "Shareholders" and each a "Shareholder").
WHEREAS, the respective boards of directors of TMW and MG each deem it
advisable and in the best interests of their respective stockholders to combine
their respective businesses by TMW acquiring shares in the capital stock of MG
through Canco pursuant to this Agreement and the Share Restructuring Plan (as
hereinafter defined).
WHEREAS, in furtherance of such combination, the respective boards of
directors of TMW and MG have approved the transactions contemplated by this
Agreement and the board of directors of MG has submitted the Share Restructuring
Plan and the other transactions contemplated hereby to its shareholders and
optionholders (together, "Securityholders") for approval.
WHEREAS, the respective boards of directors of TMW, Canco and MG have
approved and adopted this Agreement and the Share Restructuring Plan as a plan
of reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986,
as amended (the "Code"), and as a reorganization of capital of MG under Section
86 of the Income Tax Act (Canada) (the "ITA") for those MG shareholders who hold
MG Shares (as hereinafter defined) on capital account.
WHEREAS, it is intended that the transactions contemplated hereby will
be treated as a "pooling of interests" in accordance with accounting principles
generally accepted in the United States.
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the consummation of the Share Restructuring (as hereinafter
defined).
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties, covenants and agreements herein contained, the
parties hereto hereby agree as follows:
ARTICLE I.
SHARE RESTRUCTURING PLAN
1.1 SHARE RESTRUCTURING PLAN. As soon as practicable after all of the
conditions precedent set forth in Article V have been satisfied or effectively
waived pursuant to the terms hereof, MG shall cause the Share Restructuring Plan
in the form of Exhibit A attached hereto (the "Share Restructuring Plan") to be
filed with the Director under the Business Corporations Act (New
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Brunswick) (the "NBBCA"). At 12:01 a.m. (the "Effective Time") on the date (the
"Effective Date") shown on the Certificate of Amendment giving effect to the
share restructuring contemplated by the Share Restructuring Plan (the "Share
Restructuring"), the reorganization of capital and other transactions set out in
clauses (a) through (j), inclusive, of Section 2.1 of the Share Restructuring
Plan shall occur and shall be deemed to occur without any further act or
formality in the order set forth therein.
1.2 DETERMINATION OF EXCHANGE RATIO.
(a) At the Effective Time, the outstanding shares of each
class of capital stock of MG (the "MG Shares") and Options (as defined below)
will be converted into Exchangeable Shares (as defined in the Share
Restructuring Plan) of MG as follows:
The aggregate number of Exchangeable Shares to be issued with respect
to the outstanding capital stock of MG and the Options shall be 2.5 million
shares; provided, however, that if the Average TMW Stock Price (as defined
below) is below U.S. $20.00, then the aggregate number of Exchangeable Shares to
be issued shall be equal to that number of shares of TMW Common Stock (as
defined herein) which has a market value of U.S. $50 million (based on the
Average TMW Stock Price), but not to exceed 2.75 million shares in any case.
(b) Not later than two business days prior to the Effective
Date, Societe Generale (Canada) Ltd. ("Societe Generale") shall determine the
option value (the "Option Value") of each of the options (the "Options") to
purchase capital stock of MG listed on Schedule 1.2(b). The Option Value shall
be determined in Canadian dollars ("Can $") and in accordance with the
procedures and methodology in the draft report of Societe Generale dated
November 17, 1998 which has been provided to MG and TMW. Subject to Section
4.13, each holder of an Option (collectively, the "Optionholders") shall be
entitled to receive a number of Exchangeable Shares equal to the Option Value of
such holder's Option divided by the average of the closing price for the Common
Stock of TMW on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") for each of the ten trading days ending on the third
trading day prior to the Closing Date (the "Average TMW Stock Price") converted
to Can $ at the Exchange Rate. The "Exchange Rate" for purposes of this
Agreement shall be the exchange rate on the date hereof, which is 0.6460 U.S.
dollars to each Can $.
(c) At the Effective Time, the outstanding MG Shares shall be
exchanged for an aggregate number of Exchangeable Shares equal to the number of
Exchangeable Shares to be issued in accordance with Section 1.2(a) minus the
number of Exchangeable Shares issuable in respect of the Options in accordance
with Section 1.2(b) whether or not Exchangeable Shares are actually issued
pursuant to Section 1.2(b). The Exchangeable Shares to be issued to the holders
of MG Shares shall be allocated among the classes of capital stock as follows:
one Exchangeable Share shall be issued in respect of the MG Class D Shares and
the remaining Exchangeable Shares to be issued in respect of the MG Shares shall
be allocated 15.33% to the MG Common Shares, 35.78% to the MG Class B Shares and
48.89% to the MG Class C Shares (each as hereinafter defined). The number of
Exchangeable Shares allocated to each class of MG Shares shall be allocated
within such class pro rata based on the number of MG Shares in such class.
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(d) No certificate or scrip representing a fractional share of
an Exchangeable Share shall be issued and no dividend or other distribution
shall relate to any fractional security. In lieu of a fractional share, MG shall
pay to a Securityholder who would otherwise be entitled to a fractional share an
amount in cash equal to such fraction multiplied by the closing price on the
trading day prior to the Effective Date of the shares of Common Stock of TMW on
NASDAQ.
1.3 OTHER EFFECTS OF THE SHARE RESTRUCTURING. At the Effective Time:
(a) the directors of MG will be ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and ▇▇▇ ▇▇ ▇▇▇▇▇; (b) the officers of MG will be as designated by the board of
directors of MG immediately after the Effective Time, subject to later removal
and appointment of other officers; (c) each MG Share and each Option outstanding
immediately prior to the Effective Time will be exchanged as provided in Section
1.2; and (d) the Share Restructuring will, from and after the Effective Time,
have all of the effects provided by applicable law, including the NBBCA.
1.4 CURRENCY. Unless otherwise specified, all references in this
Agreement to "dollars" or "$" shall mean Canadian dollars.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF MG
In this Agreement, the term "Material Adverse Effect" or "material"
used with respect to any party means any event, change or effect that could
reasonably be expected to result in loss, damage, liabilities, cost or other
expenses to such party and its subsidiaries aggregating on a cumulative basis
$1,600,000 or more or to reduce cash flow or net income of such party and its
subsidiaries by $500,000 or more in either of the next two fiscal years.
Except as set forth in a letter dated the date of this Agreement and
delivered by MG to TMW concurrently herewith (the "MG Disclosure Letter"), MG
hereby represents and warrants to, and agrees with, TMW that:
2.1 ORGANIZATION AND STANDING. MG and each body corporate, partnership,
joint venture, association or other business entity of which more than 50% of
the total voting power of shares of stock or units of ownership or beneficial
interest entitled to vote in the election of directors (or members of a
comparable governing body) is owned or controlled, directly or indirectly, by MG
(the "MG Subsidiaries"), is an entity duly incorporated and organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, has full requisite power and authority to carry
on its business as it is currently conducted, and to own, lease and operate the
properties currently owned, leased and operated by it, and is duly qualified or
licensed to do business and is in good standing in all jurisdictions in which
the character of the properties owned or leased or the nature of the business
conducted by it would make such qualification or licensing necessary, except
where the failure to be so qualified or licensed would not have a Material
Adverse Effect on MG. The MG Disclosure Letter sets forth (i) a complete list of
the MG Subsidiaries, (ii) the percentage of each subsidiary's outstanding
capital stock or other ownership interest owned by MG or another MG Subsidiary,
(iii) a description of any lien, charge, mortgage, hypothec, security interest,
option, preferential purchase right or other right or interest of any other
person (collectively, an "Encumbrance") on such stock or other ownership
interest, (iv) a list
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identifying the ownership interest therein of any person other than MG or any MG
Subsidiary and (v) a complete list of each jurisdiction in which each of MG and
the MG Subsidiaries is duly qualified and in good standing to do business.
2.2 AGREEMENT AUTHORIZED AND ITS EFFECT ON OTHER OBLIGATIONS.
(a) MG has all requisite corporate power and authority to
enter into this Agreement and to perform its obligations hereunder and to
consummate the Share Restructuring and the other transactions contemplated by
this Agreement. All necessary approvals of the Securityholders of MG for the
execution of this Agreement and the consummation of the transactions
contemplated hereby have been obtained. The execution and delivery of this
Agreement by MG and the consummation by MG of the Share Restructuring and the
other transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of MG. This Agreement has been duly
executed and delivered by MG and is the valid and binding obligation of MG,
enforceable in accordance with its terms, except that such enforceability may be
subject to (i) bankruptcy, insolvency, reorganization or other similar laws
affecting or relating to enforcement of creditors' rights generally and (ii)
general equitable principles.
(b) Neither the execution, delivery or performance of this
Agreement or the Share Restructuring Plan by MG, nor the consummation of the
transactions contemplated hereby or thereby by MG nor compliance with the
provisions hereof or thereof by MG will: (i) conflict with, or result in any
violations of, the articles of incorporation or bylaws of MG or any equivalent
document of any of the MG Subsidiaries, or (ii) result in any breach of or cause
a default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, amendment, cancellation or acceleration of any
obligation contained in, or the loss of any benefit under, or create any penalty
payment or other obligations under, or result in the creation of any Encumbrance
upon any of the properties or assets of MG or any of the MG Subsidiaries under,
any term, condition or provision of any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to MG or any of the MG
Subsidiaries or their respective properties or assets. MG has received a letter
dated November 10, 1998 from ▇▇▇▇▇▇▇▇▇ L.L.C. and Capital D'Amerique CDPQ
("CDPQ", and together with ▇▇▇▇▇▇▇▇▇ L.L.C., the "Junior Lenders") pursuant to
which the Junior Lenders have consented to the prepayment of the junior loan
(the "Junior Debt") provided for in that certain Loan Agreement entered into on
December 23, 1996 among GB/B Acquisition Corp. and M Acquisition Corp., as
Borrowers, and MG (formerly Zorro Holding Corp.) and the Junior Lenders (the
"Junior Loan Agreement"), at "fair value" which has been determined and agreed
to be the principal amount of Junior Debt plus accrued interest thereon through
the date of such prepayment (the "Junior Debt Fair Value").
2.3 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign (each a "Governmental Entity"), is required to be obtained
by MG or any of the MG Subsidiaries in connection with the execution and
delivery of this Agreement or the Share Restructuring Plan or the consummation
of the transactions contemplated hereby or thereby, except for certain
post-signing filings to be made under the
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Investment Canada Act and/or certain consents to be obtained from the Canadian
securities regulatory authorities.
2.4 CAPITALIZATION.
(a) The authorized capital stock of MG consists of: (1) an
unlimited number of MG common shares, without par value ("MG Common Shares"),
(2) 70,000 Class B Shares, without par value ("MG Class B Shares"), (3) 122,222
Class C Shares, without par value ("MG Class C Shares"), (4) 135,000 Class D
Shares, without par value ("MG Class D Shares"), (5) 66,000 Class E Shares,
without par value ("MG Class E Shares"), (6) 6,698 Class F Shares, without par
value ("MG Class F Shares") and (7) an unlimited number of Preferred Shares,
without par value, issuable in series ("MG Preferred Shares"). As of the date
hereof, 30,000 MG Common Shares were issued and outstanding, 70,000 MG Class B
Shares were issued and outstanding, 100,000 MG Class C Shares were issued and
outstanding and 135,000 MG Class D Shares were issued and outstanding. As of the
date hereof, no MG Shares are held by MG in its treasury. As of the date hereof,
an aggregate of 12,949 MG Class C Shares were reserved for issuance upon the
exercise of stock options then outstanding under MG's stock option plans and
9,273 shares of MG Class C Shares were reserved for future issuance of options
under MG's stock option plans. Prior to the date hereof, 2,222 of the Options
have vested in accordance with their terms and 10,727 remain unvested. No MG
Class E Shares, MG Class F Shares or MG Preferred Shares are issued or
outstanding. All of the issued and outstanding MG Shares have been duly
authorized and validly issued, are fully paid and non-assessable, were not
issued in violation of the terms of any agreement or other understanding binding
upon MG and were issued in compliance with all applicable charter documents of
MG and all applicable federal, provincial and foreign securities laws, rules and
regulations. There are, and have been, no preemptive rights with respect to the
issuance of the MG Shares or any other capital stock of MG. The MG Disclosure
Letter contains a true and correct list of all record holders of MG Shares or
Options indicating the MG Shares or Options held by each of such persons.
(b) Except for the Options, there are no outstanding
subscriptions, options, warrants, convertible securities, calls, commitments,
agreements or rights (contingent or otherwise) of any character to purchase or
otherwise acquire from MG or any MG Subsidiary any shares of, or any securities
convertible into, the capital stock of MG or any MG Subsidiary nor are there any
rights to payments or benefits based on the price or market value of any shares
of capital stock of MG or any MG Subsidiary.
2.5 FINANCIAL STATEMENTS.
(a) MG has delivered to TMW copies of the (1) audited
consolidated financial statements for the year ended January 31, 1998, (2)
unaudited MG July 31, 1998 consolidated balance sheet (the "Reference Balance
Sheet") and (3) unaudited consolidated statements of income and cash flow for
the six-month periods ended on July 31, 1997 and July 31, 1998 (such latter date
being hereinafter referred to as the "Balance Sheet Date"), each of which was
prepared in accordance with Canadian generally accepted accounting principles,
and which fairly represent the financial condition and results of operations of
MG and the MG Subsidiaries on a consistent basis, as of and for the periods
presented, subject, in the case of the unaudited statements, to normal year end
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adjustments, which in the aggregate are not material, copies of which are
included in Section 2.5 of the MG Disclosure Letter (the "Financial
Statements").
(b) Since December 23, 1996, there has been no change in MG's
accounting policies or the methods of making accounting estimates or changes in
estimates that are material to such financial statements, except as described in
the notes thereto and to the knowledge of the chief financial officer of MG
there has been no change in MG's accounting policies or the method of making
accounting estimates or changes in estimates since December 31, 1995.
(c) To the knowledge of MG, the MG Disclosure Letter
accurately sets forth the sales, retail gross margin and lease expense by store
for each of the retail stores operated by MG or the MG Subsidiaries for the
fiscal year ended January 31, 1998 and for the six months ended July 31, 1998.
(d) The books, records and accounts of MG and the MG
Subsidiaries (i) since December 23, 1996 have been maintained in accordance with
good business practices on a basis consistent with prior years, (ii) are stated
in reasonable detail and accurately and fairly reflect in all material respects
the transactions and dispositions of the assets of MG and the MG Subsidiaries
since December 23, 1996 and (iii) accurately and fairly reflect in all material
respects the basis for the MG financial statements for the periods beginning
since December 23, 1996. MG has devised and maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; and (ii) transactions are recorded as necessary (A) to permit
preparation of financial statements in conformity with Canadian generally
accepted accounting principles and (B) to maintain accountability for assets.
(e) MG has delivered to TMW the unaudited balance sheet and
related unaudited statement of income and retained earnings for ▇▇▇▇▇▇ The Suit
People Inc. and ▇▇▇▇▇▇ The Suit People U.S., Inc. for the months ending August
31, 1998 and September 30, 1998, which were prepared in accordance with Canadian
generally accepted accounting principles, and which fairly represent the
financial condition and results of operations of ▇▇▇▇▇▇ The Suit People Inc. and
▇▇▇▇▇▇ The Suit People U.S., Inc., as of and for the periods presented, subject
to normal year end adjustments, which in the aggregate are not material, copies
of which are included in Section 2.5 of the MG Disclosure Letter (the "Financial
Statements").
2.6 LIABILITIES. Except as set forth in the Reference Balance Sheet,
neither MG nor any MG Subsidiary has any liabilities or obligations, either
accrued, absolute, contingent or otherwise, or has any knowledge of any
potential liabilities or obligations which could have a Material Adverse Effect,
other than those incurred in the ordinary course of business consistent with
past practices since July 31, 1998. Neither MG nor any of the MG Subsidiaries
has incurred any indebtedness for borrowed money since July 31, 1998.
2.7 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by MG for inclusion or incorporation by reference in the Registration
Statement (as defined in Section 4.4) will at the time the Registration
Statement is declared effective, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they are
made, not misleading.
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2.8 NO DEFAULTS. Neither MG nor any MG Subsidiary is, or has received
notice that it would be with the passage of time, in default or violation of any
term, condition or provision of (a) its charter documents or bylaws; (b) any
judgment, decree or order applicable to it; or (c) any loan or credit agreement,
note, bond, mortgage, indenture, contract, agreement, lease, license or other
instrument to which MG or any MG Subsidiary is now a party or by which it or any
of its properties or assets may be bound and neither MG nor any MG Subsidiary
has any knowledge that any other party to any such agreements or instruments is
in default with respect thereto.
2.9 LITIGATION; INVESTIGATIONS. There is no claim, action, suit or
proceeding pending, or to the knowledge of MG threatened against MG or any of
the MG Subsidiaries, which would, if adversely determined, individually or in
the aggregate, have a Material Adverse Effect on MG, nor is there any judgment,
decree, injunction, rule or order of any Governmental Entity or arbitrator
outstanding against MG or any of the MG Subsidiaries having, or which, insofar
as reasonably can be foreseen, in the future could have, a Material Adverse
Effect. There is no investigation pending, or to the knowledge of MG threatened,
against MG or any of the MG Subsidiaries before any Governmental Entity.
2.10 ABSENCE OF CERTAIN CHANGES AND EVENTS. Since January 31, 1998,
there has not been:
(a) Any material adverse change in the financial condition,
operations, assets, liabilities or business of MG and the MG Subsidiaries, taken
as a whole;
(b) Any material damage, destruction, or loss to the business,
properties or assets of MG and the MG Subsidiaries, taken as a whole, whether or
not covered by insurance;
(c) Any declaration, setting aside or payment of any dividend
or other distribution in respect of the capital stock of MG, or any direct or
indirect redemption, purchase or any other acquisition by MG of any such stock;
(d) Any change in the capital stock or in the number of shares
or classes of MG's authorized or outstanding capital stock as described in
Section 2.4 nor any grant or issuance of any options or other rights with
respect to the capital stock of MG or any MG Subsidiary;
(e) Any material labor dispute or charge of unfair labor
practice (other than routine individual grievances), or, to the knowledge of MG,
any activity or proceeding by a labor union or by a representative thereof to
organize any employees of MG or any MG Subsidiary or any campaign being
conducted to solicit authorization from employees to be represented by such
labor union;
(f) Any change in compensation or benefits payable or to
become payable to any employee except in the ordinary course of business
consistent with past practices; or
(g) Any other event or condition known to MG pertaining to and
adversely affecting the operations, assets or business of MG or any of the MG
Subsidiaries (other than events or conditions which are of a general or
industry-wide nature and of general public knowledge) which would constitute a
Material Adverse Effect on MG.
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2.11 ADDITIONAL MG INFORMATION. The MG Disclosure Letter contains true,
complete and correct lists of the following items with respect to MG and each of
the MG Subsidiaries, and MG has furnished or made available to TMW true,
complete and correct copies of all documents referred to in such lists:
(a) Each parcel of real property owned, or subject to a
contract of purchase and sale with a description of the nature and amount of any
Encumbrance thereon, each parcel of real property leased, or subject to a lease
commitment with a description of the landlord, base rent, any percentage rent,
any triple net or CAM charges, term of lease, go dark provisions, renewal
options, and, with respect to each parcel of real property leased in the United
States or subject to a lease which purports to restrict business activities in
the United States any radius restriction and each parcel of real property with
respect to which MG or an MG Subsidiary is in discussions with respect to the
leasing thereof;
(b) All insurance policies or bonds currently maintained,
including those covering properties, buildings, machinery, equipment, fixtures,
employees and operations, as well as a listing of any premiums, audit
adjustments or retroactive adjustments due or pending on such policies or any
predecessor policies;
(c) Each contract which involves, or may involve, aggregate
payments by any party thereto of $100,000 or more and all contracts involving
less than $100,000 but more than $10,000 to the extent all such contracts
involve payments aggregating $250,000, which are to be performed in whole or in
part after the Effective Time;
(d) All MG Plans (as defined in Section 2.13(a));
(e) Any collective bargaining agreements with any labor union
or other representative of employees, including all amendments and supplements,
and all employment and consulting agreements;
(f) All patents, trademarks, copyrights and other intellectual
property rights owned, licensed or used and all applications therefor;
(g) All trade names and fictitious names used or held, whether
and where such names are registered and where used;
(h) All material long-term and short-term promissory notes,
installment contracts, loan agreements, credit agreements, operating and finance
leases, and any other agreements relating thereto or with respect to collateral
securing the same;
(i) All indebtedness, liabilities and commitments of third
parties (other than MG Subsidiaries) and as to which MG or one or more of the MG
Subsidiaries is a guarantor, endorser, co-maker, surety or accommodation maker,
or is contingently liable therefor (excluding liabilities as an endorser of
checks and the like in the ordinary course of business) or has otherwise
provided any form of financial assistance and all letters of credit, whether
stand-by or documentary, issued by any third party;
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(j) The name and title of all directors and officers of MG or
any MG Subsidiary;
(k) All bank accounts and safety deposit arrangements of MG or
any MG Subsidiary;
(l) All persons to whom MG or any MG Subsidiary has given a
currently effective power of attorney;
(m) The aggregate amount of capital contributions by MG in,
and indebtedness owed to MG by, any MG Subsidiary;
(n) All outstanding letters of credit; and
(o) All principal and accrued interest outstanding under any
term debt or revolving credit debt of MG or any MG Subsidiary as of October 31,
1998.
2.12 CERTAIN AGREEMENTS. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will,
alone or in conjunction with another event (such as termination of employment),
(a) result in any payment (including severance, unemployment compensation,
parachute payment, bonus or otherwise) becoming due to any director, employee or
independent contractor of MG or any of the MG Subsidiaries under any MG Plan (as
hereinafter defined) or otherwise, (b) increase any benefits otherwise payable
under any MG Plan or otherwise or (c) result in the acceleration of the time of
payment or vesting of any such benefits. There are no agreements, arrangements
or understandings between MG, any MG Subsidiary or any Shareholder of MG on the
one hand and any officer, director or employee of MG relating to the management
or operation of any business of MG or any MG Subsidiary.
2.13 EMPLOYEE BENEFIT PLANS.
(a) For purposes of Section 2.12 and this Section 2.13, MG
Subsidiaries shall include any enterprise which, with MG, forms or formed a
controlled group of corporations, a group of trades or business under common
control or an affiliated service group, within the meaning of Section 414(b),
(c) or (m) of the Code and shall include any person related to MG within the
meaning of Section 251 of the ITA. For purposes of Section 2.11(d), Section 2.12
and this Section 2.13, "MG Plan" means any written or oral understanding,
program or arrangement that provides retirement income, medical, surgical,
health, or hospital care benefits or benefits in the event of sickness,
accident, disability, death or unemployment, deferred compensation, performance
incentive benefits, bonuses, stock options, stock awards, share purchase, stock
appreciation, phantom stock, profit sharing, golden parachute benefits,
severance or termination pay, dependent care assistance benefits, employee
assistance benefits, education scholarships, tuition reimbursement benefits,
retention incentive benefits, vacation benefits, and other similar plans,
agreements and arrangements that is sponsored, maintained, or contributed to, by
MG or an MG Subsidiary for the benefit of any present or former employees or
directors of MG or an MG Subsidiary, or their spouses or dependents or with
respect to which MG or an MG Subsidiary may have any liability, except the
Retirement Fund and the Insurance Fund referred to in the collective bargaining
agreement effective as of December 1, 1995, between the Associated Clothing
Manufacturers of the Province of Quebec, Inc. (the
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"Association"), Montreal Clothing Contractors Association, Inc., The Quebec
Council of Odd Pants Employers, Rainwear & Sports wear Manufacturers Association
and The Canadian Trimmings Manufacturers Association and Montreal Joint Board,
Union of Needletrades, Industrial and Textile Employees (the "Union")(QFL-CLC)
(the "Collective Bargaining Plans") shall not be considered to be MG Plans.
(b) MG has delivered to TMW, as applicable, true, complete and
correct copies of the following with respect to each MG Plan:
(i) the plan documents (or, in the case of any
unwritten MG Plans, descriptions thereof);
(ii) the most recent summary description of the plan
provided to present or former employees;
(iii) each trust agreement, insurance contract or
funding vehicle for the plan; and
(iv) all material correspondence to and from
governmental or regulatory bodies during the three-year period ending
on the Closing Date, including annual reports.
(c) (1) each MG Plan has been maintained and administered in
material compliance with its terms and, to the extent required by applicable law
or contract is fully funded; (2) all required employer contributions and
employees contributions, as the case may be, under each MG Plan have been made
and the applicable funds have been funded in accordance with the terms of such
MG Plan; (3) each MG Plan that is required or intended to be qualified under
applicable law or registered or approved by a governmental agency or authority
has been so qualified, registered or approved by the appropriate governmental
agency or authority (including registration with the relevant tax authorities
where such registration is required to qualify for tax exemption or other
beneficial tax status), and nothing has occurred since the date of the last
qualification, registration or approval to adversely affect, or cause, the
appropriate governmental agency or authority to revoke such qualification,
registration or approval; (4) there are no pending or, to the knowledge of MG,
anticipated material claims against or otherwise involving any of the MG Plans
and no suit, action or other litigation (excluding claims for benefits incurred
in the ordinary course of MG Plan activities) has been brought against or with
respect to any MG Plan; (5) no event has occurred and there has been no failure
to act on the part of MG or any MG Subsidiary, any funding agent or any
administrator of any of the MG Plans that could subject MG, any MG Subsidiary,
any officer or director or either of them, or the fund of any MG Plan to the
imposition of any material tax, penalty or other liability with respect to any
such plan, whether by way of indemnity or otherwise; (6) no MG Plan constitutes
a "multiemployer pension plan", within the meaning of Section 4001(a)(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"); (7) there
has been no amendment to, written interpretation of or announcement by MG or any
MG Subsidiary relating to, or change in employee participation or coverage under
any MG Plan that would increase materially the expense of maintaining such MG
Plan above the level of expense incurred in respect thereof for the fiscal year
ended January 31, 1998; and (8) neither MG nor any MG Subsidiary has any
obligations for retiree health and life benefits under any MG Plan, and there
are no restrictions on the rights of MG or any
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of the MG Subsidiaries to amend or terminate any such MG Plan without incurring
any liability thereunder. With respect to the Collective Bargaining Plans (1) MG
has delivered to TMW all of the plan documents which it has received in
connection with such plans, and, to the knowledge of MG, such documents
represent all of the documents comprising such plans, (2) all required
contributions of MG and the MG Subsidiaries to such plans have been made, (3) to
the knowledge of MG, there are no pending anticipated material claims against or
otherwise involving such plans and no suit, action or other litigation
(excluding claims for benefits incurred in the ordinary course of such plans'
activities) has been brought against or with respect to such plans.
(d) To the extent applicable, (1) the MG Plans comply, in all
material respects, with the requirements of all applicable laws, rules and
regulations in Canada, the United States and every political subdivision
thereof, including, without limitation, ERISA, the Code and any other applicable
tax and other laws, and any MG Plan intended to be qualified under Section
401(a) of the Code has been determined by the United States Internal Revenue
Service to be so qualified and nothing has occurred to cause the loss of such
qualified status; (2) no MG Plan is a defined benefit plan within the meaning of
Section 3(35) of ERISA (without regard to whether such plan is subject to
ERISA); (3) neither MG nor any MG Subsidiary has incurred or reasonably expects
to incur any material liability under Title IV of ERISA with respect to any
"single-employer plan", within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by MG, any MG Subsidiary or any entity which is
or was considered one employer with MG under Section 4001(a)(14)(A) and (B) of
ERISA; and (4) neither MG nor any MG Subsidiary has incurred or reasonably
expects to incur any withdrawal liability under Title IV of ERISA with respect
to any "multiemployer plan", within the meaning of Section 4001(a)(3) of ERISA.
2.14 INTELLECTUAL PROPERTY. MG or the MG Subsidiaries own or possess
licenses to use all patents, patent applications, trademarks and service marks
(including registrations and applications therefor), trade names, copyrights and
written know-how, trade secrets and all other similar proprietary data and the
goodwill associated therewith (collectively, the "MG Intellectual Property")
that are either material to the business of MG or any MG Subsidiary or that are
necessary for the manufacture, use, license or sale of any services or products
manufactured, used, licensed or sold by MG and the MG Subsidiaries. The MG
Disclosure Letter contains a complete and accurate list of the MG Intellectual
Property material to the conduct of the business. The MG Intellectual Property
is owned or licensed by MG or the MG Subsidiaries free and clear of any
Encumbrance. Neither MG nor any of the MG Subsidiaries has granted to any other
person any license to use any MG Intellectual Property. Neither MG nor any of
the MG Subsidiaries has received any notice of infringement, misappropriation or
conflict with, the intellectual property rights of others in connection with the
use by MG and the MG Subsidiaries of the MG Intellectual Property.
2.15 TITLE TO AND CONDITION OF PROPERTIES. Except for goods and other
property sold, used or otherwise disposed of since January 31, 1998, in the
ordinary course of business and consistent with past practices for fair value,
MG has good and marketable title to all its properties, interests in properties
and assets, real and personal, immovable or movable, reflected in its January
31, 1998 financial statements, free and clear of any Encumbrance, except (a)
Encumbrances reflected in the balance sheet of MG as of January 31, 1998, (b)
liens for current taxes not yet due and payable and (c) such imperfections of
title, easements and Encumbrances, if any, as are not substantial in character,
amount or extent and do not and will not materially detract from the value, or
interfere
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with the present use, of the property subject thereto or affected thereby, or
otherwise impair business operations. All leases pursuant to which MG or any MG
Subsidiary leases (whether as lessee or lessor) any real or personal, immovable
or movable, property are in good standing, valid, and effective; and there is
not, under any such leases, any existing or prospective default or event of
default or event which with notice or lapse of time, or both, would constitute a
default, by MG or any MG Subsidiary, or, to the knowledge of MG or a MG
Subsidiary, any other party thereto. The buildings and premises of MG and each
of the MG Subsidiaries that are used in its business are structurally sound with
no known defects and in good operating condition and in a state of good
maintenance and repair, normal wear and tear excepted, and are adequate and
suitable for the purpose for which they are currently being used, have access to
adequate water, electric, gas and sewage service and all other utility services
necessary for the conduct of the business of each retail store and at the
manufacturing facility. All items of operating equipment of MG and the MG
Subsidiaries are in good operating condition and in a state of reasonable
maintenance and repair, ordinary wear and tear excepted, and are free from any
known defects except as may be repaired by routine maintenance and such minor
defects as do not substantially interfere with the continued use thereof in the
conduct of normal operations. MG and the MG Subsidiaries have performed all
maintenance required to maintain all warranties with respect to all of the plant
and equipment used by them and have conducted all maintenance at the
manufacturing facility which a reasonably prudent operator thereof would have
performed. No material tenant repairs are required with respect to any leased
stores other than normal and routine repairs consistent with past practice.
There has been no violation of zoning laws or other similar restrictions, and MG
is not aware of any zoning law changes or similar restrictions that would impact
any of the stores or the manufacturing facility operated by MG or any of the MG
Subsidiaries.
2.16 FACTORY OPERATIONS AND CAPACITY. During the twelve month period
ended October 31, 1998, the manufacturing facility has averaged production of
10,078 jackets and 20,079 pairs of dress pants per week calculated on the basis
of the 47 weeks within such 12 month period in which the manufacturing facility
was in operation. To the knowledge of MG, MG does not anticipate that there will
be any interruptions in the production at the manufacturing facility during the
next twelve months and neither MG nor any MG Subsidiary is aware of any basis
for any such interruption or any threat thereof for the foreseeable future,
except that no representation is made relating to the Union contract which
terminates in November 1998 or any negotiations with the Union relating to such
Union contract.
2.17 ENVIRONMENTAL MATTERS.
(a) There are no environmental conditions or circumstances,
such as the presence or release of any hazardous substance, on any property
presently or, to the knowledge of MG, previously owned or leased by MG or any of
the MG Subsidiaries that could reasonably be expected to result in a Material
Adverse Effect on MG;
(b) MG and the MG Subsidiaries have in full force and effect
all material environmental permits, licenses, approvals and other authorizations
required to conduct their operations and are operating in material compliance
thereunder;
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(c) MG's and the MG Subsidiaries' operations and the use of
their assets do not violate any applicable United States or Canadian or other
federal, provincial, state or local law, statute, ordinance, rule, regulation,
order, policy, guideline or notice requirement pertaining to (i) the condition
or protection of air, groundwater, surface water, soil, or other environmental
media, (ii) the environment, including natural resources or any activity which
affects the environment, (iii) the regulation of any pollutants, contaminants,
waste or other substances (whether or not hazardous or toxic) or (iv)
occupational health and safety, including, without limitation, the Comprehensive
Environmental Response Compensation and Liability Act 42 U.S.C. Section 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 1609 et
seq.) the Clean Water Act (33 U.S.C. 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (17 U.S.C. Section 2601
et seq.), the Safe Drinking Water Act (42 U.S.C. Section 201 and Section 300f et
seq.), the Rivers and Harbors Act (33 U.S.C. Section 401 et seq.), the Oil
Pollution Act (33 U.S.C. Section 2701 et seq.) and analogous Canadian, foreign,
provincial, state and local provisions, including the Canadian Environmental
Protection Act (Canada), the Environmental Quality Act (Quebec), the Act
Respecting Occupational Health and Safety (Quebec), the Politique de protection
des sols et de rehabilitation des terrains contamines (Quebec), the
Environmental Protection Act (Ontario) and the Occupational Health and Safety
Act (Ontario), as any of the foregoing may have been amended or supplemented
from time to time (collectively, the "Applicable Environmental Laws"), except
for violations which, either singly or in the aggregate, would not result in a
Material Adverse Effect on MG;
(d) None of the operations or assets of MG or any MG
Subsidiary has ever been conducted or used by MG or any MG Subsidiary in such a
manner as to constitute a violation of any of the Applicable Environmental Laws,
except for violations which, either singly or in the aggregate, would not result
in a Material Adverse Effect on MG;
(e) No written notice has been served on MG or any MG
Subsidiary from any entity, governmental agency or individual regarding any
existing, pending or threatened investigation or inquiry related to alleged
violations under any Applicable Environmental Laws, or regarding any claims for
remedial obligations or contribution under any Applicable Environmental Laws,
other than any of the foregoing which, either singly or in the aggregate, would
not result in a Material Adverse Effect on MG;
(f) MG does not know of any reason that would preclude it or
TMW from renewing or obtaining a reissuance of the material permits, licenses or
other authorizations required pursuant to any Applicable Environmental Laws to
operate and use any of MG's or the MG Subsidiaries' assets for their current
purposes and uses;
(g) MG does not currently own nor has MG ever owned any real
or immovable property other than those properties disclosed on the MG Disclosure
Letter; and
(h) To the knowledge of MG, none of the buildings or premises
owned or leased by MG contain asbestos, urea formaldehyde, polychlorinated
biphenyls (PCB's) or other hazardous materials.
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2.18 COMPLIANCE WITH OTHER LAWS. Neither MG nor any MG Subsidiary is in
violation of or in default with respect to, or in alleged violation of or
alleged default with respect to any other applicable law or any applicable rule
or regulation, or any writ or decree of any court or any governmental
commission, board, bureau, agency or instrumentality, or delinquent with respect
to any report required to be filed with any Governmental Entity, except for
violations and delinquencies which, either singly or in the aggregate, do not
and are not expected to result in a Material Adverse Effect on MG.
2.19 TAXES. Except with respect to failures which, in the aggregate,
would not result in a Material Adverse Effect on MG or the MG Subsidiaries taken
as a whole, proper, complete and accurate federal, provincial, state, local and
foreign income (including net income, gross income, income as specially defined,
earnings, profits or selected items of income, earnings or profits), capital,
withholding, environmental, commodity, ad valorem, value added, sales, use,
license, goods and services, franchise, gross revenue or gross receipt, gains,
turnover, transfer, excise, payroll, unemployment, disability, social security
(or similar), property, occupation, employment, stamp, customs duties, workers'
compensation, unemployment insurance or compensation, premium, windfall profits
taxes, alternative or add-on minimum taxes, fees, imposts, assessments or
charges of any kind whatsoever, together with any interest and any penalties or
additional amounts imposed by any taxing authority and any and all other tax
returns, declarations, reports, information returns, statements and estimates
have been filed with appropriate governmental agencies, domestic and foreign, by
MG and each of the MG Subsidiaries for each period for which any returns,
declarations, reports, information returns, statements or estimates were due
(taking into account any extensions of time to file before the date hereof)(the
"Tax" or "Taxes"); all Taxes shown by such returns, declarations, reports,
information returns, or statements to be payable and any other Taxes due and
payable have been paid other than those being contested in good faith by MG or a
MG Subsidiary and indicated in the MG Disclosure Letter; and the tax provision
reflected in MG's financial statements is adequate, in accordance with Canadian
or United States (as the case may be) generally accepted accounting principles,
to cover liabilities of MG and the MG Subsidiaries for all unpaid Taxes,
including any interest, penalties and additions to taxes of any character
whatsoever applicable to MG and the MG Subsidiaries or their assets or
businesses. MG and the MG Subsidiaries have not received any notice of
reassessment or any other notification of Taxes from Revenue Canada or any other
taxing authority and no material Tax liability has been assessed, proposed to be
assessed, incurred or accrued, and no deficiencies or adjustments in respect of
Taxes payable by MG and the MG Subsidiaries have been claimed, proposed,
assessed, or, in the best of MG's knowledge, threatened. There is no material
difference between the amounts of the book basis and the tax basis of any assets
of MG and the MG Subsidiaries that is not reflected in an appropriate accrual of
deferred tax liability on the books of MG and the MG Subsidiaries. The MG
Disclosure Letter accurately sets forth the last year for which MG's and the MG
Subsidiaries' federal, provincial and state income tax returns, respectively,
have been assessed, reassessed or audited and any years which are the subject of
a pending audit by the Internal Revenue Service, Revenue Canada, Revenue Quebec
and any applicable foreign, federal, provincial, state or local agencies. No
waiver of any statute of limitations executed by MG or a MG Subsidiary with
respect to any Tax is in effect for any period. There are no Tax liens on any
assets of MG or the MG Subsidiaries except for Taxes not yet currently due and
those which could not reasonably be expected to result in a Material Adverse
Effect on MG. MG and the MG Subsidiaries withheld all Taxes required to be
withheld in the course of their businesses, in respect of wages, salaries and
other payments to all employees, officers and directors,
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and in respect of payments to any person that is not a resident of the country
of the payor and timely paid all such amounts withheld to the proper taxing
authority.
2.20 INVENTORY. The retail and finished inventory of MG and all of its
piece goods, work in progress and other unfinished inventory will be, at the
time of Closing, in all material respects of the same quality, style, condition
and saleability as on November 5, 1998. MG has piece goods and purchase
commitments and piece goods on hand sufficient to provide inventory to meet the
business plan of MG and the MG Subsidiaries for at least the next five months.
2.21 CREDIT ITEMS. The aggregate of all credit slips, due bills, gift
certificates and other credit items of MG outstanding as of the date hereof does
not exceed Can $550,000. The aggregate of all layaway transactions or
uncompleted transactions outstanding on the date hereof does not exceed Can
$25,000.
2.22 VOTE REQUIRED. This Agreement, the Share Restructuring and the
consummation of the transactions contemplated hereby have been approved by the
required vote of the Securityholders of MG.
2.23 POOLING MATTERS. To the best knowledge of MG's executive,
financial and accounting officers, prior to the date hereof, neither MG nor any
of the MG Subsidiaries has taken any action that (without giving effect to any
action taken or agreed to be taken by TMW or the TMW Subsidiaries) would
jeopardize the treatment of the business combination to be effected by the Share
Restructuring Plan as a pooling of interests for accounting purposes.
2.24 BROKERS AND FINDERS. Other than CIBC Wood Gundy Securities Inc.,
in accordance with the terms of its engagement letter dated April 21, 1998, none
of MG or any of the MG Subsidiaries nor any of their respective directors,
officers or employees has employed any broker or finder or incurred any
liability for any financial advisory fees, brokerage fees, commissions or
similar payments in connection with the transactions contemplated by this
Agreement.
2.25 DISCLOSURE. No representation or warranty made by MG in this
Agreement or the MG Disclosure Letter, nor any document, written information,
statement, financial statement, certificate or Exhibit prepared and furnished or
to be prepared and furnished by MG or its representatives pursuant hereto or in
connection with the transactions contemplated hereby, when taken together,
contains or contained (as of the date made) any untrue statement of a material
fact when made, or omits or omitted (as of the date made) to state a material
fact necessary to make the statements or facts contained herein or therein not
misleading in light of the circumstances under which they were made.
2.26 POOLING OPINION. MG's board of directors has received a written
opinion from Ernst & Young LLP ("E&Y") dated August 4, 1998 and updated as of
November 10, 1998, relating to the eligibility of MG to be a party to a Share
Restructuring Plan accounted for as a "pooling of interests" (the "MG Pooling
Opinion").
2.27 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no material
agreement, judgment, injunction, order or court decree binding upon MG or any MG
Subsidiary that has or could
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reasonably be expected to have the effect of prohibiting or materially impairing
any business practice of MG or any MG Subsidiary, any acquisition of property by
MG or any MG Subsidiary or the conduct of any business by MG or any MG
Subsidiary as currently conducted.
2.28 [INTENTIONALLY OMITTED].
ARTICLE II-B
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Except as set forth in the MG Disclosure Letter, each Shareholder,
severally and not jointly, represents and warrants to TMW pursuant to Sections
2.29 through 2.39, solely as to itself and not as to any other Shareholder,
that:
2.29 NO LIENS. The shares of MG Common Stock owned by such Shareholder
is set forth beside such Shareholder's name on Section 2.4 of the MG Disclosure
Letter, and such Shareholder owns all of such shares of MG Common Stock free and
clear of all liabilities, liens, hypothecs, encumbrances, pledges, trusts,
voting trusts or stockholders' agreements, equities, charges, options,
conditional sale or title retention agreements, covenants, restrictions,
reservations, commitments, obligations or other burdens or encumbrances of any
nature whatsoever.
2.30 EFFECT OF AGREEMENT ON SHAREHOLDERS. The execution and delivery of
this Agreement by such Shareholder and the consummation of the Share
Restructuring and the transactions contemplated hereby will not (i) result in
any breach of any of the terms or conditions of, or constitute a default under
any commitment, mortgage, hypothec, note, bond, debenture, deed of trust,
contract, agreement, license or other instrument or obligation to which such
Shareholder is now a party or by which such Shareholder or any of such
Shareholder's properties or assets may be bound or affected and which breach or
default could have an adverse effect on the Shareholders' ability to vote to
approve the Share Restructuring; (ii) result in any violation of any
governmental requirement applicable to such Shareholder; or (iii) to the best of
such Shareholder's knowledge, cause any person who normally does business with
MG not to continue to do so on the same basis as before.
2.31 AUTHORIZATION.
(a) Such Shareholder has all requisite legal right, power,
capacity and authority to execute and deliver this Agreement and to perform
fully such Shareholder's obligations hereunder. This Agreement has been duly
executed by such Shareholder and constitutes the legal, valid and binding
obligation of such Shareholder, enforceable against such Shareholder in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, moratorium, insolvency or other similar laws affecting
generally the rights of creditors or by principles of equity.
(b) No consent, approval, authorization, declaration, filing
or registration with any Governmental Entity or any other person is required to
be made or obtained by such Shareholder in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby.
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2.32 NO UNTRUE STATEMENTS. The statements, representations and
warranties of each such Shareholder set forth in Sections 2.29 through 2.39 of
this Agreement and the Exhibits hereto and in all other documents and
information furnished to TMW and Canco and their representatives by each such
Shareholder in respect of such Shareholder in connection herewith do not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements, representations and warranties set forth in
Sections 2.29 through 2.39 not misleading.
2.33 BROKERS. No broker or finder has acted for such Shareholder in
connection with this Agreement or the transactions contemplated by this
Agreement and no broker or finder is entitled to any brokerage or finder's fee
or to any commission in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of such Shareholder.
2.34 NO AFFILIATE OBLIGATIONS. MG and the MG Subsidiaries do not have
any obligations or liabilities to such Shareholder or any Affiliate (as defined
in Section 8.3) of such Shareholder, except for obligations and liabilities that
will be released in full at no cost to MG and the MG Subsidiaries on or prior to
the Closing Date.
2.35 INVESTMENT PURPOSE; ACCREDITED INVESTOR. Each Shareholder (i) is
an accredited investor as that term is defined in Regulation D promulgated under
the Securities Act of 1933, as amended (the "Securities Act"), and (ii) is
acquiring the TMW Common Stock for its own account, for investment purposes and
not with a view to, or for resale in connection with, any distribution or public
offering thereof within the meaning of the Securities Act, except pursuant to a
valid registration statement under the Securities Act declared effective by the
SEC (as hereinafter defined) or pursuant to a valid exemption from registration
under the Securities Act. Each Shareholder (i) is a "sophisticated purchaser" as
that term is defined in sections 43 and 44 of the Securities Act (Quebec) or
similar provisions of the securities acts of the other provinces of Canada, and
(ii) is acquiring the Exchangeable Shares for its own account and pursuant to
prospectus and registration exemptions under the Securities Act (Quebec) or
similar provisions of the securities acts of the other provinces of Canada.
2.36 INDEBTEDNESS AND AGREEMENTS. Immediately subsequent to the
Effective Time, neither MG nor any MG Subsidiary will have any indebtedness
outstanding that is payable to such Shareholder or any of its Affiliates.
Immediately subsequent to the Effective Time, except for this Agreement, there
will be no agreements, contracts, leases, arrangements or other understandings
(either written or oral) between such Shareholder and MG or any MG Subsidiary.
2.37 POOLING MATTERS. Since March 1, 1998, no such Shareholder nor any
of its affiliates have taken or agreed to take any action, except as
contemplated in this Agreement, that has reduced or could reduce such
Shareholder's aggregate interest in the equity of MG or would reduce the number
of Exchangeable Shares that such Shareholder is intended to receive pursuant to
the transactions contemplated hereby. Except as contemplated hereby, such
Shareholder is not aware of any plan, arrangement, understanding or agreement
pursuant to which such Shareholder will receive anything of value for such
Shareholder's interest in the equity of MG. On August 4, 1998, Marpro Holdings
Inc. (formerly known as 3323412 Canada Inc.)("Marpro"), Anpro Holdings Inc.
(formerly known as ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.)("Anpro") and Gronbri Holdings Inc.
(formerly known as 3230074 Canada Inc.)("Gronbri") confirmed an undertaking by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ that, in
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connection with a certain Letter Agreement (the "Letter Agreement") dated
December 23, 1996 among MGB Limited Partnership, Anpro and Gronbri, and upon,
subject to certain conditions set forth in the letter, the consummation of the
acquisition of MG by TMW on or prior to December 31, 1998, the Letter Agreement
would be null and void. By letter dated November 10, 1998 signed by each of
Marpro, Anpro and Gronbri, the date by which the Acquisition must be
accomplished was extended from December 31, 1998 to February 28, 1999.
2.38 RESIDENCE. Each Shareholder respectively represents and warrants,
solely as to itself and not as to any other Shareholder, in respect of its
residence status for purposes of the ITA and the Taxation Act (Quebec), that:
(a) Marpro is a corporation and is not a non-resident of
Canada;
(b) MGB Limited Partnership is a partnership all the members
of which are non-residents of Canada and at least one member of which is not an
individual;
(c) CDPQ is a corporation and is not a non-resident of Canada;
(d) Cerberus International, Ltd. is a corporation and is a
non-resident of Canada;
(e) Ultra Cerberus Fund, Ltd. is a corporation and is a
non-resident of Canada;
(f) Styx International Ltd. is a corporation and is a
non-resident of Canada;
(g) The Long Horizons Overseas Fund Ltd. is a corporation and
is a non-resident of Canada;
(h) The Long Horizons Fund, L.P. is a partnership all the
members of which are non-residents of Canada and at least one member of which is
not an individual; and
(i) Styx Partners, L.P. is a partnership all the members of
which are non-residents of Canada and at least one member of which is not an
individual.
2.39 CAPITAL PROPERTY. Each Shareholder, other than CDPQ, respectively
represents and warrants, solely as to itself and not as to any other
Shareholder, that such Shareholder holds its MG Shares as "capital property"
within the meaning of the ITA.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF TMW
Except as set forth in a letter dated the date of this Agreement and
delivered by TMW to MG concurrently herewith (the "TMW Disclosure Letter"), TMW
hereby represents and warrants to, and agrees with, MG that:
3.1 ORGANIZATION AND STANDING. TMW and each body corporate,
partnership, joint venture, association or other business entity of which more
than 50% of the total voting power of
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shares of stock or units of ownership or beneficial interest entitled to vote in
the election of directors (or members of a comparable governing body), including
Canco, is owned or controlled, directly or indirectly, by TMW (the "TMW
Subsidiaries"), is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, has full requisite power and authority to carry on its business as
it is currently conducted, and to own, lease and operate the properties
currently owned, leased and operated by it, and is duly qualified or licensed to
do business and is in good standing in all jurisdictions in which the character
of the properties owned or leased or the nature of the business conducted by it
would make such qualification or licensing necessary, except where the failure
to be so qualified or licensed would not have a Material Adverse Effect on TMW.
3.2 AGREEMENT AUTHORIZED AND ITS EFFECTS ON OTHER OBLIGATIONS.
(a) TMW and Canco have all requisite corporate power and
authority to enter into this Agreement and to perform their respective
obligations hereunder and to consummate the Share Restructuring and the other
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by TMW and Canco and the consummation by TMW and Canco of the Share
Restructuring and the other transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of TMW and Canco. This
Agreement has been duly executed and delivered by TMW and Canco and is the valid
and binding obligation of TMW and Canco, enforceable in accordance with its
terms, except that such enforceability may be subject to (i) bankruptcy,
insolvency, reorganization or other similar laws affecting or relating to
enforcement of creditors' rights generally and (ii) general equitable
principles.
(b) Neither the execution, delivery or performance of this
Agreement or the Share Restructuring by TMW and Canco, nor the consummation of
the transactions contemplated hereby or thereby by TMW and Canco nor compliance
with the provisions hereof or thereof by TMW and Canco will: (i) conflict with,
or result in any violations of, the Articles of Incorporation or bylaws of TMW
or any equivalent document of any of the TMW Subsidiaries, or (ii) result in any
breach of or cause a default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, amendment, cancellation or
acceleration of any obligation contained in, or the loss of any material benefit
under, or result in the creation of any Encumbrance upon any of the material
properties or assets of TMW or any of the TMW Subsidiaries under, any term,
condition or provision of any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to TMW or any of the TMW Subsidiaries
or their respective properties or assets.
3.3 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, declaration or filing with, any Governmental Entity, is
required to be obtained by TMW or any of the TMW Subsidiaries in connection with
the execution and delivery of this Agreement or the Share Restructuring Plan or
the consummation of the transactions contemplated hereby or thereby, except for:
(i) the filing with the United States Securities and Exchange Commission (the
"SEC") of the Registration Statement (as hereinafter defined), (ii) certain
post-signing filings to be made under the Investment Canada Act and/or certain
consents to be obtained from the Canadian securities regulatory authorities and
(iii) where the failure to obtain such consents, approvals, etc., would not
prevent or delay the consummation of the Share Restructuring or otherwise
prevent TMW
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from performing its obligations under this Agreement and would not reasonably be
expected to have a Material Adverse Effect on TMW.
3.4 CAPITALIZATION. The authorized capital stock of TMW consists of
50,000,000 common shares, $.01 par value ("TMW Common Stock") and 2,000,000
shares of preferred stock, par value $.01 per share ("TMW Preferred Stock"). As
of October 31, 1998, 34,836,409 shares of TMW Common Stock were issued and
outstanding and 71,384 shares of TMW Common Stock were held by TMW in its
treasury. As of October 31, 1998, 1,700,191 shares of TMW Common Stock were
reserved for issuance upon the exercise of stock options then outstanding under
TMW's stock option plans and 956,123 shares of TMW Common Stock were reserved
for future issuance of options under TMW's stock option plans, excluding TMW's
Employee Stock Discount Plan. Additionally, as of October 31, 1998, 938,449
shares of TMW Common Stock were reserved for future issuance under TMW's
Employee Stock Discount Plan. No shares of TMW Preferred Stock are issued or
outstanding. All of the issued and outstanding TMW Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable, were not issued
in violation of the terms of any agreement or other understanding binding upon
TMW and were issued in compliance with all applicable charter documents of TMW
and all applicable federal, state and foreign securities laws, rules and
regulations. There are, and have been, no preemptive rights with respect to the
issuance of the TMW Common Stock or any other capital stock of TMW. Except as
described in the SEC Documents (as defined in Section 3.10), there are no
outstanding subscriptions, options, warrants, convertible securities, calls,
commitments, agreements or rights (contingent or otherwise) of any character to
purchase or otherwise acquire from TMW or any TMW Subsidiary any shares of, or
securities convertible into, the capital stock of TMW or any TMW Subsidiary nor
are there any rights to payments or benefits based on the price or market value
of any shares of capital stock of TMW or any TMW Subsidiary.
3.5 LITIGATION; INVESTIGATIONS. There is no claim, action, suit or
proceeding pending, or to the knowledge of TMW threatened against TMW or any of
the TMW Subsidiaries, which would, if adversely determined, individually or in
the aggregate, have a Material Adverse Effect on TMW, nor is there any judgment,
decree, injunction, rule or order of any Governmental Entity or arbitrator
outstanding against TMW or any of the TMW Subsidiaries having, or which, insofar
as reasonably can be foreseen, in the future could have, any such effect. There
is no investigation pending, or to the knowledge of TMW threatened, against TMW
or any of the TMW Subsidiaries before any Governmental Entity.
3.6 VOTE REQUIRED. No vote of the holders of shares of the capital
stock of TMW is necessary to approve this Agreement and the Share Restructuring.
3.7 BROKERS AND FINDERS. Other than Bear, ▇▇▇▇▇▇▇ & Co. Inc. in
accordance with the terms of its engagement letter dated September 9, 1998, a
copy of which has previously been provided to MG, none of TMW or any of the TMW
Subsidiaries nor any of their respective directors, officers or employees has
employed any broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions or similar payments in connection
with the transactions contemplated by this Agreement.
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3.8 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by TMW for inclusion or incorporation by reference in the Registration
Statement will, at the time the Registration Statement is declared effective
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading.
3.9 AUTHORIZATION FOR TMW COMMON STOCK. TMW has taken all necessary
action to permit it to issue the number of shares of TMW Common Stock required
to be issued pursuant to the terms of the Share Restructuring Plan, this
Agreement and the Support Agreement. The shares of TMW Common Stock issued
pursuant to the terms of the Share Restructuring Plan, this Agreement and the
Support Agreement will, when issued, be validly issued, fully paid and
nonassessable and not subject to preemptive rights.
3.10 SEC DOCUMENTS. TMW has provided to MG copies of its filings with
the SEC since December 31, 1996 (the "SEC Documents"). As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the United States Securities Exchange Act of 1934, as amended, and the rules
and regulations of the SEC promulgated thereunder applicable to such SEC
Documents, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of TMW included in the SEC Documents comply as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the consolidated financial position of TMW
and its consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended. Except as
set forth in the SEC Documents, no event has occurred since the date of filing
of such that would constitute a Material Adverse Effect with respect to TMW.
3.11 DISCLOSURE. No representation or warranty made by TMW in this
Agreement or the TMW Disclosure Letter, nor any document, written information,
statement, financial statement, certificate or Exhibit prepared and furnished or
to be prepared and furnished by TMW or its representatives pursuant hereto or in
connection with the transactions contemplated hereby, when taken together,
contains or contained (as of the date made) any untrue statement of a material
fact when made, or omits or omitted (as the case may be) to state a material
fact necessary to make the statements or facts contained herein or therein not
misleading in light of the circumstances under which they were made.
3.12 POOLING MATTERS. To the best knowledge of TMW's executive,
financial and accounting officers, prior to the date hereof, neither TMW nor any
of the TMW Subsidiaries has taken any action that (without giving effect to any
action taken or agreed to be taken by MG or the MG Subsidiaries) would
jeopardize the treatment of the business combination to be effected by the Share
Restructuring Plan as a pooling of interests for accounting purposes.
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3.13 POOLING OPINION. TMW's board of directors has received a written
opinion from Deloitte & Touche LLP ("D&T") dated July 24, 1998 and updated as of
November 11, 1998, relating to the eligibility of TMW to be a party to a Share
Restructuring Plan accounted for as a "pooling of interests" (the "TMW Pooling
Opinion").
3.14 NO DEFAULTS. Neither TMW nor any TMW Subsidiary is, or has
received notice that it would be with the passage of time, in material default
or material violation of any term, condition or provision of (a) its charter
documents or bylaws; (b) any judgment, decree or order applicable to it; or (c)
any loan or credit agreement, note, bond, mortgage, indenture, contract,
agreement, lease, license or other instrument to which TMW or any TMW Subsidiary
is now a party or by which it or any of its properties or assets may be bound,
and neither TMW nor any TMW Subsidiary has any knowledge that any other party to
any such agreements or instruments is in material default with respect thereto.
ARTICLE IV.
OBLIGATIONS PENDING EFFECTIVE DATE
4.1 AGREEMENTS OF TMW, CANCO AND MG. TMW, Canco and MG agree to take
the following actions after the date hereof:
(a) Each party will promptly execute and file or join in the
execution and filing of any application or other document that may be
necessary in order to obtain the authorization, approval or consent of
any Governmental Entity which may be reasonably required, or which the
other party may reasonably request, in connection with the consummation
of the transactions contemplated by this Agreement. Each party will use
its reasonable best efforts to promptly obtain such authorizations,
approvals and consents;
(b) MG will allow TMW and its agents access to the files,
books, records, offices and employees (including access on a
confidential basis) of itself and its subsidiaries, including any and
all information relating to MG's tax matters, contracts, leases,
licenses and real, personal and intangible property and financial
condition. MG will cause its accountants to cooperate with TMW in
making available to TMW all financial information reasonably requested,
including the right to examine all working papers pertaining to tax
matters and financial statements prepared or audited by such
accountants;
(c) TMW shall furnish to MG copies of the SEC Documents, and
make available for review but not reproduction copies of its budget and
forecasts for fiscal 1998 and forecasts for 1999. TMW shall provide MG
and its accountants and attorneys the opportunity to meet with
executive officers of TMW and its outside accountants to discuss the
business and prospects of TMW and will authorize its outside
accountants to allow MG's outside accountants to review the working
papers of D&T pertaining to tax matters or financial statements
prepared or audited by D&T subject to customary conditions.
(d) TMW and MG shall cooperate in the preparation and prompt
filing of the Registration Statement with the SEC and all notices,
documents, information with the
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Commission des valeurs mobilieres du Quebec and other securities
commissions or regulatory authorities in Canada;
(e) Each of TMW and MG will promptly notify the other in
writing (i) of any event occurring subsequent to the date of this
Agreement which would render any representation and warranty of such
party contained in this Agreement untrue or inaccurate in any material
respect, (ii) of any Material Adverse Effect on such party and (iii) of
any breach by such party of any material covenant or agreement
contained in this Agreement; and
(f) During the period from the date hereof through the
Effective Date, unless the parties shall otherwise agree in writing,
neither MG nor TMW or any of their respective Subsidiaries shall take
or fail to take any reasonable action which action or failure to act
would knowingly jeopardize the treatment of MG's combination with TMW
and Canco as a pooling of interests for accounting purposes and each of
MG and TMW will take all reasonable steps to permit the Share
Restructuring to be treated as a pooling of interest for accounting
purposes.
(g) During the term of this Agreement, each of TMW and MG will
use its reasonable best efforts to satisfy or cause to be satisfied all
the conditions precedent that are set forth in Article V hereof, and
each of TMW and MG will use its reasonable commercial efforts to cause
the Share Restructuring and the other transactions contemplated by this
Agreement to be consummated on or prior to January 15, 1999.
4.2 ADDITIONAL AGREEMENTS OF MG. MG agrees that, except as expressly
contemplated by this Agreement or as otherwise agreed to in writing by TMW or as
set forth in the MG Disclosure Letter, from the date hereof to the Effective
Date it will, and will cause each of the MG Subsidiaries to:
(a) Operate its business only in the usual, regular and
ordinary manner so as to maintain the goodwill it now enjoys and, to
the extent consistent with such operation, use all commercially
reasonable efforts to preserve intact its present business
organization, keep available the services of its present officers and
employees, and preserve its relationships with customers, suppliers,
distributors and others having business dealings with it;
(b) Continue the same kind and level of advertising in the
ordinary course of business consistent with past practice;
(c) Accrue and properly reflect in its books all accounts
payable including all commitments of any kind to purchase inventory or
other goods required by generally accepted accounting principles in
Canada to be reflected in its books and not pay such payables in
advance of the normal time for such payment consistent with past
practices;
(d) Maintain all of its property and assets in customary
repair, order, and condition, reasonable wear and use and damage by
fire or unavoidable casualty excepted;
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(e) Maintain its books of account and records in the usual,
regular and ordinary manner, in accordance with generally accepted
accounting principles applied on a consistent basis;
(f) Duly comply in all material respects with all laws
applicable to it and to the conduct of its business;
(g) Not (i) enter into any contracts of employment which (A)
cannot be terminated on notice of 14 days or less or (B) provide for
any severance payments or benefits covering a period beyond the
termination date of such employment contract, except as may be required
by law or (ii) amend any employee benefit plan or stock option plan,
except as may be required for compliance with this Agreement or
applicable law;
(h) Not incur any borrowings except borrowings under its
existing revolving credit facilities consistent with past practices and
not make any payments of principal or interest with respect to any debt
except required regular installment payments set forth in the agreement
relating to such debt as in effect on the date hereof;
(i) Advise TMW in writing of any commitments to make capital
expenditures (including any store remodeling projects) in excess of
$25,000 or which cumulatively exceed $100,000 which are not disclosed
in the MG Disclosure Letter;
(j) Advise TMW in writing of any sale, disposition or
encumbrance of any property or assets with a value in excess of
$25,000, other than the sale of inventory in the ordinary course of
business consistent with past practices and sales disposition or
encumbrances described in the MG Disclosure Letter;
(k) Not conduct any unusual liquidation of inventory or going
out of business sale or any discount or other sale other than in the
ordinary course of business consistent with past practices as to time
of year, pricing, location and goods sold;
(l) Advise TMW in writing of any contract, commitment or
series of related contracts or commitments, for the purchase of
inventory (other than piece goods) in excess of $100,000, and all such
contracts and commitments less than or equal to $100,000 to the extent
they aggregate more than $200,000, except for any contract or
commitment disclosed in the MG Disclosure Letter;
(m) Maintain insurance upon all its properties and with
respect to the conduct of its business of such kinds and in such
amounts as is currently in effect;
(n) Not amend its charter documents or bylaws or other
organizational documents or merge or consolidate with or into any other
corporation or change in any manner the rights of its capital stock or
the character of its business;
(o) Not issue or sell, or issue options or rights to subscribe
to, or enter into any contract or commitment to issue or sell, any
shares of its capital stock or subdivide or in any
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way reclassify any shares of its capital stock, or acquire, or agree to
acquire, any shares of its capital stock;
(p) Not declare or pay any dividend on shares of its capital
stock or make any other distribution of assets to the holders thereof;
(q) Deliver to TMW, within 30 days after the end of each
fiscal quarter beginning with the quarter ended October 31, 1998, (i) a
consolidated balance sheet and related unaudited statement of income,
retained earnings and cash flow and (ii) the corresponding
consolidating information each as of the end of each fiscal quarter of
MG and each of its Subsidiaries and, and as of the corresponding fiscal
quarter of the previous fiscal year. MG hereby represents and warrants
that such unaudited consolidated financial statements shall (i) be
complete in all material respects except for the omission of notes and
schedules contained in audited financial statements, (ii) present
fairly in all material respects the financial condition of MG as at the
dates indicated and the results of operations for the respective
periods indicated, (iii) have been prepared in accordance with Canadian
generally accepted accounting principles applied on a consistent basis,
except as noted therein and (iv) contain all adjustments which MG
considers necessary for a fair presentation of its results for each
respective fiscal period;
(r) Without the prior written consent of TMW, from and after
the date hereof, MG and the MG Subsidiaries will not, and will not
authorize and will use their reasonable best efforts not to permit any
of their officers, directors, employees, financial advisors,
representatives and agents ("Representatives") to, directly or
indirectly, solicit, initiate or encourage (including by way of
furnishing information) or take any other action to facilitate any
inquiries or the making of any proposal which constitutes or may
reasonably be expected to lead to the acquisition of all or any
significant part of the assets of MG or of in excess of 20% of the
capital stock of MG (an " Acquisition Proposal") from any person, or
engage in any discussion or negotiations relating thereto or accept any
Acquisition Proposal;
(s) Not change, and not permit any MG Subsidiary to change,
its officers, directors or banking arrangements without written
disclosure to TMW;
(t) Provide to TMW copies of all financial statements and
reports provided to any creditor of MG or any MG Subsidiary at the same
time they are provided to such creditor;
(u) Provide to TMW all tax returns, reports, notifications and
information statements filed with or received from any taxation
authority together with all other information regarding taxation
reasonably requested by TMW;
(v) To the extent not prohibited by applicable laws or the
terms of any collective bargaining or other agreement with any union,
permit one representative of TMW (who shall be one of ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇) to attend, but not participate in,
MG's weekly business planning meetings and all management meetings
pertaining to the production at the facility operated by MG and to
attend, but not participate in, all meetings held by management of MG
with the union that represents the employees at
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the factory; provided, that MG represents that it is not aware of any
such prohibitions. In addition, MG shall provide TMW a status report as
to any meetings held with any industry association of which it is a
member or such union and will provide copies of all information given
to MG by any industry association of which it is a member or such union
within 48 hours of the receipt of such materials by MG;
(w) Provide TMW with at least 48 hours notice of any meeting
described in subsection (v) above, unless such meeting is called on an
emergency basis, in which case MG shall provide TMW notice of such
meeting at the time any such emergency meeting is called;
(x) Provide to TMW on Tuesday of each week a report indicating
the status of attempts to obtain any consent necessary to permit MG and
the MG Subsidiaries the right to retain the benefits of all contracts,
agreements and permits, including reports with respect to the landlords
of the store leases;
(y) Permit the representatives of TMW to contact directly all
third parties whose consents are necessary to assure that MG and the MG
Subsidiaries will retain the benefit of all contracts, agreements and
permits; provided, however, that MG shall first have a reasonable
opportunity to obtain such consents;
(z) Provide TMW with the information set forth on Schedule
4.2; and
(aa) Permit the representatives of TMW to contact directly
each of the landlords of the Canadian and U.S. leases to discuss such
leases; provided, however, that TMW shall provide reasonable prior
written notice of any such contact or discussions to MG, MG shall have
the right to have one representative present for any such discussion
and TMW shall not contact the landlords of the Canadian leases until
after the Registration Statement has been filed in accordance with
Section 4.4 hereof.
4.3 ADDITIONAL AGREEMENTS OF TMW. TMW agrees that from the date hereof
to the Effective Date it will, and will cause each of the TMW Subsidiaries to
use its reasonable best efforts to, cause the shares of TMW Common Stock to be
issued from time to time after the Effective Time upon exchange of the
Exchangeable Shares to be listed on NASDAQ upon the Closing.
4.4 REGISTRATION STATEMENT.
(a) Pursuant to a Registration Rights Agreement by and among
TMW and the Shareholders signatory thereto dated as of the date hereof,
TMW has agreed that within 15 business days of the date upon which TMW
receives the Revised MG Disclosure Letter (as defined herein), TMW
shall use its reasonable best efforts to file a registration statement
on Form S-3 (the "Registration Statement") with the SEC and use its
reasonable best efforts to cause the Registration Statement to become
effective prior to the Effective Date that would allow the Shareholders
to sell the shares of TMW Common Stock into which the Exchangeable
Shares may be exchanged in accordance with the methods of distribution
specified by the Securityholders including pursuant to brokers
transactions within the meaning of Rule 144 of the Securities Act, the
writing of options thereon and pursuant to an
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underwritten public offering and, if necessary, TMW shall maintain the
effectiveness of such registration for so long as any of the
Exchangeable Shares remain outstanding and not owned by TMW or any
affiliate of TMW. However, TMW shall be under no obligation to maintain
the effectiveness of such registration if it shall have determined
based upon a written opinion from outside counsel that the
Securityholders may sell shares of TMW Common Stock without such
registration without regard to the volume limitations set forth in
Rules 144 and 145; provided, however, that each Securityholder is
furnished with a copy of such written opinion of counsel and such
opinion states that each such Securityholder may rely upon it.
Additionally, TMW shall not be required to take any actions under this
Section 4.4 until TMW has received the letters provided for in Section
5.3(k) and (v) hereof;
(b) Each party shall promptly furnish to the other party all
information concerning such party and its Securityholders as may be
reasonably required in connection with any action contemplated by this
Section 4.4. The Registration Statement shall comply in all material
respects with all applicable requirements of law. Each of TMW and MG
will notify the other promptly of the receipt of any comments from the
SEC and of any request by the SEC for amendments or supplements to the
Registration Statement, if required, or for additional information, and
will supply the other with copies of all correspondence with the SEC
with respect to the Registration Statement, if required. Whenever any
event occurs which should be set forth in an amendment or supplement to
the Registration Statement, if required, TMW or MG, as the case may be,
shall promptly inform the other of such occurrence and cooperate in
filing such amendment or supplement with the SEC;
(c) MG shall provide to, and shall arrange for its independent
public accountants to provide to, TMW all financial information and
statements, including audited financial statements for the period
beginning December 23, 1996 and ending January 31, 1997, the year ended
January 31, 1998, and interim financial statements for the period ended
July 31, 1998, and if requested by TMW to comply with the Rules and
Regulations of the SEC interim financial statements for the period
ended October 31, 1998, with respect to MG, with such accountants
reports thereon, as TMW shall deem necessary or advisable to comply
with the Securities Act or the U.S. Securities Exchange Act of 1934. MG
shall also arrange for such accountants to consent to the inclusion of
such reports and to a reference to them as experts in the Registration
Statement; and
(d) TMW and MG shall take any action required to be taken
under any applicable provincial or state securities laws (including
"blue sky" laws) in connection with the issuance of the TMW Common
Stock and the Share Restructuring; provided, however, that with respect
to the blue sky and Canadian provincial qualifications, neither TMW nor
MG shall be required to register or qualify as a foreign corporation or
reporting issuer where any such entity is not now so registered or
qualified except as to matters and transactions arising solely from the
offer and sale of the TMW Common Stock or the issuance of the
Exchangeable Shares.
4.5 PUBLIC ANNOUNCEMENTS. Neither TMW nor MG, nor any of their
respective affiliates, shall issue or cause the publication of any press release
or other public announcement with respect to this Agreement, the Share
Restructuring or the other transactions contemplated hereby
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37
without the prior consent of the other party, except as may be required by law
or by any listing agreement with a national securities exchange and, provided
that, the party making such announcement shall give prior notice to the other
party.
4.6 COMFORT LETTERS. MG shall use its reasonable best efforts to cause
to be delivered to TMW a letter (the "MG Comfort Letter") of E&Y substantially
in the form of Exhibit B addressed to TMW and dated as of a date within five
days before the date on which the Registration Statement shall become effective,
in form and substance reasonably satisfactory to TMW and customary in scope and
substance for "comfort" letters delivered by independent public accountants in
connection with registration statements similar to the Registration Statement.
4.7 EXPENSES. Whether or not the Share Restructuring is consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses; provided, however, that if this Agreement shall have been terminated
pursuant to Section 7.1 as a result of the willful breach by a party of any of
its representations, warranties, covenants, or agreements set forth in this
Agreement, such breaching party shall pay the direct out-of-pocket costs and
expenses of the other parties in connection with the transactions contemplated
by this Agreement.
4.8 ADDITIONAL AGREEMENTS BY SHAREHOLDERS.
(a) Each of the Shareholders agrees to promptly notify TMW in
writing if such Shareholder becomes aware of (i) any event occurring
subsequent to date of this Agreement which would render any
representation or warranty of MG given in this Agreement untrue or
inaccurate in any material respect or (ii) any breach by MG of any
material covenant or agreement contained in this Agreement; and
(b) Each of the Shareholders agrees that such Shareholder will
not transfer any Exchangeable Shares held by such Shareholder unless
such transfer shall be in compliance with all related U.S. and Canadian
securities, prospectus and registration requirements or unless such
Shareholder shall receive a no action letter or similar advice from all
appropriate U.S. and Canadian securities authorities or a written
opinion from securities counsel reasonably acceptable to TMW to the
effect that such transfer may be effected without delivery of a
prospectus and registration under all applicable U.S. and Canadian
laws.
4.9 INVENTORY RECONCILIATION. MG shall permit TMW to conduct a test
inventory of the MG stores and the manufacturing facility and MG shall cooperate
with TMW and shall cause MG's independent accountants to cooperate with TMW to
allow TMW to test MG and the MG Subsidiaries' inventory to reconcile the
physical inventory to MG's books and records.
4.10 DEBT REPAYMENT. TMW agrees to cause MG to prepay on the Effective
Date the principal and accrued interest owing under (i) the Junior Loan
Agreement; (ii) a note in the amount of Can $3,333,333.00 made by GB/B
Acquisition Corp. (now known as Golden Brand Clothing (Canada) Ltd.) in favor of
3230074 Canada Inc. (now known as Gronbri Holdings Inc.), which note is
guaranteed by Zorro Holding Corp. (now known as MG) and M-Acquisition Corp. (now
known as ▇▇▇▇▇▇ The Suit People Inc.) ("Prosserman Note 1"); (iii) a note in the
amount of Can
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$1,666,667.00 made by M Acquisition Corp. in favor of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. (now
known as Ampro Holdings Inc.), which note is guaranteed by Zorro Holding Corp.
(now known as MG) and GB/B Acquisition Corp. (now known as Golden
Brand)("Prosserman Note 2" and together with Prosserman Note 1, the "Prosserman
Notes"); and (iv) Can $60,000,000 Credit Agreement among Zorro Holding Corp.
(now known as MG), as Borrower, and Societe Generale and Caisse de Depot et
Placement du Quebec, as Lenders, with Societe Generale, as Administrative Agent,
dated December 20, 1996, as amended by a First Amending Agreement to Credit
Agreement dated as of March 4, 1997 (as amended, the "Credit Agreement"), and
any penalty arising in connection with prepayment of the Credit Agreement. In
connection with any such repayment of debt to a party who is not a resident of
Canada, MG will withhold any and all appropriate withholding taxes and shall
remit such withholding taxes to Revenue Canada.
4.11 CERTAIN LEASES. TMW shall continue to provide ▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ the opportunity to use their respective automobiles and
apartments in Montreal and Toronto currently provided by MG for a period of ten
days following the Closing Date.
4.12 MG DISCLOSURE LETTER. Within five business days of the date
hereof, MG shall provide TMW with a revised disclosure letter (the "Revised MG
Disclosure Letter"). TMW shall have five business days from the date of its
receipt of the Revised MG Disclosure Letter to object to any of the information
set forth therein which differs from the information contained in the MG
Disclosure Letter by providing written notice of any such objection to MG which
notice shall contain a description of the items in respect of which TMW objects.
Within three business days of the delivery of written notice of any objection by
TMW to MG, MG shall have the right to remove the objectionable information or to
terminate the Agreement. If no such written notice is provided to MG by TMW
during the five business days following the delivery of the Revised MG
Disclosure Letter by MG to TMW, then the Revised MG Disclosure Letter shall be
deemed to have been provided as of the date hereof and shall replace and
supercede the MG Disclosure Letter provided to TMW on the date hereof and all
references herein to the MG Disclosure Letter shall thereafter be deemed
references to the Revised MG Disclosure Letter.
4.13 OPTIONHOLDERS AGREEMENT TO EXCHANGE OPTIONS. Within 15 business
days of the date upon which TMW receives the Revised MG Disclosure Letter, each
Optionholder shall have entered into an agreement in the form of Exhibit C (the
"Agreement to Exchange Options") to exchange such Optionholders' Options in
accordance with this Agreement; provided, however, that if any Optionholder does
not enter into such Agreement to Exchange Options, then at the Effective Time,
each Optionholder shall receive an amendment to such Optionholder's Option which
shall adjust the "Option Shares" which are subject to such Option in accordance
with Section 6 and Section 9(h) of the agreement creating such Option so that
such Option Shares shall become a number of Exchangeable Shares equal to the
number of Exchangeable Shares exchangeable for each MG Class C Share pursuant to
Section 1.2(c) times the number of MG Class C Shares covered by such Option. The
aggregate option price under such Option shall remain unchanged and shall be
appropriately allocated to the Exchangeable Shares subject to such Option.
4.14 TAX CERTIFICATES. Each of the Shareholders, except CDPQ and
Marpro, agree to use reasonable best efforts to obtain the tax certificates
referred to in Section 5.1(g) hereof.
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ARTICLE V.
CONDITIONS PRECEDENT TO OBLIGATIONS
5.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY. The obligations
of each party to consummate and effect the transactions contemplated hereunder
shall be subject to the satisfaction or waiver before the Effective Date of the
following conditions:
(a) Consents of Certain Parties in Privity. Except as provided
in Section 5.3 and as to leases, TMW and MG shall have received all
written consents, assignments, waivers, authorizations or other
certificates necessary to provide for the continuation in full force
and effect of all their contracts and leases and for them to consummate
the transactions contemplated hereby, except when the failure to
receive such consents or other certificates would not have a Material
Adverse Effect on TMW or MG;
(b) No Legal Action. No order shall have been entered and
remain in effect in any action or proceeding before any Governmental
Entity that would prevent or make illegal the consummation of the Share
Restructuring;
(c) Commissions, etc. All necessary orders shall have been
obtained from the relevant United States and Canadian securities
regulatory authorities in connection with the Share Restructuring;
(d) SEC Matters. The Registration Statement shall have been
declared effective under the Securities Act on or before the Effective
Date, and at its effective date and on the Closing Date the
Registration Statement shall not be the subject of any stop-order;
(e) Listings. The TMW Common Stock to be issued from time to
time after the Effective Time upon exchange of the Exchangeable Shares
shall have been approved for listing on NASDAQ, subject only to notice
of issuance;
(f) Optionholders. Each Optionholder shall have (i) entered
into an agreement in the form of Exhibit D (an "Optionholder
Agreement"); (ii) delivered to MG and TMW a certificate confirming
whether such Optionholder is a resident or non-resident of Canada for
the purposes of the ITA; (iii) in the case of an Optionholder who is a
non-resident of Canada for the purposes of the ITA, delivered to MG a
certificate reasonably satisfactory to MG and TMW, issued pursuant to
subsection 116(2) of the ITA, with respect to the Options disposed of,
and having as "certificate limit", as defined in subsection 116(2) of
the ITA, an amount equal to or greater than the cost to MG of the
Options; and (iv) in the case of an Optionholder who is not an
individual and is a non-resident of Canada for the purposes of the ITA,
delivered to MG a certificate reasonably satisfactory to MG and TMW,
issued pursuant to Section 1098 of the Taxation Act (Quebec), with
respect to the Options disposed of, and having as "certificate limit"
as defined in Section 1098 of the Taxation Act (Quebec), an amount
equal to or greater than the purchase price for MG of the Options;
(g) Tax Certificates. Each Shareholder, except CDPQ and
Marpro, shall have delivered to MG either (i)(A) in the case of a
partnership that is a Shareholder, a certificate
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40
confirming the name and address of each member thereof and the
percentage of partnership interest held by each member; (B) a
certificate reasonably satisfactory to MG and TMW, issued pursuant to
subsection 116(2) of the ITA, with respect to the MG Shares disposed
of, and having as "certificate limit", as defined in subsection 116(2)
of the ITA, an amount equal to or greater than the greater of the cost
to MG of the MG Shares and the proceeds of disposition to the
Shareholder or the member, as the case may be, of its MG Shares; and
(C) except in the case of a member of a partnership who is an
individual, a certificate reasonably satisfactory to MG and TMW, issued
pursuant to Section 1098 of the Taxation Act (Quebec), with respect to
the MG Shares disposed of, and having as "certificate limit" as defined
in Section 1098 of the Taxation Act (Quebec), an amount equal to or
greater than the greater of the cost to MG of the MG Shares and the
proceeds of disposition to the Shareholder or the member, as the case
may be, of its MG Shares or (ii) a certificate issued pursuant to
Subsection 116(2) of the ITA and Section 1098 of the Taxation Act
(Quebec) reasonably satisfactory to MG and TMW to the same effect as
(i)(B) and (C) above issued to a partnership that is a Shareholder
which covers the partners in that partnership; and
(h) Authorization for Exchangeable Shares. MG shall have taken
all necessary action to permit it to issue the number of Exchangeable
Shares required to be issued pursuant to the terms of the Share
Restructuring Plan, this Agreement and the Support Agreement. The
Exchangeable Shares issued pursuant to the terms of the Share
Restructuring Plan, this Agreement and the Support Agreement will, when
issued, be validly issued, fully paid and nonassessable.
5.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF MG AND THE SHAREHOLDERS. The
obligations of MG and the Shareholders to consummate and effect the transactions
contemplated hereunder shall be subject to the satisfaction or waiver on or
before the Effective Date of the following conditions:
(a) Representations and Warranties. The representations and
warranties of TMW contained in this Agreement shall be true and correct
on the date hereof and (except to the extent such representations and
warranties speak as of a date earlier than the date hereof) shall also
be true and correct on and as of the Effective Date, with the same
force and effect as if made on and as of the Effective Date, unless the
failure or failures of such representations and warranties to be so
true and correct (without regard to materiality qualifiers contained
therein), individually or in the aggregate, does not result or would
not reasonably be expected to result in a Material Adverse Effect on
TMW and the TMW Subsidiaries taken as a whole;
(b) Covenants. TMW shall have performed and complied with all
covenants required by this Agreement to be performed or complied with,
in all material respects, by TMW on or before the Effective Date;
(c) Certificate. TMW shall have delivered to MG a certificate,
dated the Effective Date and signed by its president and its vice
president-finance, to the effect set forth in Sections 5.2(a) and (b);
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(d) Opinion of TMW Counsel. MG shall have received opinions,
dated as of the Effective Date, from Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.,
United States counsel for TMW, and from ▇▇▇▇▇ Casgrain, Canadian
counsel for TMW, each in form and substance reasonably satisfactory to
MG;
(e) Affiliates Agreements. TMW shall have furnished copies to
MG of the TMW affiliates agreements referred to Section 8.3(b);
(f) Certificates and Resolutions. MG shall have received such
other certificates and resolutions of TMW as may be reasonably required
in connection with the consummation of the transactions contemplated by
this Agreement;
(g) Aggregate Value. The number of Exchangeable Shares to be
issued pursuant to Section 1.2(a) shall not exceed 2.75 million and,
when multiplied by the Average Stock Price, shall equal at least U.S.
$50 million; and
(h) Termination of Employment Agreements. Each of Messrs.
▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have received from TMW, on
behalf of MG, Can $300,000, less applicable withholding taxes, in cash
or immediately available funds in full satisfaction of all amounts
owing to each of them under his current employment agreement with MG
and such employment agreements shall have been terminated.
5.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF TMW. The obligations of TMW
to consummate and effect the transactions contemplated hereunder shall be
subject to the satisfaction or waiver on or before the Effective Date of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of MG and the Shareholders contained in this Agreement shall
be true and correct on the date hereof and (except to the extent such
representations and warranties speak as of a date earlier than the date
hereof) shall also be true and correct on and as of the Effective Date,
with the same force and effect as if made on and as of the Effective
Date, unless the failure or failures of such representations and
warranties to be so true and correct (without regard to materiality
qualifiers contained therein), individually or in the aggregate, does
not result or would not reasonably be expected to result in a Material
Adverse Effect on MG and the MG Subsidiaries taken as a whole;
(b) Covenants. MG and the Shareholders shall have performed
and complied with all covenants required by this Agreement to be
performed or complied with, in all material respects, by MG and the
Shareholders on or before the Effective Date;
(c) Certificate. MG and the Shareholders shall have delivered
to TMW a certificate, dated the Effective Date and signed by its chief
executive officer and its chief financial officer, to the effect set
forth in Sections 5.3(a) and (b);
(d) Opinion of MG Counsel. TMW shall have received opinions,
dated as of the Effective Date, from Coudert Brothers, United States
counsel for MG, and from Coudert
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Freres, Canadian counsel for MG, each in form and substance reasonably
satisfactory to TMW;
(e) Pooling Matters. TMW shall not have been advised by D&T or
E&Y that the transaction may not be accounted for as a pooling of
interest and the SEC shall not have advised or otherwise indicated to
TMW that TMW may not account for the transaction as a pooling of
interest, and (i) TMW shall have received an opinion from D&T updating
the TMW Pooling Opinion as of the Closing Date and (ii) MG shall have
received an opinion from E&Y updating the MG Pooling Opinion as of the
Closing Date, a copy of which shall have been provided to D&T, each to
the effect that the transactions contemplated hereby are poolable;
(f) Agreed Upon Procedures Report and Comfort Letter. TMW
shall have received the MG Comfort Letter and an additional letter from
E&Y, dated the Effective Date, in form and substance reasonably
satisfactory to TMW, stating that nothing has come to their attention,
as of a date no earlier than five days prior to the Effective Date,
which would require any change in the MG Comfort Letter if it were
required to be dated and delivered on the Effective Date and TMW and MG
shall have received the agreed upon procedures report from E&Y as
contemplated by the Confidentiality Agreement (as hereinafter defined);
(g) Affiliates Agreements. MG shall have furnished copies to
TMW of the MG affiliates agreements referred to Section 8.3(a);
(h) Options Exchanged. All Options held by the Optionholders
shall have been exchanged in accordance with Section 1.2 and Section
4.13;
(i) Amounts to be Paid by Zelnik and Kreisler. Each of ▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have paid to MG all advances made by
MG or any MG Subsidiary to him net of any salary owed plus any
withholding tax MG or an MG Subsidiary is required to remit;
(j) Certificate of the Chief Financial Officer. TMW shall have
received a certificate signed by the chief financial officer of MG
certifying as to the fact that (1) inventory levels, (2) sales of
inventory, (3) collection of accounts receivable, (4) payments of
accounts payable, including all commitments to purchase inventory or
other goods, (5) borrowings incurred and (6) banking arrangements have,
for the period between January 31, 1998 and the Closing Date, remained
consistent in all material respects with the usual, regular and
ordinary manner of business of MG and the MG Subsidiaries consistent
with past practices;
(k) Letter Regarding Debt Referred to in Section 2.2(b). MG
shall have provided TMW a letter from the Junior Lenders to the effect
that the Junior Debt can be prepaid by MG at the Junior Debt Fair
Value;
(l) Certificates and Resolutions. TMW shall have received such
other certificates and resolutions of MG as may be reasonably required
in connection with the consummation of this Agreement;
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(m) [Intentionally Omitted];
(n) Termination Agreements. ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
shall have entered into termination agreements with MG, in the form of
Exhibits E and F, respectively and the existing employment agreements
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have been terminated
accordingly.
(o) Resignations. All officers and directors of MG and the MG
Subsidiaries designated by TMW shall have submitted written
resignations;
(p) Non-Competition and Confidentiality Agreements. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ Parzialie
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ shall have executed Non-Competition and
Confidentiality Agreements in the form of Exhibits G, H, I, J, K and L
hereto;
(q) Accounts Payable. MG shall have delivered to TMW a list of
accounts payable of MG and the MG Subsidiaries dated as of the end of
the calendar month immediately preceding the Effective Date certified
by the President and the Chief Financial Officer of MG as to its
accuracy and completeness and setting forth as of such date each
account payable of MG and the MG Subsidiaries, except accounts payable
which individually do not exceed $1,000 and collectively do not exceed
$100,000, which list shall indicate the date the related liability was
incurred, the date of the invoice and the payment due date;
(r) Repayment of Debt. The Junior Lenders shall not have
revoked or modified their consent referred to in Section 2.2(b);
(s) Release of Liens. Societe Generale (CANADA), Caisse de
Depot et Placement du Quebec, ▇▇▇▇▇▇▇▇▇ L.L.C. and CDPQ shall have made
arrangements satisfactory to TMW for the release of all liens with
respect to MG or any MG Subsidiary or any of their property upon
payment of all amounts owing to such parties;
(t) Lease Consents. The landlords with respect to each store
located in Canada, where required, shall have consented to the change
of control of MG; provided, however, that if consents have not been
obtained for stores which had sales in fiscal year ended January 31,
1998 aggregating less than 10% of sales in fiscal year ended January
31, 1998 for all Canadian stores, and provided that consents have been
obtained for the West-Ottawa, Markham, Toronto Downtown and
Scarborough-East stores, any other leases controlled by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ and seven out of the nine leases entered into after January
31, 1997, then TMW shall be deemed to have waived this requirement as
to obtaining the remaining consents prior to Closing;
(u) Union Negotiations. Either a new union contract acceptable
to the Association shall have been executed by all parties and shall
not discriminate against MG or, if a new union contract has not been
entered into, there shall exist no strike or other work stoppage, or
the announcement thereof, against or at MG (a "Disruption"); provided,
however, if this condition cannot be met due to the existence of a
Disruption, TMW may
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postpone the Closing for up to 60 calendar days, or if the condition is
met within the 60 calendar days until such date as the condition is
met, and if the condition is not met within such 60 calendar days TMW
may waive this condition or may terminate the Agreement; and further
provided, notwithstanding anything herein to the contrary, that any
such Disruption shall not be deemed "material" or to have a "Material
Adverse Effect" for purposes of this Agreement;
(v) Share Allocation. TMW shall have received a letter from
CIBC Wood Gundy Securities Inc., concurred in by Bear ▇▇▇▇▇▇▇ & Co.
Inc., to the effect that the allocation of the Exchangeable Shares to
the Optionholders and to each class of capital stock of MG is based on
the relative fair value of each class of capital stock of MG and the
fair value of the Options;
(w) ▇▇▇▇▇▇ ▇▇▇▇ Letter. TMW shall have received an updated
letter from ING Baring ▇▇▇▇▇▇ ▇▇▇▇ LLC, dated within two business days
of Closing, reconfirming its previous letter dated August 28, 1998 and
updated as of November 16, 1998, with regard to the ability of MG to
obtain high yield financing;
(x) Inventory Levels. The inventory levels at the stores
operated by ▇▇▇▇▇▇ The Suit People U.S., Inc. shall not exceed an
aggregate book value of $3.9 million; provided, however, that if the
Closing shall occur after December 25, 1998 then such inventory levels
shall not exceed an aggregate book value of $3.5 million;
(y) Hazardous Materials. None of the buildings or premises
owned or leased by MG shall contain asbestos, urea formaldehyde,
polychlorinated biphenyls (PCB's) or other hazardous materials the
presence of which would reasonably be expected to result in a Material
Adverse Effect on MG and the MG Subsidiaries taken as a whole; and
(z) Termination of Certain Employees. ▇▇▇▇▇ ▇▇▇▇▇ shall have
entered into a termination agreement with MG in the form of Exhibit M
and her existing employment with MG shall have been terminated
accordingly.
ARTICLE VI.
OBLIGATIONS OF PARTIES AFTER CLOSING
6.1 POST-CLOSING CONFIDENTIALITY. After the Closing, the Shareholders
and their Affiliates shall maintain as confidential information all material,
non-public information in their possession regarding TMW or its business or
assets, and shall not disclose any of such information to any person except as
may be required to comply with any governmental requirement.
6.2 NO SOLICITATION OF EMPLOYEES. To induce TMW to complete the
transactions contemplated herein and to effect the Share Restructuring, each
Shareholder, other than CDPQ, of MG and each Affiliate (as hereinafter defined)
thereof shall not (i) for a two year period commencing on the Effective Date
solicit for employment by any person ▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇
Parzialie, and (ii) for a one year period commencing on the Effective Date,
solicit for employment by any person any employee of MG or any of the MG
Subsidiaries listed on Exhibit A to Confidentiality
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Agreement dated August 3, 1998, between TMW and MG (the "Confidentiality
Agreement") and will not permit, for the two year and one year periods as
applicable, any of the above-mentioned individuals to be hired in any business
in which such Shareholder is an officer or director or in which such Shareholder
owns more than a 5% interest.
ARTICLE VII.
TERMINATION
7.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval of the transactions
contemplated hereby by the Securityholders of MG entitled to vote, as follows:
(a) by mutual agreement of MG and TMW;
(b) by MG, if there has been a breach by TMW of any
representation, warranty, covenant or agreement set forth in this Agreement on
the part of TMW, or if any representation or warranty of TMW shall have become
untrue, in either case which has or can reasonably be expected to have a
Material Adverse Effect on TMW, and which TMW fails to cure within 15 business
days after written notice thereof from MG (except that no cure period shall be
provided for a breach by TMW which by its nature cannot be cured);
(c) by TMW, if there has been a breach by MG of any
representation, warranty, covenant or agreement set forth in this Agreement on
the part of MG, or if any representation or warranty of MG shall have become
untrue, in either case which has or can reasonably be expected to have a
Material Adverse Effect on MG, and which MG fails to cure within 15 business
days after written notice thereof from TMW (except that no cure period shall be
provided for a breach by MG which by its nature cannot be cured);
(d) by either party, if all the conditions set forth in
Article V hereof shall not have been satisfied or waived on or before 5:00 p.m.,
Montreal, Canada time on February 28, 1999, other than as a result of a breach
of this Agreement by the terminating party;
(e) by either party if a final and non-appealable order shall
have been entered in any action or proceeding before any Governmental Entity
that prevents or makes illegal the consummation of the Share Restructuring;
(f) by MG, if TMW shall have approved, or agreed to or
announced any agreement to effect, any transaction that would result in any
person, who is not currently a TMW stockholder, acquiring beneficial ownership
of more than 50% of the issued and outstanding capital stock of TMW or any
person who is not currently a TMW stockholder acquires beneficial ownership of
more than 50% of the issued and outstanding capital stock of TMW; and
(g) by MG, if the Registration Statement shall not have been
filed with the SEC within 30 business days of the date hereof.
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7.2 NOTICE OF TERMINATION. Any termination of this Agreement under
Section 7.1 above will be effected by the delivery of written notice by the
terminating party to the other party hereto.
7.3 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either MG or TMW pursuant to Section 7.1, this Agreement shall
forthwith become void and have no effect, and there shall be no liability or
obligation on the part of TMW or MG or their respective officers or directors,
except that (i) the provisions of the Confidentiality Agreement shall survive
any such termination and abandonment, and (ii) no party shall be released or
relieved from any liability arising from the willful breach by such party of any
of its representations, warranties, covenants or agreements as set forth in this
Agreement.
ARTICLE VIII.
ADDITIONAL AGREEMENTS
TMW and MG each agree to take the following actions after the execution
of this Agreement.
8.1 THE CLOSING. Subject to the termination of this Agreement as
provided in Article VII, the Closing of the transactions contemplated by this
Agreement (the "Closing") will take place at the offices of Coudert Freres in
Montreal, Quebec on a date (the "Closing Date") and at a time to be mutually
agreed upon by the parties, which date shall be no later than the first business
day after all conditions to Closing set forth herein shall have been satisfied
or waived, unless another place, time and date is mutually selected by MG and
TMW. Concurrently with the Closing, the Articles of Amendment giving effect to
the Share Restructuring Plan will be filed with the Director under the NBBCA.
8.2 ANCILLARY DOCUMENTS/RESERVATION OF SHARES.
(a) Provided all other conditions of this Agreement have been
satisfied or waived, MG shall, on the Closing Date, file the Articles of
Amendment giving effect to the Share Restructuring Plan pursuant to the NBBCA,
such Share Restructuring Plan to contain share conditions for Exchangeable
Shares substantially in the form of those contained in Exhibit A.
(b) On the Effective Date:
(i) TMW shall execute and deliver a Support
Agreement substantially in the form of
Exhibit N, together with such other terms
and conditions as may be agreed to by the
parties hereto acting reasonably; and
(ii) TMW, MG and a Canadian trust company to be
mutually agreeable to TMW and MG, acting
reasonably, shall execute and deliver a
Voting Trust Agreement substantially in the
form of Exhibit O, together with such other
terms and conditions as may be agreed to by
the parties hereto acting reasonably.
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(c) On or before the Effective Date, TMW will reserve for
issuance such number of shares of TMW Common Stock as shall be necessary to give
effect to the exchanges or exchanges of options contemplated hereby.
8.3 AFFILIATE AGREEMENTS.
(a) To ensure that the Share Restructuring will be accounted
for as a "pooling of interests" and to ensure compliance with Rule 145 of the
rules and regulations promulgated by the SEC and the Securities Act, on or
before the Closing Date MG will use its reasonable best efforts to have its
Affiliates sign and deliver to TMW the MG affiliate agreements in the form of
Exhibit P. For purposes of this Agreement, an "Affiliate" shall have the meaning
referred to in Rule 145 under the Securities Act.
(b) To ensure that the Share Restructuring will be accounted
for as a "pooling of interests" on or before the Closing Date TMW will use its
reasonable best efforts to have its Affiliates sign and deliver to TMW the TMW
Affiliate Agreements in the form of Exhibit Q.
(c) As soon as practicable after the Effective Date but in no
event later than 60 days after the end of the calendar month in which the
Closing occurs, unless the Closing occurs in December, in which case no later
than 90 days after the end of the calendar month in which the Closing occurs,
TMW shall publish in the form of a Current Report on Form 8-K or a press release
which is generally disseminated, the consolidated results of operations of TMW,
the TMW Subsidiaries, MG and the MG Subsidiaries for a period of at least 30
days after the Effective Date in order for the Securityholders to be able to
sell the shares of TMW Common Stock into which the Exchangeable Shares are
exchangeable without affecting the accounting of the Share Restructuring as a
"pooling of interests" under U.S. generally accepted accounting principles.
8.4 SAFE INCOME CALCULATION. MG shall cause as soon as reasonably
practical, but in all events not later than sixty (60) days from the Effective
Date, E&Y, Toronto head office, to calculate for each of the Shareholders its
respective share of MG's Safe Income (as the term "Safe Income" is commonly used
and applied in the context of subsection 55(2) of the ITA by Canadian income tax
counsel generally) before the Safe Income Determination Time (as the term "Safe
Income Determination Time" is defined in subsection 55(1) of the ITA) in respect
of the transactions contemplated by this Agreement and to provide each of the
Shareholders with a copy of such calculation together with sufficient details
thereof so as to enable their Canadian income tax counsel to understand the
basis of such calculation.
ARTICLE IX.
MISCELLANEOUS
9.1 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES. With the exception
of the representations and warranties given by the Shareholders in Article II-B
(excluding the representation contained in Sections 2.32 and 2.35) which shall
remain in effect until the earlier of (i) the completion of the first audit of
the combined companies subsequent to closing (for those matters expected to be
resolved in an audit) or (ii) one year following the Closing for all other
matters, all representations
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and warranties of the parties contained in this Agreement will remain operative
and in full force and effect, regardless of any investigation made by or on
behalf of the parties to this Agreement, until the earlier of the valid
termination of this Agreement or the Closing Date, whereupon such
representations and warranties will expire and be of no further force or effect.
All agreements and covenants of the parties shall survive the Closing Date,
except as otherwise set forth in this Agreement. TMW hereby agrees that all
causes of action which it may have had against MG, any Shareholder or any MG
Subsidiary or any of their respective officers, directors, partners,
shareholders, members, affiliates and successors in respect of any breach of
representation or warranty contained herein by MG or any Shareholder are hereby
waived by TMW (a) in the case of representations and warranties which do not
survive the Closing, effective at the Closing; and (b) to the extent any other
representations and warranties shall survive the Closing for any period,
effective at the end of such period; provided that a claim made prior to the
termination of a representation or warranty shall remain in effect until such
claim is finally resolved.
9.2 NOTICES. All notices, requests, demands, claims and other
communications which are required to be or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (i) delivered
in person or by courier, (ii) sent by facsimile transmission, answer back
requested, or (iii) mailed, certified first class mail, postage prepaid, return
receipt requested, to the parties hereto at the following addresses:
if to MG:
▇▇▇▇▇▇ Retail Group Inc.
▇▇▇▇, ▇▇▇ ▇▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: 514.274.4177
with a copy to:
Coudert Brothers
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: 212.626.4120
if to TMW or Canco:
The Men's Wearhouse, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: 713.657.0872
and
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The Men's Wearhouse, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: 713.664.7140
with a copy to:
Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: 713.651.5246
and
▇▇▇▇▇ Casgrain
▇ ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: ▇▇▇▇▇ ▇. Mass
Facsimile: 514.866.2241
or to such other address as any party shall have furnished to the other by
notice given in accordance with this Section 9.2. Such notices shall be
effective, (i) if delivered in person or by courier, upon actual receipt by the
intended recipient, (ii) if sent by facsimile transmission, when the answer back
is received, or (iii) if mailed, upon the earlier of five days after deposit in
the mail and the date of delivery as shown by the return receipt therefor.
9.3 ARBITRATION.
(a) Subject to the limitations set forth herein with respect
to the parties' rights to make claims hereunder, including, but not
limited to, the limitations set forth in Sections 7.3 and 9.1, any
dispute, controversy, or claim arising out of or relating to this
Agreement, or the breach, termination or invalidity hereof, including
claims for tortious interference or other tortious or statutory claims
arising before, during or after termination, providing only that such
claim touches upon matters covered by this contract, shall be finally
settled by arbitration pursuant to the Arbitration ▇▇▇, ▇▇▇▇, Ontario,
as amended or substituted from time to time as presently in force,
except as modified by the specific provisions of this Agreement. The
parties expressly agree that nothing in this Agreement shall prevent
the parties from applying to a court that would otherwise have
jurisdiction over the parties for provisional or interim measures,
including injunctive relief. After the arbitration panel is empaneled,
it shall have sole jurisdiction to hear such applications, except that
the parties agree that any measures ordered by the arbitrators may be
immediately and specifically enforced by a court otherwise having
jurisdiction over the parties. The parties agree that judgment on the
arbitration award may be entered by any court having jurisdiction
thereof.
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(b) The parties agree that the federal and province courts
located in Toronto, Ontario shall have exclusive jurisdiction over an
action brought to enforce the rights and obligations created in or
arising from this agreement to arbitrate, and each of the parties
hereto irrevocably submits to the jurisdiction of said courts.
Notwithstanding the above, application may be made by a party to any
court of competent jurisdiction wherever situated for enforcement of
any judgment and the entry of whatever orders are necessary for such
enforcement. Process in any action arising out of or relating to this
agreement may be served on any party to the agreement anywhere in the
world by delivery in person against receipt or by registered or
certified mail, return receipt requested.
(c) The arbitration shall be conducted before a tribunal
composed of three arbitrators. If the panel is selected prior to
Closing, MG and TMW shall each select an arbitrator. If the arbitration
panel is selected after Closing, the Shareholders to which the
arbitration relates, on the one hand, and TMW on the other shall each
select an arbitrator. In either case, the two arbitrators so selected
shall select a third arbitrator within 10 days of selection of the two
arbitrators. If the two arbitrators are unable to agree on a third
arbitrator, either party may petition the Ontario Court, General
Division to appoint the third arbitrator. In addition, if any one of
the parties fails to appoint the arbitrator which it is responsible for
appointing within 10 days of the request of the other party, then such
other party may petition the Ontario Court, General Division to appoint
the first party's arbitrator. Prior to his or her formal appointment,
each arbitrator shall disclose to the parties and to the other members
of the tribunal, any financial, fiduciary, kinship or other
relationship between that arbitrator and any party or its counsel, or
between that arbitrator and any individual or entity with any
financial, fiduciary, kinship or other relationship with any party. Any
award or portion thereof, whether preliminary or final, shall be in a
written opinion containing findings of fact and conclusions of law
signed by each arbitrator. The arbitrator dissenting from an award or
portion thereof shall issue a dissent from the award or portion thereof
in writing, stating the reasons for his dissent. The arbitrators shall
hear and determine any preliminary issue of law asserted by a party to
be dispositive of any claim, in whole or part, in the manner of a court
hearing a motion to dismiss for failure to state a claim or for summary
judgment, pursuant to such terms and procedures as the arbitrators deem
appropriate.
(d) It is the intent of the parties that, barring
extraordinary circumstances, any arbitration hearing shall be concluded
within two months of the date the third arbitrator is appointed. Unless
the parties otherwise agree, once commenced, hearings shall be held 5
days a week, with each hearing day to begin at 9:00 A.M. and to
conclude at 5:00 P.M. The parties may upon agreement extend these time
limits, or the chairman of the panel may extend them if he determines
that the interests of justice otherwise requires. The arbitrators shall
use their best efforts to issue the final award or awards within a
period of 30 days after closure of the proceedings. Failure to do so
shall not be a basis for challenging the award. The parties and
arbitrators shall treat all aspects of the arbitration proceedings,
including without limitation, discovery, testimony, and other evidence,
briefs and the award, as strictly confidential. The place of
arbitration shall be Toronto unless otherwise agreed by the parties.
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(e) The parties agree that discovery shall be limited and
shall be handled expeditiously. Discovery procedures available in
litigation before the courts shall not apply in an arbitration
conducted pursuant to this agreement. However, each party shall produce
relevant and non-privileged documents or copies thereof requested by
the other parties within the time limits set and to the extent required
by order of the arbitrators. All disputes regarding discovery shall be
promptly resolved by the arbitrators. No witness or party may be
required to waive any privilege recognized at law. The parties hereby
waive any claim to any damages in the nature of punitive, exemplary, or
statutory damages in excess of compensatory damages, or any form of
damages in excess of compensatory damages, and the arbitration tribunal
is specially divested of any power to award any damages in the nature
of punitive, exemplary, or statutory damages in excess of compensatory
damages, or any form of damages in excess of compensatory damages. The
party prevailing on substantially all of its claims shall be entitled
to recover its costs, including attorneys' fees, for the arbitration
proceedings, as well as for any ancillary proceeding, including a
proceeding to compel arbitration, to request interim measures, or to
confirm or set aside an award. Notwithstanding anything to the contrary
contained in this Agreement, the parties hereby waive any claim to
damages in the nature of consequential damages.
9.4 INTERPRETATION. When a reference is made in this Agreement to
Sections or Exhibits, such reference shall be to a Section or Exhibit to this
Agreement unless otherwise indicated. The words "include," "includes" and
"including" when used therein shall be deemed in each case to be followed by the
words "without limitation".
9.5 KNOWLEDGE. As used in this agreement, the words "knowledge", "best
knowledge", "awareness", "know", "known" and words of similar meaning of a
person shall mean the actual knowledge of such person and, with respect to MG
and the MG Subsidiaries, the actual knowledge of ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ Parzialie and, with respect to TMW, the
actual knowledge of ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇.
9.6 WAIVER AND AMENDMENT. Any provision of this Agreement may be waived
at any time by the party that is, or whose shareholders are, entitled to the
benefits thereof. This Agreement may not be amended or supplemented at any time,
except by an instrument in writing signed on behalf of each party hereto. The
waiver by any party hereto of any condition or of a breach of another provision
of this Agreement shall not operate or be construed as a waiver of any other
condition or subsequent breach. The waiver by any party hereto of any of the
conditions precedent to its obligations under this Agreement shall not preclude
it from seeking redress for breach of this Agreement other than with respect to
the condition so waived.
9.7 GOVERNING LAW; LANGUAGE. All questions arising out of this
Agreement and the rights and obligations created herein, or its validity,
existence, interpretation, performance or breach shall be governed by the laws
of the Province of Ontario. The parties confirm their wish that this agreement
and all documents and notices relating hereto be drawn up in English.
9.8 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms,
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provision, covenants and restrictions of this Agreement shall continue in full
force and effect and shall in no way be affected, impaired or invalidated.
9.9 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be an original, but all of which together shall constitute one
and the same agreement.
9.10 NUMBER AND GENDER. In this Agreement, words importing the singular
number only shall include the plural and vice versa, and words importing any
gender shall include all genders.
9.11 MISCELLANEOUS. This Agreement, which includes the MG Disclosure
Letter, the TMW Disclosure Letter and the Exhibits hereto, the Confidentiality
Agreement, and any other documents referred to herein or contemplated hereby (a)
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof;
(b) are not intended to confer upon any other person any rights or remedies
hereunder; and (c) shall not be assigned by operation of law or otherwise except
as otherwise specifically provided.
9.12 DIVISIONS, HEADINGS, ETC.. Division of this Agreement into
articles, sections, subsections and paragraphs and the insertion of headings are
for convenience of reference only and shall not affect the construction or
interpretation hereof. The terms "herein", "hereof", "hereunder" and similar
expressions refer to this Agreement and not to any particular article, section,
subsection, paragraph or other portion hereof and include any exhibits or
appendices hereto and any agreement or instruments supplementary or ancillary
hereto.
9.13 DATE OF ANY ACTION. In the event that any date on which an action
is required or permitted to be taken hereunder is not a Business Day, such
action shall be required or permitted to be taken on or by the next succeeding
day that is a Business Day. For purposes of this Agreement, "Business Day" shall
mean any day on which companies are generally open for business in Montreal,
Quebec; Toronto, Ontario and Houston, Texas.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, each of the parties caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
THE MEN'S WEARHOUSE, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
GOLDEN MOORES COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
▇▇▇▇▇▇ RETAIL GROUP INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: CEO
THE SHAREHOLDERS
MARPRO HOLDINGS INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
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MGB LIMITED PARTNERSHIP
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
CAPITAL D'AMERIQUE CDPQ INC.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
By /s/ ▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Vice-President
CERBERUS INTERNATIONAL, LTD.
By: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Overseas
Management Ltd.
(Investment Manager)
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
ULTRA CERBERUS FUND, LTD.
By: ▇▇▇▇▇▇▇▇▇ Hill Overseas
Management Ltd.
(Investment Manager)
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
45
55
STYX INTERNATIONAL LTD.
By: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Overseas
Management Ltd.
(Investment Manager)
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
THE LONG HORIZONS OVERSEAS FUND LTD.
By: Old Stand Management L.L.C.
(Investment Manager)
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
THE LONG HORIZONS FUND, L.P.
By: Old Stand Associates L.L.C.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
STYX PARTNERS, L.P.
By: Styx Associates, L.L.C.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
46
56
EXHIBIT A
SHARE RESTRUCTURING PLAN
57
SHARE RESTRUCTURING PLAN
AND
EXCHANGEABLE SHARE PROVISIONS
58
SHARE RESTRUCTURING PLAN
INVOLVING AND AFFECTING ▇▇▇▇▇▇ RETAIL GROUP INC.
AND THE HOLDERS OF ITS COMMON SHARES, CLASS B SHARES,
CLASS C SHARES, CLASS D SHARES, OPTIONS AND SHAREHOLDER RIGHTS
ARTICLE 1
INTERPRETATION
Section 1.1 Definitions. In this Share Restructuring Plan unless there is
something in the subject matter or context inconsistent therewith, the following
terms shall have the respective meanings set out below and grammatical
variations of such terms shall have corresponding meanings:
"Automatic Redemption Date" has the meaning provided in the
Exchangeable Share Provisions;
"Business Day" has the meaning provided in the Exchangeable Share
Provisions;
"Canco" means Golden Moores Company, an unlimited liability company
existing under the laws of Nova Scotia and a wholly owned subsidiary of TMW;
"Class A Preferred Share" means the one authorized Class A Preferred
Share of MG having the rights, privileges, restrictions and conditions set out
in Appendix C annexed hereto;
"Closing Price" means the closing price (computed and rounded to the
third decimal point) of shares of TMW Common Stock on the Nasdaq on the last
trading day prior to the Effective Date;
"Combination Agreement" means the agreement by and among TMW, Canco, MG
and the Shareholders of MG signatory thereto, dated as of November ___, 1998, as
amended and restated from time to time, providing for, among other things, this
Share Restructuring Plan and the Share Restructuring;
"Common Shares" means the authorized Common Shares of MG having the
rights, privileges, restrictions and conditions set out in Appendix A annexed
hereto;
"Depositary" means _______________________________________________;
"Effective Date" means the date shown on the Certificate of Amendment
giving effect to this Share Restructuring Plan issued by the Director under the
NBBCA;
"Effective Time" means 12:01 a.m. on the Effective Date;
"Exchange Put Right" has the meaning provided in the Exchangeable Share
Provisions;
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"Exchangeable Share Consideration" has the meaning provided in the
Exchangeable Share Provisions;
"Exchangeable Share Price" has the meaning provided in the Exchangeable
Share Provisions;
"Exchangeable Share Provisions" means the rights, privileges,
restrictions and conditions attaching to the Exchangeable Shares, which are set
forth in Appendix B hereto;
"Exchangeable Shares" means the Exchangeable Shares in the capital of
MG provided for in this Share Restructuring Plan;
"Liquidation Call Purchase Price" has the meaning provided in Section
4.1;
"Liquidation Call Right" has the meaning provided in Section 4.1;
"Liquidation Date" has the meaning provided in the Exchangeable Share
Provisions;
"MG" means ▇▇▇▇▇▇ Retail Group Inc., a corporation existing under the
laws of New Brunswick;
"MG Shares" means the MG Common Shares, the MG Class B Shares, the MG
Class C Shares and the MG Class D Shares (each as defined in the Combination
Agreement);
"Nasdaq" means National Association of Securities Dealers Automated
Quotation System;
"NBBCA" means the Business Corporations Act (New Brunswick);
"Options" has the meaning set forth in the Combination Agreement;
"Option Agreement" shall have the meaning set forth in the Combination
Agreement;
"Option Value" has the meaning set forth in the Combination Agreement;
"Redemption Call Purchase Price" has the meaning provided in Section
4.2;
"Redemption Call Right" has the meaning provided in Section 4.2;
"Share Restructuring" means the share restructuring on the terms and
subject to the conditions set out in this Share Restructuring Plan, subject to
any amendments thereto made in accordance with Section 5.1 hereof;
"Subsidiary" has the meaning provided in the Exchangeable Share
Provisions;
"TMW" means The Men's Wearhouse, Inc., a corporation existing under the
laws of Texas;
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"TMW Common Stock" has the meaning provided in the Exchangeable Share
Provisions;
"Transfer Agent" means the duly appointed transfer agent for the time
being of the Exchangeable Shares, and if there is more than one such agent then
the principal Canadian agent; and
"Voting Trust Agreement" means the agreement so entitled between TMW,
Canco, MG and the Trustee named therein to be dated as of the Effective Date and
provided for in the Combination Agreement, as amended from time to time.
SECTION 1.2 Sections, Headings and Appendices. The division of this Share
Restructuring Plan into sections and the insertion of headings are for reference
purposes only and shall not affect the interpretation of this Share
Restructuring Plan. Unless otherwise indicated, any reference in this Share
Restructuring Plan to a section or an Appendix refers to the specified section
of or Appendix to this Share Restructuring Plan. The Appendices are incorporated
herein and are part hereof.
SECTION 1.3 Number, Gender and Persons. In this Share Restructuring Plan, unless
the context otherwise requires, words importing the singular number include the
plural and vice versa, words importing any gender include all genders and words
importing persons include individuals, bodies corporate, partnerships,
associations, trusts, unincorporated organizations, governmental bodies and
other legal or business entities of any kind.
SECTION 1.4 Date for any Action. In the event that any date on or by which any
action is required or permitted to be taken hereunder is not a Business Day,
such action shall be required or permitted to be taken on or by the next
succeeding day which is a Business Day.
SECTION 1.5 Currency. Unless otherwise expressly stated herein, all references
to currency and payments in cash or money in this Share Restructuring Plan are
to Canadian dollars.
SECTION 1.6 Statutory References. Any reference in this Share Restructuring Plan
to a statute includes such statute as amended, consolidated or re-enacted from
time to time, all regulations made thereunder, all amendments to such
regulations from time to time, and any statute or regulation which supersedes
such statute or regulations.
ARTICLE 2
SHARE RESTRUCTURING
SECTION 2.1 Share Restructuring. At the Effective Time on the Effective Date,
the following reorganization of capital and other transactions shall occur and
shall be deemed to occur in the following order without any further act or
formality:
(a) The Articles of Incorporation of MG shall be amended to create
and authorize an unlimited number of Exchangeable Shares and
one Class A Preferred Share.
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(b) MG shall issue to Canco one Class A Preferred Share in
consideration of the delivery to MG of $1,000. The stated
capital of the Class A Preferred Share shall be $1,000. No
certificate shall be issued in respect of the Class A
Preferred Share.
(c) Each MG Share will be exchanged for a number of Exchangeable
Shares determined in accordance with the provisions of the
Combination Agreement, and each such holder thereof will
receive a whole number of Exchangeable Shares resulting
therefrom. In lieu of fractional Exchangeable Shares, each
such holder who otherwise would be entitled to receive a
fraction of an Exchangeable Share on the exchange shall be
paid by MG an amount, in cash, determined as set forth in
Section 3.3.
(d) In consideration for the exchange of the Options held by a
holder of one or more Options, the holder shall be entitled to
receive a number of Exchangeable Shares determined in
accordance with the provisions of the Combination Agreement,
and each such holder thereof will receive a whole number of
Exchangeable Shares resulting therefrom. In lieu of fractional
Exchangeable Shares, each such holder who otherwise would be
entitled to receive a fraction of an Exchangeable Share on the
exchange shall be paid by MG an amount, in cash, determined as
set forth in Section 3.3.
(e) Upon the exchange referred to in subsections (c) and (d)
above, each such holder of a MG Share shall cease to be such a
holder, shall have his name removed from the register of
holders of MG Shares and shall become a holder of the number
of fully paid Exchangeable Shares to which he is entitled as a
result of the exchange referred to in subsection (c), and such
holder's name shall be added to the register of holders of
Exchangeable Shares accordingly. Each holder of an Option
shall cease to hold such Option, shall become a holder of the
number of fully paid Exchangeable Shares to which he is
entitled as a result of the exchange referred to in subsection
(d) and such holder's name shall be added to the register of
holders of Exchangeable Shares accordingly.
(f) The aggregate stated capital of the Exchangeable Shares will
be equal to the aggregate stated capital immediately prior to
the Effective Date of the MG Shares which are exchanged
pursuant to such subsection 2.1(c) above, thereby excluding
the stated capital attributable to the fractional shares for
which payment is made, in cash, as contemplated in subsection
(c) above.
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(g) The Articles of Incorporation of MG shall be amended to change
the number of authorized MG Shares to an unlimited number of
Common Shares and to delete the MG Class B Shares, the MG
Class C Shares, the MG Class D Shares, the MG Class E Shares
and the MG Class F Shares (each as defined in the Combination
Agreement) and the rights, privileges, restrictions and
conditions attaching to the Common Shares shall be as set
forth in Appendix A.
(h) The one outstanding Class A Preferred Share will be exchanged
for one fully-paid and non-assessable Common Share and the
holder thereof shall cease to be a holder of the Class A
Preferred Share, shall have its name removed from the register
of holders of Class A Preferred Shares and shall become a
holder of the Common Share to which it is entitled as a result
of the exchange referred to in this subsection (h), and such
holder's name shall be added to the register as holder of the
Common Share accordingly.
(i) The stated capital of the one Common Share shall be equal to
the stated capital of the one Class A Preferred Share
immediately prior to the exchange contemplated in subsection
(h).
(j) The Articles of Incorporation of MG shall be amended to delete
the Class A Preferred Share from the authorized share capital
so that, after giving effect to the foregoing provisions of
this section 2.1, the authorized capital of MG shall consist
of an unlimited number of Exchangeable Shares having the
rights, privileges, restrictions and conditions set forth in
Appendix B hereto and an unlimited number of Common Shares
having the rights, privileges, restrictions and conditions set
forth in Appendix A hereto.
ARTICLE 3
CERTIFICATES AND FRACTIONAL SHARES
SECTION 3.1 Issuance of Certificates Representing Exchangeable Shares. At the
Effective Time, MG shall make available to the holders of MG Shares and the
holders of Options exchanged pursuant to subsections 2.1(c) and (d),
certificates representing the Exchangeable Shares issued pursuant to subsections
2.1(c) and (d) upon the exchange. Upon surrender to MG of a certificate which
immediately prior to the Effective Time represented outstanding MG Shares
together with such other documents and instruments as would have been required
to effect the transfer of the shares formerly represented by such certificate
under the NBBCA and the by-laws of MG in the case of the MG Shares and surrender
of the agreement creating the Options in the case of the Options and such
additional documents and instruments as MG may reasonably require, the holder of
such surrendered certificate or Option Agreements shall be entitled to receive
in exchange therefor, and MG shall
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deliver to such holder, a certificate representing that number (rounded down to
the nearest whole number) of Exchangeable Shares which such holder has the right
to receive (together with any dividends or distributions with respect thereto
pursuant to Section 3.2 and any cash in lieu of fractional Exchangeable Shares
pursuant to Section 3.3), and the certificate or Option Agreement so surrendered
shall forthwith be canceled. In the event of a transfer of ownership of MG
Shares which is not registered in the transfer records of MG, a certificate
representing the proper number of Exchangeable Shares may be issued to a
transferee if the certificate representing such MG Shares is presented to MG,
accompanied by all documents required to evidence and effect such transfer.
Until surrendered as contemplated by this Section 3.1, each certificate which
immediately prior to the Effective Time represented outstanding MG Shares, shall
be deemed at any time after the Effective Time, but subject to Section 3.5, to
represent only the right to receive upon such surrender (a) the certificate
representing Exchangeable Shares as contemplated by this Section 3.1, (b) a cash
payment in lieu of any fractional Exchangeable Shares as contemplated by Section
3.3 and (c) any dividends or distributions with a record date after the
Effective Time theretofore paid or payable with respect to Exchangeable Shares
as contemplated by Section 3.2.
SECTION 3.2 Distributions with Respect to Unsurrendered Certificates. No
dividends or other distributions declared or made after the Effective Time with
respect to Exchangeable Shares with a record date after the Effective Time shall
be paid to the holder of any formerly outstanding MG Shares or any Options which
were exchanged pursuant to Section 2.1, and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 3.3,
unless and until the certificate representing such shares or the agreement
creating such Options, as the case may be, shall be surrendered in accordance
with Section 3.1. Subject to applicable law and to Section 3.5, at the time of
such surrender of any such certificate or Option Agreement (or, in the case of
clause (c) below, at the appropriate payment date), there shall be paid to the
holder of the Exchangeable Shares resulting from exchange, in all cases without
interest, (a) the amount of any cash payable in lieu of a fractional
Exchangeable Share to which such holder is entitled pursuant to Section 3.3, (b)
the amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such Exchangeable Shares, and
(c) the amount of dividends or other distributions with a record date after the
Effective Time but prior to surrender and a payment date subsequent to surrender
payable with respect to such Exchangeable Shares.
SECTION 3.3 No Fractional Shares. No certificates or scrip representing
fractional Exchangeable Shares shall be issued upon the surrender for exchange
of certificates or Option Agreements pursuant to Section 3.1, and such
fractional interests shall not entitle the owner thereof to vote or to possess
or exercise any rights as a security holder of MG. In lieu of any such
fractional interests, each person entitled thereto will receive an amount of
cash (rounded to the nearest whole cent), without interest, equal to the product
of (a) such fractional interest, multiplied by (b) the Closing Price, such
amount to be provided to the Depositary by MG upon request.
SECTION 3.4 Lost Certificates. If any certificate which immediately prior to the
Effective Time represented outstanding MG Shares which were exchanged pursuant
to Section 2.1 has been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such certificate to be lost,
stolen or destroyed, the Depositary will issue in exchange for such lost, stolen
or destroyed certificate, certificates representing Exchangeable Shares (and any
dividends or
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distributions with respect thereto and any cash pursuant to Section 3.3)
deliverable in respect thereof as determined in accordance with Section 2.1.
When authorizing such payment in exchange for any lost, stolen or destroyed
certificate, the person to whom certificates representing Exchangeable Shares
are to be issued shall, as a condition precedent to the issuance thereof, give a
bond satisfactory to MG, TMW and the Transfer Agent, as the case may be, in such
sum as MG may direct or otherwise indemnify MG or TMW in a manner satisfactory
to MG and the Transfer Agent against any claim that may be made against MG, TMW
or the Transfer Agent with respect to the certificate alleged to have been lost,
stolen or destroyed.
SECTION 3.5 Extinguishment of Rights. Any certificate evidencing Exchangeable
Shares relating to any certificate which immediately prior to the Effective Time
represented outstanding MG Shares which were exchanged pursuant to Section 2.1
which has not been deposited, with all other instruments required by Section
3.1, on or prior to the fifth anniversary of the Effective Date shall be turned
over to the appropriate state or province in accordance with the applicable
state and province laws regarding escheat and abandoned property, together with
all entitlements to dividends, distributions and interest thereon held for such
former registered holder and the name of the former registered holder shall be
removed from the register of holders of such Exchangeable Shares.
ARTICLE 4
CERTAIN RIGHTS AND OBLIGATIONS OF TMW AND
CANCO TO ACQUIRE EXCHANGEABLE SHARES
SECTION 4.1 TMW and Canco Liquidation Call Right.
(a) TMW and Canco shall have the overriding right (the
"Liquidation Call Right"), in the event of and notwithstanding
the proposed liquidation, dissolution or winding-up of MG as
referred to in Article 5 of the Exchangeable Share Provisions,
to purchase from all but not less than all of the holders
(other than TMW and any Subsidiary thereof) of Exchangeable
Shares on the Liquidation Date all but not less than all of
the Exchangeable Shares held by such holders on payment by TMW
or Canco to each holder of the Exchangeable Share Price
applicable on the last Business Day prior to the Liquidation
Date (the "Liquidation Call Purchase Price"). In the event of
the exercise of the Liquidation Call Right by either TMW or
Canco, each holder shall be obligated to sell all the
Exchangeable Shares held by the holder to either TMW or Canco,
as the case may be, on the Liquidation Date on payment by TMW
or Canco to the holder of the Liquidation Call Purchase Price
for each such share.
(b) To exercise the Liquidation Call Right, either TMW or Canco
must notify MG's Transfer Agent, as agent for the holders of
Exchangeable Shares, and MG, in writing of either TMW's or
Canco's intention to exercise such right at least 90 days
before the Liquidation Date in the
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case of a voluntary liquidation, dissolution or winding-up of
MG and as soon as practicable, but in no event less than five
Business Days before the Liquidation Date in the case of an
involuntary liquidation, dissolution or winding-up of MG. MG
will cause the Transfer Agent to notify the holders of
Exchangeable Shares as to whether or not either TMW or Canco
has exercised the Liquidation Call Right forthwith after the
expiry of the date by which the same may be exercised by
either TMW or Canco. If either TMW or Canco exercises the
Liquidation Call Right, on the Liquidation Date it will
purchase and the holders will sell all of the Exchangeable
Shares then outstanding for a price per share equal to the
Liquidation Call Purchase Price.
(c) For the purposes of completing the purchase of the
Exchangeable Shares pursuant to the Liquidation Call Right,
either TMW or Canco shall deposit with the Transfer Agent, on
or before the Liquidation Date, the Exchangeable Share
Consideration representing the total Liquidation Call Purchase
Price. Provided that such Exchangeable Share Consideration has
been so deposited with the Transfer Agent, on and after the
Liquidation Date the right of each holder of Exchangeable
Shares will be limited to receiving such holder's
proportionate part of the total Liquidation Call Purchase
Price payable by either TMW or Canco without interest upon
presentation and surrender by the holder of certificates
representing the Exchangeable Shares held by such holder and
the holder shall on and after the Liquidation Date be
considered and deemed for all purposes to be the holder of the
TMW Common Stock delivered to it as part of the Liquidation
Call Purchase Price. Upon surrender to the Transfer Agent of a
certificate or certificates representing Exchangeable Shares,
together with such other documents and instruments as may be
required to effect a transfer of Exchangeable Shares under the
NBBCA and the by-laws of MG and such additional documents and
instruments as the Transfer Agent may reasonably require, the
holder of such surrendered certificate or certificates shall
be entitled to receive in exchange therefor, and MG shall
cause the Transfer Agent on behalf of either TMW or Canco to
deliver to such holder, the Exchangeable Share Consideration
to which the holder is entitled. If neither TMW nor Canco
exercises the Liquidation Call Right in the manner described
above and the holders of the Exchangeable Shares Provisions
have not exercised their put rights in the manner described in
Section 4.3 below, on the Liquidation Date the holders of the
Exchangeable Shares will be entitled to receive in exchange
therefor the liquidation price otherwise payable by MG in
connection with the liquidation, dissolution or winding-up of
MG pursuant to Article 5 of the Exchangeable Share Provisions.
Notwithstanding the foregoing,
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until such Exchangeable Share Consideration is delivered to
the holder, the holder shall be deemed to still be a holder of
Exchangeable Shares for purposes of all voting rights with
respect thereto under the Voting Trust Agreement.
SECTION 4.2 TMW and Canco Redemption Call Right.
(a) TMW and Canco shall have the overriding right (the "Redemption
Call Right"), notwithstanding the proposed redemption of the
Exchangeable Shares by MG pursuant to Article 7 of the
Exchangeable Share Provisions, to purchase from all but not
less than all of the holders (other than TMW or any Subsidiary
thereof) of Exchangeable Shares on the Automatic Redemption
Date all but not less than all of the Exchangeable Shares held
by each such holder on payment by either TMW or Canco of the
Exchangeable Share Price applicable on the last Business Day
prior to the Automatic Redemption Date to the holder (the
"Redemption Call Purchase Price"). In the event of the
exercise of the Redemption Call Right by either TMW or Canco,
each holder shall be obligated to sell all the Exchangeable
Shares held by the holder to either TMW or Canco, as the case
may be, on the Automatic Redemption Date on payment by it to
the holder of the Redemption Call Purchase Price for each such
share.
(b) To exercise the Redemption Call Right, TMW and Canco must
notify the Transfer Agent, as agent for the holders of
Exchangeable Shares, and MG, in writing of TMW's and Canco's
intention to exercise such right not later than the date by
which MG is required to give notice of the Automatic
Redemption Date. If either TMW or Canco exercises the
Redemption Call Right, on the Automatic Redemption Date it
will purchase and the holders will sell all of the
Exchangeable Shares then outstanding for a price per share
equal to the Redemption Call Purchase Price.
(c) For the purposes of completing the purchase of the
Exchangeable Shares pursuant to the Redemption Call Right,
either TMW or Canco, as the case may be, shall deposit with
the Transfer Agent, on or before the Automatic Redemption
Date, the Exchangeable Share Consideration representing the
total Redemption Call Purchase Price. Provided that such
Exchangeable Share Consideration has been so deposited with
the Transfer Agent, on and after the Automatic Redemption Date
the rights of each holder of Exchangeable Shares will be
limited to receiving such holder's proportionate part of the
total Redemption Call Purchase Price payable by TMW or Canco
upon presentation and surrender by the holder of certificates
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representing the Exchangeable Shares held by such holder and
the holder shall on and after the Automatic Redemption Date be
considered and deemed for all purposes to be the holder of the
TMW Common Stock delivered to such holder as part of the
Redemption Call Purchase Price. Upon surrender to the Transfer
Agent of a certificate or certificates representing
Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of
Exchangeable Shares under the NBBCA and the by-laws of either
TMW or Canco, as the case may be, and such additional
documents and instruments as the Transfer Agent may reasonably
require, the holder of such surrendered certificate or
certificates shall be entitled to receive in exchange
therefor, and MG shall cause the Transfer Agent on behalf of
TMW or Canco to deliver to such holder, the Exchangeable Share
Consideration to which the holder is entitled. If neither TMW
nor Canco exercises the Redemption Call Right in the manner
described above and the holders of the Exchangeable Shares
have not exercised their Exchange Put Rights in the manner
described in Section 4.3 below, on the Automatic Redemption
Date the holders of the Exchangeable Shares will be entitled
to receive in exchange therefor the redemption price otherwise
payable by MG in connection with the redemption of the
Exchangeable Shares pursuant to Article 7 of the Exchangeable
Share Provisions. Notwithstanding the foregoing, until such
Exchangeable Share Consideration is delivered to the holder,
the holder shall be deemed to still be a holder of
Exchangeable Shares for purposes of all voting rights with
respect thereto under the Voting Trust Agreement.
SECTION 4.3 Exchange Put Right. Upon and subject to the terms and conditions
contained in the Exchangeable Share Provisions:
(a) a holder of Exchangeable Shares shall have the right (the
"Exchange Put Right") at any time to require Canco to purchase
all or any part of the Exchangeable Shares of the holder; and
(b) upon the exercise by the holder of the Exchange Put Right, the
holder shall be required to sell to Canco, and Canco shall be
required to purchase from the holder, no later than the time
or times prescribed therefor herein or in the Exchangeable
Share Provisions, that number of Exchangeable Shares in
respect of which the Exchange Put Right is exercised, in
consideration of the payment by Canco of the Exchangeable
Share Price applicable thereto and delivery by or on behalf of
Canco of the Exchangeable Share Consideration representing the
total applicable Exchangeable Share Price.
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ARTICLE 5
AMENDMENT
SECTION 5.1 Share Restructuring Plan Amendment. MG reserves the right to amend,
modify and/or supplement this Share Restructuring Plan at any time and from time
to time provided that any such amendment, modification, or supplement must be
contained in a written document that is agreed to by TMW.
Any amendment, modification or supplement to this Share Restructuring
Plan shall be effective only (a) if it is consented to by MG, (b) if it is
consented to by TMW and (c) if it is consented to by the holders of MG Shares or
Exchangeable Shares in accordance with the provisions of Section 11.1 of the
Exchangeable Share Provisions.
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APPENDIX A TO THE
SHARE RESTRUCTURING PLAN
PROVISIONS ATTACHING TO THE COMMON SHARES
The Common Shares in the capital of the Corporation shall have attached
thereto the following rights, privileges, restrictions and conditions:
DIVIDENDS
The holders of the Common Shares, subject to the rights, if any, of any
class of shares ranking in priority to the Common Shares, shall be entitled to
receive dividends and the Corporation shall pay dividends thereon if, as and
when declared by the board of directors of the Corporation, out of the monies of
the Corporation properly applicable to the payment of dividends in any financial
year, such dividends in any financial year as the board of directors may by
resolution determine. A cheque for the amount of the dividend less any required
deduction shall be mailed by first class mail to the address of the registered
holder thereof.
DISSOLUTION
In the event of the liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or any other distribution of
assets of the Corporation among its shareholders for the purpose of winding-up
its affairs, the holders of the Common Shares shall be entitled to receive,
subject to the rights, if any, of any class of shares ranking in priority to the
Common Shares, all of the remaining property and assets of the Corporation.
VOTING RIGHTS
The holder of a Common Share shall be entitled to one vote for each
Common Share held at any meeting of shareholders of the Corporation other than
meetings of the holders of another class or series.
▇▇
▇▇▇▇▇▇▇▇ ▇ TO THE
SHARE RESTRUCTURING PLAN OF MG
PROVISIONS ATTACHING TO EXCHANGEABLE SHARES
The Exchangeable Shares in the capital of the Corporation shall have
the following rights, privileges, restrictions and conditions:
ARTICLE 1
INTERPRETATION
For the purposes of these rights, privileges, restrictions and
conditions:
1.1 "ACT" means the Business Corporations Act (New Brunswick), as amended,
consolidated or reenacted from time to time.
"AGGREGATE EQUIVALENT VOTE AMOUNT" means, with respect to any matter,
proposition or question on which holders of TMW Common Stock are entitled to
vote, consent or otherwise act, the product of (i) the number of shares of
Exchangeable Shares then issued and outstanding and held by holders other than
TMW and its Subsidiaries multiplied by (ii) the number of votes to which a
holder of one share of TMW Common Stock is entitled with respect to such matter,
proposition or question.
"AUTOMATIC EXCHANGE RIGHTS" MEANS the benefit of the obligation of
Canco to effect the automatic exchange of shares of TMW Common Stock for
Exchangeable Shares pursuant to Section 9.7 hereof.
"AUTOMATIC REDEMPTION DATE" means the date for the automatic redemption
by the Corporation of Exchangeable Shares pursuant to Article 7 of these share
provisions, which date shall be the first to occur of (a) the fifth anniversary
of the Effective Date of the Share Restructuring, (b) the date selected by the
Board of Directors at a time when less than 15% of the Exchangeable Shares
issuable on the Effective Date (other than Exchangeable Shares held by TMW and
its Subsidiaries and as such number of shares may be adjusted as deemed
appropriate by the Board of Directors to give effect to any subdivision or
consolidation of or stock dividend on the Exchangeable Shares, any issuance or
distribution of rights to acquire Exchangeable Shares or securities exchangeable
for or convertible into or carrying rights to acquire Exchangeable Shares, any
issue or distribution of other securities or rights or evidences of indebtedness
or assets, or any other capital reorganization or other transaction involving or
affecting the Exchangeable Shares) are outstanding, (c) the Business Day prior
to the record date for any meeting or vote of the shareholders of the
Corporation to consider any matter on which the holders of Exchangeable Shares
would be entitled to vote as shareholders of the Corporation, but excluding any
meeting or vote as described in clause (d) below or (d) the Business Day
following the day on which the holders of Exchangeable Shares fail to take the
necessary action at a meeting or other vote of holders of Exchangeable Shares,
if and to the extent such action is required, to approve or disapprove, as
applicable, any change to, or in the rights of the
71
holders of, Exchangeable Shares, if the approval or disapproval, as applicable,
of such change would be required to maintain the economic and legal equivalence
of the Exchangeable Shares and the TMW Common Stock.
"BOARD OF DIRECTORS" means the Board of Directors of the Corporation
and any committee thereof acting within its authority.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
when banks are not open for business in one or more of ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇.
"CALL NOTICE" has the meaning provided in Section 6.3.
"CANCO" means Golden ▇▇▇▇▇▇ Company, an unlimited liability company
existing under the laws of Nova Scotia and a wholly owned subsidiary of TMW.
"CANCO EXCHANGE RIGHT" has the meaning provided in Section 9.1 hereof.
"CLASS A PREFERRED SHARE" means the Class A Preferred Share in the
capital of the Corporation.
"COMMON SHARES" means the common shares in the capital of the
Corporation.
"CORPORATION" or "MG" means ▇▇▇▇▇▇ Retail Group Inc., a corporation
existing under the laws of the Province of New Brunswick and includes any
successor corporation.
"EFFECTIVE DATE" has the meaning provided in the Share Restructuring
Plan.
"EXCHANGE PUT RIGHT" has the meaning provided in Article 8.
"EXCHANGE RIGHTS" has the meaning provided in Section 9.1 hereof.
"Exchangeable Share Consideration" means, for any acquisition of or
redemption of or distribution of assets of the Corporation in respect of or
purchase pursuant to these Provisions Attaching to Exchangeable Shares, the
Share Restructuring Plan, the Support Agreement or the Voting Trust Agreement:
(a) certificates representing the aggregate number of shares of
TMW Common Stock deliverable in connection with such action;
(b) a cheque or cheques payable at par at any branch of the
bankers of the payor in the amount of all declared and unpaid
and undeclared but payable cash dividends deliverable in
connection with such action; and
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(c) such stock or property constituting any declared and unpaid
and undeclared but payable non-cash dividends deliverable in
connection with such action;
provided that (i) that part of the consideration which consists of TMW Common
Stock shall be fully paid and satisfied by the delivery of certificates
representing such shares of TMW Common Stock, (ii) that part of the
consideration which represents non-cash dividends remaining unpaid shall be
fully paid and satisfied by delivery of such non-cash items, (iii) any such
stock shall be duly issued as fully paid and non-assessable and any such
property shall be delivered free and clear of any lien, claim, encumbrance,
security interest or adverse claim or interest and (iv) such consideration shall
be paid less any tax required to be deducted and withheld therefrom and without
interest.
"EXCHANGEABLE SHARE PRICE" means, for each Exchangeable Share, an
amount equal to the aggregate, without duplication, of:
(a) one share of TMW Common Stock; plus
(b) an additional amount equal to the full amount of all cash
dividends declared and unpaid or undeclared but payable on
such Exchangeable Share; plus
(c) an additional amount equal to all dividends declared on TMW
Common Stock which have not been declared or paid on
Exchangeable Shares in accordance herewith; plus
(d) an additional amount representing non-cash dividends declared
and unpaid or undeclared but payable on such Exchangeable
Share.
"EXCHANGEABLE SHARES" means the Exchangeable Shares of the Corporation
having the rights, privileges, restrictions and conditions set forth herein.
"INSOLVENCY EVENT" means, with respect to MG or Canco, the institution
by MG or Canco, as the case may be, of any proceeding to be adjudicated a
bankrupt or insolvent or to be dissolved or wound-up, or the consent of MG or
Canco, as the case may be, to the institution of bankruptcy, insolvency,
dissolution or winding-up proceedings against it, or the filing of a petition,
answer or consent seeking dissolution or winding-up under any bankruptcy,
insolvency or analogous laws, including without limitation the Companies
Creditors' Arrangement Act (Canada) and the Bankruptcy and Insolvency Act
(Canada), and the failure by MG or Canco, as the case may be, to contest in good
faith any such proceedings commenced in respect of MG or Canco, as the case may
be, within 15 days of becoming aware thereof, or the consent by MG or Canco, as
the case may be, to the filing of any such petition or to the appointment of a
receiver, or the making by MG or Canco, as the case may be, of a general
assignment for the benefit of creditors, or the admission in writing by MG or
Canco, as the case may be, of its inability to pay its debts generally as they
become due, or MG or Canco, as the case may be, not being permitted, pursuant to
liquidity or solvency requirements or other provisions of applicable law or
pursuant to any obligation (contractual or otherwise) applicable
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to MG or Canco, to redeem, repurchase or purchase any Exchangeable Shares
pursuant to the Exchangeable Share Provisions.
"LIQUIDATION AMOUNT" has the meaning provided in Section 5.1.
"LIQUIDATION CALL RIGHT" has the meaning provided in the Share
Restructuring Plan.
"LIQUIDATION DATE" has the meaning provided in Section 5.1.
"LIQUIDATION EVENT" has the meaning provided in Section 9.5 hereof.
"LIQUIDATION EVENT EFFECTIVE TIME" has the meaning provided in Section
9.7 hereof.
"MG EXCHANGE RIGHT" has the meaning provided in Section 9.1 hereof.
"MG SHARES" means the MG Common Shares, the MG Class B Shares, the MG
Class C Shares and the MG Class D Shares (each as defined in the Combination
Agreement) of the Corporation.
"PURCHASE PRICE" has the meaning provided in Section 6.3.
"REDEMPTION CALL PURCHASE PRICE" has the meaning provided in the Share
Restructuring Plan.
"REDEMPTION CALL RIGHT" has the meaning provided in the Share
Restructuring Plan.
"REDEMPTION PRICE" has the meaning provided in Section 7.1.
"RETRACTED SHARES" has the meaning provided in subsection 6.1(i).
"RETRACTION CALL RIGHT" has the meaning provided in subsection
6.1(iii).
"RETRACTION DATE" has the meaning provided in subsection 6.1(ii).
"RETRACTION PRICE" has the meaning provided in Section 6.1.
"RETRACTION REQUEST" has the meaning provided in Section 6.1.
"SHARE RESTRUCTURING PLAN" means the Share Restructuring Plan in
respect of the MG Shares, to which Share Restructuring Plan these share
provisions are an appendix.
"SUBSIDIARY", in relation to any person, means any body corporate,
partnership, joint venture, association or other entity of which more than 50%
of the total voting power of shares of stock or units of ownership or beneficial
interest entitled to vote in the election of directors (or members of a
comparable governing body) is owned or controlled, directly or indirectly, by
such person.
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"SUPPORT AGREEMENT" means the Support Agreement between TMW, Canco and
the Corporation made as of the Effective Date.
"TMW" means The Men's Wearhouse, Inc., a corporation existing under the
laws of the State of Texas.
"TMW COMMON STOCK" means the shares of common stock of TMW, with a par
value of U.S. $0.01 per share, having voting rights of one vote per share, and
any other securities resulting from the application of Section 3.7 of the
Support Agreement.
"TMW DIVIDEND DECLARATION DATE" means the date on which the board of
directors of TMW declares any dividend on the TMW Common Stock.
"TRANSFER AGENT" means the duly appointed transfer agent for the time
being of the Exchangeable Shares, and if there is more than one such agent then
the principal Canadian agent.
"VOTING TRUST AGREEMENT" means the Voting Trust Agreement between the
Corporation, TMW and the Trustee made as of the Effective Date.
ARTICLE 2
RANKING OF EXCHANGEABLE SHARES
2.1 The Exchangeable Shares shall rank junior to the Class A Preferred
Share, shall rank equally or pari passu with the Common Shares with respect to
the payment of dividends pursuant to Section 3.1 hereof and the distribution of
assets in the event of the liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or any other distribution of the
assets of the Corporation among its shareholders for the purpose of winding-up
its affairs.
ARTICLE 3
DIVIDENDS
3.1 A holder of an Exchangeable Share shall be entitled to receive and the
Board of Directors shall, subject to applicable law, on each TMW Dividend
Declaration Date, declare a dividend on each Exchangeable Share (a) in the case
of a cash dividend declared on the TMW Common Stock, in an amount in cash for
each Exchangeable Share equal to the cash dividend declared on each share of TMW
Common Stock or (b) in the case of a stock dividend declared on the TMW Common
Stock to be paid in TMW Common Stock, in such number of Exchangeable Shares for
each Exchangeable Share as is equal to the number of shares of TMW Common Stock
to be paid on each share of TMW Common Stock or (c) in the case of a dividend
declared on the TMW Common Stock in property other than cash or TMW Common
Stock, in such type and amount of property for each Exchangeable Share as is the
same as the type and amount of property declared as a dividend on each share of
TMW Common Stock. Such dividends shall be paid out of money, assets or property
of the Corporation properly applicable to the payment of dividends, or out of
authorized but unissued shares
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of the Corporation. A dividend payable pursuant to (a) above shall be payable in
Canadian dollars based on the spot exchange rate as of 12 o'clock noon on the
dividend payment date determined by the Bank of Canada.
3.2 Cheques of the Corporation payable at par at any branch of the bankers
of the Corporation shall be issued in respect of any cash dividends contemplated
by subsection 3.1(a) hereof and the sending of such a cheque to each holder of
an Exchangeable Share (less any tax required to be deducted and withheld from
such dividends paid or credited by the Corporation) shall satisfy the cash
dividends represented thereby unless the cheque is not paid on presentation.
Certificates registered in the name of the registered holder of Exchangeable
Shares shall be issued or transferred in respect of any stock dividends
contemplated by subsection 3.1(b) hereof and the sending of such a certificate
to each holder of an Exchangeable Share shall satisfy the stock dividend
represented thereby. Such other type and amount of property in respect of any
dividends contemplated by subsection 3.1(c) hereof shall be issued, distributed
or transferred by the Corporation in such manner as it shall determine and the
issuance, distribution or transfer thereof by the Corporation to each holder of
an Exchangeable Share shall satisfy the dividend represented thereby. In all
cases any such dividends shall be subject to any reduction or adjustment for tax
required to be deducted and withheld from such dividends paid or credited by the
Corporation. No holder of an Exchangeable Share shall be entitled to recover by
action or other legal process against the Corporation any dividend which is
represented by a cheque that has not been duly presented to the Corporation's
bankers for payment or which otherwise remains unclaimed for a period of six
years from the date on which such dividend was payable.
3.3 The record date for the determination of the holders of Exchangeable
Shares entitled to receive payment of, and the payment date for, any dividend
declared on the Exchangeable Shares under Section 3.1 hereof shall be the same
dates as the record date and payment date, respectively, for the corresponding
dividend declared on the TMW Common Stock.
3.4 If on any payment date for any dividends declared on the Exchangeable
Shares under Section 3.1 hereof the dividends are not paid in full on all of the
Exchangeable Shares then outstanding, any such dividends which remain unpaid
shall be paid on a subsequent date or dates determined by the Board of Directors
on which the Corporation shall have sufficient moneys, assets or property
properly applicable to the payment of such dividends.
3.5 Except as provided in Section 3.1, the holders of Exchangeable Shares
shall not be entitled to receive dividends in respect thereof.
ARTICLE 4
CERTAIN RESTRICTIONS
4.1 So long as any of the Exchangeable Shares are outstanding, the
Corporation shall not at any time without, but may at any time with, the
approval of the holders of the Exchangeable Shares given as specified in Section
11.1 of these share provisions:
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(a) pay any dividends on the Common Shares or any other shares of
the Corporation ranking equally with the Exchangeable Shares
with respect to the payment of dividends or the payment of any
liquidation distribution, or any shares ranking junior to the
Exchangeable Shares, other than stock dividends payable in any
such other shares ranking junior to the Exchangeable Shares;
(b) redeem or purchase or make any capital distribution in respect
of Common Shares or any other shares of the Corporation
ranking equally with the Exchangeable Shares with respect to
the payment of dividends or the payment of any liquidation
distribution or any other shares ranking junior to the
Exchangeable Shares with respect to the payment of dividends
or the payment of any liquidation distribution;
(c) issue any additional Common Shares;
(d) issue any further Exchangeable Shares (other than pursuant to
Section 3.1(b) hereof) or any capital stock ranking superior
to the Exchangeable Shares;
(e) amend the articles or by-laws of the Corporation, in either
case in any manner that would affect the rights of the holders
of the Exchangeable Shares; or
. (f) take any action to cause the voluntary liquidation of the
Corporation.
The restrictions in subsections 4.1(a), 4.1(b), and 4.1(c) above shall not apply
if all dividends on the outstanding Exchangeable Shares corresponding to
dividends declared with a record date on or following the effective date of the
Share Restructuring Plan on the TMW Common Stock shall have been declared on the
Exchangeable Shares and paid in full (either prior to such payment on the Common
Shares or simultaneously with such payment on the Common Shares).
ARTICLE 5
DISTRIBUTION ON LIQUIDATION
5.1 In the event of the liquidation, dissolution or winding-up of the
Corporation or any other distribution of the assets of the Corporation among its
shareholders for the purpose of winding-up its affairs, a holder of Exchangeable
Shares shall be entitled, subject to applicable law, to receive from the assets
of the Corporation in respect of each Exchangeable Share held by such holder on
the effective date of such liquidation, dissolution or winding-up (the
"Liquidation Date"), simultaneously with any distribution in respect of the
Common Shares, an amount equal to the Exchangeable Share Price applicable on the
last Business Day prior to the Liquidation Date (the "Liquidation Amount"). In
connection with payment of the Liquidation Amount, the Corporation shall be
entitled to liquidate
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some of the TMW Common Stock which would otherwise be deliverable to the
particular holder of Exchangeable Shares in order to fund any statutory
withholding tax obligation.
5.2 On or promptly after the Liquidation Date, and subject to the exercise
by TMW and Canco of the Liquidation Call Right, the Corporation shall cause to
be delivered to the holders of the Exchangeable Shares the Liquidation Amount
for each such Exchangeable Share upon presentation and surrender of the
certificates representing such Exchangeable Shares, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Act and the by-laws of the Corporation and such
additional documents and instruments as the Transfer Agent may reasonably
require, at the registered office of the Corporation or at any office of the
Transfer Agent as may be specified by the Corporation by notice to the holders
of the Exchangeable Shares. Payment of the total Liquidation Amount for such
Exchangeable Shares shall be made by delivery to each holder, at the address of
the holder recorded in the securities register of the Corporation for the
Exchangeable Shares or by holding for pick up by the holder at the registered
office of the Corporation or at any office of the Transfer Agent as may be
specified by the Corporation by notice to the holders of Exchangeable Shares, on
behalf of the Corporation of the Exchangeable Share Consideration representing
the total Liquidation Amount. On and after the Liquidation Date, the holders of
the Exchangeable Shares shall cease to be holders of such Exchangeable Shares
and shall not be entitled to exercise any of the rights of holders in respect
thereof, other than the right to receive their proportionate part of the total
Liquidation Amount, unless payment of the total Liquidation Amount for such
Exchangeable Shares shall not be made upon presentation and surrender of share
certificates in accordance with the foregoing provisions, in which case the
rights of the holders shall remain unaffected until the total Liquidation Amount
has been paid in the manner hereinbefore provided. The Corporation shall have
the right at any time on or after the Liquidation Date to deposit or cause to be
deposited the Exchangeable Share Consideration in respect of the Exchangeable
Shares represented by certificates that have not at the Liquidation Date been
surrendered by the holders thereof in a custodial account or for safe keeping,
in the case of non-cash items, with any chartered bank or trust company in
Canada. Upon such deposit being made, the rights of the holders of Exchangeable
Shares after such deposit shall be limited to receiving their proportionate part
of the total Liquidation Amount for such Exchangeable Shares so deposited,
against presentation and surrender of the said certificates held by them,
respectively, in accordance with the foregoing provisions. Upon such payment or
deposit of such Exchangeable Share Consideration, the holders of the
Exchangeable Shares shall thereafter be considered and deemed for all purposes
to be the holders of the TMW Common Stock delivered to them. Notwithstanding the
foregoing, until such payment or deposit of such Exchangeable Share
Consideration, the holder shall be deemed to still be a holder of Exchangeable
Shares for purposes of all voting rights with respect thereto under the Voting
Trust Agreement. The Corporation shall be entitled to liquidate some of the TMW
Common Stock that would otherwise be deliverable to the particular holder of
Exchangeable Shares in order to fund any statutory withholding tax obligation.
5.3 After the Corporation has satisfied its obligations to pay the holders
of the Exchangeable Shares the Liquidation Amount per Exchangeable Share, such
holders shall not be entitled to share in any further distribution of the assets
of the Corporation.
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ARTICLE 6
RETRACTION OF EXCHANGEABLE SHARES BY HOLDER
6.1 A holder of Exchangeable Shares shall be entitled at any time subject
to the exercise by TMW and Canco of the Retraction Call Right and otherwise upon
compliance with the provisions of this Article 6, to require the Corporation to
redeem any or all of the Exchangeable Shares registered in the name of such
holder for an amount equal to the Exchangeable Share Price applicable on the
last Business Day prior to the Retraction Date (the "Retraction Price"). In
connection with payment of the Retraction Price, the Corporation shall be
entitled to liquidate some of the TMW Common Stock that would otherwise be
deliverable to the particular holder of Exchangeable Shares in order to fund any
statutory withholding tax obligation. To effect such redemption, the holder
shall present and surrender at the registered office of the Corporation or at
any office of the Transfer Agent as may be specified by the Corporation in
Schedule A hereto or by notice to the holders of Exchangeable Shares the
certificate or certificates representing the Exchangeable Shares which the
holder desires to have the Corporation redeem, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Act and the by-laws of the Corporation and such
additional documents and instruments as the Transfer Agent may reasonably
require, and together with a duly executed statement (the "Retraction Request")
in the form of Schedule A hereto or in such other form as may be acceptable to
the Corporation:
(i) specifying that the holder desires to have all or any number
specified therein of the Exchangeable Shares represented by
such certificate or certificates (the "Retracted Shares")
redeemed by the Corporation;
(ii) stating the Business Day on which the holder desires to have
the Corporation redeem the Retracted Shares (the "Retraction
Date"), provided that the Retraction Date shall be not less
than three Business Days nor more than 10 Business Days after
the date on which the Retraction Request is received by the
Corporation and further provided that, in the event that no
such Business Day is specified by the holder in the Retraction
Request, the Retraction Date shall be deemed to be the tenth
Business Day after the date on which the Retraction Request is
received by the Corporation; and
(iii) acknowledging the overriding right (the "Retraction Call
Right") of TMW and Canco to purchase all but not less than all
the Retracted Shares directly from the holder and that the
Retraction Request shall be deemed to be a revocable offer by
the holder to sell the Retracted Shares in accordance with the
Retraction Call Right on the terms and conditions set out in
Section 6.3 below.
6.2 Subject to the exercise by TMW and Canco of the Retraction Call Right,
upon receipt by the Corporation or the Transfer Agent in the manner specified in
Section 6.1 hereof of a certificate or certificates representing the number of
Exchangeable Shares which the holder desires to have the
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Corporation redeem, together with a Retraction Request, and provided that the
Retraction Request is not revoked by the holder in the manner specified in
Section 6.7, the Corporation shall redeem the Retracted Shares effective at the
close of business on the Retraction Date and shall cause to be delivered to such
holder the total Retraction Price with respect to such shares in accordance with
Section 6.4 hereof. If only a part of the Exchangeable Shares represented by any
certificate are redeemed or purchased by TMW and Canco pursuant to the
Retraction Call right, a new certificate for the balance of such Exchangeable
Shares shall be issued to the holder at the expense of the Corporation.
6.3 Upon receipt by the Corporation of a Retraction Request, the
Corporation shall immediately notify TMW and Canco thereof. In order to exercise
the Retraction Call Right, TMW or Canco must notify the Corporation in writing
of its determination to do so (the "Call Notice") within two Business Days of
such notification. If neither TMW nor Canco notifies the Corporation within two
Business Days, the Corporation will notify the holder as soon as possible
thereafter that neither TMW nor Canco will exercise the Retraction Call Right.
If either TMW or Canco delivers the Call Notice within such two Business Days,
and provided that the Retraction Request is not revoked by the holder in the
manner specified in Section 6.7, the Retraction Request shall thereupon be
considered only to be an offer by the holder to sell the Retracted Shares to
either TMW or Canco in accordance with the Retraction Call Right. In such event,
the Corporation shall not redeem the Retracted Shares and TMW or Canco as set
forth in the Call Notice shall purchase from such holder and such holder shall
sell to either TMW or Canco on the Retraction Date the Retracted Shares for a
purchase price (the "Purchase Price") per share equal to the Retraction Price
per share. For the purposes of completing a purchase pursuant to the Retraction
Call Right, TMW or Canco shall deposit with the Transfer Agent, on or before the
Retraction Date the Exchangeable Share Consideration representing the total
Purchase Price. Provided that such Exchangeable Share Consideration has been so
deposited with the Transfer Agent, the closing of the purchase and sale of the
Retracted Shares pursuant to the Retraction Call Right shall be deemed to have
occurred as at the close of business on the Retraction Date and, for greater
certainty, no redemption by the Corporation of such Retracted Shares shall take
place on the Retraction Date. In the event that neither TMW nor Canco delivers a
Call Notice within two Business Days or otherwise comply with these Exchangeable
Share provisions with respect thereto, and provided that Retraction Request is
not revoked by the holder in the manner specified in Section 6.7, the
Corporation shall redeem the Retracted Shares on the Retraction Date and in the
manner otherwise contemplated in this Article 6.
6.4 The Corporation or either TMW or Canco, as the case may be, shall
deliver or cause the Transfer Agent to deliver to the relevant holder, at the
address of the holder recorded in the securities register of the Corporation for
the Exchangeable Shares or at the address specified in the holder's Retraction
Request or, if requested by the holder, by holding for pick up by the holder at
the registered office of the Corporation or at any office of the Transfer Agent
as may be specified by the Corporation by notice to the holders of Exchangeable
Shares, the Exchangeable Share Consideration representing the total Retraction
Price or the total Purchase Price, as the case may be, and such delivery of such
Exchangeable Share Consideration to the Transfer Agent shall be deemed to be
payment of and shall satisfy and discharge all liability for the total
Retraction Price or total Purchase Price, as the case may be, except as to any
cheque included therein which is not paid on due presentation.
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6.5 On and after the close of business on the Retraction Date, the holder
of the Retracted Shares shall not be entitled to exercise any of the rights of a
holder in respect thereof, other than the right to receive his proportionate
part of the total Retraction Price or total Purchase Price, as the case may be,
unless upon presentation and surrender of certificates in accordance with the
foregoing provisions, payment of the total Retraction Price or the total
Purchase Price, as the case may be, shall not be made, in which case the rights
of such holder shall remain unaffected until the Exchangeable Share
Consideration representing the total Retraction Price or the total Purchase
Price, as the case may be, has been paid in the manner hereinbefore provided. On
and after the close of business on the Retraction Date, provided that
presentation and surrender of certificates and payment of the Exchangeable Share
Consideration representing the total Retraction Price or the total Purchase
Price, as the case may be, has been made in accordance with the foregoing
provisions, the holder of the Retracted Shares so redeemed by the Corporation or
purchased by either TMW or Canco shall thereafter be considered and deemed for
all purposes to be a holder of the TMW Common Stock delivered to it.
Notwithstanding the foregoing, until payment of such Exchangeable Share
Consideration to the holder, the holder shall be deemed to still be a holder of
Exchangeable Shares for purposes of all voting rights with respect thereto under
the Voting Trust Agreement.
6.6 Notwithstanding any other provision of this Article 6, the Corporation
shall not be obligated to redeem Retracted Shares specified by a holder in a
Retraction Request to the extent that such redemption of Retracted Shares would
be contrary to liquidity or solvency requirements or other provisions of
applicable law. If the Corporation believes that on any Retraction Date it would
not be permitted by any of such provisions to redeem the Retracted Shares
tendered for redemption on such date, and provided that neither TMW nor Canco
has exercised the Retraction Call Right with respect to the Retracted Shares,
the Corporation shall only be obligated to redeem Retracted Shares specified by
a holder in a Retraction Request to the extent of the maximum number that may be
so redeemed (rounded down to a whole number of shares) as would not be contrary
to such provisions and shall notify the holder at least two Business Days prior
to the Retraction Date as to the number of Retracted Shares which will not be
redeemed by the Corporation. In any case in which the redemption by the
Corporation of Retracted Shares would be contrary to liquidity or solvency
requirements or other provisions of applicable law, the Corporation shall redeem
Retracted Shares in accordance with Section 6.2 of these share provisions on a
pro rata basis and shall issue to each holder of Retracted Shares a new
certificate, at the expense of the Corporation, representing the Retracted
Shares not redeemed by the Corporation pursuant to Section 6.2 hereof. Provided
that the Retraction Request is not revoked by the holder in the manner specified
in Section 6.7, the holder of any such Retracted Shares not redeemed by the
Corporation pursuant to Section 6.2 of these share provisions as a result of
liquidity or solvency requirements or applicable law shall be deemed by giving
the Retraction Request to require Canco to purchase such Retracted Shares from
such holder on the Retraction Date or as soon as practicable thereafter on
payment by Canco to such holder of the Purchase Price for each such Retracted
Share, all as more specifically provided in Article 9 hereof.
6.7 A holder of Retracted Shares may, by notice in writing given by the
holder to the Corporation before the close of business on the Business Day
immediately preceding the Retraction Date, withdraw its Retraction Request in
which event such Retraction Request shall be null and void and, for greater
certainty, the revocable offer constituted by the Retraction Request to sell the
Retracted Shares to either TMW or Canco shall be deemed to have been revoked.
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ARTICLE 7
REDEMPTION OF EXCHANGEABLE SHARES BY THE CORPORATION
7.1 Subject to applicable law, and if neither TMW nor Canco exercises the
Redemption Call Right and the holder does not exercise its Exchange Put Right,
the Corporation shall on the Automatic Redemption Date redeem the whole of the
then outstanding Exchangeable Shares for an amount equal to the Exchangeable
Share Price applicable on the last Business Day prior to the Automatic
Redemption Date (the "Redemption Price"). In connection with payment of the
Redemption Price, the Corporation shall be entitled to liquidate some of the TMW
Common Stock which would otherwise be deliverable to the particular holder of
Exchangeable Shares in order to fund any statutory withholding tax obligation.
7.2 In any case of a redemption of Exchangeable Shares under this Article
7, the Corporation, or the Transfer Agent on behalf of the Corporation, shall,
at least 45 days before an Automatic Redemption Date or before a possible
Automatic Redemption Date which may result from a failure of the holders of
Exchangeable Shares to take necessary action as described in clause (d) of the
definition of Automatic Redemption Date, send or cause to be sent to each holder
of Exchangeable Shares a notice in writing of the redemption or possible
redemption by the Corporation or the purchase by TMW and Canco under the
Redemption Call Right, as the case may be, of the Exchangeable Shares held by
such holder. Such notice shall set out the formula for determining the
Redemption Price or the Redemption Call Purchase Price, as the case may be, the
Automatic Redemption Date and, if applicable, particulars of the Redemption Call
Right. In the case of any notice given in connection with a possible Automatic
Redemption Date, such notice will be given contingently and will be withdrawn if
the contingency does not occur.
7.3 On or after the Automatic Redemption Date and subject to the exercise
by TMW or Canco of the Redemption Call Right, the Corporation shall cause to be
delivered to the holders of the Exchangeable Shares to be redeemed the
Redemption Price for each such Exchangeable Share upon presentation and
surrender at the registered office of the Corporation or at any office of the
Transfer Agent as may be specified by the Corporation in such notice of the
certificates representing such Exchangeable Shares, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Act and the by-laws of the Corporation and such
additional documents and instruments as the Transfer Agent may reasonably
require. Payment of the total Redemption Price for such Exchangeable Shares
shall be made by delivery to each holder, at the address of the holder recorded
in the securities register or at any office of the Transfer Agent as may be
specified by the Corporation in such notice, on behalf of the Corporation of the
Exchangeable Share Consideration representing the total Redemption Price. On and
after the Automatic Redemption Date, the holders of the Exchangeable Shares
called for redemption shall cease to be holders of such Exchangeable Shares and
shall not be entitled to exercise any of the rights of holders in respect
thereof, other than the right to receive their proportionate part of the total
Redemption Price, unless payment of the total Redemption Price for such
Exchangeable Shares shall not be made upon presentation and surrender of
certificates in accordance with the foregoing provisions, in which case the
rights of the holders shall remain unaffected until the total Redemption Price
has been paid in the manner hereinbefore provided. The Corporation shall have
the right at any time after the
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sending of notice of its intention to redeem the Exchangeable Shares as
aforesaid to deposit or cause to be deposited the Exchangeable Share
Consideration with respect to the Exchangeable Shares so called for redemption,
or of such of the said Exchangeable Shares represented by certificates that have
not at the date of such deposit been surrendered by the holders thereof in
connection with such redemption, in a custodial account or for safe keeping, in
the case of non-cash items, with any chartered bank or trust company in Canada
named in such notice. Upon the later of such deposit being made and the
Automatic Redemption Date, the Exchangeable Shares in respect whereof such
deposit shall have been made shall be redeemed and the rights of the holders
thereof after such deposit or Automatic Redemption Date, as the case may be,
shall be limited to receiving their proportionate part of the total Redemption
Price for such Exchangeable Shares so deposited, against presentation and
surrender of the said certificates held by them, respectively, in accordance
with the foregoing provisions. Upon such payment or deposit of such Exchangeable
Share Consideration, the holders of the Exchangeable Shares shall thereafter be
considered and deemed for all purposes to be holders of the TMW Common Stock
delivered to them as part of the Exchangeable Share Consideration.
Notwithstanding the foregoing, until such payment or deposit of such
Exchangeable Share Consideration is made, the holder shall be deemed to still be
a holder of Exchangeable Shares for purposes of all voting rights with respect
thereto under the Voting Trust Agreement.
ARTICLE 8
EXCHANGE PUT RIGHT
8.1 Upon and subject to the terms and conditions contained herein:
(a) a holder of Exchangeable Shares shall have the right (the
"Exchange Put Right") at any time to require Canco to purchase
all or any part of the Exchangeable Shares of the holder; and
(b) upon the exercise by the holder of the Exchange Put Right, the
holder shall be required to sell to Canco, and Canco shall be
required to purchase from the holder, that number of
Exchangeable Shares in respect of which the Exchange Put Right
is exercised, in consideration of the payment by Canco of the
Exchangeable Share Price applicable thereto (which shall be
the Exchangeable Share Price applicable on the Exchange Put
Date, as defined below) and delivery by or on behalf of Canco
of the Exchangeable Share Consideration representing the total
applicable Exchangeable Share Price. In connection with
payment of the Exchangeable Share Consideration, Canco shall
be entitled to liquidate some of the TMW Common Stock which
would otherwise be deliverable to the particular holder of
Exchangeable Shares in order to fund any statutory withholding
tax obligation.
8.2 The Exchange Put Right provided in Section 4.3 of the Share
Restructuring Plan and Section 8.1 hereof may be exercised at any time by notice
in writing given by the holder to and received by Canco (the date of such
receipt, the "Exchange Put Date") accompanied by presentation and
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surrender of the certificates representing such Exchangeable Shares, together
with such documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Act and the by-laws of the Corporation and such
additional documents and instruments as Canco may reasonably require, at the
principal offices of the Corporation in Toronto. Such notice may be (i) in the
form of the panel, if any, on the certificates representing Exchangeable Shares,
(ii) in the form of the notice and election contained in any letter of
transmittal distributed or made available by the Corporation for that purpose,
or (iii) in other form satisfactory to the Corporation (or such other persons
aforesaid), shall stipulate the number of Exchangeable Shares in respect of
which the right is exercised (which may not exceed the number of shares
represented by certificates surrendered to Canco), shall be irrevocable unless
the exchange is not completed in accordance herewith and shall constitute the
holder's authorization to the Corporation (and such other persons aforesaid) to
effect the exchange on behalf of the holder.
8.3 The completion of the sale and purchase referred to in section 8.1
shall be required to occur, and Canco shall be required to take all actions on
its part necessary to permit it to occur, not later than the close of business
on the third Business Day following the Exchange Put Date.
8.4 The surrender by the holder of Exchangeable Shares under section 8.2
shall constitute the representation, warranty and covenant of the holder that
the Exchangeable Shares so purchased are sold free and clear of any lien,
encumbrance, security interest or adverse claim or interest.
8.5 If a part only of the Exchangeable Shares represented by any
certificate is to be sold and purchased pursuant to the exercise of the Exchange
Put Right, a new certificate for the balance of such Exchangeable Shares shall
be issued to the holder at the expense of the Corporation.
8.6 Upon receipt by Canco of the notice, certificates and other documents
or instruments required by section 8.2, Canco shall deliver or cause to be
delivered to the relevant holder at the address of the holder specified in the
notice or, if requested by the holder, by holding for pick-up by the holder at
the registered office of the Corporation the Exchangeable Share Consideration
representing the total applicable Exchangeable Share Price, within the time
stipulated in section 8.3. Delivery by Canco of such Exchangeable Share
Consideration to the holder shall be deemed to be payment of and shall satisfy
and discharge all liability for the total applicable Exchangeable Share Price,
except as to any cheque included therein which is not paid on due presentation.
8.7 On and after the close of business on the Exchange Put Date, the holder
of the Exchangeable Shares in respect of which the Exchange Put Right is
exercised shall not be entitled to exercise any of the rights of a holder in
respect thereof, other than the right to receive the total applicable
Exchangeable Share Price, unless upon presentation and surrender of certificates
in accordance with the foregoing provisions, payment of the Exchangeable Share
Consideration shall not be made, in which case the rights of such holder shall
remain unaffected until such payment has been made. On and after the close of
business on the Exchange Put Date provided that presentation and surrender of
certificates and payment of the Exchangeable Share Consideration has been made
in accordance with the foregoing provisions, the holder of the Exchangeable
Shares so purchased by Canco shall thereafter be considered and deemed for all
purposes to be a holder of the TMW Common Stock delivered to it. Notwithstanding
the foregoing, until payment of the Exchangeable Share
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Consideration to the holder, the holder shall be deemed to still be a holder of
Exchangeable Shares for purposes of all voting rights with respect thereto under
the Voting Trust Agreement.
ARTICLE 9
EXCHANGE RIGHTS
9.1 Upon and subject to the terms and conditions contained herein:
(a) a holder of Exchangeable Shares shall have the right (the "MG
Exchange Right"), upon the occurrence of an Insolvency Event
with respect to MG, to require Canco to purchase from such
holder all or any part of the Exchangeable Shares held by such
holder;
(b) a holder of Exchangeable Shares shall have the right (the
"Canco Exchange Right" and together with the MG Exchange
Right, the "Exchange Rights"), upon the occurrence of an
Insolvency Event with respect to Canco, to require TMW to
purchase from such holder all or any part of the Exchangeable
Shares held by such holder;
(c) upon the exercise by the holder of an Exchange Right, the
holder shall be required to sell to either TMW or Canco, and
either TMW or Canco shall be required to purchase from the
holder, that number of Exchangeable Shares in respect of which
the Exchange Right is exercised, in consideration of the
payment by either TMW or Canco of the Exchangeable Share Price
on the last Business Day prior to the date of closing of the
purchase and sale of such Exchangeable Shares under the
Exchange Rights, and delivery by and on behalf of either TMW
or Canco of the Exchangeable Share Consideration representing
the total applicable Exchangeable Share Price; provided, that
in connection with payment of the Exchangeable Share
Consideration, TMW or Canco shall be entitled to liquidate
some of the TMW Common Stock which would otherwise be
deliverable to the particular holder of Exchangeable Shares in
order to fund any statutory withholding tax obligation; and
(d) a holder of Exchangeable Shares shall have the Automatic
Exchange Right.
9.2 The purchase price payable for each Exchangeable Share to be purchased
by Canco under the MG Exchange Right and by TMW under the Canco Exchange Right
shall be an amount equal to the Exchangeable Share Price on the last Business
Day prior to the day of closing of the purchase and sale of such Exchangeable
Share under the MG Exchange Right or the Canco Exchange Right, as the case may
be.
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9.3 The Exchange Rights provided for in Section 9.1 may be exercised by a
holder upon the occurrence and during the continuance of an Insolvency Event
with respect to MG or Canco, by notice in writing given to TMW or Canco, as the
case may be, accompanied by presentation and surrender of the certificates
representing the Exchangeable Shares which such holder desires TMW or Canco, as
the case may be, to purchase, duly endorsed in blank, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Act and the by-laws of MG and such additional
documents and instruments as TMW or Canco, as the case may be, may reasonably
require and:
(a) a duly completed form of notice of exercise of the applicable
Exchange Right, contained on the reverse of or attached to the
Exchangeable Share certificates, stating:
(i) that the holder thereby exercises the applicable
Exchange Right so as to require Canco or TMW, as
applicable, to purchase from the holder the number of
Exchangeable Shares specified therein,
(ii) that such holder has good title to and owns all such
Exchangeable Shares to be acquired by Canco or TMW,
as applicable, free and clear of all liens, claims,
encumbrances, security interests and adverse claims
or interests,
(iii) the names in which the certificates representing TMW
Common Stock issuable in connection with the exercise
of such Exchange Right are to be issued, and
(iv) the names and addresses of the persons to whom the
Exchangeable Share Consideration should be delivered;
and
(b) payment (or evidence satisfactory to TMW, Canco and MG of
payment) of the taxes (if any) payable as contemplated by
Section 9.8.
If only a part of the Exchangeable Shares represented by any
certificate or certificates delivered to Canco or TMW are to be purchased by
Canco or TMW under such Exchange Right, a new certificate for the balance of
such Exchangeable Shares shall be issued to the holder at the expense of MG.
9.4 Promptly after receipt of the certificates representing the
Exchangeable Shares which the holder desires Canco or TMW to purchase under the
Exchange Rights (together with such documents and instruments of transfer and a
duly completed form of notice of exercise of the Exchange Right), duly endorsed
for transfer to Canco or TMW, as the case may be, Canco or TMW, as the case may
be, shall immediately thereafter deliver or cause to be delivered to the holder
of such Exchangeable Shares (or to such other persons, if any, properly
designated by such holder), the Exchangeable Share Consideration deliverable in
connection with the exercise of the Exchange Right; provided, however,
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that no such delivery shall be made unless and until the holder requesting the
same shall have paid (or provided evidence satisfactory to TMW, Canco and MG of
the payment of) the taxes (if any) payable as contemplated by Section 9.8.
Immediately upon the giving of notice by the holder to Canco or TMW, as the case
may be, of the exercise of the Exchange Right, (a) the closing of the
transaction of purchase and sale contemplated by the Exchange Right shall be
deemed to have occurred, (b) Canco or TMW, as the case may be, shall be required
to take all action necessary to permit it to occur, including delivery to the
holder (or such other persons, if any, properly designated by such holder) of
the relevant Exchangeable Share Consideration, no later than the close of
business on the third Business Day following the receipt by TMW or Canco, as the
case may be, of notice, certificates and other documents as aforesaid and (c)
the holder of such Exchangeable Shares shall be deemed to have transferred to
Canco or TMW, as the case may be, all of its right, title and interest in and to
such Exchangeable Shares, shall cease to be a holder of such Exchangeable Shares
and shall not be entitled to exercise any of the rights of a holder in respect
thereof, other than the right to receive his proportionate part of the total
Exchangeable Share Consideration, unless such Exchangeable Share Consideration
is not delivered by Canco or TMW, as the case may be, to the holder (or such
other persons, if any, properly designated by such holder) by the date specified
above, in which case the rights of the holder shall remain unaffected until such
Exchangeable Share Consideration is delivered by Canco or TMW, as the case may
be, and any cheque included therein is paid. Concurrently with such holder
ceasing to be a holder of Exchangeable Shares, the holder shall be considered
and deemed for all purposes to be the holder of the shares of TMW Common Stock
delivered to it pursuant to the Exchange Right. Notwithstanding the foregoing
until the Exchangeable Share Consideration is delivered to the holder, the
holder shall be deemed to still be a holder of the sold Exchangeable Shares for
purposes of voting rights with respect thereto under the Voting Trust Agreement.
9.5 (a) In the event that a holder has exercised its right under
Article 6 of the Exchangeable Share Provisions to require MG
to redeem any or all of the Exchangeable Shares held by the
holder (the "Retracted Shares") and is notified by MG that MG
will not be permitted as a result of an Insolvency Event to
redeem all such Retracted Shares, subject to receipt by the
holder of written notice to that effect from MG and provided
that Canco shall not have exercised the Retraction Call Right
with respect to the Retracted Shares and that the holder has
not revoked the retraction request delivered by the holder to
MG pursuant to Section 6.1 of the Exchangeable Share
Provisions, the retraction request will constitute and will be
deemed to constitute notice from the holder to Canco of its
exercise of the MG Exchange Right with respect to those
Retracted Shares which MG is unable to redeem and Canco will
purchase such shares in accordance with this Article 9.
(b) In the event that a holder has exercised its right under
Article 6 of the Exchangeable Share Provisions to require MG
to redeem any or all of the Retracted Shares and is notified
by MG that MG will not be permitted as a result of an
Insolvency Event to redeem all such Retracted Shares, and
Canco shall notify the holders that it will not be permitted
as a result of an Insolvency Event to purchase any Retracted
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Shares pursuant to Section 9.5(a), subject to receipt by the
holder of written notice to that effect from Canco and
provided that TMW shall not have exercised the Retraction Call
Right with respect to the Retracted Shares and that the holder
has not revoked the retraction request delivered by the holder
to MG pursuant to Section 6.1 of the Exchangeable Share
Provisions, the retraction request will constitute and will be
deemed to constitute notice from the holder to TMW of its
exercise of the Canco Exchange Right with respect to those
Retracted Shares which Canco is unable to repurchase and TMW
will purchase such shares in accordance with this Article 9.
9.6 Immediately upon the occurrence of an Insolvency Event with respect to
MG or Canco or any event which with the giving of notice or the passage of time
or both would be an Insolvency Event with respect to MG or Canco, MG and TMW
shall give written notice thereof to each holder of Exchangeable Shares, which
notice shall contain a brief statement of the right of the holders with respect
to the applicable Exchange Right.
9.7 (a) TMW will give each holder of Exchangeable Shares written
notice of each of the following events at the time set forth below:
(i) in the event of any determination by the board of
directors of TMW to institute voluntary liquidation,
dissolution or winding-up proceedings with respect to
TMW or to effect any other distribution of assets of
TMW among its stockholders for the purpose of winding
up its affairs, at least 60 days prior to the
proposed effective date of such liquidation,
dissolution, winding-up or other distribution; and
(ii) immediately, upon the earlier of (A) receipt by TMW
of notice of and (B) TMW's otherwise becoming aware
of any threatened or instituted claim, suit, petition
or other proceedings with respect to the involuntary
liquidation, dissolution or winding-up of TMW or to
effect any other distribution of assets of TMW among
its stockholders for the purpose of winding up its
affairs.
(b) In order that the holders of Exchangeable Shares will be able
to participate on a pro rata basis with the holders of TMW
Common Stock in the distribution of assets of TMW in
connection with any event contemplated by Section 9.7(a) above
(a "Liquidation Event"), immediately prior to the effective
time (the "Liquidation Event Effective Time") of a Liquidation
Event, all of the then outstanding Exchangeable Shares shall
be automatically exchanged for shares of TMW Common Stock. To
effect such automatic exchange, Canco shall be deemed to have
purchased each Exchangeable Share
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outstanding immediately prior to the Liquidation Event
Effective Time and each holder shall be deemed to have sold
the Exchangeable Shares held by it at such time, for a
purchase price per share equal to the Exchangeable Share Price
applicable at such time.
(c) The closing of the transaction of purchase and sale
contemplated by Section 9.7(b) above shall be deemed to have
occurred immediately prior to the Liquidation Event Effective
Time, and each holder of Exchangeable Shares shall be deemed
to have transferred to Canco all of the holder's right, title
and interest in and to such Exchangeable Shares and shall
cease to be a holder of such Exchangeable Shares, and Canco
shall deliver to the holder the Exchangeable Share
Consideration deliverable upon the automatic exchange of
Exchangeable Shares. Concurrently with such holder's ceasing
to be a holder of Exchangeable Shares, the holder shall be
considered and deemed for all purposes to be the holder of the
shares of TMW Common Stock issued to it pursuant to the
automatic exchange of Exchangeable Shares for TMW Common
Stock, and the certificates held by the holder previously
representing the Exchangeable Shares exchanged by the holder
with Canco pursuant to such automatic exchange shall
thereafter be deemed to represent the shares of TMW Common
Stock issued to the holder by Canco pursuant to such automatic
exchange. Upon the request of a holder and the surrender by
the holder of Exchangeable Share certificates deemed to
represent shares of TMW Common Stock, duly endorsed in blank
and accompanied by such instruments of transfer as Canco may
reasonably require, Canco shall deliver or cause to be
delivered to the holder certificates representing the shares
of TMW Common Stock of which the holder is the holder.
Notwithstanding the foregoing, until each holder is actually
entered on the register of holders of TMW Common Stock, such
holder shall be deemed to still be a holder of the transferred
Exchangeable Shares for purposes of all voting rights with
respect thereto under the Voting Trust Agreement.
9.8 Upon any sale of Exchangeable Shares to TMW, Canco or MG, as the case
may be, pursuant to these Exchangeable Share Provisions or the Share
Restructuring Plan, the share certificate or certificates representing TMW
Common Stock to be delivered in connection with the payment of the total
purchase price therefor shall be issued in the name of the holder of the
Exchangeable Shares so sold or in such names as such holder may otherwise direct
in writing without charge to the holder of the Exchangeable Shares so sold,
provided, however, that such holder:
(a) in the case where such holder or, in the case of a partnership
that is a holder, a member thereof, is a non-resident for the
purposes of the Income Tax Act (Canada), shall have delivered
to TMW, Canco or MG, as the case may be, (i) either (A) such
certificates reasonably
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satisfactory to TMW, Canco and MG, issued pursuant to
subsection 116(2) of the Income Tax Act (Canada) and Section
1098 of the Taxation Act (Quebec), and having as "certificate
limit", as defined in subsection 116(2) of the Income Tax Act
(Canada) and Section 1098 of the Taxation Act (Quebec), an
amount equal to or greater than the greater of the cost to
TMW, Canco or MG, as the case may be, of the Exchangeable
Shares and the proceeds of disposition to such holder or
member, as the case may be, of the Exchangeable Shares or (B)
a certificate issued pursuant to Subsection 116(2) of the ITA
and Section 1098 of the Taxation Act (Quebec) reasonably
satisfactory to TMW, Canco and MG to the same effect as (i)(A)
above issued to a partnership that is a holder which covers
the partners in that partnership; and (ii) any other similar
certificate under any applicable legislation;
(b) in the case of a partnership that is a holder, a certificate
confirming the name and address of each member thereof and the
percentage of partnership interest held by each member; and
(c) (i) shall pay (and neither TMW, Canco nor MG shall be
required to pay) any documentary, stamp, transfer or
other similar taxes that may be payable in respect of
any transfer involved in the issuance or delivery of
such shares to a person other than such holder; or
(ii) shall have established to the satisfaction of TMW,
Canco and MG that such taxes, if any, have been paid.
ARTICLE 10
VOTING RIGHTS
10.1 Except as required by applicable law and the provisions hereof, the
holders of the Exchangeable Shares shall not be entitled as such to receive
notice of or to attend any meeting of the shareholders of the Corporation or to
vote at any such meeting.
ARTICLE 11
AMENDMENT AND APPROVAL
11.1 The rights, privileges, restrictions and conditions attaching to the
Exchangeable Shares may be added to, changed or removed but, except as
hereinafter provided, only with the approval of the holders of the Exchangeable
Shares given as hereinafter specified.
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11.2 Any approval given by the holders of the Exchangeable Shares to add to,
change or remove any right, privilege, restriction or condition attaching to the
Exchangeable Shares or any other matter requiring the approval or consent of the
holders of the Exchangeable Shares shall be deemed to have been sufficiently
given if it shall have been given in accordance with applicable law subject to a
minimum requirement that such approval be evidenced by resolution passed by not
less than 75% of the votes cast on such resolution by persons represented in
person or by proxy at a meeting of holders of Exchangeable Shares duly called
and held at which the holders of at least 75% of the outstanding Exchangeable
Shares at that time are present or represented by proxy (excluding Exchangeable
Shares beneficially owned by TMW or its Subsidiaries). If at any such meeting
the holders of at least 75% of the outstanding Exchangeable Shares at that time
are not present or represented by proxy within one-half hour after the time
appointed for such meeting then the meeting shall be adjourned to such date not
less than 10 days thereafter and to such time and place as may be designated by
the Chairman of such meeting. At such adjourned meeting the holders of
Exchangeable Shares present or represented by proxy thereat may transact the
business for which the meeting was originally called and a resolution passed
thereat by the affirmative vote of not less than 75% of the votes cast on such
resolution by persons represented in person or by proxy at such meeting shall
constitute the approval or consent of the holders of the Exchangeable Shares.
For the purposes of this section, any spoiled votes, illegible votes, defective
votes and abstinences shall be deemed to be votes not cast.
ARTICLE 12
RECIPROCAL CHANGES, ETC. IN RESPECT OF
TMW COMMON STOCK
12.1 (a) Each holder of an Exchangeable Share acknowledges that the Support
Agreement provides, in part, that TMW will not:
(i) issue or distribute shares of TMW Common Stock (or
securities exchangeable for or convertible into or
carrying rights to acquire shares of TMW Common
Stock) to the holders of all or substantially all of
the then outstanding shares of TMW Common Stock by
way of stock dividend or other distribution; or
(ii) issue or distribute rights, options or warrants to
the holders of all or substantially all of the then
outstanding shares of TMW Common Stock entitling them
to subscribe for or to purchase shares of TMW Common
Stock (or securities exchangeable for or convertible
into or carrying rights to acquire shares of TMW
Common Stock); or
(iii) issue or distribute to the holders of all or
substantially all of the then outstanding shares of
TMW Common Stock (A) shares or securities of TMW of
any class other than TMW Common Stock (other than
shares convertible into or
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exchangeable for or carrying rights to acquire TMW
Common Stock), (B) rights, options or warrants other
than those referred to in subsection 12.1(a)(ii)
above, (C) evidences of indebtedness of TMW or (D)
assets of TMW;
unless (A) one or both of the Corporation and TMW is permitted under applicable
law, and not prohibited by any agreement applicable to the Corporation or TMW,
to issue or distribute the economic equivalent on a per share basis of such
rights, options, warrants, securities, shares, evidences of indebtedness or
assets and (B) the items referred to in clauses (i), (ii) and (iii) above, as
applicable, are issued or distributed simultaneously to holders of Exchangeable
Shares.
(b) Each holder of an Exchangeable Share acknowledges that the
Support Agreement further provides, in part, that TMW will not:
(i) subdivide, redivide or change the then outstanding
shares of TMW Common Stock into a greater number of
shares of TMW Common Stock; or
(ii) reduce, combine or consolidate or change the then
outstanding shares of TMW Common Stock into a lesser
number of shares of TMW Common Stock; or
(iii) reclassify or otherwise change the shares of TMW
Common Stock or effect an amalgamation, merger,
reorganization or other transaction involving or
affecting the shares of TMW Common Stock;
unless (A) the Corporation is permitted under applicable law, and not prohibited
by any agreement applicable to the Corporation or TMW, to simultaneously make
the same or an economically equivalent change to, or in the rights of the
holders of, the Exchangeable Shares and (B) the same or an economically
equivalent change is simultaneously made to, or in the rights of the holders of,
the Exchangeable Shares.
The Support Agreement further provides, in part, that, with the
exception of certain ministerial amendments, the aforesaid provisions of the
Support Agreement shall not be changed without the approval of the holders of
the Exchangeable Shares given in accordance with Section 11.1 of these share
provisions.
ARTICLE 13
ACTIONS BY THE CORPORATION UNDER SUPPORT AGREEMENT
13.1 The Corporation will take all such actions and do all such things as
shall be necessary or advisable to perform and comply with and to ensure
performance and compliance by TMW and Canco with all provisions hereof and of
the Share Restructuring Plan, the Support Agreement, the
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Voting Trust Agreement and TMW's Restated Articles of Incorporation applicable
to the Corporation and TMW, respectively, in accordance with the terms thereof
including, without limitation, taking all such actions and doing all such things
as shall be necessary or advisable to enforce to the fullest extent possible for
the direct benefit of the Corporation all rights and benefits in favour of the
Corporation under or pursuant thereto.
13.2 The Corporation shall not propose, agree to or otherwise give effect to
any amendment to, or waiver or forgiveness of its rights or obligations under,
the Support Agreement, the Voting Trust Agreement or TMW's Restated Articles of
Incorporation without the approval of the holders of the Exchangeable Shares
given in accordance with Section 11.1 of these share provisions other than such
amendments, waivers and/or forgiveness as may be necessary or advisable for the
purpose of:
(a) adding to the covenants of the other party or parties to such
agreement for the protection of the Corporation or the holders
of Exchangeable Shares; provided that the Board of Directors
shall be of the opinion, after receipt of a written opinion of
outside counsel, that such provision and modification are not
prejudicial to the interest of the holders of the Exchangeable
Shares; or
(b) making such provisions or modifications not inconsistent with
such agreement or certificate as may be necessary or desirable
with respect to matters or questions arising thereunder which,
in the opinion of the Board of Directors, it may be expedient
to make, provided that the Board of Directors shall be of the
opinion, after receipt of a written opinion of outside
counsel, that such provisions and modifications will not be
prejudicial to the interests of the holders of the
Exchangeable Shares; or
(c) making such changes in or corrections to such agreement or
certificate which, on the receipt of a written opinion of
outside counsel to the Corporation, are required for the
purpose of curing or correcting any ambiguity or defect or
inconsistent provision or clerical omission or mistake or
manifest error contained therein, provided that the Board of
Directors shall be of the opinion, after receipt of a written
opinion of outside counsel, that such changes or corrections
will not be prejudicial to the interests of the holders of
the Exchangeable Shares.
The Corporation shall send a written notice to the holders of the Exchangeable
Shares notifying them of any amendment made pursuant to clause (a), (b) or (c)
of this Section 13.2 and a copy of any written opinion of counsel received in
connection with any such amendment.
ARTICLE 14
LEGEND
14.1 The certificates evidencing the Exchangeable Shares shall contain or
have affixed thereto a legend, in form and on terms approved by the Board of
Directors, with respect to the Support
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Agreement, the provisions of the Share Restructuring Plan relating to the
Liquidation Call Right, the Retraction Call Right and the Redemption Call Right,
and the provisions hereof relating to the MG Exchange Right, the Canco Exchange
Right, the Automatic Exchange Rights and the Exchange Put Right and the Voting
Trust Agreement (including the provisions with respect to the voting rights
thereunder).
ARTICLE 15
MISCELLANEOUS
15.1 Any notice, request or other communication to be given to the
Corporation by a holder of Exchangeable Shares shall be in writing and shall be
valid and effective if given by mail (postage prepaid) or by telecopy or by
delivery to the registered office of the Corporation and addressed to the
attention of the President. Any such notice, request or other communication, if
given by mail, telecopy or delivery, shall only be deemed to have been given and
received upon actual receipt thereof by the Corporation.
15.2 Any presentation and surrender by a holder of Exchangeable Shares to
the Corporation or the Transfer Agent of certificates representing Exchangeable
Shares in connection with the liquidation, dissolution or winding-up of the
Corporation or the retraction, redemption or exchange of Exchangeable Shares
shall be made by registered mail (postage prepaid) or by delivery to the
registered office of the Corporation or to such office of the Transfer Agent as
may be specified by the Corporation, in each case addressed to the attention of
the President of the Corporation. Any such presentation and surrender of
certificates shall only be deemed to have been made and to be effective upon
actual receipt thereof by the Corporation or the Transfer Agent, as the case may
be, and the method of any such presentation and surrender of certificates shall
be at the sole risk of the holder.
15.3 Any notice, request or other communication to be given to a holder of
Exchangeable Shares by or on behalf of the Corporation shall be in writing and
shall be valid and effective if given by mail (postage prepaid) or by delivery
to the address of the holder recorded in the securities register of the
Corporation or, in the event of the address of any such holder not being so
recorded, then at the last known address of such holder. Any such notice,
request or other communication, if given by mail, shall be deemed to have been
given and received on the fifth Business Day following the date of mailing and,
if given by delivery, shall be deemed to have been given and received on the
date of delivery. Accidental failure or omission to give any notice, request or
other communication to one or more holders of Exchangeable Shares shall not
invalidate or otherwise alter or affect any action or proceeding to be or
intended to be taken by the Corporation.
15.4 For greater certainty, the Corporation shall not be required for any
purpose under these share provisions to recognize or take account of persons who
are not so recorded in such securities register.
15.5 All Exchangeable Shares acquired by the Corporation upon the redemption
or retraction thereof shall be canceled.
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SCHEDULE "A"
NOTICE OF RETRACTION
To the Corporation and Golden Moores Company ("Canco"):
This notice is given pursuant to Article 6 of the provisions (the
"Share Provisions") attaching to the Exchangeable Shares of the Corporation and
all capitalized words and expressions used in this notice which are defined in
the Share Provisions have the meaning attributed to such words and expressions
in such Share Provisions.
The undersigned hereby notifies the Corporation that, subject to the
Retraction Call Right referred to below, the undersigned desires to have the
Corporation redeem in accordance with Article 6 of the Share Provisions:
[ ] all share(s) represented by the accompanying certificate; or
[ ] __________ share(s) only.
The undersigned hereby notifies the Corporation that the Retraction
Date shall be _____________.
NOTE: The Retraction Date must be a Business Day and
must not be less than three Business Days nor more
than 10 Business Days after the date upon which this
notice and the accompanying shares are received by
the Corporation. In the event that no such business
day is correctly specified above, the Retraction
Date shall be deemed to be the tenth Business Day
after the date on which this notice is received by
the Corporation.
The undersigned acknowledges the Retraction Call Right of TMW and Canco
to purchase all but not less than all the Retracted Shares from the undersigned
and that this notice shall be deemed to be a revocable offer by the undersigned
to sell the Retracted Shares to either TMW or Canco in accordance with the
Retraction Call Right on the Retraction Date for the Retraction Price and on the
other terms and conditions set out in Section 6.3 of the Share Provisions. If
either TMW or Canco determines not to exercise the Retraction Call Right, the
Corporation will notify the undersigned of such fact as soon as possible. This
notice of retraction, and offer to sell the Retracted Shares to either TMW or
Canco, may be revoked and withdrawn by the undersigned by notice in writing
given to the Corporation at any time before the close of business on the
Business Date immediately preceding the Retraction Date.
The undersigned acknowledges that if, as a result of an Insolvency
Event, the Corporation is unable to redeem all Retracted Shares, the undersigned
will be deemed to have exercised the Exchange Right (as defined in the Share
Provisions) so as to require either TMW or Canco to purchase the unredeemed
Retracted Shares.
95
The undersigned hereby represents and warrants to the Corporation, TMW
and Canco that the undersigned has good title to, and owns, the share(s)
represented by the accompanying certificate free and clear of all liens, claims,
encumbrances, security interests and adverse claims or interests.
----------------- ------------------------ -----------------------
(Date) (Signature of Shareholder) (Guarantee of Signature)
[ ] Please check box if the legal or beneficial owner of the Retracted
Shares is a non-resident of Canada.
[ ] Please check box if the securities and any cheque(s) or other
non-cash assets resulting from the retraction of the Retracted Shares
are to be held for pick-up by the shareholder at the principal transfer
office of American Stock Transfer & Trust Company (the "TRANSFER
AGENT") in New York, New York, failing which the securities and any
cheque(s) or other non-cash assets will be delivered to the shareholder
in accordance with the share provisions.
NOTE: This panel must be completed and the accompanying certificate,
together with such additional documents as the Transfer Agent
may require, must be deposited with the Transfer Agent at its
principal transfer office in New York, New York. The
securities and any cheque(s) or other non-cash assets
resulting from the retraction or purchase of the Retracted
Shares will be issued and registered in, and made payable to,
or transferred into, respectively, the name of the
shareholder as it appears on the register of the Corporation
and the securities, cheque(s) and other non-cash assets
resulting from such retraction or purchase will be delivered
to the shareholder in accordance with the Share Provisions.
----------------------------------------------------- -----------------------
Name of Person in Whose Name Securities or Cheque(s) Date
or Other Non-cash Assets Are To Be Registered, Issued
or Delivered (please print)
---------------------------------------------- -----------------------
Street Address or P.O. Box Signature of Shareholder
---------------------------------------------- -----------------------
City, Province Signature Guaranteed by
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NOTE: If the notice of retraction is for less than all of the share(s)
represented by the accompanying certificate, a certificate
representing the remaining shares of the Corporation will be
issued and registered in the name of the shareholder as it
appears on the register of the Corporation or its lawful
transferee.
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APPENDIX C TO THE SHARE
RESTRUCTURING PLAN OF MG
PROVISIONS ATTACHING TO THE CLASS A PREFERRED SHARE
The Class A Preferred Share in the capital of the Corporation shall
have attached thereto the following rights, privileges, restrictions and
conditions:
DIVIDENDS
Subject to the prior rights of the holders of any shares ranking senior
to the Class A Preferred Share with respect to priority in the payment of
dividends, the holder of the Class A Preferred Share shall be entitled to
receive dividends and the Corporation shall pay dividends thereon, as and when
declared by the board of directors of the Corporation as cumulative dividends in
the amount of $1.00 per share per annum payable annually on December 31 in each
year in arrears. Such dividends shall accrue from the date of issue to and
including the date to which the computation of dividends is to be made. A cheque
for the amount of the dividend less any required deduction shall be mailed by
first class mail to the address of the registered holder thereof.
DISSOLUTION
In the event of the liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or any other distribution of
assets of the Corporation among its shareholders for the purpose of winding-up
its affairs, subject to the prior rights of the holders of any shares ranking
senior to the Class A Preferred Share with respect to priority in the
distribution of assets upon liquidation, dissolution or winding-up, the holder
of the Class A Preferred Share shall be entitled to receive an amount equal to
the stated capital in respect of the Class A Preferred Share and dividends
remaining unpaid, including all cumulative dividends, whether or not declared.
After payment to the holder of the Class A Preferred Share of such amounts, such
holder shall not be entitled to share in any further distribution of the assets
of the Corporation.
VOTING RIGHTS
The holder of the Class A Preferred Share shall be entitled to one vote
at any meeting of the shareholders of the Corporation other than meetings of the
holders of another class or series.
98
EXHIBIT N
SUPPORT AGREEMENT
99
SUPPORT AGREEMENT
THIS SUPPORT AGREEMENT is entered into as of ____________, 1998,
between The Men's Wearhouse, Inc., a Texas corporation ("TMW"), Golden Moores
Company, a Nova Scotia unlimited liability company and wholly owned subsidiary
of TMW ("Canco"), and ▇▇▇▇▇▇ Retail Group Inc., a New Brunswick corporation
("MG"), and MARPRO Holdings, Inc., MGB Limited Partnership, Capital D'Amerique
CDPQ Inc., Cerberus International, Ltd., Ultra Cerberus Fund, Ltd., Styx
International Ltd, The Long Horizons Overseas Fund Ltd., The Long Horizons Fund,
L.P. and Styx Partners, L.P. (collectively, the "Shareholders" and each a
"Shareholder").
RECITALS
WHEREAS, pursuant to a Combination Agreement dated as of November __,
1998, by and between TMW, Canco, MG and the Shareholders (such agreement as it
may be amended or restated is hereinafter referred to as the "Combination
Agreement") the parties agreed that on the Effective Date (as defined in the
Combination Agreement), TMW, Canco and MG would execute and deliver a Support
Agreement containing the terms and conditions set forth in Exhibit N to the
Combination Agreement together with such other terms and conditions as may be
agreed to by the parties to the Combination Agreement acting reasonably.
WHEREAS, pursuant to a share restructuring (the "Share Restructuring")
effected by a share restructuring plan (the "Share Restructuring Plan") filed
pursuant to the Business Corporations Act (New Brunswick) (or any successor or
other corporate statute by which MG may in the future be governed) (the "Act")
each issued and outstanding Common Share, Class B Share, Class C Share and Class
D Share of MG (the "MG Shares") and each option to purchase MG Shares (the
"Options") was exchanged for issued and outstanding Exchangeable Shares of MG
(the "Exchangeable Shares"), and thereafter, MG's sole issued and outstanding
Preferred Share was exchanged by the holder thereof for one issued and
outstanding Common Share.
WHEREAS, the above-mentioned Share Restructuring Plan sets forth the
rights, privileges, restrictions and conditions (collectively the "Exchangeable
Share Provisions") attaching to the Exchangeable Shares.
WHEREAS, the parties hereto desire to make appropriate provision and to
establish a procedure whereby TMW and Canco will take certain actions and make
certain payments and deliveries necessary to ensure that TMW and Canco will be
able to make certain payments and to deliver or cause to be delivered shares of
TMW Common Stock in satisfaction of the obligations of TMW and Canco under the
Exchangeable Share Provisions.
WHEREAS, the parties hereto desire to make appropriate provision and to
establish a procedure whereby TMW and Canco will take certain actions and make
certain payments and deliveries necessary to ensure that MG will be able to make
certain payments and to deliver or cause to be delivered shares of TMW Common
Stock in satisfaction of the obligations of MG under the Exchangeable Share
Provisions.
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NOW, THEREFORE, in consideration of the respective covenants and
agreements provided in this agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
ARTICLE I.
DEFINITIONS AND INTERPRETATION
1.1 Defined Terms. Each term denoted herein by initial capital letters
and not otherwise defined herein shall have the meaning attributed thereto in
the Exchangeable Share Provisions, unless the context requires otherwise.
1.2 Interpretation Not Affected by Headings, Etc. The division of this
agreement into articles, sections and paragraphs and the insertion of headings
are for convenience of reference only and shall not affect the construction or
interpretation of this agreement.
1.3 Number, Gender, Etc. Words importing the singular number only shall
include the plural and vice versa. Words importing the use of any gender shall
include all genders.
1.4 Date for Any Action. If any date on which any action is required to
be taken under this agreement is not a Business Day, such action shall be
required to be taken on the next succeeding Business Day.
ARTICLE II.
Covenants of TMW and Canco
2.1 Delivery by TMW. TMW hereby agrees that it will provide directly to
the Shareholders or to Canco, as required by the Exchangeable Share Provisions
or the Share Restructuring Plan, out of TMW's authorized and unissued capital
stock such number of shares of TMW Common Stock (or other shares or securities
into which TMW Common Stock may be reclassified or changed as contemplated by
section 3.7 hereof) (a) as is equal to the sum of the number of Exchangeable
Shares issued and outstanding from time to time and (b) as are now and may
hereafter be required to enable and permit TMW, Canco or MG, as applicable, to
meet their obligations hereunder, under the Combination Agreement, the Share
Restructuring Plan, the Exchangeable Share Provisions or any other related
document.
2.2 Delivery by Canco. Canco hereby agrees to deliver to the
Shareholders or MG, as required by the Exchangeable Share Provisions or the
Share Restructuring Plan, such shares of TMW Common Stock as they may become
entitled to under the provisions hereof or of the Combination Agreement, the
Share Restructuring Plan, the Exchangeable Share Provisions or any other related
document.
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ARTICLE III.
Covenants of TMW, Canco and MG
3.1 Covenants of TMW and Canco Regarding Exchangeable Shares. So long
as any Exchangeable Shares are outstanding, TMW will or will cause Canco and
Canco will or will cause MG, as the case may be, to:
(a) not declare or pay any dividend on TMW Common Stock
unless (A) MG will have sufficient assets, funds and
other property available to enable the due
declaration and the due and punctual payment in
accordance with applicable law of an equivalent
dividend on the Exchangeable Shares and (B)
subsection 3.1(b) shall be complied with in
connection with such dividend;
(b) cause MG to declare simultaneously with the
declaration of any dividend on TMW Common Stock an
equivalent dividend on the Exchangeable Shares and,
when such dividend is paid on TMW Common Stock, cause
MG to pay simultaneously therewith such equivalent
dividend on the Exchangeable Shares, in each case in
accordance with the Exchangeable Share Provisions;
(c) advise MG sufficiently in advance of the declaration
by TMW of any dividend on TMW Common Stock and take
all such other actions as are necessary, in
cooperation with MG, to ensure that the respective
declaration date, record date and payment date for a
dividend on the Exchangeable Shares shall be the same
as the record date, declaration date and payment date
for the corresponding dividend on TMW Common Stock;
(d) ensure that the record date for any dividend declared
on TMW Common Stock is not less than ten Business
Days after the declaration date for such dividend;
(e) take all such actions and do all such things as are
necessary or desirable to enable and permit MG, in
accordance with applicable law, to pay and otherwise
perform its obligations with respect to the
satisfaction of the Liquidation Amount in respect of
each issued and outstanding Exchangeable Share upon
the liquidation, dissolution or winding-up of MG or
any other distribution of the assets of MG for the
purpose of winding up its affairs, including without
limitation all such actions and all such things as
are necessary or desirable to enable and permit MG to
cause to be delivered shares of TMW Common Stock to
the holders of Exchangeable Shares in accordance with
the provisions of Article 5 of the Exchangeable Share
Provisions;
(f) take all such actions and do all such things as are
necessary or desirable to enable and permit MG, in
accordance with applicable law, to pay and otherwise
perform its obligations with respect to the
satisfaction of the
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Retraction Price and the Redemption Price, including
without limitation all such actions and all such
things as are necessary or desirable to enable and
permit MG to cause to be delivered shares of TMW
Common Stock to the holders of Exchangeable Shares,
upon the retraction or redemption of the Exchangeable
Shares in accordance with the provisions of Article 6
or Article 7 of the Exchangeable Share Provisions, as
the case may be;
(g) take all such actions and do all such things as are
necessary or desirable to enable and permit TMW and
Canco, in accordance with applicable law and any
contractual obligation of TMW, Canco and MG, to, and
TMW and Canco shall, pay and perform their
obligations to purchase Exchangeable Shares,
including without limitation all such actions and all
such things as are necessary or desirable to enable
and permit TMW and Canco to deliver shares of TMW
Common Stock to the holder of Exchangeable Shares, in
accordance with Article 6, Article 8 or Article 9 of
the Exchangeable Share Provisions and Sections 4.1,
4.2 and 4.3 of the Share Restructuring Plan; and
(h) cause the Transfer Agent to take all actions to be
taken by the Transfer Agent to carry out the terms of
the Exchangeable Share Provisions and the Share
Restructuring Plan.
3.2 Segregation of Funds. TMW will or will cause Canco and Canco will
or will cause MG, as required by the Exchangeable Share Provisions or the Share
Restructuring Plan, to deposit a sufficient amount of funds in a separate
account and segregate a sufficient amount of such assets and other property as
is necessary to enable TMW, Canco and MG to pay or otherwise satisfy their
obligations under the Exchangeable Share Provisions or the Share Restructuring
Plan to deliver and pay the Exchangeable Share Consideration and the
Exchangeable Share Price, in each case for the benefit of holders from time to
time of the Exchangeable Shares, and TMW, Canco and MG will use such funds,
assets and other property so segregated exclusively for the payment of dividends
and the payment or other satisfaction of the Exchangeable Share Consideration
and the Exchangeable Share Price, net of any corresponding withholding tax
obligations and for the remittance of such withholding tax obligations.
3.3 Reservation of Shares of TMW Common Stock. TMW hereby represents,
warrants and covenants that it has irrevocably reserved for issuance and will at
all times keep available, free from pre-emptive and other rights, out of TMW's
authorized and unissued capital stock such number of shares of TMW Common Stock
(or other shares or securities into which TMW Common Stock may be reclassified
or changed as contemplated by section 3.7 hereof) (a) as is equal to the sum of
the number of Exchangeable Shares issued and outstanding from time to time and
(b) as are now and may hereafter be required to enable and permit TMW, Canco and
MG to meet their obligations hereunder, under the Combination Agreement, the
Share Restructuring Plan, the Voting Trust Agreement, the Exchangeable Share
Provisions and any other related document pursuant to which TMW, MG or Canco may
now or hereafter be required to deliver shares of TMW Common Stock to the
holders of Exchangeable Shares.
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3.4 Notification of Certain Events. In order to assist TMW and Canco to
comply with their obligations hereunder, MG will give TMW and Canco notice of
each of the following events at the time set forth below:
(a) immediately, in the event of any determination by the
Board of Directors of MG to take any action which
would require a vote of the holders of Exchangeable
Shares for approval;
(b) immediately, upon the earlier of (A) receipt by MG of
notice of, and (B) MG otherwise becoming aware of,
any threatened or instituted claim, suit, petition or
other proceedings with respect to the involuntary
liquidation, dissolution or winding-up of MG or to
effect any other distribution of the assets of MG
among its shareholders for the purpose of winding-up
its affairs;
(c) immediately, upon receipt by MG of a Retraction
Request (as defined in the Exchangeable Share
Provisions);
(d) at least 130 days prior to any Automatic Redemption
Date determined by the Board of Directors of MG in
accordance with clause (b) of the definition of
Automatic Redemption Date in the Exchangeable Share
Provisions; and
(e) as soon as practicable upon the issuance by MG of any
Exchangeable Shares or rights to acquire Exchangeable
Shares.
3.5 Delivery of Shares of TMW Common Stock. In furtherance of its
obligations hereunder, upon notice of any event which requires MG to cause to be
delivered shares of TMW Common Stock to any holder of Exchangeable Shares, TMW
shall deliver to Canco and Canco shall forthwith deliver or TMW shall be
entitled to deliver directly the requisite shares of TMW Common Stock to or to
the order of the former holder of the surrendered Exchangeable Shares, as MG
shall direct. All such shares of TMW Common Stock shall be duly issued as fully
paid and non-assessable and shall be free and clear of any lien, claim,
encumbrance, security interest or adverse claim or interest.
3.6 Qualification of Shares of TMW Common Stock. TMW covenants that if
any shares of TMW Common Stock to be issued and delivered hereunder or under the
Combination Agreement, the Share Restructuring Plan or the Exchangeable Share
Provisions require registration or qualification with or approval of or the
filing of any document including any prospectus or similar document the taking
of any proceeding with or the obtaining of any order, ruling or consent from any
governmental or regulatory authority under any Canadian or United States
federal, provincial or state law or regulation or pursuant to the rules and
regulations of any regulatory authority, or the fulfillment of any other legal
requirement (collectively, the "Applicable Laws") before such shares may be
delivered to the initial holder thereof or in order that such shares may be
freely traded thereafter (other than any restrictions on transfer by reason of a
holder being a "control person" of TMW for purposes of Canadian federal or
provincial securities law or an "affiliate" of TMW for purposes of United States
federal or state securities law), TMW will in good faith expeditiously take all
such actions and do all such things as are necessary to cause such shares of TMW
Common Stock to be
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and remain duly registered, qualified or approved. TMW represents and warrants
that it has in good faith taken all actions and done all things as are necessary
under Applicable Laws as they exist on the date hereof to cause the shares of
TMW Common Stock to be issued and delivered hereunder or under the Combination
Agreement, the Share Restructuring Plan or the Exchangeable Share Provisions to
be freely tradeable thereafter (other than restrictions on transfer by reason of
a holder being a "control person" of TMW for the purposes of Canadian federal
and provincial securities law or an "affiliate" of TMW for purposes of United
States federal or state securities law). TMW will in good faith expeditiously
take all such actions and do all such things as are necessary to cause all
shares of TMW Common Stock to be delivered hereunder or under the Combination
Agreement, the Share Restructuring Plan or the Exchangeable Share Provisions to
be listed, quoted or posted for trading on all stock exchanges and quotation
systems on which such shares are listed, quoted or posted for trading at such
time.
3.7 Equivalence.
(a) TMW will not:
(i) issue or distribute shares of TMW Common
Stock (or securities exchangeable for or
convertible into or carrying rights to
acquire shares of TMW Common Stock) to the
holders of all or substantially all of the
then outstanding shares of TMW Common Stock
by way of stock dividend or other
distribution; or
(ii) issue or distribute rights, options or
warrants to the holders of all or
substantially all of the then outstanding
shares of TMW Common Stock entitling them to
subscribe for or to purchase shares of TMW
Common Stock (or securities exchangeable for
or convertible into or carrying rights to
acquire shares of TMW Common Stock); or
(iii) issue or distribute to the holders of all or
substantially all of the then outstanding
shares of TMW Common Stock (A) shares or
securities of TMW of any class other than
TMW Common Stock (other than shares
convertible into or exchangeable for or
carrying rights to acquire shares of TMW
Common Stock), (B) rights, options or
warrants other than those referred to in
subsection 3.7(a)(ii) above, (C) evidences
of indebtedness of TMW or (D) assets of TMW;
unless
(iv) one or all of TMW, Canco and MG is permitted
under applicable law and any contractual
obligations of TMW, Canco and MG to issue or
distribute the economic equivalent on a per
share basis of such rights, options,
warrants, securities, shares, evidences of
indebtedness or other assets to holders of
the Exchangeable Shares; and
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(v) one or all of TMW, Canco and MG shall issue
or distribute such rights, options,
warrants, securities, shares, evidences of
indebtedness or other assets simultaneously
to holders of the Exchangeable Shares.
(b) TMW will not:
(i) subdivide, redivide or change the then
outstanding shares of TMW Common Stock into
a greater number of shares of TMW Common
Stock; or
(ii) reduce, combine or consolidate or change the
then outstanding shares of TMW Common Stock
into a lesser number of shares of TMW Common
Stock; or
(iii) reclassify or otherwise change the shares of
TMW Common Stock or effect an amalgamation,
merger, reorganization or other transaction
affecting the shares of TMW Common Stock;
unless
(iv) MG is permitted under applicable law and any
contractual obligation of MG to
simultaneously make the same or an
economically equivalent change to, or in the
rights of holders of, the Exchangeable
Shares; and
(v) the same or an economically equivalent
change is made to, or in the rights of the
holders of, the Exchangeable Shares.
(c) TMW will ensure that the record date for any event
referred to in section 3.7(a) or 3.7(b) above, or (if
no record date is applicable for such event) the
effective date for any such event, is not less than
10 Business Days after the date on which such event
is declared or announced by TMW (with simultaneous
notice thereof to be given by TMW to MG).
3.8 Tender Offers, Etc. In the event that a tender offer, share
exchange offer, issuer bid, take-over bid, merger, business combination or
similar transaction with respect to TMW Common Stock (an "Offer") is proposed by
TMW or is proposed to TMW or its shareholders and is recommended by the Board of
Directors of TMW, or is otherwise effected or to be effected with the consent or
approval of the Board of Directors of TMW, TMW shall, in good faith, take all
such actions and do all such things as are necessary or desirable to enable and
permit holders of Exchangeable Shares to participate in such Offer to the same
extent and on an equivalent basis as the holders of shares of TMW Common Stock,
without discrimination, including, without limiting the generality of the
foregoing, TMW will use its good faith efforts expeditiously to (and shall, in
the case of a transaction proposed by TMW or where TMW is a participant in the
negotiation thereof) ensure that holders of Exchangeable Shares may participate
in all such Offers without being required to retract Exchangeable Shares as
against MG (or, if so required, to ensure that any such retraction shall
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be effective only upon, and shall be conditional upon, the closing of the Offer
and only to the extent necessary to tender or deposit to the Offer).
3.9 Ownership of Outstanding Shares. Without the prior approval of MG
and the prior approval of the holders of the Exchangeable Shares given in
accordance with Section 11.1 of the Exchangeable Share Provisions, TMW covenants
and agrees in favor of MG that, as long as any outstanding Exchangeable Shares
are owned by any person or entity other than TMW or any of its Subsidiaries, TMW
will be and remain the direct or indirect beneficial owner of all issued and
outstanding MG Common Shares and of at least 50.1% of all other securities of MG
carrying or entitled to voting rights in any circumstances generally for the
election of directors, in each case other than the Exchangeable Shares.
3.10 TMW to Vote Exchangeable Shares Proportionately. TMW covenants and
agrees that it will appoint and cause to be appointed proxy holders with respect
to all Exchangeable Shares held by TMW and its Subsidiaries for the sole purpose
of attending each meeting of holders of Exchangeable Shares in order to be
counted as part of the quorum for each such meeting. TMW further covenants and
agrees that it will, and will cause its Subsidiaries to, exercise any voting
rights which may be exercisable by holders of Exchangeable Shares from time to
time pursuant to the Exchangeable Share Provisions or pursuant to the provisions
of the Act with respect to any Exchangeable Shares held by it or by its
Subsidiaries in respect of any matter considered at any meeting of holders of
Exchangeable Shares in the same proportion as the Exchangeable Shares not held
by TMW and its Subsidiaries are voted by the holders thereof; provided, however,
that any such obligation of TMW and its Subsidiaries to vote Exchangeable Shares
proportionately shall only apply to matters of MG with respect to which the
Exchangeable Shares are entitled to vote.
3.11 Due Performance. On and after the Effective Date, TMW and Canco
shall duly and timely perform all of their obligations provided for in the Share
Restructuring Plan, including any obligations that may arise upon the exercise
of TMW's or Canco's rights under the Exchangeable Share Provisions.
3.12 Automatic Redemption Date. Each of TMW, Canco and MG agrees that
it will not take any action which would cause an Automatic Redemption Date to
occur under clause (c) of the definition thereof under the Exchangeable Share
Provisions.
ARTICLE IV.
GENERAL
4.1 Term. This agreement shall come into force and be effective as of
the date hereof and shall terminate and be of no further force and effect at
such time as no Exchangeable Shares (or securities or rights convertible into or
exchangeable for or carrying rights to acquire Exchangeable Shares) are held by
any party other than TMW and any of its Subsidiaries.
4.2 Changes in Capital of TMW and MG. Notwithstanding the provisions of
section 4.4 hereof, at all times after the occurrence of any event effected
pursuant to section 3.7 or 3.8 hereof,
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as a result of which either TMW Common Stock or the Exchangeable Shares or both
are in any way changed, this agreement shall forthwith be amended and modified
as necessary in order that it shall apply with full force and effect, mutatis
mutandis, to all new securities into which TMW Common Stock or the Exchangeable
Shares or both are so changed, and the parties hereto shall execute and deliver
an agreement in writing giving effect to and evidencing such necessary
amendments and modifications.
4.3 Severability. If any provision of this agreement is held to be
invalid, illegal or unenforceable, the validity, legality or enforceability of
the remainder of this agreement shall not in any way be affected or impaired
thereby and this agreement shall be carried out as nearly as possible in
accordance with its original terms and conditions.
4.4 Amendments, Modifications, Etc. This agreement may not be amended,
modified or waived except by an agreement in writing executed by TMW, Canco and
MG and approved by the holders of the Exchangeable Shares in accordance with
Section 11.1 of the Exchangeable Share Provisions.
4.5 Ministerial Amendments. Notwithstanding the provisions of Section
4.4, TMW, Canco and MG may in writing, at any time and from time to time,
without the approval of the holders of the Exchangeable Shares, amend or modify
this agreement for the purposes of:
(a) adding to the covenants of either or both parties for the
protection of the holders of the Exchangeable Shares;
provided, that the Board of Directors shall be of the
opinion, after receipt of a written opinion of outside
counsel, that such covenants are not prejudicial to the
interests of the holders of the Exchangeable Shares; or
(b) making such amendments or modifications not inconsistent
with this agreement as may be necessary or desirable with
respect to matters or questions which, in the opinion of
the board of directors of each of TMW, Canco and MG, it
may be expedient to make, provided that each such board of
directors shall be of the opinion, after receipt of a
written opinion of outside counsel, that such amendments
or modifications will not be prejudicial to the interests
of the holders of the Exchangeable Shares; or
(c) making such changes or corrections which, on receipt of a
written opinion of outside counsel to TMW, Canco and MG,
are required for the purpose of curing or correcting any
ambiguity or defect or inconsistent provision or clerical
omission or mistake or manifest error; provided that the
boards of directors of each of TMW, Canco and MG shall be
of the opinion, after receipt of a written opinion of
outside counsel, that such changes or corrections will not
be prejudicial to the interests of the holders of the
Exchangeable Shares.
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The Corporation shall send a written notice to the holders of the Exchangeable
Shares notifying them of any amendment made pursuant to clause (a), (b) or (c)
of this Section 4.5 and a copy of any written opinion of counsel received in
connection with any such amendment.
4.6 Meeting to Consider Amendments. MG, at the request of TMW or Canco,
shall call a meeting or meetings of the holders of the Exchangeable Shares for
the purpose of considering any proposed amendment or modification requiring
approval of such shareholders. Any such meeting or meetings shall be called and
held in accordance with the by-laws of MG, the Exchangeable Share Provisions and
all applicable laws.
4.7 Amendments Only in Writing. No amendment to or modification or
waiver of any of the provisions of this agreement otherwise permitted hereunder
shall be effective unless made in writing and signed by both of the parties
hereto.
4.8 Inurement; Third Party Beneficiaries. This agreement shall be
binding upon and inure to the benefit of the parties hereto and the holders,
from time to time, of Exchangeable Shares and each of their respective heirs,
successors and assigns.
4.9 Notices to Parties. All notices and other communications between
the parties shall be in writing and shall be deemed to have been given if
delivered personally or by confirmed telecopy to the parties at the following
addresses (or at such other address for either such party as shall be specified
in like notice):
if to MG:
▇▇▇▇▇▇ Retail Group Inc.
▇▇▇▇, ▇▇▇ ▇▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: 514.274.4177
with a copy to:
Coudert Brothers
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: 212.616.4120
if to the Shareholders:
------------------
------------------
------------------
Attn:
-------------
Facsimile
---------
-11-
109
with a copy to:
------------------
------------------
------------------
Attn:
-------------
Facsimile
---------
if to TMW or Canco:
The Men's Wearhouse, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: 713.657.0872
with a copy to:
Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: 713.651.5246
and
▇▇▇▇▇ Casgrain
▇ ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: ▇▇▇▇▇ ▇. Mass
Facsimile: 514.866.2241
Any notice or other communication given personally shall be deemed to
have been given and received upon delivery thereof and if given by telecopy
shall be deemed to have been given and received on the date of confirmed receipt
thereof, unless such day is not a Business Day, in which case it shall be deemed
to have been given and received upon the immediately following Business Day.
4.10 Counterparts. This agreement may be executed in counterparts, each
of which shall be deemed an original, and all of which taken together shall
constitute one and the same instrument.
4.11 Jurisdiction. This agreement shall be construed and enforced in
accordance with the laws of the Province of Ontario.
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110
4.12 Attornment. TMW and Canco agree that any action or proceeding
arising out of or relating to this agreement may be instituted in the courts of
Ontario, waive any objection which they may have now or hereafter to the venue
of any such action or proceeding, irrevocably submits to the non-exclusive
jurisdiction of such courts in any such action or proceeding, agrees to be bound
by any judgment of such courts and not to seek, and hereby waives, any review of
the merits of any such judgment by the courts of any other jurisdiction, and TMW
hereby appoints Canco at its registered office in the Province of Ontario as
TMW's attorney for service of process.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
THE MEN'S WEARHOUSE, INC.
By
-------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
President
GOLDEN MOORES COMPANY
By
-------------------------------------
[name]
[title]
▇▇▇▇▇▇ RETAIL GROUP INC.
By
-------------------------------------
[name]
[title]
THE SHAREHOLDERS
MARPRO HOLDINGS, INC.
By
-------------------------------------
Name:
Title:
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111
MGB LIMITED PARTNERSHIP
By
-------------------------------------
Name:
Title:
CAPITAL D'AMERIQUE CDPQ INC.
By
-------------------------------------
Name:
Title:
CERBERUS INTERNATIONAL, LTD.
By: ▇▇▇▇▇▇▇▇▇ Hill Overseas Management Ltd.
(Investment Manager)
By
-------------------------------------
Name:
Title:
ULTRA CERBERUS FUND, LTD.
By: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Overseas Management Ltd.
(Investment Manager)
By
-------------------------------------
Name:
Title:
STYX INTERNATIONAL LTD.
By: ▇▇▇▇▇▇▇▇▇ Hill Overseas Management Ltd.
(Investment Manager)
By
-------------------------------------
Name:
Title:
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112
THE LONG HORIZONS OVERSEAS FUND LTD.
By: Old Stand Management L.L.C.
(Investment Manager)
By
------------------------------------
Name:
Title:
THE LONG HORIZONS FUND, L.P.
By: Old Stand Associates L.L.C.
By
------------------------------------
Name:
Title:
STYX PARTNERS, L.P.
By: Styx Associates, L.L.C.
By
------------------------------------
Name:
Title:
-15-
113
EXHIBIT O
VOTING TRUST AGREEMENT
114
VOTING TRUST AGREEMENT
THIS VOTING TRUST AGREEMENT (this "Agreement") is entered into as of
___________________, 1998, by and between The Men's Wearhouse, Inc., a Texas
corporation ("TMW"), Golden Moores Company, a Nova Scotia unlimited liability
company and wholly owned subsidiary of TMW ("Canco"), ▇▇▇▇▇▇ Retail Group Inc.,
a New Brunswick corporation ("MG"), and The Trust Company of Bank of Montreal, a
Canadian trust company ("Trustee").
WHEREAS, pursuant to a Combination Agreement dated as of November __,
1998, by and between TMW, Canco, MG and the Shareholders of MG signatory thereto
(collectively, the "Shareholders") (such agreement as it may be amended or
restated is hereinafter referred to as the "Combination Agreement") the parties
agreed that on the Effective Date (as defined in the Combination Agreement), TMW
and MG would execute and deliver a Voting Trust Agreement containing the terms
and conditions set forth in Exhibit O to the Combination Agreement together with
such other terms and conditions as may be agreed to by the parties to the
Combination Agreement acting reasonably.
WHEREAS, pursuant to a share restructuring (the "Share Restructuring")
effected by an Article of Amendment giving effect to the share restructuring
plan (the "Share Restructuring Plan") filed pursuant to the Business
Corporations Act (New Brunswick) (or any successor or other corporate statute by
which MG may in the future be governed) (the "Act"), each issued and outstanding
Common Share, Class B Share, Class C Share and Class D Share of MG (a "MG Common
Share") and each option to purchase MG Shares was exchanged for issued and
outstanding Exchangeable Shares of MG (the "Exchangeable Shares"), and
thereafter, MG's sole issued and outstanding Preferred Share was exchanged by
the holder thereof for one issued and outstanding MG Common Share.
WHEREAS, the above-mentioned Share Restructuring Plan sets forth the
rights, privileges, restrictions and conditions attaching to the Exchangeable
Shares (collectively, the "Exchangeable Share Provisions").
WHEREAS, TMW is to provide voting rights in TMW to each holder (other
than TMW and its Subsidiaries) from time to time of Exchangeable Shares, such
voting rights per Exchangeable Share to be equivalent to the voting rights per
share of TMW Common Stock.
WHEREAS, the parties desire to make appropriate provision and to
establish a procedure whereby voting rights in TMW shall be exercisable by
holders (other than TMW and its Subsidiaries) from time to time of Exchangeable
Shares by and through the Trustee, which will hold legal title to one share of
TMW Series A Special Voting Preferred Stock (the "TMW Series A Special Voting
Preferred Stock") to which voting rights attach for the benefit of such holders.
WHEREAS, these recitals and any statements of fact in this Agreement
are made by TMW, Canco and MG and not by the Trustee.
115
NOW, THEREFORE, in consideration of the respective covenants and
agreements provided in this Agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Definitions. In this Agreement, the following terms shall have the
following meanings:
"AGGREGATE EQUIVALENT VOTE AMOUNT" means, with respect to any matter,
proposition or question on which holders of TMW Common Stock are entitled to
vote, consent or otherwise act, the product of (i) the number of Exchangeable
Shares issued and outstanding and held by Holders multiplied by (ii) the number
of votes to which a holder of one share of TMW Common Stock is entitled with
respect to such matter, proposition or question.
"AUTHORIZED PERSONS" has the meaning provided in Section 7.20 hereof.
"BOARD OF DIRECTORS" means the Board of Directors of MG.
"BUSINESS DAY" has the meaning provided in the Exchangeable Share
Provisions;
"EQUIVALENT VOTE AMOUNT" means, with respect to any matter, proposition
or question on which holders of TMW Common Stock are entitled to vote, consent
or otherwise act, the number of votes to which a holder of one share of TMW
Common Stock is entitled with respect to such matter, proposition or question.
"EXCHANGEABLE SHARE CONSIDERATION" has the meaning provided in the
Exchangeable Share Provisions.
"EXCHANGEABLE SHARE PROVISIONS" has the meaning provided in the
recitals hereto.
"EXCHANGEABLE SHARES" has the meaning provided in the recitals hereto.
"HOLDER VOTES" has the meaning provided in Section 4.2 hereof.
"HOLDERS" means the registered holders from time to time of
Exchangeable Shares, other than TMW and its Subsidiaries.
"LIST" has the meaning provided in Section 4.6 hereof.
"MG COMMON SHARES" has the meaning provided in the recitals hereto.
"NOTICE EVENT" has the meaning provided in Section 7.17 hereof.
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"OFFICER'S CERTIFICATE" means, with respect to TMW, Canco or MG, as the
case may be, a certificate signed by any one of the Chairman of the Board, the
Vice-Chairman of the Board (if there be one), the President or any
Vice-President of TMW, Canco or MG, as the case may be.
"PERSON" includes an individual, body corporate, partnership, limited
liability partnership, company, limited liability company, unincorporated
syndicate or organization, trust, trustee, executor, administrator and other
legal representative.
"SHARE RESTRUCTURING" has the meaning provided in the recitals hereto.
"SHARE RESTRUCTURING PLAN" has the meaning provided in the recitals
hereto.
"SUBSIDIARY" has the meaning provided in the Exchangeable Share
Provisions.
"SUPPORT AGREEMENT" means that certain support agreement made as of
even date hereof by and between TMW, Canco, MG and the Shareholders signatory
thereto.
"TMW COMMON STOCK" has the meaning provided in the Exchangeable Share
Provisions.
"TMW CONSENT" has the meaning provided in Section 4.2 hereof.
"TMW MEETING" has the meaning provided in Section 4.2 hereof.
"TMW SERIES A SPECIAL VOTING PREFERRED STOCK" has the meaning provided
in the recitals hereto.
"TMW SUCCESSOR" has the meaning provided in subsection 11.1(a) hereof.
"TRUST" means the trust created by this Agreement.
"TRUST ESTATE" means the Voting Share, any other securities and any
money or other property which may be held by the Trustee from time to time
pursuant to this Agreement.
"TRUSTEE" means The Trust Company of Bank of Montreal and, subject to
the provisions of Article X hereof, includes any successor trustee or permitted
assigns.
"VOTING RIGHTS" means the voting rights attached to the Voting Share.
"VOTING SHARE" means the one share of TMW Series A Special Voting
Preferred Stock, U.S. $0.01 par value, issued by TMW to and deposited with the
Trustee, which entitles the holder of record to a number of votes at meetings of
holders of TMW Common Stock equal to the Aggregate Equivalent Vote Amount.
1.2 Interpretation Not Affected by Headings, Etc. The division of this
Agreement into articles, sections and paragraphs and the insertion of headings
are for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
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117
1.3 Number, Gender, Etc. Words importing the singular number only shall
include the plural and vice versa. Words importing the use of any gender shall
include all genders.
1.4 Date for Any Action. If any date on which any action is required to
be taken under this Agreement is not a Business Day, such action shall be
required to be taken on the next succeeding Business Day.
ARTICLE II
PURPOSE OF AGREEMENT
The purpose of this Agreement is to create the Trust for the benefit of
the Holders, as herein provided. The Trustee will hold the Voting Share in order
to enable the Trustee to exercise the Voting Rights, as trustee for and on
behalf of the Holders as provided in this Agreement.
ARTICLE III
VOTING SHARE
3.1 Issuance and Ownership of the Voting Share. TMW hereby issues to
and deposits with the Trustee the Voting Share to be hereafter held of record by
the Trustee as trustee for and on behalf of, and for the use and benefit of, the
Holders and in accordance with the provisions of this Agreement. TMW hereby
acknowledges receipt from the Trustee as trustee for and on behalf of the
Holders of good and valuable consideration (and the adequacy thereof) for the
issuance of the Voting Share by TMW to the Trustee. During the term of the Trust
and subject to the terms and conditions of this Agreement, the Trustee shall
possess and be vested with full legal ownership of the Voting Share and shall be
entitled to exercise all of the rights and powers of an owner with respect to
the Voting Share, provided that the Trustee shall:
(a) hold the Voting Share and the legal title thereto as
trustee solely for the use and benefit of the Holders in
accordance with the provisions of this Agreement; and
(b) except as specifically authorized by this Agreement, have
no power or authority to sell, transfer, vote or otherwise
deal in or with the Voting Share, and the Voting Share
shall not be used or disposed of by the Trustee for any
purpose other than the purposes for which this Trust is
created pursuant to this Agreement.
3.2 Legended Share Certificates. MG will cause each certificate
representing Exchangeable Shares to bear an appropriate legend notifying the
Holders of their right to instruct the Trustee with respect to the exercise of
the Holder Votes.
3.3 Safe Keeping of Certificate. The certificate representing the
Voting Share shall at all times be held in safe keeping by the Trustee or its
agent.
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ARTICLE IV
EXERCISE OF VOTING RIGHTS
4.1 Voting Rights. The Trustee, as the holder of record of the Voting
Share, shall be entitled to all of the Voting Rights, including the right to
consent to or to vote in person or by proxy the Voting Share, on any matter,
question or proposition whatsoever that may properly come before the
stockholders of TMW at a TMW Meeting or in connection with a TMW Consent (in
each case, as hereinafter defined). The Voting Rights shall be and remain vested
in and exercised by the Trustee. Subject to Section 7.15 hereof, the Trustee
shall exercise the Voting Rights only on the basis of instructions received
pursuant to this Article IV from Holders entitled to instruct the Trustee as to
the voting thereof at the time at which a TMW Consent is sought or a TMW Meeting
is held. To the extent that no instructions are received from a Holder with
respect to the Holder Votes to which such Holder is entitled, the Trustee shall
not exercise or permit the exercise of such Holder Votes.
4.2 Number of Votes. With respect to all meetings of stockholders of
TMW at which holders of shares of TMW Common Stock are entitled to vote (a "TMW
Meeting") and with respect to all written consents sought by TMW from its
stockholders, including the holders of shares of TMW Common Stock (a "TMW
Consent"), each Holder shall be entitled to instruct the Trustee to cast and
exercise, in the manner instructed, a number of votes equal to the Equivalent
Vote Amount for each Exchangeable Share owned of record by such Holder on the
record date established by TMW or by applicable law for such TMW Meeting or TMW
Consent, as the case may be (the "Holder Votes"), in respect of each matter,
question or proposition to be voted on at such TMW Meeting or to be consented to
in connection with such TMW Consent.
4.3 Mailings to Shareholders. With respect to each TMW Meeting and TMW
Consent, the Trustee will mail or cause to be mailed (or otherwise communicate
in the same manner as TMW utilizes in communications to holders of TMW Common
Stock, subject to the Trustee's ability to provide such method of communication
and upon being advised in writing of such method) to each of the Holders named
in the List on the same day as the initial mailing or notice (or other
communication) with respect thereto is given by TMW to its stockholders:
(a) a copy of such notice, together with any proxy or
information statement and related materials to be provided
to stockholders of TMW;
(b) a statement that such Holder is entitled to instruct the
Trustee as to the exercise of the Holder Votes with
respect to such TMW Meeting or TMW Consent, as the case
may be, or, pursuant to Section 4.7 hereof, to attend such
TMW Meeting and to exercise personally the Holder Votes
thereat;
(c) a statement as to the manner in which such instructions
may be given to the Trustee, including an express
indication that instructions may be given to the Trustee
to give:
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119
(i) a proxy to such Holder or his designee to
exercise personally the Holder Votes; or
(ii) a proxy to a designated agent or other
representative of the management of TMW to
exercise such Holder Votes;
(d) a statement that if no such instructions are received
from the Holder, the Holder Votes to which such
Holder is entitled will not be exercised;
(e) a form of direction whereby the Holder may so direct
and instruct the Trustee as contemplated herein; and
(f) a statement of (i) the time and date by which such
instructions must be received by the Trustee in order
to be binding upon it, which in the case of a TMW
Meeting shall not be earlier than the close of
business on the second Business Day prior to such
meeting, and (ii) the method for revoking or amending
such instructions.
The materials referred to above are to be provided by TMW to the
Trustee, but shall be subject to review and comment by the Trustee.
For the purpose of determining Holder Votes to which a Holder is
entitled in respect of any such TMW Meeting or TMW Consent, the number of
Exchangeable Shares owned of record by the Holder shall be determined at the
close of business on the record date established by TMW or by applicable law for
purposes of determining stockholders entitled to vote at such TMW Meeting or to
give written consent in connection with such TMW Consent. TMW will notify the
Trustee in writing of any decision of the board of directors of TMW with respect
to the calling of any such TMW Meeting or the seeking of any such TMW Consent
and shall provide all necessary information and materials to the Trustee in each
case promptly and in any event in sufficient time to enable the Trustee to
perform its obligations contemplated by this Section 4.3.
4.4 Copies of Stockholder Information. TMW will deliver to the Trustee
copies of all proxy materials, (including notices of TMW Meetings, but excluding
proxies to vote shares of TMW Common Stock), information statements, reports
(including without limitation all interim and annual financial statements) and
other written communications that are to be distributed from time to time to
holders of TMW Common Stock in sufficient quantities and in sufficient time so
as to enable the Trustee to send those materials to each Holder at the same time
as such materials are first sent to holders of TMW Common Stock (but in any
event, no later than one Business Day before the day on which materials are
first sent to holders of TMW Common Stock). The Trustee will mail or otherwise
send to each Holder, at the expense of TMW, copies of all such materials (and
all materials specifically directed to the Holders or to the Trustee for the
benefit of the Holders by TMW) received by the Trustee from TMW at the same time
as such materials are first sent to holders of TMW Common Stock. The Trustee
will make copies of all such materials available for inspection by any Holder at
the Trustee's principal corporate trust office in the city of Toronto.
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120
4.5 Other Materials. Immediately after receipt by TMW or any
stockholder of TMW of any material sent or given generally to the holders of TMW
Common Stock by or on behalf of a third party, including without limitation
dissident proxy and information circulars (and related information and material)
and tender and exchange offer circulars (and related information and material),
TMW shall use all reasonable commercial efforts to obtain and deliver to the
Trustee copies thereof in sufficient quantities so as to enable the Trustee to
forward such material (unless the same has been provided directly to Holders by
such third party) to each Holder as soon as possible thereafter. As soon as
practicable after receipt thereof, the Trustee will mail or otherwise send to
each Holder, at the expense of TMW, copies of all such materials received by the
Trustee from TMW. The Trustee will also make copies of all such materials
available for inspection by any Holder at the Trustee's principal corporate
trust office in the city of Toronto. It shall be a condition precedent to the
Trustee's obligations under this Agreement including, in particular, under
Sections 4.3, 4.4 and 4.9, that TMW or MG, as the case may be, prepare the
applicable material, List and mailing labels and provide the Trustee with a
sufficient quantity thereof in a timely fashion.
4.6 List of Persons Entitled to Vote. MG shall, (i) prior to each
annual, general and special TMW Meeting or the seeking of any TMW Consent and
(ii) forthwith upon each request made at any time by the Trustee in writing,
prepare or cause to be prepared a list (a "List") of the names and addresses of
the Holders arranged in alphabetical order and showing the number of
Exchangeable Shares held of record by each such Holder, in each case at the
close of business on the date specified by the Trustee in such request or, in
the case of a List prepared in connection with a TMW Meeting or a TMW Consent,
at the close of business on the record date established by TMW or pursuant to
applicable law for determining the holders of TMW Common Stock entitled to
receive notice of and/or to vote at such TMW Meeting or to give consent in
connection with such TMW Consent. Each such List shall be delivered to the
Trustee promptly after receipt by MG of such request or the record date for such
meeting or seeking of consent, as the case may be, and in any event within
sufficient time as to enable the Trustee to perform its obligations under this
Agreement. TMW agrees to give MG written notice (with a copy to the Trustee) of
the calling of any TMW Meeting or the seeking of any TMW Consent, together with
the record dates therefor, sufficiently prior to the date of the calling of such
meeting or seeking of such consent so as to enable MG to perform its obligations
under this Section 4.6.
4.7 Entitlement to Direct Votes. Any Holder named in a List prepared in
connection with any TMW Meeting or any TMW Consent will be entitled (i) to
instruct the Trustee in the manner described in Section 4.3 hereof with respect
to the exercise of the Holder Votes to which such Holder is entitled or (ii) to
attend such meeting and personally to exercise thereat (or to exercise with
respect to any written consent), as the proxy of the Trustee, the Holder Votes
to which such Holder is entitled; provided, that such Holder has obtained a
valid proxy from the Trustee to vote the Holder Votes which the Holder desires
to vote by proxy.
4.8 Voting by Trustee, and Attendance of Trustee Representative, at
Meeting.
(a) In connection with each TMW Meeting and TMW Consent,
the Trustee shall exercise, either in person or by
proxy, in accordance with the instructions received
from a Holder pursuant to Section 4.3 hereof, the
Holder Votes as to which such Holder is entitled to
direct
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121
the vote (or any lesser number thereof as may be set
forth in the instructions); provided, however, that
such written instructions are received by the Trustee
from the Holder prior to the time and date fixed by
it for receipt of such instructions in the notice
given by the Trustee to the Holder pursuant to
Section 4.3 hereof.
(b) The Trustee shall cause such representatives as are
empowered by it to sign and deliver, on behalf of the
Trustee, proxies for Voting Rights to attend each TMW
Meeting. Upon submission by a Holder (or its
designee) of identification satisfactory to the
Trustee's representatives, and at the Holder's
request, such representatives shall sign and deliver
to such Holder (or its designee) a proxy to exercise
personally the Holder Votes as to which such Holder
is otherwise entitled hereunder to direct the vote,
if such Holder either:
(i) has not previously given the Trustee
instructions pursuant to Section 4.3 hereof
in respect of such meeting, or
(ii) submits to the Trustee's representatives
written revocation of any such previous
instructions.
At such meeting, the Holder exercising such Holder Votes pursuant to a
proxy provided in accordance with Section 4.8(b) shall have the same rights as
the Trustee to speak at the meeting in respect of any matter, question or
proposition, to vote by way of ballot at the meeting in respect of any matter,
question or proposition and to vote at such meeting by way of a show of hands in
respect of any matter, question or proposition.
4.9 Distribution of Written Materials. Any written materials to be
distributed by the Trustee to the Holders pursuant to this Agreement shall be
delivered or sent by mail (or otherwise communicated in the same manner as TMW
utilizes in communications to holders of TMW Common Stock) to each Holder at its
address as shown on the books of MG. MG shall provide or cause to be provided to
the Trustee for this purpose, on a timely basis and without charge or other
expense:
(a) current lists of the Holders; and
(b) mailing labels to enable the Trustee to carry out its
duties under this Agreement.
The materials referred to above are to be provided by MG to the
Trustee, but shall be subject to review and comment by the Trustee.
4.10 Termination of Voting Rights. Except as otherwise provided herein
or in the Exchangeable Share Provisions, all of the rights of a Holder with
respect to the Holder Votes exercisable in respect of the Exchangeable Shares
held by such Holder, including the right to instruct the Trustee as to the
voting of or to vote personally such Holder Votes, shall be deemed to be
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surrendered by the Holder to TMW, and such Holder Votes and the Voting Rights
represented thereby shall cease immediately, upon the delivery by such Holder to
TMW, Canco or MG of the certificates representing such Exchangeable Shares in
connection with the exchange of Exchangeable Shares for shares of TMW Common
Stock pursuant to the Share Restructuring Plan, the Exchangeable Share
Provisions or the Support Agreement (unless in any case TMW, Canco or MG shall
not have delivered the Exchangeable Share Consideration deliverable in exchange
therefor to the Holders).
ARTICLE V
[INTENTIONALLY OMITTED]
ARTICLE VI
RESTRICTIONS ON ISSUANCE OF TMW SERIES A
SPECIAL VOTING PREFERRED STOCK
During the term of this Agreement, TMW will not issue any shares of TMW
Series A Special Voting Preferred Stock in addition to the Voting Share.
ARTICLE VII
CONCERNING THE TRUSTEE
7.1 Powers and Duties of the Trustee. The rights, powers and
authorities of the Trustee under this Agreement, in its capacity as trustee of
the Trust, shall include:
(a) receipt and holding of the Voting Share from TMW as
trustee for and on behalf of the Holders in
accordance with the provisions of this Agreement;
(b) granting proxies and distributing materials to
Holders as provided in this Agreement;
(c) voting the Holder Votes in accordance with the
provisions of this Agreement;
(d) holding title to the Trust Estate;
(e) taking action at the direction of a Holder or Holders
to enforce the obligations of TMW, Canco and MG under
this Agreement; and
(f) taking such other actions and doing such other things
as are specifically provided in this Agreement.
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In the exercise of such rights, powers and authorities the Trustee
shall have (and is granted) such incidental and additional rights, powers and
authority not in conflict with any of the provisions of this Agreement as the
Trustee, acting in good faith and in the reasonable exercise of its discretion,
may deem necessary, appropriate or desirable to effect the purpose of the Trust.
Any exercise of such discretionary rights, powers and authorities by the Trustee
shall be final, conclusive and binding upon all persons. For greater certainty,
the Trustee shall have only those duties as are set out specifically in this
Agreement. In particular, the Trustee shall have no liability or responsibility
arising under any agreement or instrument, including the Exchangeable Share
Provisions or any other agreement or instrument referred to in this Agreement,
to which the Trustee is not a party and shall not be bound by any notice of a
claim or demand with respect thereto. The Trustee in exercising its rights,
powers, duties and authorities hereunder shall act honestly and in good faith
with a view to the best interests of the Holders and shall exercise the care,
diligence and skill that a reasonably prudent trustee would exercise in
comparable circumstances. The Trustee shall not be bound to give any notice or
do or take any act, action or proceeding by virtue of the powers conferred on it
hereby unless and until it shall be specifically required to do so under the
terms hereof; nor shall the Trustee be required to take any notice of, or to do
or to take any act, action or proceeding as a result of any default or breach of
any provision hereunder, unless and until notified in writing of such default or
breach, which notices shall distinctly specify the default or breach desired to
be brought to the attention of the Trustee and in the absence of such notice the
Trustee may for all purposes of this Agreement conclusively assume that no
default or breach has been made in the observance or performance of any of the
representations, warranties, covenants, agreements or conditions contained
herein.
7.2 No Conflict of Interest. The Trustee represents to MG and TMW that
at the date of execution and delivery of this Agreement there exists no material
conflict of interest in the role of the Trustee as a fiduciary hereunder and the
role of the Trustee in any other capacity. The Trustee shall, within 90 days
after it becomes aware that such a material conflict of interest exists, either
eliminate such material conflict of interest or resign in the manner and with
the effect specified in Article X hereof. If, notwithstanding the foregoing
provisions of this Section 7.2, the Trustee has such a material conflict of
interest, the validity and enforceability of this Agreement shall not be
affected in any manner whatsoever by reason only of the existence of such
material conflict of interest. If the Trustee contravenes the foregoing
provisions of this Section 7.2, any interested party may apply to the superior
court of the province in which MG has its registered office for an order that
the Trustee be replaced as trustee hereunder.
7.3 Dealings with Transfer Agents, Registrars, Etc. TMW, Canco and MG
irrevocably authorize the Trustee, from time to time, to:
(a) consult, communicate and otherwise deal with the
respective registrars and transfer agents, and with
any such subsequent registrar or transfer agent, of
the Exchangeable Shares and TMW Common Stock; and
(b) requisition, from time to time, from any such
registrar or transfer agent any information readily
available from the records maintained by it which the
Trustee may reasonably require for the discharge of
its duties and responsibilities under this Agreement.
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MG and TMW irrevocably authorize their respective registrars and
transfer agents to comply with all such requests.
7.4 Books and Records. The Trustee shall keep available for inspection
by TMW and MG, at the Trustee's principal corporate trust office in Toronto,
correct and complete books and records of account relating to the Trustee's
actions under this Agreement, including without limitation all information
relating to mailings and instructions to and from Holders and all transactions
pursuant to the Voting Rights for the term of this Agreement. On or before March
31, 1999, and on or before March 31 in every year thereafter, so long as the
Voting Share is on deposit with the Trustee, the Trustee shall transmit to TMW
and MG a brief report, dated as of the preceding December 31, with respect to:
(a) property and funds comprising the Trust Estate as of
that date; and
(b) all other actions taken by the Trustee in the
performance of its duties under this Agreement which
it had not previously reported.
7.5 [Intentionally Omitted].
7.6 Indemnification Prior to Certain Actions by Trustee. The Trustee
shall exercise any or all of the rights, duties, powers or authorities vested in
it by this Agreement at the request, order or direction of any Holder upon such
Holder's furnishing to the Trustee reasonable funding, security and indemnity
against the costs, expenses and liabilities which may be incurred by the Trustee
therein or thereby; provided that no Holder shall be obligated to furnish to the
Trustee any such funding, security or indemnity in connection with the exercise
by the Trustee of any of its rights, duties, powers and authorities with respect
to the Voting Share pursuant to Article IV hereof, subject to Section 7.15
hereof. None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the exercise of any of its rights, powers, duties or authorities unless
funded, given funds, security and indemnified as aforesaid.
7.7 Actions by Holders. No Holder shall have the right to institute any
action, suit or proceeding or to exercise any other remedy authorized by this
Agreement for the purpose of enforcing any of its rights or for the execution of
any trust or power hereunder unless the Holder has requested the Trustee to take
or institute such action, suit or proceeding and furnished the Trustee with the
funding, security and indemnity referred to in Section 7.6 hereof and the
Trustee shall have failed to act within a reasonable time thereafter. In such
case, but not otherwise, the Holder shall be entitled to take proceedings in any
court of competent jurisdiction such as the Trustee might have taken; it being
understood and intended that no one or more Holders shall have any right in any
manner whatsoever to affect, disturb or prejudice the rights hereby created by
any such action, or to enforce any right hereunder or under the Voting Rights
except subject to the conditions and in the manner herein provided, and that all
powers and trusts hereunder shall be exercised and all proceedings at law shall
be instituted, had and maintained by the Trustee, except only as herein
provided, and in any event for the equal benefit of all Holders.
7.8 Reliance upon Declarations. The Trustee shall not be considered to
be in contravention of any of its rights, powers, duties and authorities
hereunder if, when required, it acts
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and relies in good faith upon lists, mailing labels, notices, statutory
declarations, certificates, opinions, reports or other papers or documents
furnished pursuant to the provisions hereof or required by the Trustee to be
furnished to it in the exercise of its rights, powers, duties and authorities
hereunder, and such lists, mailing labels, notices, statutory declarations,
certificates, opinions, reports or other papers or documents comply with the
provisions of Section 7.9 hereof, if applicable, and with any other applicable
provisions of this Agreement.
7.9 Evidence and Authority to Trustee. TMW, Canco and/or MG shall
furnish to the Trustee evidence of compliance with the conditions provided for
in this Agreement relating to any action or step required or permitted to be
taken by TMW, Canco and/or MG or the Trustee under this Agreement or as a result
of any obligation imposed under this Agreement, including, without limitation,
in respect of the Voting Rights and the taking of any other action to be taken
by the Trustee at the request of or on the application of TMW, Canco and/or MG
forthwith if and when:
(a) such evidence is required by any other section of
this Agreement to be furnished to the Trustee in
accordance with the terms of this Section 7.9; or
(b) the Trustee, in the exercise of its rights, powers,
duties and authorities under this Agreement, gives
TMW, Canco and/or MG written notice requiring it to
furnish such evidence in relation to any particular
action or obligation specified in such notice.
Such evidence shall consist of an Officer's Certificate of TMW, Canco
and/or MG or a statutory declaration or a certificate made by persons entitled
to sign an Officer's Certificate stating that any such condition has been
complied with in accordance with the terms of this Agreement.
Whenever such evidence relates to a matter other than the Voting Rights
and except as otherwise specifically provided herein, such evidence may consist
of a report or opinion of any solicitor, auditor, accountant, appraiser, valuer,
engineer or other expert or any other person whose qualifications give authority
to a statement made by him, provided that if such report or opinion is furnished
by a director, officer or employee of TMW, Canco and/or MG it shall be in the
form of an Officer's Certificate or a statutory declaration.
Each statutory declaration, certificate, opinion or report furnished to
the Trustee as evidence of compliance with a condition provided for in this
Agreement shall include a statement by the person giving the evidence:
(i) declaring that he has read and understands the
provisions of this Agreement relating to the
condition in question;
(ii) describing the nature and scope of the examination or
investigation upon which he based the statutory
declaration, certificate, statement or opinion; and
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(iii) declaring that he has made such examination or
investigation as he believes is necessary to enable
him to make the statements or give the opinions
contained or expressed therein.
7.10 Experts, Advisers and Agents. The Trustee may:
(a) in relation to these presents act and rely on the
opinion or advice of or information obtained from or
prepared by any solicitor, auditor, accountant,
appraiser, valuer, engineer or other expert, whether
retained by the Trustee or by TMW, Canco and/or MG or
otherwise, and may employ such assistants as may be
necessary to the proper determination and discharge
of its powers and duties and determination of its
rights hereunder and may pay proper and reasonable
compensation for all such legal and other advice or
assistance as aforesaid; and
(b) employ such agents and other assistants as it may
reasonably require for the proper determination and
discharge of its powers and duties hereunder, and may
pay reasonable remuneration for all services
performed for it (and shall be entitled to receive
reasonable remuneration for all services performed by
it) in the discharge of the trusts hereof and
compensation for all disbursements, costs and
expenses made or incurred by it in the determination
and discharge of its duties hereunder and in the
management of the Trust.
7.11 [Intentionally Omitted].
7.12 Trustee Not Required to Give Security. The Trustee shall not be
required to give any bond or security in respect of the execution of the trusts,
rights, duties, powers and authorities of this Agreement or otherwise in respect
of the premises.
7.13 Trustee Not Bound to Act on Request. Except as in this Agreement
otherwise specifically provided, the Trustee shall not be bound to act in
accordance with any direction or request of TMW, Canco and/or MG or of the
directors thereof until a duly authenticated copy of the instrument or
resolution containing such direction or request shall have been delivered to the
Trustee, and the Trustee shall be empowered to act and rely upon any such copy
purporting to be authenticated and believed by the Trustee to be genuine.
7.14 Authority to Carry on Business. The Trustee represents to TMW,
Canco and MG that at the date of execution and delivery by it of this Agreement
it is authorized to carry on the business of a trust company in the Province of
Ontario but if, notwithstanding the provisions of this Section 7.14, it ceases
to be so authorized to carry on business, the validity and enforceability of
this Agreement and the Voting Rights shall not be affected in any manner
whatsoever by reason only of such event; provided, however, the Trustee shall,
within 90 days after ceasing to be authorized to carry on the business of a
trust company in the Province of Ontario, either become so authorized or resign
in the manner and with the effect specified in Article X hereof.
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7.15 Conflicting Claims. If conflicting claims or demands are made or
asserted with respect to any interest of any Holder in any Exchangeable Shares,
including any disagreement between the heirs, representatives, successors or
assigns succeeding to all or any part of the interest of any Holder in any
Exchangeable Shares resulting in conflicting claims or demands being made in
connection with such interest, then the Trustee shall be entitled, at its sole
discretion, to refuse to recognize or to comply with any such claim or demand.
In so refusing, the Trustee may elect not to exercise any Voting Rights subject
to such conflicting claims or demands and, in so doing, the Trustee shall not be
or become liable to any person on account of such election or its failure or
refusal to comply with any such conflicting claims or demands. The Trustee shall
be entitled to continue to refrain from acting and to refuse to act until:
(a) the rights of all adverse claimants with respect to
the Voting Rights subject to such conflicting claims
or demands have been adjudicated by a final judgment
of a court of competent jurisdiction; or
(b) all differences with respect to the Voting Rights
subject to such conflicting claims or demands have
been conclusively settled by a valid written
agreement binding on all such adverse claimants, and
the Trustee shall have been furnished with an
executed copy of such agreement.
If the Trustee elects to recognize any claim or comply with any demand
made by any such adverse claimant, it may in its discretion require such
claimant to furnish such surety bond or other security satisfactory to the
Trustee as it shall deem appropriate fully to indemnify it as between all
conflicting claims or demands.
7.16 Acceptance of Trust. The Trustee hereby accepts the Trust created
and provided for by and in this Agreement and agrees to perform the same upon
the terms and conditions herein set forth and to hold all rights, privileges and
benefits conferred hereby and by law in trust for the various persons who shall
from time to time be Holders, subject to all the terms and conditions herein set
forth.
7.17 Notice to Trustee. The Trustee shall not be bound to give any
notice or do or take any act, action or proceeding by virtue of the powers
conferred on it hereby unless and until it shall have been required so to do
under the terms of this Agreement; nor shall the Trustee be required to take
notice of, be deemed to have actual or constructive notice or knowledge of any
matter under this Agreement, or take any action in connection with any notice of
any TMW Meeting or the seeking of any TMW Consent (each a "Notice Event"),
unless and until notified in writing of such Notice Event in accordance with
section 14.3 hereof which notice shall distinctly specify the Notice Event
desired to be brought to the attention of the Trustee and in the absence of any
such notice the Trustee may for all purposes of this Agreement conclusively
assume that no such Notice Event has occurred.
7.18 Merger or Consolidation of Trustee. Any corporation into or with
which the Trustee may be merged or consolidated or amalgamated, or any
corporation resulting therefrom to which the Trustee shall be a party, or any
corporation succeeding to the trust business of the Trustee shall be the
successor to the Trustee under this Agreement without any further act on its
part or any of the
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parties hereto, provided that such corporation would be eligible for appointment
as a successor trustee under the provisions of this Agreement.
7.19 No Personal Liability. In the exercise of the powers, authorities
or discretion conferred upon the Trustee under this Agreement, the Trustee is
and shall be conclusively deemed to be acting as trustee of the Trust and shall
not be subject to any personal liability for any liabilities, obligations,
claims, demands, judgments, costs or expenses against or with respect to the
Trust.
7.20 Incumbency Certificate. Each of TMW, Canco and MG shall file with
the Trustee a certificate of incumbency setting forth the names of the
individuals authorized to give instructions, directions or other instruments to
the Trustee ("Authorized Persons") together with specimen signatures of such
persons, and the Trustee shall be entitled to rely on the latest certificate of
incumbency filed with it unless it receives notice of a change in Authorized
Persons with updated specimen signatures.
ARTICLE VIII
COMPENSATION
TMW, Canco and MG jointly and severally agree to pay to the Trustee
reasonable compensation for all of the services rendered by it under this
Agreement and will reimburse the Trustee for all reasonable expenses (including
but not limited to taxes, compensation paid to experts, agents and advisors and
travel expenses) and disbursements, including the cost and expense of any suit
or litigation of any character and any proceedings before any governmental
agency, reasonably incurred by the Trustee in connection with its rights and
duties under this Agreement; provided that TMW, Canco and MG shall have no
obligation to reimburse the Trustee for any expenses or disbursements paid,
incurred or suffered by the Trustee in any suit or litigation in which the
Trustee is determined to have acted in bad faith or with negligence or willful
misconduct.
ARTICLE IX
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 Indemnification of the Trustee. TMW, Canco and MG jointly and
severally agree to indemnify and hold harmless the Trustee and each of its
directors, officers, employees and agents appointed and acting in accordance
with this Agreement (collectively, the "Indemnified Parties") against all
claims, losses, damages, costs, penalties, fines and reasonable expenses
(including reasonable expenses of the Trustee's legal counsel) which, without
fraud, negligence, willful misconduct or bad faith on the part of such
Indemnified Party, may be paid, incurred or suffered by the Indemnified Party by
reason of or as a result of the Trustee's acceptance or administration of the
Trust, its compliance with its duties set forth in this Agreement, or any
written or oral instructions delivered to the Trustee by TMW, Canco or MG
pursuant hereto. In no case shall TMW, Canco or MG be liable under this
indemnity for any claim against any of the Indemnified Parties unless TMW, Canco
and MG shall be notified by the Trustee of the written assertion of a claim or
of any action commenced against the Indemnified Parties, promptly after any of
the Indemnified Parties shall have received any such written assertion of a
claim or shall have been served with a summons or other first
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legal process giving information as to the nature and basis of the claim.
Subject to (i) below, TMW, Canco and MG shall be entitled to participate at
their own expense in the defense and, if TMW, Canco or MG so elect at any time
after receipt of such notice, either of them may assume the defense of any suit
brought to enforce any such claim. The Trustee shall have the right to employ
separate counsel in any such suit and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the Trustee
unless: (i) the employment of such counsel has been authorized by TMW, Canco or
MG; or (ii) the named parties to any such suit include both the Trustee and TMW,
Canco or MG and the Trustee shall have been advised by counsel acceptable to
TMW, Canco or MG that there may be one or more legal defenses available to the
Trustee that are different from or in addition to those available to TMW, Canco
or MG and that an actual or potential conflict of interest exists (in which case
TMW, Canco and MG shall not have the right to assume the defense of such suit on
behalf of the Trustee, but shall be liable to pay the reasonable fees and
expenses of counsel for the Trustee). This indemnity shall survive the
termination of this Agreement or the resignation or replacement of the Trustee.
9.2 Limitation of Liability. The Trustee shall not be held liable for
any loss which may occur by reason of depreciation of the value of any part of
the Trust Estate or any loss incurred on any investment of funds pursuant to
this Agreement, except to the extent that such loss is attributable to the
fraud, negligence, willful misconduct or bad faith on the part of the Trustee.
ARTICLE X
CHANGE OF TRUSTEE
10.1 Resignation. The Trustee, or any trustee hereafter appointed, may
at any time resign by giving written notice of such resignation to TMW, Canco
and MG specifying the date on which it desires to resign, provided that such
notice shall never be given less than 60 days before such desired resignation
date unless TMW, Canco and MG otherwise agree and provided further that such
resignation shall not take effect until the date of the appointment of a
successor trustee and the acceptance of such appointment by the successor
trustee. Upon receiving such notice of resignation, TMW, Canco and MG shall
promptly appoint a successor trustee by written instrument in duplicate, one
copy of which shall be delivered to the resigning trustee and one copy to the
successor trustee. Failing acceptance by a successor trustee, a successor
trustee may be appointed by an order of the superior court of the province in
which MG has its registered office upon application of one or more of the
parties hereto.
10.2 Removal. The Trustee, or any trustee hereafter appointed, may be
removed with or without cause, at any time on 60 days' prior notice by written
instrument executed by TMW, Canco and MG, in duplicate, one copy of which shall
be delivered to the trustee so removed and one copy to the successor trustee,
provided that, in connection with such removal, provision is made for a
replacement trustee similar to that contemplated in Section 10.1.
10.3 Successor Trustee. Any successor trustee appointed as provided
under this Agreement shall execute, acknowledge and deliver to TMW, Canco and MG
and to its predecessor trustee an instrument accepting such appointment.
Thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed
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or conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor under this Agreement, with like effect as if
originally named as trustee in this Agreement. However, on the written request
of TMW, Canco and MG or of the successor trustee, the trustee ceasing to act
shall, upon payment of any amounts then due it pursuant to the provisions of
this Agreement, execute and deliver an instrument transferring to such successor
trustee all the rights and powers of the trustee so ceasing to act. Upon the
request of any such successor trustee, TMW, Canco, MG and such predecessor
trustee shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers.
10.4 Notice of Successor Trustee. Upon acceptance of appointment by a
successor trustee as provided herein, TMW, Canco and MG shall cause to be mailed
notice of the succession of such trustee hereunder to each Holder specified in a
List. If TMW, Canco or MG shall fail to cause such notice to be mailed within 10
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of TMW, Canco and
MG.
ARTICLE XI
TMW SUCCESSORS
11.1 Certain Requirements in Respect of Combination, Etc. TMW shall not
enter into any transaction (whether by way of reconstruction, reorganization,
consolidation, merger, transfer, sale, lease or otherwise) whereby all or
substantially all of its undertaking, property and assets would become the
property of any other Person or, in the case of a merger, of the continuing
corporation resulting therefrom, but may do so if:
(a) such other Person or continuing corporation (the "TMW
Successor"), by operation of law, becomes, without
more, bound by the terms and provisions of this
Agreement or, if not so bound, executes, prior to or
contemporaneously with the consummation of such
transaction an agreement supplemental hereto and such
other instruments (if any) as are satisfactory to the
Trustee and in the opinion of legal counsel to the
Trustee are necessary or advisable to evidence the
assumption by the TMW Successor of liability for all
moneys payable and property deliverable hereunder,
the covenant of such TMW Successor to pay and deliver
or cause to be delivered the same and its agreement
to observe and perform all the covenants and
obligations of TMW under this Agreement; and
(b) such transaction shall, to the reasonable
satisfaction of the Trustee and in the opinion of
legal counsel to the Trustee, be upon such terms
which substantially preserve and do not impair in any
material respect any of the rights, duties, powers
and authorities of the Trustee or of the Holders
hereunder.
11.2 Vesting of Powers in Successor. Whenever the conditions of Section
11.1 hereof have been duly observed and performed, the Trustee, if required by
Section 11.1 hereof, the TMW
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Successor and MG shall execute and deliver the supplemental agreement provided
for in Article XII hereof, and thereupon the TMW Successor shall possess and
from time to time may exercise each and every right and power of TMW under this
Agreement in the name of TMW or otherwise and any act or proceeding by any
provision of this Agreement required to be done or performed by the board of
directors of TMW or any officers of TMW may be done and performed with like
force and effect by the directors or officers of such TMW Successor.
11.3 Wholly owned Subsidiaries. Nothing herein shall be construed as
preventing the amalgamation or merger of any wholly owned subsidiary of TMW with
or into TMW.
ARTICLE XII
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
12.1 Amendments, Modifications, Etc. Subject to Section 12.4, this
Agreement may not be amended, modified or waived except by an agreement in
writing executed by TMW, Canco, MG and the Trustee and approved by the Holders
in accordance with Section 11.1 of the Exchangeable Share Provisions. No
amendment to or modification or waiver of any of the provisions of this
Agreement otherwise permitted hereunder shall be effective unless made in
writing and signed by all of the parties hereto.
12.2 Ministerial Amendments. Notwithstanding the provisions of Section
12.1 hereof, the parties to this Agreement may in writing, at any time and from
time to time, without the approval of the Holders, amend or modify this
Agreement for the purposes of:
(a) adding to the covenants of any or all of the parties
hereto for the protection of the Holders hereunder;
provided that the Board of Directors shall be of the
opinion, after receipt of a written opinion of
outside counsel, that such covenants are not
prejudicial to the interests of the holders of the
Exchangeable Shares; or
(b) making such amendments or modifications not
inconsistent with this Agreement as may be necessary
or desirable with respect to matters or questions
which, in the opinion of the board of directors of
each of TMW, Canco and MG and in the opinion of the
Trustee and its counsel, having in mind the best
interests of the Holders as a whole, it may be
expedient to make; provided that such boards of
directors and the Trustee and its counsel shall be of
the opinion, after receipt of a written opinion of
outside counsel, that such amendments and
modifications will not be prejudicial to the
interests of the Holders as a whole; or
(c) making such changes or corrections which, on the
advice of counsel to TMW, Canco, MG and the Trustee,
are required for the purpose of curing or correcting
any ambiguity or defect or inconsistent provision or
clerical omission or mistake or manifest error;
provided
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that the Trustee and its counsel and the board of
directors of each of TMW, Canco and MG shall be of
the opinion, after receipt of a written opinion of
outside counsel, that such changes or corrections
will not be prejudicial to the interests of the
Holders as a whole.
MG shall send a written notice to the Holders notifying them of any
amendment made pursuant to this Section 12.2 and a copy of any written opinion
of counsel received in connection with any such amendment.
12.3 Meeting to Consider Amendments. MG, at the request of TMW or
Canco, shall call a meeting or meetings of the Holders for the purpose of
considering any proposed amendment or modification requiring approval pursuant
hereto. Any such meeting or meetings shall be called and held in accordance with
the by-laws of MG, the Exchangeable Share Provisions and all applicable laws.
12.4 Changes in Capital of TMW and MG. At all times after the
occurrence of any event effected pursuant to the Support Agreement, as a result
of which either TMW Common Stock or the Exchangeable Shares or both are in any
way changed, this Agreement shall forthwith be amended and modified as necessary
in order that it shall apply with full force and effect, mutatis mutandis, to
all new securities into which TMW Common Stock or the Exchangeable Shares or
both are so changed, and the parties hereto shall execute and deliver a
supplemental agreement giving effect to and evidencing such necessary amendments
and modifications.
12.5 Execution of Supplemental Agreements. From time to time MG (when
authorized by a resolution of its Board of Directors), TMW (when authorized by a
resolution of its board of directors), Canco (when authorized by a resolution of
its board of directors) and the Trustee may, subject to the provisions of these
presents, and they shall, when so directed by these presents, execute and
deliver by their proper officers, agreements or other instruments supplemental
hereto, which thereafter shall form part hereof, for any one or more of the
following purposes:
(a) evidencing the succession of any TMW Successors to
TMW and the covenants of and obligations assumed by
each such TMW Successor in accordance with the
provisions of Article XI and the successor of any
successor trustee in accordance with the provisions
of Article X;
(b) making any additions to, deletions from or
alterations of the provisions of this Agreement or
the Voting Rights which, in the opinion of the Board
of Directors of each of TMW, Canco and MG and in the
opinion of the Trustee and its counsel, after receipt
of a written opinion of outside counsel, will not be
prejudicial to the interests of the Holders as a
whole or are in the written opinion of counsel to the
Trustee necessary or advisable in order to
incorporate, reflect or comply with any legislation
the provisions of which apply to TMW, Canco, MG, the
Trustee or this Agreement; and
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(c) for any other purposes not inconsistent with the
provisions of this Agreement, including without
limitation to make or evidence any amendment or
modification to this Agreement as contemplated
hereby, provided that, in the opinion of the Board of
Directors of each of TMW, Canco and MG and in the
opinion of the Trustee and its counsel, after receipt
of a written opinion of outside counsel, the rights
of the Trustee and the Holders as a whole will not be
prejudiced thereby.
ARTICLE XIII
TERMINATION
13.1 Term. The Trust created by this Agreement shall continue until the
earliest to occur of the following events:
(a) no outstanding Exchangeable Shares are held by a
Holder;
(b) each of TMW, Canco and MG elects in writing to
terminate the Trust and such termination is approved
by the Holders of the Exchangeable Shares in
accordance with Section 11.1 of the Exchangeable
Share Provisions and notice of such termination is
provided to the Trustee; and
(c) 21 years after the death of the last survivor of the
descendants of His Majesty King ▇▇▇▇▇▇ VI of the
United Kingdom of Great Britain and Northern Ireland
living on the date of the creation of the Trust.
13.2 Survival of Agreement. This Agreement shall survive any
termination of the Trust and shall continue until there are no Exchangeable
Shares outstanding held by a Holder; provided, however, that the provisions of
Articles VIII and IX hereof shall survive any such termination of this
Agreement.
ARTICLE XIV
GENERAL
14.1 Severability. If any provision of this Agreement is held to be
invalid, illegal or unenforceable, the validity, legality or enforceability of
the remainder of this Agreement shall not in any way be affected or impaired
thereby, and the Agreement shall be carried out as nearly as possible in
accordance with its original terms and conditions.
14.2 Inurement; Third Party Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns and to the benefit of the Holders. The parties
hereto acknowledge and agree that the holders of the Exchangeable Shares are
intended to be third party beneficiaries of this Agreement and shall be
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entitled to all rights and benefits provided hereunder which affect such holders
and shall be entitled to enforce such rights and benefits as if they were a
party hereto.
14.3 Notices to Parties. All notices and other communications between
the parties hereunder shall be in writing and shall be deemed to have been given
if delivered personally or by confirmed telecopy to the parties at the following
addresses (or at such other address for such party as shall be specified in like
notice):
if to MG:
▇▇▇▇▇▇ Retail Group Inc.
▇▇▇▇, ▇▇▇ ▇▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: 514.274.4177
with a copy to:
Coudert Brothers
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: 212.616.4120
if to TMW or Canco:
The Men's Wearhouse, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: 713.657.0872
with a copy to:
Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: 713.651.5246
and
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▇▇▇▇▇ Casgrain
▇ ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: ▇▇▇▇▇ Mass
Facsimile: 514.866.2241
If to the Trustee:
The Trust Company of Bank of Montreal
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: Senior Trust Officer
Facsimile: 416.867.6264
Any notice or other communication given personally shall be deemed to
have been given and received upon delivery thereof, and if given by telecopy
shall be deemed to have been given and received on the date of receipt thereof
unless such day is not a Business Day in which case it shall be deemed to have
been given and received upon the immediately following Business Day.
14.4 Notice to Holders. Any and all notices to be given and any
documents to be sent to any Holders may be given or sent to the address of such
Holder shown on the register of Holders of Exchangeable Shares in any manner
permitted by the Exchangeable Share Provisions and shall be deemed to be
received (if given or sent in such manner) at the time specified in such
Exchangeable Share Provisions, the provisions of which Exchangeable Share
Provisions shall apply mutatis mutandis to notices or documents as aforesaid
sent to such Holders.
14.5 Risk of Payments by Post. Whenever payments are to be made or
documents are to be sent to any Holder by the Trustee, by MG or by TMW of Canco
or by such Holder to the Trustee or to TMW, Canco or MG, the making of such
payment or sending of such document sent through the post shall be at the risk
of TMW, Canco or MG in the case of payments made or documents sent by the
Trustee or TMW, Canco or MG, and the Holder, in the case of payments made or
documents sent by the Holder.
14.6 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
14.7 Jurisdiction. This Agreement shall be construed and enforced in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
14.8 Attornment. TMW agrees that any action or proceeding arising out
of or relating to this Agreement may be instituted in the courts of Ontario,
waives any objection which it may have now or hereafter to the venue of any such
action or proceeding, irrevocably submits to the jurisdiction of such courts in
any such action or proceeding, agrees to be bound by any judgment of such courts
and agrees not to seek, and hereby waives, any review of the merits of any such
judgment by the
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courts of any other jurisdiction and TMW hereby appoints Canco at its registered
office in the Province of Ontario as TMW's attorney for service of process.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
duly executed as of the date first above written.
THE MEN'S WEARHOUSE, INC.
By:
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
President
GOLDEN MOORES COMPANY
By:
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
President
▇▇▇▇▇▇ RETAIL GROUP INC.
By:
------------------------------------
Name:
Title:
THE TRUST COMPANY OF BANK OF
MONTREAL
By:
------------------------------------
Name:
Title:
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