AMENDED AND RESTATED UNANIMOUS
SHAREHOLDERS’ AGREEMENT made this 20 th day of September,
2005
BETWEEN:
Solar Roofing Systems
Inc. , a corporation
incorporated under the laws of the Province of Ontario (the “
Corporation ”)
-and-
Jim Chaney,
of the State of Arizona;
William Chislett,
of the Province of
Ontario;
Paul Cowley,
of the Province of
Ontario;
Norman Dodd,
of the Province of
Ontario;
Howard Gomes,
of the Province of
Ontario;
Lois Holmes,
of the Province of
Ontario;
Krino Kafato,
of the Province of
Ontario;
Robert Kafato,
of the Province of
Ontario;
Keith Knights,
of the Province of
Ontario;
Heshmat Laaly
, of the State of California;
and
Raymond Laaly,
of the Province of
Manitoba;
Stanley Levy,
of the State of Delaware;
Donald Rogers,
of the Province of
Ontario;
1594505 Ontario Inc.
, a corporation incorporated under
the laws of the Province of Ontario;
Barnabus Energy, Inc.
, a corporation incorporated under
the laws of the State of Nevada;
Jahangir Noorvash,
of the State of
California;
Sean Noorvash,
of the State of
California;
Bahram Raeen,
of the State of
California;
Craig Suarez,
of the State of Florida;
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Phil Kaszuba,
of the Province of
Ontario;
Craig Brown,
of the Province of
Ontario;
Allan Kling,
of the Province of
Ontario;
Margreg Ltd.
, a corporation incorporated under
the laws of the Province of Ontario;
- and-
such other Persons who shall from
time to time become a party to this Agreement in accordance with
the terms hereof.
WHEREAS the authorized capital of the Corporation
consists of an unlimited number of shares of one class designated
as common shares;
AND WHEREAS
on the date hereof there all of the
issued and outstanding common shares are legally and beneficially
owned by and recorded on the Corporation’s books as set out
in Schedule “A” hereto;
AND WHEREAS
the parties hereto desire to enter
into this shareholders agreement to provide for certain rights in
respect of the management of the Corporation, the acquisition of
any shares that may be issued by the Corporation, the sale or
transfer of any shares, and their rights and duties as shareholders
thereof;
NOW THEREFORE THIS AGREEMENT
WITNESSETH that in
consideration of the presents and the mutual covenants and
agreements herein contained the parties hereto agree as
follows:
ARTICLE 1
INTERPRETATION
In this agreement, the following
terms shall have the following meanings, respectively, unless the
context otherwise requires:
“ Act ” means the
Business Corporations Act (Ontario).
“ Affiliate ” has
the meaning ascribed to such term in the Act.
“ Agreement ”
means this agreement and all schedules attached to this agreement,
in each case as they may be supplemented or amended from time to
time and the expressions “ hereof, “
herein ”, “ hereto ”, “
hereunder ”, “ hereby ” and similar
expressions refer to this agreement, and “ Article
”, “ Section ” and “
Subsection ” mean and refer to the specified Article,
Section and Subsection of this agreement.
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“ Approved Incentive
Plan ” means any incentive stock plan or other form of
incentive compensation approved by the Board and Barnabus in
writing.
“ Arm’s Length
” has the meaning attributed to that term for the purposes of
the Income Tax Act (Canada).
“ Articles ”
means the Articles of Incorporation of the Corporation as may be
amended or restated from time to time.
“ Assumption Agreement
” means an agreement pursuant to which a party agrees to
become a party to and be bound by the terms of this Agreement in
form and substance satisfactory to the Corporation, acting
reasonably.
“ Barnabus ”
means Barnabus Energy, Inc. and any successor entity or permitted
assignee.
“ Board ” means
the board of directors of the Corporation.
“ Business ” has
the meaning ascribed thereto in Section 2.1.
“ Business Day ”
means any day, other than Saturday, Sunday or any statutory holiday
in the Province of Ontario.
“ Business Plan ”
means for any financial year, the business, financial, operations
and marketing plan for the Corporation and any Subsidiary over a 12
month or longer period of time as determined by the Board from time
to time, including the capital and operating budgets and a capital
expenditure plan indicating the nature and amount of capital
expenditures proposed to be incurred in such financial
year.
“ By-Laws ” means
the by-laws of the Corporation from time to time in force and
effect.
“ Control ”
unless otherwise specified herein shall have the meaning ascribed
thereto in the Act when the word “control” is used with
reference to a corporation, and shall mean actual power or
authority to manage and direct the affairs of, or ownership of more
than 50% of the transferable beneficial interests in, a
partnership, trust, syndicate or other entity when the word
“control” is used with reference to a partnership,
trust, syndicate or other entity. “Control Person”
means with respect to any entity other than an individual, the
individual who exercises Control over such entity, and
“Control Persons” means the combination of Persons
and/or other entities who together exercise Control over such
entity.
“ Corporation ”
means Solar Roofing Systems Inc. and shall include, for all
purposes (unless the context otherwise reasonably excludes), any
Subsidiaries of the Corporation, and, for greater certainty, a
covenant by the Corporation to do or not do something shall be
construed also as a covenant to cause its Subsidiaries to do that
thing or covenant or covenant not to permit its Subsidiaries to do
that thing, as the case may be.
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“ Event of Default
” means any Shareholder being in material breach of the terms
and conditions of this Agreement.
“ Fully Diluted Basis
” means at any time the sum of (x) the number of issued
and outstanding Shares at such time, whether or not vested, plus
(y) the total number of Shares, whether or not vested ,
issuable upon the exercise, exchange or conversion of all
securities exercisable, convertible or exchangeable into Shares
issued and outstanding at such time whether or not such Securities
are exercisable, convertible or exchangeable at such
time.
“ Permitted Transferee
” means, in respect of any Shareholder:
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(a)
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if the Shareholder is an individual,
a Corporation which is not a non-Canadian within the meaning of the
Investment Canada Act of which such Shareholder or the
spouse and/or issue of such are the controlling registered and
beneficial shareholders (as control is defined in the Income Tax
Act (Canada));
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(b)
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if the Shareholder is an individual,
a trust of which, such Shareholder or the spouse and/or issue of
such Shareholder are the sole beneficiaries, provided that such
trust is not a non-Canadian within the meaning of the Investment
Canada Act;
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(c)
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if the Shareholder is an individual,
the spouse or issue of that Shareholder provided such spouse or
issue, as the case may be, is then sui juris and not then a
non-Canadian within the meaning of the Income Tax Act
(Canada);
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(d)
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if the Shareholder is an individual,
where the context permits, upon the death of such Shareholder, his
or her legal personal representatives; or
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(e)
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if the Shareholder is a corporation,
any Person who is the controlling registered and beneficial
shareholder of such corporation or is an affiliate (as that term is
defined in the Act) of such beneficial shareholder, directly or
indirectly.
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Provided that in each case the
Permitted Transferree has agreed in writing to the terms and
conditions of this Agreement.
“Person”
or “Persons”
means an individual, partnership, corporation, trust,
unincorporated association, joint venture, governmental agency or
other entity.
“ Qualified Public
Offering ” means the Corporation’s first closing of
a public offering pursuant to an effective registration statement
under the United States Securities Act of 1933, as amended, or a
prospectus under the securities legislation of any province of
Canada, in either case covering the offering and sales of Shares
for the account of the Corporation where (i) the aggregate
gross net proceeds attributable to sales for the account of the
Corporation after deducting underwriters’ discounts and
commissions in such public offering equal or exceed 4 times the
price set forth in the Securities Purchase Agreement of even date
herewith,(ii) the valuation of the Corporation
represented
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by the price per share for which
Shares are sold in such public offering is not less than
$20,000,000; and (iii) after giving effect to which the Shares are
listed for trading on a securities exchange approved by
Barnabus.
“ Sale of the
Corporation ” means any of the following: (a) a merger or
consolidation of the Corporation into or with any other Person or
Persons, or a Transfer of issued and outstanding Shares in a single
transaction or a series of transactions, in which in any case the
Shareholders immediately prior to such merger, consolidation, sale,
exchange, conveyance or other disposition or first of such series
of transactions possess less than a majority of the voting power of
the Corporation’s or any successor entity’s issued and
outstanding securities immediately after such transaction or series
of such transactions ( provided that a Qualified Public
Offering shall not be a “Sale of the Corporation”); or
(b) a single transaction or series of transactions, pursuant to
which a Person or Persons acquire all or substantially all of the
Corporation’s assets determined on a consolidated basis;
provided that an exercise by the holder of the Warrant shall not be
deemed to be a Sale of the Corporation.
“ Share ” or
“ Shares ” means the common shares in the
capital of the Corporation and includes any shares which result
from a conversion, consolidation, subdivision, reclassification or
redesignation of such shares, any shares or securities which are
received in respect of the Shares as a stock dividend or
distribution payable in shares or securities of the Corporation and
any shares or securities which may be received in respect of the
Shares by the parties hereto or bound hereby as a result of an
amalgamation, merger, arrangement or other reorganization of or
including the Corporation.
“ Shareholder ”
means a party to this Agreement that is a holder of a Share or
Shares at the time the term is being applied, and any Person that
from time to time may agree to be bound by the terms of this
Agreement by executing an Assumption Agreement and that is a holder
of a Share or Shares at the time the term is being applied; and
“Shareholders” means any or all of those Persons each
of which is a Shareholder for purposes of this Agreement at the
time the term is being applied.
“ Special Majority
” means, at any time, the then holders of at least 80% of the
Shares then outstanding at any time, which approval must include
the affirmative vote of Barnabus, to be effective.
“ Subsidiary ”
means any corporation controlled, directly or indirectly, by the
Corporation.
“ Transfer ”
includes any sale, exchange, assignment, gift, bequest,
disposition, mortgage, charge, pledge, encumbrance, grant or
security interest or other arrangement or combination thereof by
which possession, legal title or beneficial ownership passes,
directly or indirectly, from one party or entity to another, or to
the same party or entity in a different capacity, whether or not
voluntary and whether or not for value, and any agreement to effect
any of the foregoing; and the words “ Transferred
”, “ Transferring ” and similar words have
corresponding meanings.
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“ Warrant ” means
the common share purchase warrant of even date herewith issued by
the Company to Barnabus, a copy of which is attached hereto as
Schedule B.
The Shareholders acknowledge and
agree that as of the date hereof conflicts may exist between this
Agreement and the Articles and By-laws. Except as expressly
otherwise provided herein, in the event of conflict between the
provisions of this Agreement and the Articles and By-laws or any
resolutions of the Board, or Shareholders, the provisions of this
Agreement shall govern and each of the Shareholders covenants and
agrees that it shall vote its Shares so as to cause the Articles,
By-laws and/or resolutions to be amended to resolve any conflict in
favour of this Agreement so that this Agreement shall at all times
prevail.
Time shall be strictly of the
essence of this Agreement.
All references to dollars in this
Agreement shall, unless otherwise provided, be to Canadian
dollars.
This Agreement shall be deemed to be
an agreement made in and shall be performed, construed and enforced
in accordance with the laws of the Province of Ontario and the
federal laws of Canada applicable therein.
The headings and marginal
descriptions of all Sections and parts of this Agreement are
inserted for convenience of reference only, and shall not affect
the construction or interpretation of this Agreement or of any part
thereof.
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1.7
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Accounting
Principles
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References in this Agreement to
generally accepted accounting principles shall be deemed to be
generally accepted accounting principles in Canada applicable as of
the date on which such calculation is made or required to be made
in accordance with such generally accepted accounting
principles.
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In construing this Agreement, words
in the singular shall include the plural and vice-versa and words
importing the neuter shall include the masculine and the feminine
and vice-versa, and words importing Persons or individuals shall
include corporations and vice-versa. Words such as
“hereunder”, “hereto”, “hereof, and
“herein”, and other words commencing with
“here” shall, unless the context clearly indicate to
the contrary, refer to the whole of this Agreement and not to any
particular Section or part thereof.
If any Section, Subsection or part
thereof of this Agreement or application of such provision to any
Person or circumstance, shall be held invalid or unenforceable, the
remainder of this Agreement, or the application of such provision
to Persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby.
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1.10
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Unanimous Shareholders
Agreement
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This is a unanimous shareholder
agreement within the meaning of the Act as presently in
force.
The following are the schedules
attached hereto which shall be deemed to be a part of this
Agreement and are incorporated herein by this reference:
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Schedule “A”
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Securities of the
Corporation
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Schedule “B”
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Warrant
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ARTICLE 2
THE CORPORATION
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2.1
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Business of the Corporation
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The business of the Corporation and
each Subsidiary shall consist of the business of manufacturing,
marketing and selling photo-voltaic roofing materials and matters
ancillary thereto and such other business as the Board of the
Corporation may from time to time determine (the
“Business”). The Business shall be carried on at all
times so as to implement to the fullest extent possible the annual
Business Plan from time to time.
- 8 -
2.2 Board of Directors of the
Corporation
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(a)
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Number and Representation of the
Corporation . The Board
shall initially consist of no more than 5 members who shall be
nominated and elected in accordance herewith. The Shareholders
hereby agree that each of them shall, to the extent the Shares held
by them entitle them to vote, vote their Shares at a meeting duly
called for such purpose or by an instrument in writing with the
like effect so as to cause the Board to consist of (i) the Chief
Executive Officer of the Corporation from time to time (initially,
Norman Dodd, but only, for greater certainty, for so long as he
continues to be either the Chief Executive Officer of the
Corporation or the holder of at least 10% of the issued and
outstanding Shares) and (ii) two duly qualified individuals
nominated by a majority of the Shareholders who shall initially be
Donald Rogers and Jim Chaney and (iii) one director nominated by
Barnabus, who shall initially be David Saltman (the “
Investor Director ”) and (iv) independent director who
shall be agreed to and nominated by the Board and Barnabus. The
Shareholders shall ensure that sufficient nominees as directors
shall be Canadian citizens so as to allow the Corporation to
maintain its status as a Canadian controlled private corporation
(as that term is defined in the Income Tax Act (Canada). A
sufficient number of nominees shall be resident Canadians for the
purposes of the residency requirements in the Act. The board of
directors of any Subsidiary shall consist of such directors as may
be determined by the Board. Any committee of the Board of Directors
shall include the Barnabus nominee as a member.
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(b)
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Entitlement to Vote
. Notwithstanding anything to the
contrary herein contained, if an Event of Default occurs with
respect to any Shareholder (the “ Defaulting
Shareholder ”), from and after the occurrence of such
Event of Default, the Defaulting Shareholder shall not be entitled
to vote its Shares or to notice of meetings of Shareholders and,
where a vote of the Shareholders is required, the other
Shareholders who are not Defaulting Shareholders shall be deemed to
own all of the Shares of the Corporation, provided that if such
Event of Default is subsequently remedied, such Defaulting
Shareholder shall again be entitled to vote its Shares and to
notice of meetings of Shareholders. In addition, the Defaulting
Shareholder hereby irrevocably gives its proxy to the Chief
Executive Officer of the Corporation (or failing him, any other
officer of the Corporation designated by it) to vote its Shares in
any matter that he shall determine and hereby appoints the Chief
Executive Officer of the Corporation (or failing him, any other
officer of the Corporation designated by it) as its attorney in
accordance with the Substitute Decisions Act (Ontario) to
execute all necessary documents on behalf of the Defaulting
Shareholder to give effect to such proxy.
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(c)
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Removal of Directors and Filling
of Vacancies on the Board . A majority of shareholders at a duly
constituted meeting of such Shareholders shall be entitled at any
time to require the removal of any director provided however that
Barnabus Director may only be removed with the approval of
Barnabus. If a director ceases to be a director for any reason, the
Shareholders shall fill the vacancy thereby created by appointing,
by a vote of the majority of the Shareholders, as soon as
reasonably possible, an individual to fill such position, subject
to Subsection 2.2 (a) above.
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(d)
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Quorum and Voting
. A quorum for a meeting of the
Board shall be a majority of the directors. The Board shall use its
best efforts to establish a schedule of meetings in advance so as
to meet the timetables of the members of the Board. Except as
otherwise herein provided, decisions of the Board shall be
effective only if approved by a majority of the votes cast at a
meeting of the Directors or by written resolution signed by all of
the Directors. For greater certainty, the chairman of the meeting
shall not be entitled to a second or deciding vote. No resolution
with respect to any matter may be put to any meeting of the Board
unless the notice of the meeting contains reasonable detail of the
matter or unless all of the Directors either are present and do not
object to the matter being put to the meeting or otherwise waive
the provisions of this Subsection.
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(e)
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Meetings of the Board
. The Board shall meet at least
every three months. Notice of meetings of the Board shall be given
not less than ten Business Days prior to the date scheduled for the
meeting, unless all the directors approve otherwise. Directors will
be reimbursed for their reasonable out-of-pocket costs incurred in
connection with attendance at meetings of each Board and any
committees thereof. Notwithstanding the provisions of
Subsection 2.2(d), if proper notice of a meeting of the Board,
specifying the business to be transacted at the meeting, is given
and a quorum of directors is not present, then a meeting of the
Board may thereafter be held on 48 hours written notice of the
second meeting to transact the business set forth in the original
notice and, subject to the provisions of applicable corporate law
and notwithstanding any other provisions of this Agreement, any
members of the Board present at that meeting shall constitute a
quorum for the transaction of the business set out in the original
notice in respect of that meeting and such business may be
transacted by majority vote of those Directors in attendance at the
meeting.
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(f)
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Remote Participation
. A director may participate in a
meeting of directors or of a committee of directors by means of
telephonic, electronic or other communication facility that permits
all participants to communicate adequately with each other during
the meeting. A director participating in a meeting by such means
shall be deemed to be in attendance at that meeting.
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(g)
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Investor
Representative. The
Corporation shall invite Barnabus to send a representative
designated by Barnabus to attend in a non-voting observer capacity
all meetings of the Board, and, in this respect shall give
Barnabus’ representative copies of all notices, minutes,
consents and other material that it provides to its directors;
provided , however , that the Corporation reserves
the right to exclude the Barnabus representative from access to any
material or meeting or portion thereof if the Corporation believes
upon advice of counsel that such exclusion is reasonably necessary
to preserve the attorney-client privilege, to protect highly
confidential proprietary information or for other similar reasons.
Barnabus’ representative may participate in discussions of
matters brought to the Board.
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(h)
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The Corporation will promptly notify
Barnabus in writing of the occurrence of any material default or
event of default or if any Person shall give any notice or take any
other significant action in respect of a claimed material default
or event of default under any material agreement to which the
Corporation is a party.
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The Chairman and the President and
other senior officers of the Corporation shall be those individuals
designated from time to time by the Board and shall report directly
to the Board. The Chairman of the Board shall initially be Norman
Dodd. The President shall initially be Donald Rogers. The Secretary
of the Corporation shall initially be Craig Brown. If at any time
an officer of the Corporation is unable for any reason to fulfil
his responsibilities to the Corporation, the Board may replace such
officer during the period of such inability.
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2.4
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Meetings of
Shareholders
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The quorum for the transaction of
business at any meeting of the Shareholders shall be two Persons
present in Person or by proxy holding over 50% of the Shares
entitled to vote at the meeting provided however where the vote of
Barnabus is required, then Barnabus must be present in person or
proxy for there to be a quorum. No meeting shall continue with the
transaction of business unless the foregoing provisions are
complied with. But for those matters requiring a Special Majority
as set out herein, all questions before the Shareholders shall be
decided by a majority of those voting. The chairman of the meeting
of the Shareholders will not have a second or deciding vote. If
proper notice of a meeting of the Shareholders is given and a
quorum of Shareholders is not present then a meeting of the
Shareholders may thereafter be held on 48 hours written notice of
the second meeting to transact the business set forth in the
original notice and, subject to the by-laws and applicable
corporate law any Shareholders present at that meeting shall
constitute a quorum for the transaction of the business set out in
the original notice in respect of that meeting and such business
may be transacted by a majority of voting Shares of Shareholders in
attendance at the meeting, with the exception of those matters
requiring a Special Majority as set out herein.
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Each of the Shareholders covenants
and agrees that he shall vote or cause to be voted the Shares owned
by him to accomplish and give effect to the terms and conditions of
this Agreement and act in all other respects in connection with the
corporate proceedings of the Corporation so as to ensure that the
provisions of this Agreement are complied with.
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2.6
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Covenants by the
Corporation
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The Corporation consents to the
terms of this Agreement and hereby covenants with each of the
Shareholders that it will at all times during the term of this
Agreement be governed by the terms and provisions hereof in
carrying on its business and affairs and shall duly comply with,
perform or otherwise satisfy all representations, warranties,
covenants and agreements contained in this Agreement on its part to
be complied with, performed or otherwise satisfied. Each of the
Shareholders shall vote or cause to be voted their respective
Shares to cause the Corporation to fulfil its foregoing
covenant.
Subject to applicable law, the
Corporation hereby agrees to indemnify each director and officer of
the Corporation and his heirs and legal representatives against all
costs, charges and expenses reasonably incurred by him, including
an amount paid to defend or settle an action or satisfy a judgment
in respect of any civil, criminal or administrative proceeding to
which he is made a party by reason of being or having been a
director or officer of the Corporation or any of its Subsidiaries,
whether before or after such director or officer ceased to be a
director or officer, provided that (i) he acted honestly and in
good faith with a view to the best interest of the Corporation; and
(ii) in the case of a criminal or administrative proceeding that is
enforced by a monetary penalty, he had reasonable grounds for
believing that his conduct was lawful. The Corporation shall
execute from time to time an indemnity agreement in favour of each
director and officer of the Corporation and his heirs and legal
representatives to give full effect to the foregoing. The
Corporation agrees that it shall obtain as soon as may be
practicable and maintain directors and officers’ liability
insurance , having due regard to the cost of such insurance and the
profitability of the Corporation.
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2.8
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Bank Accounts and Execution of
Documents
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The Corporation shall maintain bank
accounts at such bank or trust company as the Board shall from time
to time determine. All bank accounts shall be kept in the name of
the Corporation and all cheques, bills, notes, drafts, agreements
or other instruments shall require the signatures of two directors,
or such directors or officers of the Corporation or other persons
as the Board shall from time to time determine by way or written
resolution. Until otherwise determined by the Board all cheques,
bills, notes, drafts or other banking instruments (collectively,
the “ Instruments ”) shall require the
signatures of any two of the Chairman, the Chief Executive Officer,
the President, the Secretary or a vice president, or such other
individual that has been given such authority in writing by the
Board, (collectively, the “ Signing Officers ”).
(For clarity, a Signing Officer holding more than one
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of the above designated positions
may only provide one signature in relation to any cheques, bills,
notes, drafts, agreements or other instruments, and the signature
of another Signing Officer shall be required to meet the terms of
this provision.) Notwithstanding the foregoing, in exceptional
circumstances of need, an Instrument may be signed by any one of
the Signing Officers, provided that written notice of the fact of
and the reason for such exceptional signature shall be provided
within five (5) Business Days of the execution of such Instrument
to each of the other Signing Officers and such Signing Officers
each acknowledge in writing their receipt of such notice.
Notwithstanding anything to the contrary herein, no Signing Officer
may sign any cheque payable to him.
ARTICLE 3
SPECIAL APPROVALS AND FURTHER
FINANCING
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3.1
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Required Approvals by Holders of
Shares
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In addition to any vote or consent
which may be required by the Articles, any statute or other law to
the contrary, none of the following matters shall be undertaken or
effected by the Corporation, any Shareholders or any Subsidiary
without the written approval of a Special Majority, evidenced by a
resolution passed by such holders at a duly constituted meeting or
by an instrument or instruments in writing signed by a Special
Majority, and the Corporation covenants to obtain such approval
prior to completing any of the following:
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(a)
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the borrowing of any money or
guaranteeing any obligation on a secured or unsecured basis, other
than an operating line of credit in the ordinary course with a
Canadian chartered bank not to exceed $100,000 in principal
amount;
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(b)
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the issue, transfer, purchase or
redemption of any Shares, other securities, securities convertible
or exchangeable into Shares or the granting of options or other
rights to purchase, acquire or receive any such Shares or
securities, other than as expressly provided in this Agreement
(except for the issuance of the Warrant to Barnabus) or as set
forth in an Approved Incentive Plan, so long as the aggregate
options under such plan do not exceed options to purchase 1,504,065
Shares;
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(c)
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amend, modify or repeal the Articles
or By-laws, or make any change to the Business;
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(d)
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engage in any transaction outside
the normal course of business of the Corporation, including,
without limitation, acquiring or establishing any new business or
going concern or terminating any part of the Business;
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(e)
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the taking or institution of any
proceedings for the winding up, reorganization, liquidation or
dissolution of the Corporation or any of its affiliates (as that
term is defined in the Act) or the making of an assignment for the
benefit of any creditors of the Corporation or any of its
affiliates (as that term is defined in the Act) or the consenting
to the appointment of a receiver, receiver manager, monitor or
other Person acting in a similar capacity by any secured creditor
of the Corporation or of any of its affiliates (as that term is
defined in the Act);
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(f)
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the sale, lease, license, exchange
or other disposition of all or substantially all of the assets of
any Subsidiary or any sale, lease, license, exchange, abandonment,
or other disposition of any such assets out of the ordinary course
of business or any material assets, in each case, whether through a
sale, merger, recapitalization or other transaction or
device;
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(g)
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a Sale of the
Corporation;
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(h)
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the declaration, payment or setting
aside for payment of any dividend, the distribution of any surplus
or earnings, the return of any capital, the repayment or retirement
of any indebtedness of the Corporation to any shareholder thereof
or any Person not at Arm’s Length with the Corporation, or
any other payment or distribution of assets of the Corporation to
any shareholder or any Person not at Arm’s Length with the
Corporation; or
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(i)
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the payment of any advance, salary,
bonus, consulting fee, management fee, incentive compensation or
bonus or other payment to or the entering into of any transaction
or arrangement (whether by way of loan, financial assistance or
otherwise) with any director, former director, officer,
shareholder, employee or affiliate (as that term is defined in the
Act) (excluding the market value of goods sold or services provided
in the ordinary course of business) of the Corporation or any
Subsidiary or to any Person related by blood, adoption or marriage
to any of the foregoing or to any corporation not dealing at
Arm’s Length with any such Person or the creation of any
agreement which would obligate the Corporation or any Subsidiary to
make any such payment, except to the extent that such fees, bonuses
or other payments constitute normal remuneration payable to bona
fide employees of the Corporation or any Subsidiary and have been
specifically approved by the Board as part of the approval process
for the annual Business Plan; or
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(j)
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Authorize the Corporation to enter
into any transaction, including, without limitation, the purchase,
sale or exchange of property or assets or the rendering or
accepting or any service with or to any Affiliate of the
Corporation, or to amend any agreement between the Corporation and
such Affiliates, or waive any substantial right of the Corporation
thereunder; or
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(k)
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Engage or terminate the employment
of any senior management employee, or increase the compensation or
benefits of any senior management employee, except on terms
approved by the Board;
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(l)
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Authorize or effect, or permit any
Subsidiary to authorize or effect any of the following: (i) the
organization of any new or indirect subsidiaries, joint ventures,
partnerships or similar arrangements or the material amendment or
modification of any joint venture or partnership agreement to which
the Corporation or any Subsidiary is a party; or (ii) the
investment in any Person, including without limitation becoming a
general or limited partner of a partnership or a member of a
limited liability company; or
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(m)
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Increase the number, class or the
rights of the Shares reserved for issuance under the Approved
Incentive Plan.
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The decision to raise further debt
or equity funding for the Corporation shall be a decision of the
Board, subject to any approvals contemplated by Section 3.1 above.
No Shareholder shall be required to guarantee or otherwise secure
any borrowing of the Corporation. The Corporation shall exercise
its best efforts to satisfy or secure all requirements
for
