EXHIBIT (e)(2)
BLACKFRIARS CORP.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
February 19,2003
CONFIDENTIAL
Masco Corporation
▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Dear Sirs:
This Agreement sets out the terms and conditions of the agreement by
Masco Corporation (the "SELLER") to deposit 6,621,334 common shares (the "COMMON
SHARES") of Emco Limited (the "COMPANY") under the offer (the "OFFER") to be
made by a wholly-owned subsidiary (the "OFFEROR") of Blackfriars Corp.
("PARENT") pursuant to a support agreement (the "SUPPORT AGREEMENT") of even
date herewith between Parent, the Offeror and the Company.
ARTICLE 1 - THE OFFER AND ACCEPTANCE
1.1 Price and Terms. The Offeror agrees to make the Offer on the terms and
conditions provided in the Support Agreement.
1.2 Deposit of Common Shares. Subject to the terms and conditions hereof, Seller
agrees to deposit its Common Shares, together with a completed and executed
letter of transmittal, under the Offer as soon as practicable after the mailing
thereof and, in any event, within five business days of such mailing.
1.3 Non-Withdrawal. Seller irrevocably agrees not to withdraw or take any action
to withdraw any of its Common Shares deposited under the Offer, notwithstanding
any withdrawal rights it may have under the terms of the Offer or otherwise,
unless this Agreement is terminated in accordance with its terms prior to the
Offeror taking up and paying for Seller's Common Shares under the Offer.
1.4 Parent Guarantee. Parent guarantees that the Offeror will fulfill all
of its obligations under this Agreement in a timely manner.
1.5 Minority Approval Counting. Seller hereby confirms that it is not acting
jointly or in concert with Parent and its affiliates in respect of the Offer,
and that the entry into this Agreement was a condition imposed by Parent to
proceeding with the Offer. Seller consents to being treated, and confirms that
it will support its treatment, as part of the minority for the purposes of the
minority approval requirement under Rule 61-501 of the Ontario Securities
Commission (or equivalent provisions in other jurisdictions) in any regulatory
or court proceedings.
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES
2.1 Representation and Warranties of Seller. Seller hereby represents and
warrants that:
(a) it is a corporation duly incorporated and validly existing under
the laws of Delaware and has the requisite corporate power to enter
into this Agreement and to sell its Common Shares to the Offeror
pursuant to the Offer;
(b) the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized
by Seller;
(c) Seller has duly executed and delivered this Agreement and it
constitutes a valid and binding obligation of Seller enforceable
against Seller in accordance with its terms, subject to bankruptcy,
insolvency, reorganization and other laws of general application
limiting the enforcement of creditors' rights generally and to general
principles of equity;
(d) it is, and upon the deposit of its 6,621,334 Common Shares under the
Offer will be, the sole legal and beneficial owner of such Common
Shares free and clear of all mortgages, liens, pledges, security
interests, charges, encumbrances and any other rights of others, and
it has and will have the exclusive right to dispose of its Common
Shares as provided in this Agreement; and
(e) the 6,621,334 Common Shares to be acquired by the Offeror from Seller
pursuant to the Offer will be acquired with good and marketable title,
free and clear of all mortgages, liens, pledges, security interests,
charges, encumbrances and adverse claims and are all of the Common
Shares owned by the Seller.
2.2 Representations and Warranties of the Parent and Offeror. The Parent and
Offeror hereby represent and warrant, jointly and severally, that:
(a) the Offeror is a corporation duly incorporated and validly existing
under the laws of Ontario and has the requisite corporate power to
enter into this Agreement and to carry out its obligations hereunder;
(b) the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by both
Parent and the Offeror;
(c) Parent and the Offeror have duly executed and delivered this Agreement
and it constitutes a valid and binding obligation of both of them
enforceable against them in accordance with its terms, subject to
bankruptcy, insolvency, reorganization and other laws of general
application limiting the enforcement of creditors' rights generally
and to general principles of equity; and
(d) the Offeror has sufficient funds, or has made adequate and binding
arrangements to ensure that such funds are available, to make payment
in full for all Common Shares offered to be acquired pursuant to the
Offer.
2.3 Survival of Representations and Warranties. The representations and
warranties made by Seller and the Offeror herein shall survive for a period of
two years fiom the date hereof except the representations and warranties made by
the Seller in Sections 2.l(d) and (e) which shall survive indefinitely.
ARTICLE 3 - TERMINATION
3.1 Termination by Seller. Seller may, without prejudice to any other
rights, terminate its obligations under this Agreement by notice to the Offeror
if the Offer is not mailed by March 14, 2003 or the Offeror has not taken up and
paid for the Seller's Common Shares pursuant to the Offer by May 15, 2003.
3.2 Termination by the Offeror. The Offeror may, without prejudice to any other
rights, terminate its obligations under this Agreement by notice to Seller if
there is a material breach of this Agreement by Seller or if the Offeror is
entitled to terminate the Support Agreement in accordance with its terms.
3.3 Superior Proposal. If, during the term of this Agreement, a Superior
Proposal (as defined in the Support Agreement) is made, Parent and Offeror will
(i) notify Seller in writing prior to the expiry of the Superior Proposal that
it will waive any unsatisfied conditions in its transaction and irrevocably
commit to purchase Seller's Common Shares on the terms of the Offer or (ii) will
release Seller from this Agreement and return Seller's Common Shares to Seller
so as to permit Seller to tender those Common Shares into the Superior Proposal
48 hours prior to its expiry.
ARTICLE 4 - GENERAL
4.1 Disclosure. Unless required by applicable laws, rules or regulations
(including stock exchange rules and regulations), neither party shall make any
public announcement or statement with respect to this Agreement without prior
consultation with the other. Seller shall not issue any press release or other
public disclosure that describes Parent or Offeror without the consent of
Parent.
4.2 Expenses. Each of the Offeror and Seller will pay its own legal, financial
advisor and other costs and expenses incurred in connection with this Agreement
and the Offer.
4.3 Assignment. This Agreement shall not be assignable by either party without
the prior written consent of the other party, which consent will be within its
sole discretion.
4.4 Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements, arrangements and understandings with respect
thereto.
4.5 Time. Time shall be of the essence of ths Agreement.
4.6 Notices. All notices or other communications which are required or
permitted hereunder shall be communicated confidentially and in writing to
the addresses set out below or if sent by confidential facsimile to:
Blackfriars Corp., Attn: ▇▇▇ ▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇, and to Stikeman
Elliott LLP, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇, in respect of the
Offeror; and to (▇▇▇) ▇▇▇-▇▇▇▇, Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇, in respect of the
Seller.
4.7 Counterparts. This Agreement may be executed in one or more counterparts
which together shall be deemed to constitute one valid and binding agreement.
4.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
4.9 Cooperation. Seller agrees to cooperate with the Offeror in the following
respects in order to assist the Offeror to successfully complete the acquisition
of all of the outstanding Common Shares:
(a) to consent to the disclosure of the substance of this Agreement in the
Take-over Bid Circular (as defined in the Support Agreement) and the
filing of this Agreement as may be required pursuant to applicable
securities laws;
(b) to exercise its voting rights attached to its Common Shares to oppose
any proposed action (i) which might reasonably be regarded as being
directed towards reducing the likelihood of, or preventing or delaying
the successful completion of the Offer, or (ii) which could materially
change the business, assets, operations, capital, affairs, financial
conditions, licences, permits, rights or privileges of the Company and
its subsidiaries;
(c) not to take any action of any kind which may reduce the likelihood of
success of or delay the completion of the Offer and, promptly upon
request, to assist the Offeror by providing any information reasonably
required for the Offeror to secure regulatory approvals in respect of
the completion of the Offer; and
(d) to ensure that its representations and warranties in section 2.1 are
true and correct at all times during the period from the date of this
Agreement until the earlier of (i) the date the Offeror acquires the
Seller's Common Shares and (ii) the date this Agreement is terminated
in accordance with its terms.
Please confirm that the foregoing accurately reflects the agreement
between Seller and the Offeror by signing and returning the enclosed copy of
this letter to the undersigned.
2022841 ONTARIO INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------
Title: Director
----------------------
Yours truly,
BLACKFRIARS CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Treasurer & Assistant Secretary
---------------------------------
Agreed and confirmed this 19th day of February, 2003.
MASCO CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Title: Senior Vice President and General Counsel
----------------------------------------------