Exhibit 2.2
Execution Copy
LOCK-UP AGREEMENT
April 7, 2004
LOCK-UP AGREEMENT
STRICTLY CONFIDENTIAL
April 7, 2004
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WS Acquisition LLC
Lever House
390 Park Avenue
New York, NY
10022-4608
Attention: Greg S. Feldman
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Phoenix Life Insurance
Company
c/o Phoenix
Investment Partners
56 Prospect Street
Hartford, Connecticut
06115 USA
Attention: Paul C. Chute
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The Equitable Life Assurance Company
of the United States
1290 Avenue of the Americas
12 th Floor
New York, NY 10104
Attention: Lydia M. Pitts
-and-
James C. Pendergast
- and -
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The individuals listed in Schedule A
attached hereto
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Dear Sirs:
This letter agreement (the “
Agreement ”) sets out the terms and conditions upon
which Reebok International Ltd. (“ Reebok ”)
will make, or will cause a direct or indirect wholly-owned
subsidiary of Reebok to make, an offer in compliance with all
applicable law (the “ Offer ”), on substantially
the terms and conditions summarized in Schedule B
forming part of this Agreement, to purchase all of the issued and
outstanding common shares of The Hockey Company Holdings Inc. (the
“ Corporation ”), including common shares
issuable upon (i) the conversion or exchange, in accordance with
their terms, of all non-voting exchangeable common stock, par value
US$0.01 per share (the “ Exchangeable Shares ”),
of The Hockey Company, a subsidiary of the Corporation (“
THC ”), including Exchangeable Shares outstanding as
of the date hereof or issuable pursuant to the exercise of options,
warrants or other rights to acquire Exchangeable Shares; and (ii)
the exercise of stock options or other rights granted by the
Corporation to acquire common shares (collectively, the “
Common Shares ”). In this Agreement,
the “ Offeror ” means Reebok
and, if a wholly-owned subsidiary of Reebok makes the Offer, shall
include that subsidiary.
This Agreement also sets out the terms and
conditions of the agreement by each of WS Acquisition LLC, The
Equitable Life Assurance Company of the United States, Phoenix Life
Insurance Company and the individuals listed in Schedule A
attached hereto (the “ Selling Shareholders
”) to deposit irrevocably and unconditionally under the Offer
(i) all of the Common Shares issuable upon the conversion or
exchange of the Exchangeable Shares beneficially owned, directly or
indirectly, by each of them, including all Exchangeable Shares
issuable pursuant to the exercise of options, warrants or other
rights to acquire Exchangeable Shares, being in the aggregate
5,529,781 Exchangeable
Shares, and (ii) all Common Shares beneficially owned,
directly or indirectly, by each of them (the “ Selling
Shareholders’ Shares ”), and sets out the
obligations and commitments of the Selling Shareholders in
connection therewith. This Agreement is being entered into
concurrently with a support agreement (the “ Support
Agreement ”) among the Offeror and the Corporation in
connection with the Offer.
ARTICLE 1
THE OFFER
1.1
Timing
. The Offeror agrees to make the Offer for
all of the Common Shares as promptly as is reasonably practicable
after the date hereof, but in any event not later than
April 28, 2004, unless prior to April 28, 2004 an
Acquisition Proposal shall have been made and not rejected by the
board of directors of the Corporation (the “ Board of
Directors ”) (or if the Board of Directors shall not have
recommended rejection thereof to holders of Common Shares, as
applicable), in which event the Offeror may, but shall not be
obligated to, make the Offer.
1.2
Conditions
Precedent . Notwithstanding section 1.1, the
Offeror shall not be required to make the Offer (and the Offeror
may, without prejudice to any other rights, by notice to the
Selling Shareholders, terminate this Agreement) if:
(a)
prior to the making of the Offer,
(i) any act, action, suit or proceeding shall have been taken
before or by any domestic or foreign arbitrator, court or tribunal
or governmental agency or other regulatory authority or
administrative agency or commission or by any elected or appointed
public official or private person (including, without limitation,
any individual, corporation, firm, group or other entity) in Canada
or elsewhere, whether or not having the force of law, or (ii) any
law, regulation, rule, judgment, injunction or policy shall have
been proposed, enacted, promulgated or applied, in the case of (i)
or (ii) above, whether or not having the force of law:
(A)
to cease trade, enjoin, challenge,
prohibit or impose material limitations or conditions on the
purchase by or the sale to the Offeror of the Common Shares or the
right of the Offeror to own or exercise full rights of ownership of
the Common Shares or the ability of the Offeror from effectively
controlling or operating in
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any material respect the business or
operations of the Corporation, or
(B)
which has resulted in or, if the
Offer were consummated, would result in a Material Adverse Change
(as such term is defined in section 8.9 hereof);
(b)
at the time the Offeror proposes to
make the Offer, there exists any prohibition at law against the
Offeror making the Offer or the taking up and paying for the Common
Shares under the Offer (other than the absence of regulatory
approvals which are not required until the Offeror takes up and
pays for the Common Shares under the Offer);
(c)
except with the prior written
approval of Reebok subsequent to the date of this Agreement and
prior to the making of the Offer, either the Corporation or any of
its subsidiaries shall have authorized, or shall have entered into
any agreement, arrangement or understanding (written or oral,
conditional or otherwise) with respect to:
(i)
any take-over bid (other than the
Offer), merger, amalgamation, plan of arrangement, reorganization,
joint venture, strategic alliance or other business combination or
similar transaction involving the Corporation, its subsidiaries or
all or substantially all of the Corporation’s or its
subsidiaries’ assets;
(ii)
any acquisition or disposition of
any business, assets or securities in an amount in excess of (i)
US$100,000 with respect to any single transaction, or (ii) in an
aggregate amount in excess of US$200,000 ;
(iii)
any change in its capitalization
(including, but not limited to, any increase in the amount or
maturity of its consolidated borrowings) or any conversion of an
amount of short term borrowings into long term borrowings
, other than accessing, in the
ordinary course of business consistent with past practice, existing
credit facilities;
(iv)
making or committing to make capital
expenditures (i) in excess of US$100,000 with respect to any
single transaction, or (ii) outside of transactions described
in the Corporation’s budget attached at Schedule 4.2 of
the Support Agreement;
(v)
declaring or paying any dividend or
declaring, authorizing or making any distribution of, on or in
respect of any of its securities, whether payable in cash,
securities or otherwise or splitting, combining or reclassifying
any of its securities or issuing or authorizing the issuance of any
other securities (other than in
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connection with the exchange of the
Exchangeable Shares) in respect of, in lieu of or in substitution
for shares of its securities;
(vi)
any settlement, payment, release or
relinquishment not in the ordinary course of business consistent
with past practice of any material contractual rights, claims,
liabilities or obligations including, without limitation, any
material environmental or tax claims or litigation;
(vii)
the amendment of its articles or
by-laws or those of any of its subsidiaries;
(viii)
the issuance, purchase or other
acquisition of any shares of its capital stock of any class or
securities convertible into, or rights, warrants or options to
acquire, any such shares or other convertible securities, other
than pursuant to:
(A)
the exercise of stock options
currently outstanding, or
(B)
the conversion or exchange of
currently outstanding Exchangeable Shares into Common
Shares;
(ix)
agreeing or committing to the
incurrence or payment of, or the guarantee of payment of, any
indebtedness other than short-term indebtedness incurred or paid in
the ordinary course of business consistent with past practice and
other than in connection with the credit facilities referred to in
(iii) above, or the making of any loans or advances (other than
loans or advances to or from wholly-owned subsidiaries);
(x)
instituting, cancelling or modifying
in any material respect any pension plans or other employee benefit
arrangements, except to conform with applicable laws or regulations
or with collective labour agreements;
(xi)
unless a change is required under
Canadian generally accepted accounting principles or United States
generally accepted accounting principles, as applicable, and such
change is disclosed to the Offeror, making any change in the
accounting or tax practices, methods or principles followed by the
Corporation or any of its subsidiaries or making any tax elections
that would be material to the business and affairs of the
Corporation or any of its subsidiaries or amending any previously
filed returns;
(xii)
pledging or otherwise encumbering
any securities of the Corporation or any of its
subsidiaries;
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(xiii)
amending, defaulting under or
terminating any contracts, agreements, indentures or instruments to
which the Corporation or any of its subsidiaries is a party and
that are material to the Corporation and its subsidiaries, taken as
a whole (collectively, “ Material Agreements ”),
waiving, releasing or assigning any material right or claim, or
modifying or entering into any new Material Agreement;
or
(xiv)
granting to any senior officer of
the Corporation or any of its subsidiaries any increase in
compensation or severance or termination pay, or entering into or
amending any employment, severance or consulting agreement with any
senior officer of the Corporation or any subsidiary other than
(i) in the ordinary course of business consistent with past
practice, (ii) in connection with regularly scheduled annual
reviews of employees of the Corporation and its subsidiaries,
(iii) pursuant to a previously entered into binding written
agreement, or (iv) as approved by the Offeror in
writing;
(d)
there shall have occurred or arisen
a Material Adverse Change;
(e)
the Corporation or THC shall be in
breach of any material provision of the Support
Agreement;
(f)
the Corporation and its subsidiaries
(including THC) shall not have taken all steps reasonably requested
by the Offeror in connection with the Offer including, without
limitation, any steps required up to the Termination Date (as
defined in Schedule B to this Agreement) to satisfy regulatory
requirements in order for the Offeror to purchase the Common
Shares;
(g)
the Offeror shall not have obtained
all requisite regulatory approvals, consents or exemptions from the
Autorité des marchés financiers (Québec) and
the Ontario Securities Commission (the “ OSC ”)
in order for the Common Shares to be counted in calculating the
minority approval required by Policy Statement Q-27 of the
Autorité des marchés financiers (Québec) and
Rule 61-501 of the OSC in respect of any subsequent acquisition
transaction contemplated in the Offer or the Offeror shall not be
reasonably satisfied that such approvals, consents or exemptions
will be granted in due time prior to completion of the transactions
contemplated herein, including relevant rulings from the Canadian
securities regulatory authorities, if required, in respect of
collateral benefits;
(h)
any representation or warranty of
the Selling Shareholders in this Agreement or of the Corporation in
the Support Agreement that is qualified as to materiality shall not
be true and correct or any such representation and warranty that is
not so qualified shall not be true and correct in any material
respect, as of the date made and as of the date that the Offer is
required to be made pursuant to section 1.1; or
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(i)
each of the Selling Shareholders or
the Corporation shall not have performed in all material respects
any of such Selling Shareholder’s covenants or complied with
any of such Selling Shareholder’s agreements to be performed
and complied with by such Selling Shareholder under this Agreement
or by the Corporation and THC under the Support Agreement, as the
case may be.
The foregoing conditions are for the sole
benefit of the Offeror and may be waived by the Offeror in whole or
in part at any time and shall be deemed to have been waived by the
making of the Offer.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE SELLING SHAREHOLDERS
The Selling Shareholders hereby jointly but not
solidarily (unless otherwise specifically provided below) represent
and warrant to the Offeror (it being agreed that each Selling
Shareholder is making such representations and warranties as to
itself only and not as to other Selling Shareholders), and
acknowledge that the Offeror is relying upon such representations
and warranties in making the Offer, that:
2.1
Incorporation;
Authorization . With the exception of the persons listed
in Schedule A, each of the Selling Shareholders is a
corporation or legal entity duly incorporated or constituted, as
the case may be, and validly existing under the laws of its
jurisdiction of incorporation or formation. Each of the Selling
Shareholders has all necessary power, authority, capacity and right
and, where applicable, has received all requisite corporate or
other required approvals to enter into this Agreement and to
complete the transactions contemplated hereby and this Agreement
has been duly executed and delivered by such Selling Shareholder
and constitutes a legal, valid and binding agreement enforceable by
Reebok against such Selling Shareholder in accordance with its
terms subject, however, to limitations with respect to enforcement
imposed by law in connection with bankruptcy or similar
proceedings, the equitable power of the court to stay proceedings
before them and the execution of judgments and to the extent that
equitable remedies such as specific performance and injunction are
in the discretion of the court from which they are
sought.
2.2
Ownership of
Securities . Each of the Selling Shareholders is the
sole beneficial owner of the respective Exchangeable Shares and
other securities (within the meaning of the Securities Act
(Québec)) of the Corporation or any of its subsidiaries
indicated below and such respective Exchangeable Shares and other
securities constitute all of the Selling Shareholders’ Shares
beneficially owned, directly or indirectly, by each of the Selling
Shareholders:
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Selling Shareholder
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Number of
Exchangeable Shares
(including options
and warrants)
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Other Securities
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WS Acquisition LLC
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3,308,493
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(1)
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nil
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The Equitable Life Assurance Company
of the United States
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1,440,570
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nil
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Phoenix Life Insurance
Company
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570,718
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(2)
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nil
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Matthew H. O’Toole
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175,000
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(3)
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4,675 Common Shares
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Robert A. Desrosiers
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35,000
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(3)
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1,550 Common Shares
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(1) Includes 7,947 Exchangeable Shares owned by
Wellspring Capital Management LLC, an affiliate of WS Acquisition
LLC.
(2) Includes 159,127 warrants for Exchangeable
Shares.
(3)
Currently held as options for
Exchangeable Shares.
Subject to (i) making necessary filings with, or
giving required notification to, any governmental, administrative
or regulatory authority as provided in section 2.5 below, (ii)
the prior acceleration of vesting of all options held by the
Selling Shareholders, as the case may be, and (iii)
section 3.2 hereof, each of the Selling Shareholders has the
exclusive right to deposit the Selling Shareholders’ Shares
as provided in this Agreement, and no Selling Shareholder is a
party to, bound by or subject to any charter or by-law provision,
statute, regulation, judgment, order, decree, law or agreement
which would be violated, contravened, breached by, or under which
default would occur as a result of the execution and delivery of
this Agreement or the consummation of any of the transactions
provided for in this Agreement and for which a waiver has not been
received.
2.3
Good Title
. The Common Shares to be issued upon the
conversion or exchange of the Exchangeable Shares held by the
Selling Shareholders will be issued and deposited into the Offer,
in accordance with Article 5 hereof, with good title, free and
clear of any and all mortgages, liens, charges, restrictions,
security interests, adverse claims, pledges, encumbrances and
demands or rights of others of any nature or kind
whatsoever.
2.4
No Agreements
. No person, firm or corporation has any agreement
or option, or any right or privilege (whether by law, pre-emptive
or contractual) capable of becoming an agreement or option, for the
purchase, requisition or transfer from the Selling Shareholders of
any of the Selling Shareholder’s Shares or any interest
therein or right thereto, except pursuant to this Agreement and the
Amended and Restated Certificate of Incorporation of THC (including
Exhibit A thereto).
2.5
Consents
. Other than in connection with or in
compliance with the provisions, to the extent applicable, of the
Competition Act (Canada), the Hart-Scott-Rodino
Anti-Trust Improvements Act of 1976 (United States) and such
other equivalent legislation of the European Union and/or any of
its member countries or such other countries where the Corporation,
its subsidiaries or Reebok has operations or assets, no consent,
waiver, approval, authorization,
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exemption, registration, license or declaration
of or by, or filing with, or notification to any governmental,
administrative or regulatory authority is required to be made or
obtained by any Selling Shareholder in connection with (i) the
execution and delivery by such the Selling Shareholder and
enforcement against such Selling Shareholder of this Agreement or
(ii) the consummation of any transactions by such Selling
Shareholder provided for herein, except for the filing of press
releases and material change reports, insider reports or early
warning reports under applicable Canadian or U.S. securities
legislation.
2.6
No Untrue
Statements . None of the information which has been or will
be provided by the Selling Shareholders in writing to the Offeror
for inclusion in the take-over bid circular with respect to the
Offer contains or will contain any untrue statement of a material
fact or omits or will omit to state any material fact required to
be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not
misleading.
2.7
Adequate
Information . Each Selling Shareholder is a
sophisticated seller with respect to its Selling
Shareholder’s Shares and has adequate information concerning
the business and financial condition of the Corporation to make an
informed decision regarding the sale of such Selling
Shareholder’s Shares and has independently and without
reliance upon the Offeror and based on such information as such
Selling Shareholder has deemed appropriate, made its own analysis
and decision to enter into this Agreement. Each Selling
Shareholder acknowledges that the Offeror has not made and does not
make any representation or warranty, whether express or implied, of
any kind or character except as expressly set forth in this
Agreement. Each Selling Shareholder acknowledges that the
agreements contained herein with respect to such Selling
Shareholder’s Shares are irrevocable, and that such Selling
Shareholder shall have no recourse to such Selling
Shareholder’s Shares or other securities of the Corporation
or the Offeror, except with respect to breaches of representations,
warranties, covenants and agreements expressly set forth in this
Agreement.
2.8
No Amounts Payable to the
Selling Shareholders . Except as provided in section 8.12
hereof, there are no amounts due or payable by the Corporation or
any of its subsidiaries to any Selling Shareholder or any of its
affiliates or associates in connection with the transactions
contemplated by the Support Agreement or this Agreement or
otherwise.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE OFFEROR
3.1
Incorporation and
Qualification. The Offeror is a corporation duly
incorporated and is validly subsisting and in good standing under
the laws of its jurisdiction of incorporation. The Offeror is not
in default under or in violation of any provision of its articles
or by-laws.
3.2
Corporate
Authority. The Offeror has the corporate power
and authority and has received all necessary corporate approvals to
enter into this Agreement and to perform the transactions
contemplated herein. This Agreement has been duly authorized,
executed and delivered by the Offeror and constitutes a legal,
valid and binding obligation of the Offeror enforceable against it
in accordance with its terms subject, however, to limitations with
respect to
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enforcement imposed by law in connection with
bankruptcy or similar proceedings, the equitable power of the
courts to stay proceedings before them and the execution of
judgements and to the extent that equitable remedies such as
specific performance and injunction are in the discretion of the
court from which they are sought.
3.3
Consents
.
Other than in connection with or in
compliance with the provisions, to the extent applicable, of the
Investment Canada Act (Canada), the Competition Act
(Canada), the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (United States) and equivalent legislation of the European
Union and/or any of its member countries or such other countries
where the Offeror has operations or assets, no consent,
waiver, approval, authorization, exemption, registration, license
or declaration of or by, or filing with, or notification to any
governmental, administrative or regulatory authority is required to
be made or obtained by the Offeror in connection with (i) the
execution and delivery by the Offeror and enforcement
against it of this Agreement or (ii) the c
