EXHIBIT 2
DRAFT
▇▇▇▇▇ ▇▇▇▇▇ & SONS, INC.
SECURITIES PURCHASE AGREEMENT
July_, 2002
TABLE OF CONTENTS
Page
1. PURCHASE AND SALE OF PREFERRED SHARES AND NOTES...........................2
1.1 Sale and Issuance of Preferred Shares and Notes..................2
1.2 Closings.........................................................2
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............................2
2.1 Organization, Good Standing and Qualification....................3
2.2 Capitalization and Voting Rights.................................3
2.3 Subsidiaries.....................................................4
2.4 Authorization....................................................4
2.5 Valid Issuance of Preferred Shares, Notes and Conversion
Shares...........................................................5
2.6 Consents.........................................................5
2.7 Offering.........................................................5
2.8 Securities Laws..................................................6
2.9 Litigation.......................................................6
2.10 Intellectual Property............................................6
2.11 Compliance with Other Instruments................................7
2.12 Agreements, Action...............................................7
2.13 Related-Party Transactions.......................................9
2.14 Financial Statements.............................................9
2.15 Recent Changes..................................................10
2.16 Tax Returns.....................................................12
2.17 Compliance with Laws: Permits...................................13
2.18 Environmental and Safety Laws...................................13
2.19 Disclosure......................................................14
2.20 Registration Rights.............................................14
2.21 Corporate Documents; Minute Books...............................14
2.22 Title to Property and Assets....................................14
2.23 Insurance.......................................................15
2.24 Employee Benefit Plans..........................................15
2.25 Labor Agreements and Actions; Employee Compensation.............16
2.26 Obligations of Management.......................................17
2.27 Voting Agreements...............................................17
2.28 Acknowledgment Regarding Prime Investments SA Purchase of
Preferred Shares and Notes......................................17
2.29 No Integrated Offering..........................................17
2.30 No Brokers......................................................18
2.31 Inventory.......................................................18
2.32 MJI and the Investment Agreement................................18
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS..........................18
3.1 Authorization...................................................18
3.2 Purchase Entirely for Own Account...............................18
3.3 No Conflict.....................................................19
3.4 Litigation......................................................19
3.5 Legends.........................................................19
4. COVENANTS................................................................19
4.1 Best Efforts....................................................19
4.2 Use of Proceeds.................................................19
4.3 Reservation of Shares...........................................19
4.4 Legal Compliance................................................19
4.5 Material Transactions...........................................19
4.6 Ratable Treatment of Holders of Preferred Shares and Holders
of Notes........................................................20
4.7 Transferability.................................................20
5. CONDITIONS OF INVESTOR'S OBLIGATIONS AT CLOSING..........................20
5.1 Representations and Warranties..................................20
5.2 Performance.....................................................20
5.3 Compliance Certificate..........................................20
5.4 Qualifications; Consents........................................20
5.5 Proceedings and Documents.......................................21
5.6 Shareholders' Agreement, Security Agreement, Senior Lenders'
Priority Agreement, Pari Passu Creditors' Priority Agreement,
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Intercreditor Agreement, Diamond Supply Agreement and Diamond
Consignment Agreement...........................................21
5.7 Filing of Articles of Amendment.................................21
5.8 Reservation of Conversion Shares................................21
5.9 Secretary's Certificate.........................................21
5.10 Board of Directors..............................................21
5.11 Opinion of Company Counsel......................................21
5.12 Acquisition Transaction.........................................21
5.13 No Material Adverse Change or Development.......................22
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING.......................22
6.1 Representations and Warranties..................................22
6.2 Performance.....................................................22
6.3 Qualifications; Consents........................................22
6.4 Shareholders' Agreement, Intercreditor Agreement, Senior Lenders'
Priority Agreement, Pari Passu Creditor's Priority Agreement,
Security Agreement, Diamond Supply Agreement and Diamond
Consignment Agreement...........................................22
6.5 Filing of Articles of Amendment.................................22
7. MISCELLANEOUS............................................................23
7.1 Survival........................................................23
7.2 Successors and Assigns..........................................23
7.3 Governing Law and Jurisdiction..................................23
7.4 Titles and Subtitles............................................23
7.5 Notices.........................................................23
7.6 Finder's Fee....................................................24
7.7 Expenses........................................................24
7.8 Amendments and Waivers..........................................24
7.9 Delays or Omissions.............................................24
7.10 Severability....................................................24
7.11 Entire Agreement................................................25
7.12 Pronouns........................................................25
7.13 Counterparts....................................................25
7.14 Jury Trial......................................................25
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7.15 Publicity and Confidentiality...................................25
7.16 Further Assurances..............................................26
7.17 Language........................................................26
7.18 Termination.....................................................26
7.19 Joint Participation in Drafting.................................26
SCHEDULE A Schedule of Investors
SCHEDULE B Schedule of Exceptions
SCHEDULE C Use of Proceeds
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is made on the
____day of July, 2002, by and among ▇▇▇▇▇ ▇▇▇▇▇ & SONS INC., a corporation
governed by the laws of Canada (the "Company") and the investors listed on
Schedule A, each, an "Investor" and collectively, the "Investors").
WHEREAS:
A. The Company desires to sell, and the Investors desire to purchase
upon the terms and conditions stated in this Agreement, (i) ______________1 of
the Company's Series A Convertible Preferred Shares, without par value (the
"Preferred Shares"), which are convertible into the Company's voting common
shares, without par value (the "Voting Common Stock") (the rights, preferences,
privileges, restrictions and conditions of the Preferred Shares, are set forth
in the articles of amendment in the form attached hereto as Exhibit A (the
"Articles of Amendment") and (ii) the Company's convertible notes in the
aggregate principal amount of US$5,000,000 which are convertible into shares of
Voting Common Stock, in the form attached hereto as Exhibit B (the "Notes"). The
Notes are secured by, among other things, the collateral described in that
certain Deed of Hypothec between the Company and National Bank Trust Inc., as
trustee for the Investors (the "Trustee") in the form attached hereto as Exhibit
C (the "Security Agreement"). The shares of Voting Common Stock issuable upon
conversion of the Notes in accordance with its terms and upon conversion of the
Preferred Shares in accordance with the terms of the Articles of Amendment are
referred to herein as the "Conversion Shares".
C. At the First Closing (as defined below), the parties hereto shall
execute and deliver a Shareholders' Agreement, in the form attached hereto as
Exhibit D (the "Shareholders' Agreement"), the Company and one of the Investors
shall execute and deliver a Diamond Supply Agreement, in the form attached
hereto as Exhibit E (the "Diamond Supply Agreement") and a Diamond Consignment
Agreement in the form attached hereto as Exhibit F (the "Diamond Consignment
Agreement"), the Investors and the Trustee shall execute and deliver an
Intercreditor Agreement in the form as attached as Exhibit G (the "Intercreditor
Agreement"), the Trustee and two creditors of the Company shall execute and
deliver a Priority and Cession of Rank Agreement in the form as attached as
Exhibit H (the "Senior Lenders' Priority Agreement") the Trustee and a creditor
of the Company shall execute and deliver a Priority and Cession of Rank
Agreement in the form attached as Exhibit I (the "Pari Passu Creditor's Priority
Agreement") and the parties thereto will execute and deliver the Security
Agreement. This Agreement, the Articles of Amendment, the Notes, the
Shareholders' Agreement, Diamond Supply Agreement, Diamond Consignment
Agreement, Intercreditor Agreement, Senior Lenders' Priority Agreement, and Pari
Passu Creditor's Priority Agreement shall be collectively referred to as the
"Transaction Documents."
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:
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1 Insert a number of shares which is the quotient of (a) US $10,000,000 divided
by (b) the US dollar equivalent of CDN$7.73 using the noon rate of exchange of
the Bank of Canada on the Closing Date.
1. PURCHASE AND SALE OF PREFERRED SHARES AND NOTES.
1.1 Sale and Issuance of Preferred Shares and Notes.
(a) The Company's board of directors shall duly approve and file the
Articles of Amendment with the Director appointed under the Canada Business
Corporations Act on or before the First Closing.
(b) Subject to the terms and conditions of this Agreement, each
Investor agrees, jointly and not solidarily, to purchase at the First Closing
for cash, and the Company agrees to sell and issue to each Investor at the First
Closing, that number of Preferred Shares set forth opposite such Investor's name
in column 2 on Schedule A for the purchase price set forth opposite such
Investor's name in column 3 on Schedule A. The purchase price for each Preferred
Share shall be [US $] per share2 and shall be paid in US Dollars. Subject to
terms and conditions of this Agreement, each Investor agrees, jointly and not
solidarily to purchase at the Second Closing (as defined below) for cash, Notes
in the aggregate principal U.S. dollar amount set forth opposite such Investor's
name in column 4 on Schedule A for the aggregate amount set forth opposite such
Investors name in column 5 on Schedule A. The Purchase Price for the Notes shall
be paid in U.S. Dollars.
1.2 Closings.
(a) The purchase and sale of the Preferred Shares shall take place at
the Montreal offices of Stikeman Elliot at 10:00 A.M. (Montreal time), on August
15, 2002, or at such other time and place as the Company and the Investors may
mutually agree upon in writing (which time and place are designated as the
"First Closing"). The purchase and sale of the Notes shall take place at the
Montreal offices of Stikeman Elliot at 10:00 A.M. (Montreal time), on September
30, 2002, or at such other time and place as the Company and the Investors may
mutually agree upon in writing (which time and place are designated as the
"Second Closing". The First Closing and the Second Closing shall sometimes be
collectively referred to herein as the "Closing".
(b) At the First Closing, the Company shall deliver to each Investor a
certificate representing the number of Preferred Shares such Investor is
purchasing hereunder against payment of the purchase price therefor by check or
wire transfer, which payment shall be made by each Investor at the First
Closing. At the Second Closing, the Company shall deliver to each Investor a
duly executed Note in the aggregate principal amount set forth opposite such
Investor's name in column 4 on Schedule A against payment of the purchase price
therefor by check or wire transfer, which payment shall be made by each Investor
at the Second Closing.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company makes the representations and warranties to each Investor that
are set forth in this Article 2; provided that such representations and
warranties shall be modified by the
--------
2 Insert an amount which is equal to the US dollar equivalent of CND$7.73 using
the Bank of Canada noon rate of exchange on the business day immediately
preceding the Closing Date.
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information set forth on the Schedule of Exceptions (the "Schedule of
Exceptions") attached hereto as Schedule B beneath the applicable Section
heading and any reference to subsidiaries in any representation and warranty of
the Company shall exclude Mayor's Jewelers Inc., a Delaware corporation ("MJI"),
unless such company is specifically referred to in such representation or
warrant:
2.1 Organization, Good Standing and Qualification. The Company and each
of its subsidiaries is a corporation duly incorporated and existing under the
laws of the jurisdiction in which it is incorporated. The Company and each of
its subsidiaries is duly qualified as an extra-provincial or foreign corporation
to do business in each jurisdiction in which the nature of the business
conducted by it makes such qualification necessary and where the failure to be
so qualified could reasonably be expected to have a material adverse effect on
the business, assets, liabilities, properties, condition (financial or
otherwise), prospects or operations of the Company and its subsidiaries, taken
as a whole (an "MAE"). The Company and each of its subsidiaries has all
requisite corporate power to own and operate its properties and assets as now
conducted and as presently proposed to be conducted.
2.2 Capitalization and Voting Rights. The authorized capital of the
Company consists, or will consist immediately prior to the First Closing, of:
(i) Preferred Shares. ________ 3Series A Convertible Preferred
Shares without par value. The rights, privileges and preferences of the
Preferred Shares are as stated in the Articles of Amendment. The Company
has not authorized or agreed to issue any Preferred Shares other than the
Preferred Shares to be sold hereunder.
(ii) Common Stock. An unlimited number of shares of Voting Common
Stock, of which _________________ shares were issued and outstanding on
_________, 2002 and an unlimited number of shares of Non-Voting Common
Stock, without par value of which ___ shares were issued and outstanding as
of ________, 2002.
(b) The outstanding shares of Voting Common Stock and Non-Voting
Common Stock are owned by the stockholders and in the numbers specified on the
Schedule of Exceptions attached hereto.
(c) The outstanding shares of Voting Common Stock and Non-Voting
Common Stock are all duly authorized and validly issued, are fully paid and
non-assessable, and were issued in compliance with all applicable laws
concerning the issuance of securities.
(d) Except for (i) the conversion privileges of the Preferred Shares
to be sold pursuant to this Agreement as such privileges are set forth in the
Articles of Amendment and the conversion privileges of the Notes to be sold
pursuant to this Agreement, (ii) the rights provided in Article IV of that
certain Shareholders' Rights Agreement and (iii) currently outstanding
--------
3 Insert a number equal to the quotient of (i) $5,000,000 divided by (ii) the US
Dollar equivalent of CND$7.73 using the Bank of Canada's noon rate of exchange
on the Business Day immediately preceding the Closing Date.
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options to purchase up to _________ shares of Voting Common Stock and _________
shares of Non-Voting Common Stock granted to employees pursuant to the Company's
Stock Option Plan (the "Option Plan"), there are not outstanding any options,
warrants, rights (including conversion, preemptive rights or rights to exchange)
or agreements of any kind for the purchase or acquisition from the Company of
any shares of its capital stock or other securities of the Company. The Option
Plan reserves a total of _______ shares of Voting Common Stock and __________
shares of Non-Voting Common Stock (including the shares issuable upon exercise
of the aforementioned outstanding options) for issuance upon exercise of options
granted thereunder to officers, directors, employees and consultants of the
Company or any of its subsidiaries and as _______. 2002, options to purchase up
to _______ shares of Voting Common Stock and _____________ shares of Non-Voting
Common Stock upon exercise thereof remain eligible for future grants under the
Option Plan. The Schedule of Exceptions sets forth with respect to all
outstanding options (and other rights to acquire any shares of the Company's
capital stock or other security of the Company, if any), the holder, number and
type of shares or security covered, exercise price and expiration or termination
date. Options granted under the Option Plan contain vesting and buy back
provisions as described in the Schedule of Exceptions and no acceleration or
changes in the vesting provisions of any outstanding options or lapse of a
repurchase right will occur in connection with or upon the occurrence of any
event (e.g., termination, change in control, etc.) or otherwise for any reason
except as specifically described in Schedule of Exceptions.
2.3 Subsidiaries. Except as set forth in the Schedule of Exceptions or
as contemplated by the Investment Agreement referred to on Schedule C, the
Company (i) does not presently own or control, directly or indirectly, any
interest in any other corporation, association, or other business entity, (ii)
is not a participant in any joint venture, partnership, or similar arrangement
and (iii) is not, directly or indirectly, subject to any obligation or
requirement to provide funds to, or invest in any corporation, limited liability
company or general partnership, association, joint venture or other entity or
enterprise. For each of the Company's direct or indirect subsidiaries, the
Schedule of Exceptions sets forth the name of such subsidiary, its jurisdiction
of incorporation, its authorized and outstanding capital stock and its
stockholders. The Schedule of Exceptions describes in reasonable detail all
applicable joint venture, partnership or similar arrangement or obligation to
provide funds to or invest in any corporation, limited liability company,
general or limited partnership, association or joint venture or other entity or
enterprise.
2.4 Authorization. The Company has all necessary corporate power and
authority to enter into this Agreement and to carry out its obligations under
this Agreement. All corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization, execution and filing
of the Articles of Amendment and for the authorization, execution and delivery
of the other Transaction Documents to which the Company is a party and the
performance of all obligations of the Company hereunder and thereunder, and the
authorization, sale and issuance of the Preferred Shares and the Notes being
sold hereunder and the reservation for issuance of the Conversion Shares upon
conversion of the Preferred Shares in accordance with the terms of the Articles
of Amendment and upon conversion of the Notes in accordance with the terms
hereof and thereof and the registration of the hypothec and other rights created
by the Security Agreement in all relevant jurisdictions, has been taken or will
be
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taken prior to the First Closing.4 This Agreement and the other Transaction
Documents to which the Company is a party, when executed and delivered, will
constitute valid and legally binding obligations of the Company, enforceable
against it in accordance with their respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally, and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
2.5 Valid Issuance of Preferred Shares, Notes and Conversion Shares. The
Preferred Shares and the Notes that are being purchased by the Investors
hereunder, when issued, sold and delivered in accordance with the terms of this
Agreement for the consideration expressed herein will be duly and validly
issued, fully paid and non-assessable and will be free and clear of any and all
liens, claims or other encumbrances and of restrictions on transfer, other than
restrictions on transfer under the Articles of Amendment, this Agreement, the
Shareholders' Agreement and under applicable securities laws. The Conversion
Shares issuable upon conversion of the Preferred Shares and the Notes have been
duly and validly reserved for issuance and, upon issuance in accordance with the
terms of the Articles of Amendment and the Notes, respectively will be duly and
validly issued, fully paid and non-assessable and will be free and clear of any
and all liens, claims or other encumbrances and of restrictions on transfer
other than restrictions on transfer under the Company's Articles, the Notes, the
Shareholders' Agreement and under applicable securities laws. The issuance of
the Preferred Shares and the Notes pursuant to this Agreement and the subsequent
conversion of the Preferred Shares and the Notes into the Conversion Shares in
accordance with the terms of the Articles of Amendment and the Notes,
respectively, are not and will not be subject to any preemptive rights or rights
of first refusal that have not been properly waived or complied with.
2.6 Consents. No consent, approval, order, permission or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, provincial, state, municipal or local Governmental Authority (as
defined below) or any natural person, sole proprietorship, firm, corporation,
partnership, trust, limited liability company, joint venture, association, body
corporate or other entity of any kind and a natural person in such person's
capacity as trustee, executor, administrator or other legal representative
(each, a "Person") is required in connection with the consummation of the
transactions contemplated by this Agreement and the Transaction Documents which
have not been obtained or made prior to the First Closing, except for such
filings as are required pursuant to applicable securities laws, which filings,
if any, will be effected within the required statutory period [and filings
registering the hypothec and the Senior Lenders' Priority Agreement and the Pari
Passu Creditor's Agreement which shall be filed for registration by the Company
immediately following the Second Closing].
2.7 Offering. Subject in part to the truth and accuracy of each Investor's
representation set forth in Section 3 of this Agreement, the offer, sale and
issuance of the Preferred Shares and Notes as contemplated by this Agreement and
the issuance of the Conversion Shares upon conversion of the Preferred Shares
and Notes in accordance with the terms of the Articles of Amendment and the
Notes respectively will be exempt from the
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4 We expect the Company to do whatever is required to register the Deed of
Hypothec.
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registration requirements of applicable securities laws, and will have been
registered or qualified (or are exempt from registration and qualification)
under the registration, permit or qualification requirements of all applicable
provincial securities laws. Neither the Company nor any authorized agent acting
on its behalf will take any action hereafter that would bring the sale of such
shares by the Company within the registration provisions of any applicable
securities laws, or otherwise cause the loss of such exemptions.
2.8 Securities Laws. The Company is a "closed company," as such term is
defined in Section 5 of the Securities Act (Quebec).
2.9 Litigation. Except as set forth in the Schedule of Exceptions, there
is no action, suit, proceeding or investigation, claim, complaint or grievance,
including appeals and applications for review, in progress, or to the Company's
knowledge, currently threatened, against or relating to the Company or any of
its subsidiaries before any court, Governmental Authority, commission, board,
bureau, agency or arbitration panel that questions, the validity of this
Agreement or the other Transaction Documents or the right of the Company to
enter into such agreements or to consummate the transactions contemplated hereby
or thereby, or that might result, either individually or in the aggregate, in an
MAE, or any change in the current equity ownership of the Company (except as
contemplated hereby) or any of its subsidiaries, nor is the Company aware that
there is any basis for any of the foregoing. The foregoing includes, without
limitation, actions, suits, proceedings, or investigations, claims, complaints
or grievances pending or threatened involving the prior employment of any of the
Company's or any subsidiary's employees, their use in connection with the
Company's or such subsidiary's business of any information or techniques
allegedly proprietary to any of their former employers, or their obligations
under any agreements with prior employers. Neither the Company nor any of its
subsidiaries is a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or Governmental Authority,
commission, board, bureau, agency, arbitrator or instrumentality. There is no
action, suit, proceeding, investigation claim, complaint or grievance by the
Company or any of its subsidiaries currently pending.
2.10 Intellectual Property.
(a) To the best of the Company's knowledge, the Company or one of its
subsidiaries owns or possesses sufficient legal rights to all patents,
trademarks, service marks, trade names, copyrights, industrial designs,
patterns, drawings, trade secrets, licenses, information and other proprietary
rights and processes necessary for its business as now conducted and as
presently proposed to be conducted, without any infringement of or conflict with
the valid rights of others and the lack of which could reasonably be expected to
have an MAE, and neither the Company nor any of its subsidiaries has received
any notice of alleged infringement upon or conflict with the asserted rights of
others, nor is it aware of any basis to the best of the Company's knowledge
therefor. Without limiting the foregoing, to the best of the Company's knowledge
each of the Company and its subsidiaries has the right to use all of its trade
secrets (including without limitation all know how, concepts, computer programs,
domain names, websites, databases and technical data) free and clear of any
rights, liens, encumbrances or claims of others, other than as contemplated by
the liens in favor the Investors provided in the Security Agreement and liens of
the senior lenders and pari passu creditor identified in the Senior Lenders'
Priority Agreements and the Pari Passu Creditor's Priority Agreement. There are
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no outstanding options, licenses or agreements of any kind relating to any of
the foregoing, nor is the Company or any of its subsidiaries bound by or a party
to any options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, industrial designs, trade
secrets, licenses, information and other proprietary rights and processes of any
other person or entity other than such licenses arising from the purchase of
commercially available software legally in the possession of the Company or its
subsidiaries. Except for "off the shelf" software used in the ordinary course of
its business, neither the Company nor any of its subsidiaries is obligated to
make any payments by way of royalties, fees or otherwise to any owner or
licensor of any patent, trademark, trade name, copyright, industrial design or
other intangible asset, with respect to the use thereof or in connection with
the conduct of its business, or otherwise. The Company is not aware of any
violation by a third party of any of the Company's or any of its subsidiaries'
patents, trademarks, service marks, trade names, copyrights, trade secrets,
industrial designs, information or other proprietary rights and processes.
(b) The Company is not aware that any of its or its subsidiaries
employees, officers or consultants is obligated under any contract (including
licenses, covenants or commitments of any nature) or other agreement of any
kind, or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with their ability to use their best efforts to
fulfill their duties to the Company and its subsidiaries or that would conflict
with the Company's and its subsidiaries' business as now conducted or as
presently proposed to be conducted or that would prevent such individual from
assigning inventions to the Company or one of its subsidiaries, as applicable.
2.11 Compliance with Other Instruments. Neither the Company nor any of
its subsidiaries is in violation or default of (i) any provision of its
governing documents (which in the case of the Company consist of its Articles
and By-laws), or (ii) any material instrument, judgment, order, writ, decree,
mortgage, lease, contract, statute, rule, or regulation applicable to the
Company or any of its subsidiaries. To the Company's knowledge, neither the
Company nor any of its subsidiaries has taken any action or failed to take any
action (nor has any other event or condition occurred), which would result in
the loss of any right of the Company or any of its subsidiaries granted under
any license, distribution agreement or other agreements which may be material to
the Company's or such subsidiary's business. The execution, delivery and
performance of this Agreement and the other Transaction Documents and the
consummation of the transactions contemplated hereby and thereby will not result
in any such violation, or conflict with or constitute, with or without the
passage of time and giving of notice, either a default thereunder or an event
that results in the creation of any lien, charge, or encumbrance upon any
property or assets of the Company or any of its subsidiaries other than as
contemplated by the Security Agreement or the suspension, revocation,
impairment, forfeiture or non-renewal of any material permit, license,
authorization or approval applicable to the Company, its business or operations,
or any of its assets or properties or applicable to any subsidiary of the
Company, its business operations or its assets or properties.
2.12 Agreements, Action.
(a) Except for agreements contemplated by the Transaction Documents,
there are no agreements, understandings or proposed transactions between the
Company and any of its officers, directors, affiliates, stockholders or any
affiliate thereof.
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(b) Except as set forth on the Schedule of Exceptions, there are no
agreements, understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which the Company or any of its
subsidiaries is a party or by which it or any asset of the Company or any of its
subsidiaries is bound that involve (i) obligations (contingent or otherwise) of
the Company and any of its subsidiaries, in excess of [$__________] or any
commitment to or by the Company or any of its subsidiaries that may reasonably
extend beyond ______ years and which does not or cannot be terminated without
penalty on less than ____ months notice or which is outside the ordinary course
of business, (ii) the license of the trade name and trademark Birks, (iii)
provisions restricting or affecting the development, manufacture, sale or
distribution of the Company's or its subsidiaries' products or services, (iv) a
warranty with respect to services rendered or products sold or leased, other
than the standard warranty terms (which terms are described in the Schedule of
Exceptions) granted by the Company or its subsidiaries in the ordinary course of
business, (v) indemnification by the Company or any of its subsidiaries for any
obligations or (vi) any agreement, whether oral or written, which is or would be
material to the Company and its subsidiaries, taken as a whole (collectively,
the "Contracts"). All of the Contracts are valid and binding obligations of the
parties thereto and in full force and effect and enforceable by the Company or
its subsidiary (as the case may be) in accordance with their respective terms,
except as such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar federal or provincial
laws affecting the rights of creditors, (ii) rules of law governing specific
performance, injunctive relief or other equitable remedies (whether considered
in a proceeding at law or in equity) or (iii) indemnification provisions to the
extent limited by statutes, judicial decisions or public policy considerations.
The Company or the Company's applicable subsidiary has performed in all
materials respects all obligations required to be performed by it and is not in
default under or in breach of nor in receipt of any claim of default or breach
under any Contract and neither the Company nor any of its subsidiaries has any
present expectation or intention of not fully performing all such obligations.
No event has occurred which with the passage of time or the giving of notice or
both would result in a default, breach or event of noncompliance by the Company
or any of its subsidiaries under any Contract. The Company has no knowledge of
any material default or anticipated material breach or termination by any other
parties to any Contract.
(c) Except as set forth on the Schedule of Exceptions, since March 31,
2002, neither the Company nor any of its subsidiaries has (i) declared or paid
any dividends or authorized or made any distribution upon or with respect to any
class or series of its capital stock (except for dividends by the subsidiaries
to the Company or other subsidiaries), (ii) incurred any indebtedness for money
borrowed or any other liabilities individually in excess of [$_______], or, in
the case of indebtedness or liabilities individually less than [$_______] in
excess of [$_______] in the aggregate, (iii) made any loans or advances to any
person, other than ordinary advances for travel expenses, (iv) discharged or
satisfied any lien or encumbrance, or paid any obligation other than liabilities
incurred in the ordinary course of business, (v) sold, exchanged or otherwise
disposed of any of its assets or rights or cancelled any debts or entitlements,
other than the sale of its inventory in the ordinary course of business or (vi)
mortgaged, pledged, subjected to lien, granted a security interest in or
otherwise encumbered any of its assets or property (except for security
interests created pursuant to the Security Agreement).
-8-
(d) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same Person (including Persons or
entities the Company has reason to believe are affiliated with each other) shall
be aggregated for the purpose of meeting the individual minimum dollar amounts
of such sections.
(e) Except as disclosed on the Schedule of Exceptions, the Company has
not engaged in the past three (3) months in any discussion (i) with any
representative of any corporation or corporations regarding the consolidation or
merger of the Company with or into any such corporation or corporations, (ii)
with any corporation, partnership, association or other business entity or any
individual regarding the sale, conveyance or disposition of all or substantially
all of the assets of the Company or a transaction or series of related
transactions in which more than fifty percent (50%) of the voting power of the
Company is disposed of, or (iii) regarding any other form of acquisition,
liquidation, dissolution, or winding up of the Company.
(f) Neither the Company nor any of its subsidiaries is a party to or
bound or affected by any contract, agreement, commitment or instrument, or
subject to any restriction under its governing documents (the Articles and
By-laws in the case of the Company), containing any covenant expressly limiting
the freedom of the Company or any of its subsidiaries to compete in any line of
business, transfer or move any of its assets or operations and which adversely
affects its business as now conducted or as proposed to be conducted, its
properties, or its financial condition.
2.13 Related-Party Transactions. There are no obligations of the Company
or any of its subsidiaries to or on behalf of (including by way of guarantee,
commitments to extend credit or otherwise) any officers, directors, stockholders
or employees of the Company or any of its subsidiaries (collectively, the
"Insiders") other than (a) for payment of compensation for services rendered,
(b) reimbursement for reasonable expenses incurred on behalf of the Company or
any of its subsidiaries consistent with the Company's or such subsidiary's past
practice and (c) for other standard employee benefits made generally available
to all employees (including stock option agreements outstanding under the Option
Plan). None of the Insiders nor any members of their immediate families, are
indebted to the Company. None of the officers or directors or, to the best of
the Company's knowledge, employees or stockholders of the Company or its
subsidiaries, or any members of their immediate families, have any direct or
indirect ownership interest in any firm or corporation with which the Company is
affiliated or with which the Company or any of its subsidiaries has a material
business relationship, or any firm or corporation which competes with the
Company or any of its subsidiaries, other than passive investments in publicly
traded companies (representing less than 1% of such company). Except as set
forth on the Schedule of Exceptions, no Insider or any member of any Insider's
immediate family, is, directly or indirectly, interested in any material
Contract with the Company or any of its subsidiaries.
2.14 Financial Statements. The Company has delivered to each Investor
the audited consolidated financial statements (consolidated balance sheet and
consolidated statements of operations, stockholders' equity and cash flows,
including notes thereto) of the Company and its subsidiaries at March 31, 2002
and for the fiscal year then ended (the "Financial Statements"). The Financial
Statements are accurate and complete in all material respects and is consistent
with
-9-
the books and records of the Company and its subsidiaries. The Financial
Statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent throughout the periods indicated and with
each other, and fairly present the assets, liabilities, financial condition and
operating results of the Company and its subsidiaries as of the date, and for
the period, indicated therein. Except as set forth in the Financial Statements,
the Company and its subsidiaries, taken as a whole, do not have any material
liabilities or obligations, contingent or otherwise, other than (i) liabilities
or obligations that have arisen after March 31, 2002 in the ordinary course of
business and consistent with the Company's and such subsidiaries past practice,
and (ii) obligations under contracts and commitments incurred in the ordinary
course of business that would not be required to be reflected in financial
statements prepared in accordance with generally accepted accounting principles,
which in both cases, individually or in the aggregate, are not material to the
financial condition or operating results of the Company and its subsidiaries,
taken as a whole. Except as disclosed in the Financial Statements, neither the
Company nor any of its subsidiaries is a guarantor or indemnitor of any
indebtedness of (or otherwise obligated to make any loans or extend any credit
to) any other Person. The Company maintains and will continue to maintain a
standard system of accounting established and administered in accordance with
generally accepted accounting principles.
2.15 Recent Changes. Since March 31, 2002, there has not been:
(a) any change in the business, assets, liabilities, properties,
condition (financial or otherwise), prospects or operations of the Company or
its subsidiaries, taken as a whole, from that reflected in the Financial
Statements, other than changes in the ordinary course of business consistent
with past practice, none of which, individually or in the aggregate, could
reasonably be expected to have an MAE;
(b) any damage, destruction or loss, whether or not covered by
insurance, that could reasonably be expected to have an MAE;
(c) any waiver or compromise by the Company or its subsidiaries of a
valuable right or of a material debt owed to it;
(d) any satisfaction or discharge of any lien, claim or encumbrance or
payment of any obligation by the Company or its subsidiaries, except for
immaterial items in the ordinary course of business consistent with past
practice;
(e) any change or amendment to a contract or arrangement by which the
Company or any of its subsidiaries or any of their assets or properties is bound
or subject which could reasonably be expected to have an MAE;
(f) any material change in any compensation arrangement or agreement
with any Insider;
(g) any sale, assignment or transfer of any material intellectual
proprietary information or material assets of the Company or any subsidiary, or
disclosure of any confidential information to any person or entity;
-10-
(h) any resignation or termination (including any threat or
expectation thereof) of any officer or key employee of the Company or any
subsidiary which could reasonably be expected to have a MAE;
(i) any declaration or payment of any dividend or other distribution
of any assets of the Company;
(j) any mortgage, pledge, transfer of a security interest in, or lien,
or other encumbrance created by the Company or any of its subsidiaries, with
respect to any of its properties or assets, except liens for taxes not yet due
or payable;
(k) receipt of notice that there has been a loss of, or order
cancellation by, any major customer of the Company or any of its subsidiaries;
(l) any labor organization activity related to the Company or any of
its subsidiaries;
(m) any material change in the contingent obligations of the Company
or any of its subsidiaries, whether by way of guaranty, endorsement, indemnity
or otherwise;
(n) capital expenditures or commitments therefor that aggregate in
excess of [$__________];
(o) any loans or advances to, or any investments in, any Person other
than a subsidiary of the Company), other than advances for travel expenses made
in the ordinary course of business consistent with past practice;
(p) any loan to the Company or any subsidiary or other debt,
obligation or liability incurred or assumed by the Company or any of its
subsidiaries, other than current liabilities incurred in the ordinary course of
business consistent with past practice;
(q) any material transaction to which the Company or any of its
subsidiaries is a party that is not in the ordinary course of business
consistent with past practice;
(r) any material tax election or change in tax or accounting
(s) any material suits, actions, claims, audits, investigations, or
the settlement of any of the foregoing;
(t) except for the issuance of the Preferred Shares hereunder, the
Conversion Shares upon the exercise of the Preferred Shares and Notes, shares of
Non-Voting Common Stock or Voting Common Stock upon exercise of options issued
pursuant to the Option Plan, or the issuance of options pursuant to the Option
Plan, any issuance of stocks, bonds or other securities of the Company or any of
subsidiary;
(u) any other event or condition of any character that, either
individually or in the aggregate, could reasonably be expected to have an MAE;
or
-11-
(v) any agreement or commitment by the Company or any of its
subsidiaries take any of the actions described in subsections (a) through (u)
above.
2.16 Tax Returns.
(a) The Company and each of its subsidiaries have timely filed all its
Tax Returns (as defined below) required to be filed by it with the appropriate
Governmental Authority and has duly, completely and correctly reported all
income and all other amounts and information required to be reported thereon.
The Company and each of its subsidiaries have duly and timely paid all Taxes (as
defined below) including all installments on account of Taxes for the current
year, that are due and payable by it and the Company and each of its
subsidiaries have established reserves that are reflected on the Financial
Statements that are adequate for the payment by the Company of all Taxes , if
any, that are not yet due and payable and that related to periods ending on or
prior to the Closing Date.
(b) The Company and each of its subsidiaries have not requested, or
entered into any agreement or other arrangement or executed any waiver providing
for, any extension of time within which (i) to file any Tax Return covering any
Taxes for which the Company or any of its subsidiaries is or may by liable, (ii)
to file any elections, designations or similar things relating to Taxes for
which the Company or any of its subsidiaries; is or may be liable, (iii) the
Company or any of its subsidiaries is required to pay or remit any Taxes or
amounts on account of Taxes, or (iv) any Governmental Authority may assess or
collect Taxes for which the Company or any of its subsidiaries is or may be
liable.
(c) The Canadian federal and provincial income and capital tax
liabilities of the Company and each of its subsidiaries has been assessed by the
relevant taxing authorities and notices of assessment have been issued to each
such entity by the relevant taxing authorities for all taxation years prior to
and including the taxation year ended December 31, 2001.
(d) There are no actions, suits, proceedings, investigations, audits
or claims now pending or, to the knowledge of the Company, threatened, against
the Company or any of its subsidiaries in respect of any Taxes and there are no
matters under discussion, audit or appeal with any Governmental Authority
relating to Taxes.
(e) The Company has duly and timely withheld from any amount paid or
credited by it to or for the account or benefit of any Person, including,
without limitation, any of its employees, officers and directors and any
non-resident Person, the amount of all Taxes and other deductions required by
any applicable law, rule or regulation to be withheld from any such amount and
has duly and timely remitted the same to the appropriate Governmental Authority.
(f) Except as disclosed in the Schedule of Exceptions, for purposes of
the Income Tax Act (Canada) or any applicable provincial or municipal taxing
statute, no Person of group of Persons has ever acquired or had the right to
acquire control of the Company.
(g) There are no actual or proposed Tax deficiencies, assessments,
charges or adjustments with respect to the Company or any of its subsidiaries or
any assets or operations of the Company or any of its subsidiaries.
-12-
(h) Neither the Company nor any of its subsidiaries have ever been
party to a Tax sharing agreement or any other agreement to indemnify any person
for any Tax liability.
"Tax" or "Taxes" includes, without limitation, all taxes, duties, fees,
premiums, assessments, imposts, levies and other charges of any kind whatsoever
imposed by any Governmental Authority, together with all interest, penalties,
fines, additions to tax or other additional amounts imposed in respect thereof,
including, without limitation, those levied on, or measured by, or referred to
as income, gross receipts, profits, real property, personal property, land
transfer, franchise, capital, capital stock, transfer, excise, stamp, license,
business, payroll, employment, unemployment, disability, severance, occupation,
windfall, sales, goods and services, use, value-added, health, social services,
education and social security taxes, all surtaxes, all customs duties and impost
and export taxes, premium, environmental, employees' income withholding, foreign
or domestic withholding, alternative or add-on minimum or other similar taxes,
all licenses, franchise and registration fees and all unemployment insurance,
health insurance and Canada, Quebec and other government pension plan premiums.
"Tax Returns" includes, without limitation, all returns, reports,
declarations, elections, notices, filings, information returns and statements
filed in respect of Taxes.
"Governmental Authorities" means any government, regulatory authority,
governmental department, agency, commission, board, tribunal, crown corporation,
or court or other law, rule or regulation-making entity having or purporting to
have jurisdiction on behalf of any nation, or province or state or other
subdivision thereof or any municipality, district or other subdivision thereof.
2.17 Compliance with Laws: Permits. Neither the Company nor any of its
subsidiaries is in violation of any Laws (as defined below) or restriction of
any Governmental Authority, in respect of the conduct of its business or the
ownership of its properties which violation would reasonably be expected to have
a MAE and the Company or any of its subsidiaries have not received any notice of
any alleged breach thereof. The Company and each of its subsidiaries has all
(and is not in default under any) franchises, permits, licenses and any similar
authority necessary for the conduct of its business as now being conducted by it
or as may be presently proposed, the lack of which (or default under) could
reasonably be expected to have an MAE. Such authorizations are in full force and
effect in accordance with their terms, and there have been no violations thereof
and no proceedings are pending or, to the knowledge of the Company, threatened,
which could result in their revocation or limitation.
"Laws" means all applicable laws, by-laws, rules, regulations, orders,
directives, ordinances, protocols, codes, guidelines, policies, notices,
directions and judgments or other requirements of any Governmental Authority. In
connection with the representations set forth in this Section 2.17, the term
Laws shall exclude Environmental Laws (as defined below) which are covered by
Section 2.18.
2.18 Environmental and Safety Laws. The Company, each of its subsidiaries,
the operation of their respective businesses and any real property that the
Company or any of its subsidiaries owns or has owned, leases or has leased or
otherwise occupies or uses or has occupied or used (the "Premises") are, to the
best of the Company's knowledge after due inquiry,
-13-
in compliance with all applicable Environmental Laws (as defined below). Any
release by the Company or any of its subsidiaries of any hazardous substance
into the environment complied and complies with all Environmental Laws. The
Company has not received any citation, directive, letter or other communication,
written or oral, or any notice of any proceeding, claim or lawsuit, from any
Person arising out of the ownership or occupation of the Premises (including, to
the best of its knowledge, as may relate to any previous occupants), or the
conduct of its operations, and the Company is not aware of any basis therefor,
and no material expenditures are or will be required in order to comply with any
such Environmental Laws.
"Environmental Laws" means all Laws relating in full or in part to the
protection of the environment, product liability and employee and public health
and safety, and includes, without limitation, those Environmental Laws relating
to the storage, generation, use, handling, manufacture, processing, labeling,
advertising, sale, display, transportation, treatment, release and disposal of
hazardous substances.
2.19 Disclosure. The Company has provided each Investor with all the
information that such Investor has requested for deciding whether to purchase
the Preferred Shares and Notes. To the best of the Company's knowledge, neither
this Agreement (including all the exhibits and schedules hereto) nor any other
Transaction Documents nor any other certificates made or delivered in connection
herewith or therewith contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements herein or therein not
misleading in light of the circumstances under which they were made. The
financial projections of the Company and its subsidiaries provided to the
Investors were prepared by the Company in good faith based upon the Company's
and such subsidiaries' past experience in their respective businesses and the
Company believes that there is a reasonable basis for such projections.
2.20 Registration Rights. Except as provided in the Shareholders'
Agreement, [and that certain Management Investors Shareholders Agreement dated
as of April 5, 2002 between the Company and the Management Investors named
therein], the Company has not granted or agreed to grant any registration
rights, including piggyback rights, to any Person.
2.21 Corporate Documents; Minute Books. The Articles and By-laws of the
Company, including any and all amendments have been delivered or made available
to the Investors and such Articles and By-laws as so amended are in full force
and effect and no amendments are being made to the same. The minute books of the
Company and its subsidiaries contain a complete summary of all meetings of
directors and stockholders of the Company and each of its subsidiaries or
resolutions passed by the directors or shareholders thereof on consent since the
time of incorporation and reflect all transactions referred to in such minutes
accurately in all material aspects. The share certificate book, register of
shareholders, register of transfers and register of directors of the Company,
are complete and accurate.
2.22 Title to Property and Assets. The Company or its subsidiaries have
good title to or valid leasehold interests in all property and assets disclosed
in the Financial Statements as being owned or leased, as applicable, by the
Company and its subsidiaries. The property and assets the Company owns, and the
property and assets the Company's subsidiaries own, are owned by the Company or
such subsidiaries free and clear of all mortgages, liens, claims, loans
-14-
and encumbrances, except for (i) statutory liens for the payment of current
taxes that are not yet delinquent, (ii) liens, encumbrances and security
interests set forth in the Financial Statements or in the Schedule of Exceptions
and (iii) liens, encumbrances and security interests that arise in the ordinary
course of business and minor defects in title, none of which, individually or in
the aggregate, materially impair the Company's ownership or use of such property
or assets. With respect to the property and assets leased by the Company or any
of its subsidiaries, the Company or such subsidiary is in material compliance
with such leases and holds its leasehold interest free of any liens, claims or
encumbrances, subject to clauses (i), (ii) and (iii). All material facilities,
machinery, equipment, fixtures, vehicles and other properties owned, leased or
used by the Company or its subsidiaries are in good operating condition and
repair and are reasonably fit and usable for the purposes for which they are
being used.
2.23 Insurance. The Company has in force fire, casualty, product
liability and other insurance policies, with extended coverage, sufficient in
amount to allow it to replace any of its or its subsidiaries' material
properties or assets which might be damaged or destroyed or sufficient to cover
liabilities to which the Company or its subsidiaries may reasonably become
subject, and which types and amounts of other insurance with respect to the
business and properties, on both a per occurrence and an aggregate basis, are as
customarily carried by Persons engaged in the same or similar business as the
Company and its subsidiaries. No default or event has occurred that could give
rise to a default under any such policy.
2.24 Employee Benefit Plans.
(a) A complete list of all Pension/Benefit Plans (as defined) of the
Company and of its subsidiaries is set forth in the Schedule of Exceptions.
(b) Each Pension/Benefit Plan of the Company or of its subsidiaries
is, and has been, established, registered, qualified, administered and invested,
in compliance with the terms thereof and all applicable Laws and the Company has
not received, in the last three years, any notice from any Person questioning or
challenging such compliance.
(c) All obligations under the Pension/Benefit Plans (whether pursuant
to the terms thereof or applicable Law) have been satisfied, and there are no
outstanding defaults or violations thereunder by the Company or any of its
subsidiaries nor does the Company have any knowledge of any default or violation
by any other party to any Pension/Benefit Plan.
(d) All contributions or premiums required to be made under the terms
of any of Pension/Benefit Plans of the Company and its subsidiaries as of the
date of this Agreement have been timely made in accordance with the terms
thereof and all applicable Law, or, if not yet due, have been properly reflected
in the Financial Statements and no Taxes, penalties or fees are owing or
exigible under any Pension/Benefit Plan.
(e) No suit, administrative proceeding, action or other adverse
proceeding or claim has been brought or threatened against or with respect to
any Pension/Benefit Plan of the Company or of its subsidiaries (other than
routine benefits claims) and there is no pending audit or inquiry by any
Governmental Authority with respect to any Pension/Benefit Plan of the Company
or of any of its subsidiaries which if adversely determined could reasonably be
-15-
expected to have a MAE. No event has occurred and, to the knowledge of Company,
there exists no condition or set of circumstances that could subject the Company
or any subsidiary of the Company to any material liability (other than for
routine benefit liabilities) relating in any way to any Pension/Benefit Plan.
(f) There are no going concern unfunded actuarial liabilities, past
service unfunded liabilities or solvency deficiencies respecting any of the
Pension/Benefit Plans of the Company or any of its subsidiaries.
"Pension/Benefit Plans" means all plans, arrangements, agreements, programs,
policies or practices, whether oral or written, formal or informal, funded or
unfunded, to which the Company is a party to or bound by or under which the
Company has any liability or contingent liability, relating to (i) retirement
savings or pensions, including, without limitation, any defined benefit pension
plan, defined contribution pension plan, group registered retirement savings
plan, or supplemental pension or retirement plan, or (ii) any bonus, profit
sharing, deferred compensation, incentive compensation, hospitalization, health,
dental, disability, unemployment insurance, vacation pay, severance pay or other
benefit plan with respect to any of its employees or former employees,
individuals working on contract with it or other individuals providing services
to it of a kind normally provided to employees, and all statutory plans which
the Company is required to comply with, including, without limitation, the
Canada or Quebec Pension Plans and plans administered pursuant to applicable
provincial health tax, workers compensation and unemployment insurance
legislation.
2.25 Labor Agreements and Actions; Employee Compensation. Neither the
Company nor any of its subsidiaries is bound by or subject to (and none of their
assets or properties is bound by or subject to) any written or oral, express or
implied, collective bargaining agreement, contract, commitment or arrangement
with any labor union, and no labor union has requested or, to the best of the
Company's knowledge, has sought to represent any of the employees,
representatives or agents of the Company or any of its subsidiaries. There is no
strike or other labor dispute involving the Company or any of its subsidiaries
pending, or to the best of the Company's knowledge, threatened, that could have
a MAE on the assets, properties, financial condition, operating results, or
business of the Company or any of its subsidiaries (as presently conducted and
presently proposed to be conducted), nor is the Company aware of any labor
organization activity involving its employees. The Company is not aware that any
officer or key employee, or any group of key employees, intends to terminate
their employment with the Company or any of its subsidiaries, nor does the
Company have a present intention to terminate the employment of any of the
foregoing. Neither the Company nor any of its subsidiaries is party to a written
contract of employment entered into with any employees or any oral contracts of
employment which are not terminable on the giving of reasonable notice in
accordance with applicable Law. Except as set forth on the Schedule of
Exceptions, neither the Company nor any of its subsidiaries is a party to or
bound by any currently effective deferred compensation agreement, bonus plan,
incentive plan, profit sharing plan, retirement agreement, or other employee
compensation agreement. To the best of its knowledge, the Company has complied
in all material respects with all Laws relating to employees, including
employment standards, occupational health and safety, pay equity and employment
equity and neither the Company nor any of its subsidiaries has received any
notice alleging otherwise. There are no outstanding decision or settlements or
pending settlements under the employment standards legislation which
-16-
place any obligation upon the Company or any of its subsidiaries, to do or
refrain from doing any act. All current assessments under workplace safety and
insurance legislation in relation to the Company or any of its subsidiaries have
been paid or accrued and the Company or any of its subsidiaries have note been
subject to any special or penalty assessment under such legislation which has
not been paid.
2.26 Obligations of Management. Except as set forth on the Schedule of
Exceptions, each officer and key employee of the Company and each of its
subsidiaries is currently devoting substantially all of his or her business time
to the conduct of the business of the Company or such subsidiary. The Company is
not aware that any officer or key employee of the Company or any subsidiary is
planning to work less than full time at the Company or its subsidiaries in the
future. No officer or key employee of the Company or any subsidiary is currently
working or, to the Company's knowledge, plans to work for a competitive
enterprise, whether or not such officer or key employee is or will be
compensated by such enterprise, except that upon the consummation of the
transaction contemplated by the Investment Agreement referred to on Schedule C,
certain employees of the Company may become employees of or consultants to MJI.
2.27 Voting Agreements. Except as set forth on the Schedule of Exceptions,
or as provided in the Shareholders Agreement, the Company is not a party or
subject to any agreement or understanding, and, to the Company's knowledge,
there is no agreement or understanding between any Persons, that affects or
relates to the voting or giving of written consents with respect to any security
of the Company or by a director of the Company. Without limiting the foregoing,
except as set forth herein and in the Shareholders' Agreement, the Company has
no agreement, obligation or commitment with respect to the election of any
individual or individuals to the Board of Directors, and to the best of the
Company's knowledge, there is no voting agreement or other arrangement among its
stockholders with respect to the election of any individual or individuals to
the Board of Directors.
2.28 Acknowledgment Regarding Prime Investments SA Purchase of Preferred
Shares and Notes. The Company acknowledges and agrees that Prime Investments SA
("PI") is not acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to this Agreement or any of the other
Transaction Documents or the transactions contemplated hereby or thereby, the
relationship between the Company and PI is "arms-length" and any statement made
by PI or any of its representatives or agents in connection with this Agreement
and the other Transactions Documents and the transactions contemplated hereby
and thereby (other than the representations and warranties of PI herein and in
the other Transaction Documents) has not been relied upon by the Company, its
officers or directors in any way. The Company further acknowledges that the
Company's decision to enter into this Agreement and the other Transactions
Documents has been based solely on an independent evaluation by the Company and
its representatives.
2.29 No Integrated Offering. Neither the Company, nor any of its
Affiliates (as defined), nor any person acting on its or their behalf, has
directly or indirectly made any offers or sales of any security or solicited any
offers to buy any security under circumstances that would require registration
of the Preferred Shares or Notes being issued hereby under applicable securities
laws or cause this offering of Preferred Shares, Notes and Conversion Shares to
be integrated with any prior offering of securities of the Company for purposes
such securities laws.
-17-
2.30 No Brokers. The Company has taken no action which would give rise
to any claim by any Person for brokerage commissions, finder's fees or similar
payments by any Investor relating to this Agreement or the transactions
contemplated hereby.
2.31 Inventory. All inventory of the Company and its subsidiaries is
valued on the Company's consolidated books and records at the lower of cost and
net realizable value. Inventories of work-in-progress and the Company's
manufactured finished goods are valued at the lower of the average cost and net
realizable value. Average cost includes material, labour and overhead costs.
Except, to the extent of the Company's reserves for obsolete or unmerchantable
inventory reflected in the Company's Financial Statements, all such inventory,
after consideration of reserves consisting of finished goods is of merchantable
quality and is saleable in the ordinary course of business consistent with past
practice.
2.32 MJI and the Investment Agreement. The Company and its counsel have
participated in the drafting and negotiating of the Investment Agreement
referred to on Schedule C. The Company has completed its due diligence of MJI
and is satisfied with the results of such due diligence review. In the course of
the Company's negotiations with MJI nothing has come to the Company's attention
that would cause it to believe on the date hereof and on each Closing Date that
the representations and warranties of MJI set forth in the Investment Agreement
are true and correct in all material respects. As of each Closing Date, MJI
shall have performed, satisfied and complied in all material respects with all
agreements, obligations and conditions contained in the Investment Agreement
that are required to be performed, satisfied or complied with by MJI on or
before the Closing (as defined in the Investment Agreement).
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.
Each Investor hereby represents, warrants and covenants to the Company
that:
3.1 Authorization. Such Investor has full power and authority to enter
into this Agreement and the other Transaction Documents to which it is a party,
and each such agreement constitutes its valid and legally binding obligation,
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies. Such Investor is a corporation duly
incorporated and existing under the laws of the jurisdiction in which it is
incorporated.
3.2 Purchase Entirely for Own Account. Such Investor understands that
this Agreement is made with such Investor in reliance upon such Investor's
representation to the Company that the Preferred Shares, Notes and Conversion
Shares thereof (collectively the "Securities") will be acquired for investment
for such Investor's own account, not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof, and that such Investor has no
present intention of selling, granting any participation in or otherwise
distributing the same. Such Investor does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Securities.
-18-
3.3 No Conflict. The execution, delivery and performance by each Investor
of this Agreement and the other Transaction Documents to which such Investor is
a party do not and will not (a) violate, conflict with or result in the breach
of any provision of the organizational documents of the Investor, or (b)
conflict with or violate any Law or governmental order applicable to the
Investor or its assets, properties or business, or (c) in any material respect,
conflict with, result in any breach of, constitute a default or (event which
with the giving of notice or lapse of time, or both, would become a default)
under, require any consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation or cancellation of, or result in
the creation of any encumbrance or any property or asset of the Investor
pursuant to, any note, bond mortgage or indenture, contract, agreement, lease,
sublease, license, permit franchise or other instrument or arrangement to which
the Investor is a party or by which any of such assets or properties is bound or
affected.
3.4 Litigation. There are no material actions, suits or proceedings
pending before any Governmental Authority by or against the Investor (or by or
against the Investor or any affiliate thereof and relating to its business) or
affecting any of the Investor's assets pending before any Governmental Authority
(or, to the knowledge of the Investor, threatened to be brought by or before any
Governmental Authority) that would reasonably be expected to effect the
legality, validity or enforceability of this Agreement, any Transaction Document
or the consummation of the transactions contemplated by this Agreement or
thereby.
3.5 Legends. It is understood that the certificates evidencing the
Securities may bear one or more restrictive legends as may be required by the
Shareholders' Agreement or applicable legislation.
4. COVENANTS.
4.1 Best Efforts. The parties shall use their commercially reasonable
best efforts timely to satisfy each of the conditions described in Sections 5
and 6 of this Agreement.
4.2 Use of Proceeds. The Company shall use the proceeds from the sale of
the Preferred Shares and Notes as set forth on Schedule C.
4.3 Reservation of Shares. The Company shall at all times have
authorized and reserved for the purpose of issuance a sufficient number of
shares of Voting Common Stock to provide for the full conversion of the
outstanding Preferred Shares and outstanding Notes and issuance of the
Conversion Shares in connection therewith.
4.4 Legal Compliance. The Company shall conduct its business and the
business of its subsidiaries in compliance with all laws, ordinances or
regulations of governmental entities applicable to such businesses, except where
the failure to do so would not have a MAE.
4.5 Material Transactions. So long as the Investors shall hold any Notes
and Preferred Shares, the written consent of the Required Investors shall be
required for the Company or any of its subsidiaries to enter into any material
transaction with any Insider or any Affiliate of any Insider, other than
transactions in the ordinary course of the Company's or such subsidiaries
business on terms not less favorable to the Company than it could obtain in an
arms-length transaction. For purposes of this Agreement, the term "Required
Investors" means (i)
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for the period commencing the First Closing and ending on the fifth anniversary
of the First Closing, Investors holding Preferred Shares and Notes (determined
on an as converted basis) and (ii) at any time after the fifth anniversary of
the First Closing, (a) Investors owning sixty-seven percent (67%) of the
outstanding Preferred Shares and (b) Investors owning sixty-seven percent (67%)
of the outstanding Notes.
4.6 Ratable Treatment of Holders of Preferred Shares and Holders of
Notes. So long as the Preferred Shares are outstanding, the Corporation agrees
to deal ratably with the holders thereof in any and all matters, other than the
conversion thereof at the election of a holder of Preferred Shares. So long as
the Notes are outstanding, the Company agrees to deal ratably with the holders
thereof in all matters other than the conversion thereof at the election of the
holder of the Notes.
4.7 Transferability. Without the consent of the Corporation, which shall
not be unreasonably withheld, neither Investor will transfer its Preferred
Shares or Notes to any Person who is not directly or indirectly through one or
more intermediaries controlled by or under common control with the applicable
Investor.
5. CONDITIONS OF INVESTOR'S OBLIGATIONS AT CLOSING.
The obligations of each Investor under Section 1.1(b) of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions, the waiver of which shall not be effective against any Investor who
does not consent in writing thereto:
5.1 Representations and Warranties. The representations and warranties of
the Company contained in Section 2 shall be true and correct on and as of the
Closing with the same force and effect as though such representations and
warranties had been made on and as of the date of such Closing (except for
representations and warranties that speak as of a specific date, which
representations and warranties shall be true and correct as of such date).
5.2 Performance. The Company shall have performed, satisfied and complied
in all material respects, with all agreements, obligations and conditions
contained in this Agreement that are required to be performed, satisfied or
complied with by the Company on or before the Closing.
5.3 Compliance Certificate. The President of the Company shall deliver
to each Investor at the Closing a certificate stating that the conditions
specified in Sections 5.1, 5.2 and 5.13 have been fulfilled.
5.4 Qualifications; Consents. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of Canada or of any
province that are required in connection with the lawful issuance and sale of
the Notes and Preferred Shares pursuant to this Agreement and the Conversion
Shares upon conversion of the Notes and Preferred Shares shall be duly obtained
and effective as of the Closing. The Company shall also have obtained any and
all consents and waivers, if any, required for the consummation of the
transactions contemplated by this Agreement and the Transaction Documents.
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5.5 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the applicable Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to the Investors and the Investors' special counsel, and they shall
have received all such counterpart original and certified or other copies of
such documents as they may reasonably request.
5.6 Shareholders' Agreement, Security Agreement, Senior Lenders' Priority
Agreement, Pari Passu Creditors' Priority Agreement, Intercreditor Agreement,
Diamond Supply Agreement and Diamond Consignment Agreement. At the First Closing
(i) the Company and each Investor shall have executed and delivered the
Shareholders' Agreement, (ii) the Trustee and the Investors shall have executed
and delivered the Intercreditor Agreement, (iii) the Trustee and two creditors
of the Company shall have executed and delivered the Priority Agreement, (iv)
the Trustee and one creditor of the Company shall have executed and delivered
the Acknowledgement Agreement, (v) the Company and the Trustee shall have
executed and delivered the Security Agreement and (vi) [ ] and the Company shall
have executed and delivered the Diamond Supply Agreement and the Diamond
Consignment Agreement.
5.7 Filing of Articles of Amendment. The Articles of Amendment shall have
been filed with the Director appointed under the Canada Business Corporations
Act and shall be in full force and effect at the time of Closing.
5.8 Reservation of Conversion Shares. The Conversion Shares issuable upon
conversion of the Preferred Shares and Notes shall have been duly authorized
and reserved for issuance upon such conversion.
5.9 Secretary's Certificate. The Investors shall have received from the
Company's Secretary, a certificate having attached thereto (i) the Company's
Articles as in effect at the time of the Closing, (ii) the Company's Bylaws as
in effect at the time of Closing; (iii) resolutions approved by the Board of
Directors and the Company's stockholders, as necessary, authorizing the
transactions contemplated hereby, including without limitation the filing of the
Articles of Amendment, and (iv) good standing certificates with respect to the
Company from the applicable authorities in its state of formation.
5.10 Board of Directors. The Company and ▇▇▇▇▇ ▇▇▇▇▇ & Sons Holdings
Inc. shall have taken all necessary corporate action such that immediately
following the Closing, the authorized size of the Board of Directors of the
Company shall be ___ members and the Board shall consist of the following
directors: [_________].
5.11 Opinion of Company Counsel. Each Investor shall have received from
Stikeman Elliott, counsel for the Company, an opinion, dated as of the Closing,
in substantially the form attached as Exhibit J.
5.12 Acquisition Transaction. The Company shall have delivered to each
of the Investors true and correct copies of the transaction documents required
to consummate of the acquisition transaction described on Schedule C (the
"Acquisition Transaction") and the Company and the parties to the Acquisition
Transaction shall have executed and delivered all of the documents and
agreements required to consummate the Acquisition Transaction and
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complied with all of their obligations thereunder except for the payment of the
purchase price therefor. Immediately following the First Closing, the cash
portion of the purchase price described in the Acquisition Transaction shall be
paid and immediately following the Second Closing the note delivered in
connection with the Acquisition Transaction shall be paid in full.
5.13 No Material Adverse Change or Development. There shall have been no
material adverse changes and no material adverse developments in the business,
properties, operations, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole, since the date hereof,
and no information, of which the Investor is not currently aware, shall come to
the attention of the Investor that is materially adverse to the Company.
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING.
The obligations of the Company to each Investor under this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions by that Investor:
6.1 Representations and Warranties. The representations and warranties
of the Investors contained in Section 3 shall be true on and as of the Closing
with the same effect as though such representations and warranties had been made
on and as of the Closing.
6.2 Performance. The Investors shall have performed and complied with
all agreements and conditions herein required to be performed or complied with
by such Investors on or before the Closing, including the delivery of the
purchase price in accordance with Section 1.2(b) hereof.
6.3 Qualifications; Consents. All authorizations, approvals or permits,
if any, of any Governmental Authority that are required in connection with the
lawful issuance and sale of the Securities pursuant to this Agreement shall be
duly obtained and effective as of the Closing. The Company shall also have
obtained any and all consents and waivers, if any, required for the consummation
of the transactions contemplated by this Agreement and the Shareholders'
Agreement.
6.4 Shareholders' Agreement, Intercreditor Agreement, Senior Lenders'
Priority Agreement, Pari Passu Creditor's Priority Agreement, Security
Agreement, Diamond Supply Agreement and Diamond Consignment Agreement. At the
First Closing (i) the Company and each Investor shall have executed and
delivered the Shareholders' Agreement, (ii) the Trustee and the Investors shall
have executed and delivered the Intercreditor Agreement, (iii) the Trustee and
two creditors of the Company shall have executed and delivered the Priority
Agreement, (iv) the Trustee and one creditor of the Company shall have executed
and delivered the Acknowledgement Agreement, (v) the Company and the Trustee
shall have executed and delivered the Security Agreement and (vi) [ ] and the
Company shall have executed and delivered the Diamond Supply Agreement and the
Diamond Consignment Agreement.
6.5 Filing of Articles of Amendment. The Articles of Amendment shall have
been filed with the Director appointed under the Canada Business Corporations
Act and shall be in full force and effect at the time of Closing.
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7. MISCELLANEOUS.
7.1 Survival. The warranties, representations and pre-closing covenants
of the Company and Investors contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and the First and
Second Closings for a period of six months from the Second Closing and shall in
no way be affected by any investigation of the subject matter thereof made by or
on behalf of the Investors or the Company and the post-closing covenants of the
Company and the Investors contained in or made pursuant to this Agreement shall
survive the execution and delivery and the Closings.
7.2 Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
permitted transferees of any Securities). Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto or
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
7.3 Governing Law and Jurisdiction.
(a) This Agreement shall be governed by and construed under the laws
of the Province of Quebec and the federal laws of Canada, applicable therein.
(b) The Company and the Investors irrevocably consent to the
jurisdiction of the courts of the Province of Quebec in any suit or proceeding
based on or arising under this Agreement and irrevocably agree that all claims
in respect of such suit or proceeding may be heard and determined in such
courts. The Company and the Investors irrevocably waive the defense of an
inconvenient forum to the maintenance of such suit or proceeding. The Company
further agrees that service of process upon the Company mailed by first class
mail shall be deemed in every respect effective service of process upon the
Company in any such suit or proceeding. Nothing herein shall affect the right of
any Investor to serve process in any other manner permitted by Law. The Company
and the Investors agree that a final non-appealable judgment in any such suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.
7.4 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
7.5 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
address as set forth on the signature page hereof or at such other address as
such party may designate by ten (10) days advance written notice to the other
parties hereto.
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7.6 Finder's Fee. Each party represents that it neither is nor will be
obligated for any finder's fee or commission in connection with this
transaction. Each Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Investor or any of its officers, partners,
employees or representatives is responsible. The Company agrees to indemnify and
hold harmless each Investor from any liability for any commission or
compensation in the nature of a finder's fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Company or
any of its officers, employees or representatives is responsible.
7.7 Expenses. Irrespective of whether the Closing is effected, the
Company and each Investor shall pay all costs and expenses that such Person
incurs with respect to the negotiation, execution, delivery and performance of
this Agreement. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, or any other Transaction Document, or the
Articles of Amendment, the prevailing party shall be entitled to reasonable
attorney's fees, costs, and necessary disbursements in addition to any other
relief to which such party may be entitled.
7.8 Amendments and Waivers.
(a) Any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the Required Investors. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each holder of
any Securities purchased under this Agreement at the time outstanding (including
Conversion Shares), each future holder of all such securities and the Company.
(b) Each Investor acknowledges that by operation of Section 7.8(a)
above, the Required Investors will have the power to diminish or eliminate all
rights of such Investor under this Agreement.
7.9 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, shall impair any
such right, power or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of or in
any similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent or approval of any kind or character on
any party's part of any breach, default or noncompliance under this Agreement,
or any waiver on such party's part of any provisions or conditions of the
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to any party, shall be cumulative and
not alternative.
7.10 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable Law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
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7.11 Entire Agreement. This Agreement and the documents referred to
herein constitute the entire agreement among the parties, and no party shall be
liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein or therein.
7.12 Pronouns. All pronouns contained herein, and any variations thereof,
shall be deemed to refer to the masculine, feminine or neutral, singular or
plural, as to the identity of the parties hereto may require.
7.13 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement, once
executed by a party, may be delivered to the other parties hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement. In the event any signature is delivered by facsimile
transmission, the party using such means of delivery shall cause the manually
executed Execution Page(s) hereof to be physically delivered to the other party
within five (5) days of the execution hereof, provided that the failure to so
deliver any manually executed Execution Page shall not effect the validity or
enforceability of this Agreement.
7.14 Jury Trial. Each party to this Agreement hereby waives a trial by
jury in any legal action or proceeding relating to this Agreement.
7.15 Publicity and Confidentiality. From and after the date hereof, the
Company and each Investor agrees that it shall make no written or other public
disclosure or announcement regarding this transaction or regarding the parties
hereto to any Person without the prior written consent of the other parties,
provided that disclosures to Investor's capital investors, the professional
advisors and employees of each of the parties hereto and, with prior notice to
the applicable Investor, regulatory authorities or as otherwise required by law
shall be permitted. Neither the Company nor any Investor shall issue any press
release or generate other publicity concerning the transactions contemplated
hereby without the prior written consent of the other parties hereto. All
documents, materials and information ("Information") relating to the Company
provided to the Investors by the Company or its representatives, and all
Information relating to an Investor provided to the Company by such Investor,
are confidential and proprietary to the disclosing party, and each Investor
jointly and severally, the Company and their representatives, respectively, will
maintain the Information in strict confidence. Such confidential and proprietary
documents, material and information shall not however include documents,
materials or information that (a) is now and subsequently becomes generally
available to the public or such Investor, the Company or their respective
representatives, as the case may be, through no fault or breach on the part of
such Investor, the Company or their respective representatives, as the case may
be, (b) such Investor, the Company or their respective representatives, as the
case may be, can demonstrate to have had rightfully in its possession without a
confidentiality obligation prior to disclosure hereunder or (c) is independently
developed by such Investor, the Company or their respective representatives, as
the case may be, without the use of any confidential or proprietary documents,
materials or information of the Company, such Investor or their respective
representatives, as the case may be.
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7.16 Further Assurances. At and after Closing, the Company and each
Investor agree to take and do such further actions and things reasonably
required to consummate the purchase and sale of securities contemplated hereby.
7.17 Language. The parties have required that this Agreement and all
instruments relating hereto be in the English language; les parties ont exige
que la presente convention et tout autre document afferent aux presentes soient
en langue anglaise.
7.18 Termination. In the event that the First Closing shall not have
occurred on or before ________, 2002, unless the parties agree otherwise, this
Agreement shall terminate at the close of business on such date. Notwithstanding
any termination of this Agreement, any party not in breach of this Agreement
shall preserve all rights and remedies it may have against another party hereto
for a breach of this Agreement prior to or relating to the termination hereof.
7.19 Joint Participation in Drafting. Each party to this Agreement has
participated in the negotiation and drafting of this Agreement and the other
Transaction Documents to which it is a party. As such, the language used herein
and therein shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction will be applied
against any party to this Agreement.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
THE COMPANY:
▇▇▇▇▇ ▇▇▇▇▇ & SONS INC.
By:__________________________________
Name:________________________________
Its:___________________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President and Corporate Secretary
with copies to:
Stikeman Elliott
Suite 4000
▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
INVESTORS:
PRIME INVESTMENTS SA
By:__________________________________
Name:________________________________
Its:___________________________________
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Address: Saphir Building lst Floor
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ - Luxembourg
The postal address and telephone numbers are:
▇.▇. ▇▇▇ ▇▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Contact Person: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇▇▇▇
with copies to:
Wolf, Block, ▇▇▇▇▇▇ and ▇▇▇▇▇-▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇-▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇ & SONS HOLDINGS INC.
By:__________________________________
Name:________________________________
Its:___________________________________
Address: ______________________________
______________________________
with copies to:
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