SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 11)
HOSPOSABLE PRODUCTS, INC.
(Name of Issuer)
Common Stock, Par Value $.01
(Title of Class of Securities)
441069101
(CUSIP Number)
Donald C. MacMartin Kenneth E. Adelsberg
G. H. Wood + Wyant Inc. Winthrop, Stimson, Putnam
1475 32nd Avenue & Roberts
Lachine (Quebec) H8T3J1 New York, New York 10004
514-636-9926 212-858-1000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
October 9, 1996
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of Rule 13d-1(b)(3) or (4), check the following: |_|
Check the following box if a fee is being paid with this
Statement: |X|
Page 1
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SCHEDULE 13D
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CUSIP NO. 441069101 |
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- -----------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
G.H. Wood + Wyant Inc.
(formerly Wyant & Company Limited)
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
|-|
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
- --------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 937,690 shares of Common Stock
BENEFICIALLY -------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH PERSON 0
WITH -------------------------------------------
9. SOLE DISPOSITIVE POWER
937,690 shares of Common Stock
-------------------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
937,690 shares of Common Stock
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
|-|
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11)
55.4%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
Page 2
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SCHEDULE 13D
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CUSIP NO. 441069101 |
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- -----------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
James A. Wyant
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
|-|
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
- --------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 0 (See Items 4 and 5)
BENEFICIALLY ----------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH PERSON 0
WITH ----------------------------------
9. SOLE DISPOSITIVE POWER
WITH 0 (See Items 4 and 5)
----------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0 (See Items 4 and 5)
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
|X|
Reporting Person disclaims beneficial
ownership of any shares of Common Stock
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11)
0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
Page 3
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SCHEDULE 13D
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CUSIP NO. 441069101 |
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- -----------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John Derek Wyant, M.D.
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF; OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
|-|
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
- --------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 0 (See Items 4 and 5)
BENEFICIALLY ----------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH PERSON 0
WITH ----------------------------------
EACH PERSON 9. SOLE DISPOSITIVE POWER
WITH 0 (See Items 4 and 5)
----------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0 (See Items 4 and 5)
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
|X|
Reporting Person disclaims beneficial
ownership of any shares of Common Stock
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11)
0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
Page 4
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SCHEDULE 13D
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CUSIP NO. 441069101 |
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- -----------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lynne Emond
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF; OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
|-|
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
- --------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 0 (See Items 4 and 5)
BENEFICIALLY ----------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH PERSON 0
WITH ----------------------------------
EACH PERSON 9. SOLE DISPOSITIVE POWER
WITH 0 (See Items 4 and 5)
----------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0 (See Items 4 and 5)
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
|X|
Reporting Person disclaims beneficial
ownership of any shares of Common Stock
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11)
0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
Page 5
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SCHEDULE 13D
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CUSIP NO. 441069101 |
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- -----------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gerald W. Wyant
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF; OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
|-|
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
- --------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 0 (See Items 4 and 5)
BENEFICIALLY ----------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH PERSON 0
WITH ---------------------------------
EACH PERSON 9. SOLE DISPOSITIVE POWER
WITH 0 (See Items 4 and 5)
----------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0 (See Items 4 and 5)
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
|X|
Reporting Person disclaims beneficial
ownership of any shares of Common Stock
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11)
0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
Page 6
<PAGE>
SCHEDULE 13D
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CUSIP NO. 441069101 |
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- -----------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1186020 Ontario Limited
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF; OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
|-|
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
- --------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 0 (See Items 4 and 5)
BENEFICIALLY ----------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH PERSON 0
WITH ----------------------------------
EACH PERSON 9. SOLE DISPOSITIVE POWER
WITH 0 (See Items 4 and 5)
----------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0 (See Items 4 and 5)
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
|X|
Reporting Person disclaims beneficial
ownership of any shares of Common Stock
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11)
0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
Page 7
<PAGE>
SCHEDULE 13D
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CUSIP NO. 441069101 |
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- -----------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
3287858 Canada Inc.
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF; OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
|-|
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
- --------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 0 (See Items 4 and 5)
BENEFICIALLY ----------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH PERSON 0
WITH ---------------------------------
EACH PERSON 9. SOLE DISPOSITIVE POWER
WITH 0 (See Items 4 and 5)
----------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0 (See Items 4 and 5)
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
|X|
Reporting Person disclaims beneficial
ownership of any shares of Common Stock
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11)
0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
Page 8
<PAGE>
SCHEDULE 13D
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CUSIP NO. 441069101 |
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- -----------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
3271706 Canada Inc.
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF; OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
|-|
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
- --------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 0 (See Items 4 and 5)
BENEFICIALLY ----------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH PERSON 0
WITH ----------------------------------
EACH PERSON 9. SOLE DISPOSITIVE POWER
WITH 0 (See Items 4 and 5)
----------------------------------
10. SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0 (See Items 4 and 5)
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
|X|
Reporting Person disclaims beneficial
ownership of any shares of Common Stock
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11)
0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
Page 9
<PAGE>
AMENDMENT NO. 11
TO
SCHEDULE 13D
The Items identified below are amended. Capitalized terms used
herein which have not been defined shall have the meaning ascribed to them in
the initial filing of the Schedule 13D dated May 14, 1990.
Item 2. Identity and Background.
This statement is being filed on behalf of the following
corporations and individuals (the "Filing Parties"), which together may
constitute a group pursuant to Rule 13d-5 of the Securities Exchange Act of
1934, as amended (the "Act"):
A. G. H. Wood + Wyant Inc.
B. James A. Wyant.
C. John Derek Wyant, M.D.
D. Lynne Emond.
E. Gerald W. Wyant.
F. 1186020 Ontario Limited, a Canadian corporation
("Derekco"). Derekco is wholly owned by Derek Wyant, and its principal business
is to hold and preserve the Company's Common Stock for Derek Wyant. Derekco
maintains its business address at 202 Hinton Avenue, Thunder Bay North, Ontario
P7A 7E4.
G. 287858 Canada Inc., a Canadian corporation
("Lynneco"). Lynneco is wholly owned by Lynne Emond, and its principal business
is to hold and preserve the Company's Common Stock for Lynne Emond. Lynneco
maintains its principal address at 407 Morningside Crescent, Dollard des
Ormeaux, Quebec H9G 1J9.
H. 3271706 Canada Inc., a Canadian corporation
("Geraldco"). Geraldco is wholly owned by Gerald Wyant, and its principal
business is to hold and preserve the Company's Common Stock for Gerald Wyant.
Geraldco maintains its principal address at 1475 32nd Avenue, Lachine, Quebec
H8T 3J1.
During the last five years, none of the Filing Parties nor any
of their respective directors and officers has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or was a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of which proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or
Page 10
<PAGE>
or finding any violations with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
See Item 4 below.
Item 4. Purpose of Transaction.
On May 2, 1996, Derek Wyant, Lynne Emond, James Wyant and
Gerald Wyant entered into an agreement with G. H. Wood + Wyant Inc. ("Wyant")
(the "Wyant Agreement"), whereby the parties agreed that if Wyant sold its
assets to the Company, then Derek Wyant, Lynne Emond and Gerald Wyant would sell
to Wyant their respective shares of Wyant for the consideration, and in the
manner, set forth in the Wyant Agreement (the "Transaction"). Subsequent to the
execution of the Wyant Agreement, Derek Wyant, Lynne Emond and Gerald Wyant
transferred their respective shares of Wyant to their respective holding
companies, Derekco, Lynneco and Geraldco (collectively, the "Holding
Companies").
In connection with the Wyant Agreement, on October 9, 1996,
each of Derekco, Lynneco and Geraldco entered into a separate Memorandum of
Agreement with Wyant, each dated as of September 3, 1996 (collectively, the
"Agreements"), whereby Wyant agreed to sell to (i) Derekco 238,000 shares, (ii)
Lynneco 238,000 shares, and (iii) Geraldco 146,000 shares, of Common Stock of
the Company (collectively, the "Shares"), subject to certain provisions in the
Wyant Agreement and the Agreements. In consideration therefor, each of Derekco,
Lynneco and Geraldco delivered to Wyant a non-interest bearing promissory note
in the principal amount of $1,817,290 Cdn, $1,817,290 Cdn. and $1,114,808 Cdn,
respectively (collectively, the "Notes"), which Notes shall become payable on
demand following the occurrence of the Event.
The aforesaid discussion is a summary of only certain
provisions of the Notes, each of which is attached hereto as Exhibit B, C and D,
respectively, to this Amendment No. 11 to Schedule 13D. Such summary is
qualified in its entirety by reference to the Notes.
Pursuant to the terms and conditions of the Agreements, all of
the Shares will continue to be held by, and in the name of, Wyant, until the
occurrence of the Event (as defined in each of the Agreements). In substance,
the Event is defined to be the consummation of the Transaction in accordance
with the terms and conditions of the Wyant Agreement. Upon the occurrence of the
Event and subject to the satisfaction of the terms and conditions of Article 4
of the Agreements, the Shares will be released by Wyant to the Holding Companies
and the legal and beneficial interest in the Shares will be transferred
therewith.
Page 11
<PAGE>
The aforesaid discussion is a summary of only certain
provisions of the Agreements, each of which is attached hereto as Exhibit E, F
and G, respectively, to this Amendment No. 11 to Schedule 13D. Such summary is
qualified in its entirety by reference to the Agreements.
Under the terms of the Agreements, prior to the occurrence of
the Event, Wyant will be entitled to exercise all rights and powers to vote the
Shares. In furtherance thereof, on October 9, 1996, each of the Holding
Companies entered into a separate Memorandum of Agreement dated September 16,
1996 with Wyant (collectively, the "Voting Agreements"), whereby each of the
Holding Companies granted to Wyant an irrevocable proxy for purposes of voting
the Shares prior to the occurrence of the Event. In addition, on October 9,
1996, the Holding Companies entered into a Memorandum of Agreement dated
September 16, 1996 with Wyant (the "Proxy Interest"), which Proxy Interest
further effected the obligation of the Holding Companies to grant to Wyant an
irrevocable proxy pursuant to the terms of the Voting Agreements.
The aforesaid discussion is a summary of only certain
provisions of the Voting Agreements and the Proxy Interest, each of which is
attached hereto as Exhibit H, I, J and K, respectively, to this Amendment No. 11
to Schedule 13D. Such summary is qualified in its entirety by reference to the
Voting Agreements and the Proxy Interest.
Except as otherwise described herein, none of the Filing
Parties has present plans or proposals which relate to, or which would result
in, any changes specified in clauses (a) through (j) of Item 4 of Schedule 13D.
Each of the Filing Parties reserves the right to adopt, and to seek to
implement, any such plans or proposals that may seem appropriate in the future.
Except as otherwise described herein, each of the Filing Parties may, under
certain circumstances, also determine to sell its shares of Common Stock if any
such Filing Party deems it to be appropriate based on the conditions existing at
the time.
Item 5. Interest in Securities of the Issuer.
(a) After giving effect to the Agreements, Wyant owned a total
of 937,690 shares of Common Stock, which represented 55.4% of the then
outstanding shares of Common Stock of the Company. Pursuant to Rule 13d-4 of the
Act, each of the other Filing Parties disclaims beneficial ownership, as of the
date hereof, of any shares of Common Stock.
(b) Except as otherwise described herein, Wyant has the sole
power, and not the shared power, to vote or to direct the vote and to discuss or
direct the disposition of all 937,690 shares owned by Wyant. Subject to the
disclaimer as to beneficial ownership cited in Item 5(a) above, each of the
Page 12
<PAGE>
Filing Parties disclaims any voting power in any shares of Common Stock of the
Company.
(c) There have been no transactions in the Company's Common
Stock that were effected over the past 60 days, other than described in this
Amendment No. 11 to Schedule 13D.
(d) Except as otherwise disclosed herein, with respect to the
937,690 shares of Common Stock held by Wyant, no other person has the right to
receive or the power to direct receipt of dividends from, or the proceeds of the
sale of, such securities.
Item 7. Material to be Filed as Exhibits.
Exhibit A Joint Filing Agreement, dated October 9, 1996, by
and among G. H. Wood + Wyant Inc., John Derek
Wyant, M.D., Lynne Emond, Gerald Wyant, 1186020
Ontario Limited, 3287858 Canada Inc. and 3271706
Canada Inc.
Exhibit B Promissory Note from 1186020 Ontario Limited in
favor of G. H. Wood + Wyant Inc.
Exhibit C Promissory Note from 3287858 Canada Inc. in favor
of G. H. Wood + Wyant Inc.
Exhibit D Promissory Note from 3271706 Canada Inc. in favor
of G. H. Wood + Wyant Inc.
Exhibit E Memorandum of Agreement entered into at the City
of Montreal, Province of Quebec, on the 3rd day of
September, 1996, between 3287858 Canada Inc. and
G. H. Wood + Wyant Inc.
Exhibit F Memorandum of Agreement entered into at the City
of Montreal, Province of Quebec, on the 3rd day of
September, 1996, between 3271706 Canada Inc. and
G. H. Wood + Wyant Inc.
Exhibit G Memorandum of Agreement entered into at the City
of Montreal, Province of Quebec, on the 3rd day of
September, 1996, between 1186020 Ontario Limited
and G. H. Wood + Wyant Inc.
Exhibit H Memorandum of Agreement entered into at the City
of Montreal, Province of Quebec, on the 16th day
of September, 1996, between 3271706 Canada Inc.
and G. H. Wood + Wyant Inc.
Exhibit I Memorandum of Agreement entered into at the City
of Montreal, Province of Quebec, on the 16th day
of September, 1996, between 3287858 Canada Inc.
and G. H. Wood + Wyant Inc.
Page 13
<PAGE>
Exhibit J Memorandum of Agreement entered into at the City
of Montreal, Province of Quebec, on the 16th day
of September, 1996, between 1186020 Ontario
Limited and G. H. Wood + Wyant Inc.
Exhibit K Memorandum of Agreement entered into at the City
of Montreal, Province of Quebec, on the 16th day
of September, 1996, by and among G. H. Wood +
Wyant Inc., 1186020 Ontario Limited, 3287858
Canada Inc. and 3271706 Canada Inc.
Page 14
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
G. H. WOOD + WYANT INC.
DATED: October 9, 1996 By: /c/ Donald C. MacMartin
---------------------------
Donald C. MacMartin
President
/c/ James A. Wyant
------------------------------
James A. Wyant
/c/ John Derek Wyant, M.D.
------------------------------
John Derek Wyant, M.D.
/c/ Lynne Emond
------------------------------
Lynne Emond
/c/ Gerald W. Wyant
------------------------------
Gerald W. Wyant
1186020 ONTARIO LIMITED
By: /c/ John Derek Wyant,M.D.
------------------------------
John Derek Wyant, M.D.
President
3287858 CANADA INC.
By: /c/ Lynne Emond
------------------------------
Lynne Emond
President
3271706 CANADA INC.
By: /c/ Gerald Wyant
------------------------------
Gerald Wyant
President
Page 15
<PAGE>
EXHIBIT INDEX
Exhibit A Joint Filing Agreement, dated October 9, 1996, by
and among G. H. Wood + Wyant Inc., John Derek
Wyant, M.D., Lynne Emond, Gerald Wyant, 1186020
Ontario Limited, 3287858 Canada Inc. and 3271706
Canada Inc.
Exhibit B Promissory Note from 1186020 Ontario Limited in
favor of G. H. Wood + Wyant Inc.
Exhibit C Promissory Note from 3287858 Canada Inc. in favor
of G. H. Wood + Wyant Inc.
Exhibit D Promissory Note from 3271706 Canada Inc. in favor
of G. H. Wood + Wyant Inc.
Exhibit E Memorandum of Agreement entered into at the City
of Montreal, Province of Quebec, on the 3rd day of
September, 1996, between 3287858 Canada Inc. and
G. H. Wood + Wyant Inc.
Exhibit F Memorandum of Agreement entered into at the City
of Montreal, Province of Quebec, on the 3rd day of
September, 1996, between 3271706 Canada Inc. and
G. H. Wood + Wyant Inc.
Exhibit G Memorandum of Agreement entered into at the City
of Montreal, Province of Quebec, on the 3rd day of
September, 1996, between 1186020 Ontario Limited
and G. H. Wood + Wyant Inc.
Exhibit H Memorandum of Agreement entered into at the City
of Montreal, Province of Quebec, on the 16th day
of September, 1996, between 3271706 Canada Inc.
and G. H. Wood + Wyant Inc.
Exhibit I Memorandum of Agreement entered into at the City
of Montreal, Province of Quebec, on the 16th day
of September, 1996, between 3287858 Canada Inc.
and G. H. Wood + Wyant Inc.
Exhibit J Memorandum of Agreement entered into at the City
of Montreal, Province of Quebec, on the 16th day
of September, 1996, between 1186020 Ontario
Limited and G. H. Wood + Wyant Inc.
Exhibit K Memorandum of Agreement entered into at the City
of Montreal, Province of Quebec, on the 16th day
of September, 1996, by and among G. H. Wood +
Wyant Inc., 1186020 Ontario Limited, 3287858
Canada Inc. and 3271706 Canada Inc.
Page 16
<PAGE>
EXHIBIT A
JOINT FILING AGREEMENT
The undersigned, and each of them, do hereby agree and consent
to the filing of a single statement on Schedule 13D and amendments thereto, in
accordance with the provisions of Rule 13d-1(f)(1) of the Securities Exchange
Act of 1934.
G. H. WOOD + WYANT INC.
DATED: October 9, 1996 By: /c/ Donald C. MacMartin
----------------------------
Donald C. MacMartin
President
/c/ James A. Wyant
-----------------------------
James A. Wyant
/c/ John Derek Wyant, M.D.
------------------------------
John Derek Wyant, M.D.
/c/ Lynne Emond
------------------------------
Lynne Emond
/c/ Gerald W. Wyant
------------------------------
Gerald W. Wyant
1186020 ONTARIO LIMITED
By: /c/ John Derek Wyant,M.D.
------------------------------
John Derek Wyant, M.D.
President
3287858 CANADA INC.
By: /c/ Lynne Emond
------------------------------
Lynne Emond
President
3271706 CANADA INC.
By: /c/ Gerald Wyant
------------------------------
Gerald Wyant
President
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<PAGE>
EXHIBIT B
PROMISSORY NOTE
3287858 CANADA INC. does hereby promise to pay to or to the order of G.H. WOOD +
WYANT INC. the amount of One Million, Eight Hundred and Seventeen Thousand, Two
Hundred and Ninety Dollars ($1,817,290.00) bearing no interest or interest upon
interest until demand. The present promissory note shall become payable by the
undersigned on demand following the occurrence of the Event as defined in that
agreement of even date, entered into between the undersigned and G.H. Wood +
Wyant Inc.
Further, the undersigned specifically waives the necessity of presentment for
payment, notice or dishonour and protest for dishonour.
DATED this 3rd day of September, 1996.
3287858 CANADA INC.
Per:-------------------------------
Lynne Emond
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<PAGE>
EXHIBIT C
PROMISSORY NOTE
1186020 ONTARIO LIMITED, does hereby promise to pay to or to the order of G.H.
WOOD + WYANT INC. the amount of One Million, Eight Hundred and Seventeen
Thousand, Two Hundred and Ninety Dollars ($1,817,290.00) bearing no interest or
interest upon interest until demand. The present promissory note shall become
payable by the undersigned on demand following the occurrence of the Event as
defined in that agreement of even date, entered into between the undersigned and
G.H. Wood + Wyant Inc.
Further, the undersigned specifically waives the necessity of presentment for
payment, notice or dishonour and protest for dishonour.
DATED this 3rd day of September, 1996.
1186020 ONTARIO LIMITED
Per:--------------------------------
Dr. Derek Wyant
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<PAGE>
EXHIBIT D
PROMISSORY NOTE
3271706 CANADA INC. does hereby promise to pay to or to the order of G.H. WOOD +
WYANT INC. the amount of One Million, One Hundred Fourteen Thousand, Eight
Hundred and Eight Dollars ($1,114,808.00) bearing no interest or interest upon
interest until demand. The present promissory note shall become payable by the
undersigned on demand following the occurrence of the Event as defined in that
agreement of even date, entered into between the undersigned and G.H. Wood +
Wyant Inc.
Further, the undersigned specifically waives the necessity of presentment for
payment, notice or dishonour and protest for dishonour.
DATED this 3rd day of September, 1996.
3271706 CANADA INC.
Per:--------------------------------
Gerald Wyant
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<PAGE>
EXHIBIT E
MEMORANDUM OF AGREEMENT ENTERED INTO AT THE CITY OF
MONTREAL, PROVINCE OF QUEBEC, ON THE 3RD DAY OF
SEPTEMBER 1996.
- --------------------------------------------------------------------------------
BETWEEN: 3287858 CANADA INC., a body corporate
and politic duly incorporated according
to law, herein represented by Lynne
Emond, its representative duly
authorized as she so declares
(hereinafter referred to as "Lynneco")
ND: G.H. WOOD + WYANT INC., a body corporate
and politic duly incorporated according
to law, herein represented by Jim Wyant,
its representative duly authorized as he
so declares
(hereinafter referred to as the
"Company")
WHEREAS the shareholdings of the Company are as follows:
Lynne Emond: 100 Class B preferred shares;
Derek Wyant: 100 Class B preferred shares;
Jim Wyant: 100 common shares; and
Gerald Wyant: 100 Class A preferred shares;
WHEREAS Derek Wyant, Lynne Emond, Jim Wyant, Gerald Wyant and
the Company entered into an agreement (the "Agreement") dated May 2, 1996, a
copy of which is attached hereto as Schedule A, whereby the parties agreed that
if the Company sold its assets to Hosposable Products Inc. (hereinafter
"Hosposable"), a public company whose shares are traded on a recognized
exchange, or to a subsidiary thereof, other than its shares of Hosposable, Lynne
Emond, Derek Wyant and Gerald Wyant would sell to the Company their shares of
the Company for the consideration and in the manner set forth in the Agreement
(hereinafter the "Transaction");
WHEREAS the parties to the Agreement wish that the Transaction
be executed in the manner set forth in a step by step plan, a copy of which is
attached hereto as Schedule B, or in any other manner agreed to by the parties
to the Agreement (hereinafter the "Plan");
Page 21
<PAGE>
WHEREAS the Plan provides that, as a first step, the shares in
the Company held by Lynne Emond, Derek Wyant and Gerald Wyant would be
transferred to their respective holding companies;
WHEREAS the Agreement provides that as part of the
consideration for the sale of their shares in the capital stock of the Company
to the Company, Derek Wyant's holding company and Lynne Emond's holding company
namely Lynneco, would receive each 238,000 common shares of Hosposable and
Gerald Wyant's holding company would receive 146,000 common shares of
Hosposable, which shares are currently held by the Company;
WHEREAS the parties hereto wish that the 238,000 common shares
of Hosposable be transferred to Lynneco immediately instead of in the sequence
provided for in the Plan;
WHEREAS the parties hereto wish that in the event that the
Transaction is not completed to the satisfaction of the parties to the Agreement
and in accordance with the Agreement and the Plan, the sale contemplated herein
shall be retroactively resolved as if never entered into.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
ARTICLE 1
PREAMBLE
1.1 The preamble hereto shall form an integral part hereof
as if recited herein at length.
ARTICLE 2
SALE AND PURCHASE
2.1 The Company hereby sells, transfers and assigned unto Lynneco and Lynneco
hereby purchases from the Company, 238,000 common shares in the capital stock of
Hosposable (the "Hosposable Shares").
2.2 The sale contemplated herein is subject to the fulfillment of the conditions
set forth in the Agreement and in the Plan, and without limiting the generality
of the foregoing, the sale of the Hosposable Shares shall be subject to the
provisions of paragraph 4 of the Agreement and the granting of the security in
favor of Lynneco mentioned in paragraph 2(ii) of the Agreement.
ARTICLE 3
PURCHASE PRICE AND PAYMENT
3.1 The purchase price for the Hosposable Shares shall be the sum of $1,328,040
dollars $U.S. being $1,817,290 Canadian based on the exchange rate of 1.3684
being the Bank of Canada noon rate on August 30, 1996 payable to the Company by
the issuance of a non interest bearing promissory note (the "Promissory Note")
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<PAGE>
of Lynneco in the amount of $1,817,290 Cdn. It is hereby acknowledged that the
purchase price for the Hosposable shares was determined based on the weighted
average trading price of shares of Hosposable for the last thirty (30) trading
days ended August 30, 1996.
3.2 Upon the occurrence of the Event, as defined in Article 4.1, the Promissory
Note shall become payable by Lynneco on demand by the Company. For greater
certainty, the Promissory Note shall not be payable prior to the occurrence of
the Event.
ARTICLE 4
RESOLUTION OF SALE
4.1 The completion and closing of the Transaction in accordance with the
Agreement and the Plan shall, for purposes of this agreement, be referred to as
the "Event".
4.2 The parties hereto agree that in the event that the Event does not occur
prior to January 30, 1997, or by such later date as is agreed to by the parties
to the Agreement, the sale contemplated herein shall be resolved, in which case
the present agreement shall be retroactively resolved ab initio and shall be
deemed never to have existed and any prestations received by either of the
parties hereto shall be returned to the other.
ARTICLE 5
THE EVENT
5.1 Upon occurrence of the Event, the Company shall notify the transfer agent of
the Hosposable Shares to register the Hosposable Shares to Lynneco and to
deliver same to Lynneco.
ARTICLE 6
RIGHTS ATTACHING TO HOSPOSABLE SHARES
6.1 It is hereby acknowledged that until the occurrence of the Event, Wyant
shall act as prete-nom and nominee of Lynneco with respect to the Hosposable
Shares.
6.2 Subject to the following, Lynneco hereby grants to Wyant a proxy to vote the
Hosposable Shares. Prior to the occurrence of the Event, Wyant shall be
entitled, and hereby undertakes, to exercise all rights and powers to vote the
Hosposable Shares and to assent to or dissent from any corporate or shareholder
action of any kind whatsoever, whenever such vote, assent or dissent is required
or permitted by law or otherwise.
6.3 Prior to the occurrence of the Event, in the event that any dividends are
declared on the Hosposable Shares, such dividends shall be held in trust by
Wyant in an interest bearing account. In the event that the sale is resolved in
accordance with Article 4, the dividends and any interest thereon shall be
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<PAGE>
paid to the Company. In the event that the Event occurs, the
dividends and any interest thereon shall be paid to Lynneco.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
7.1 The Company hereby represents, warrants and guarantees to Lynneco the
following:
7.1.1 the Company is the beneficial owner of all of the Hosposable
Shares and the same are free and clear of all liens, charges, pledges
or other encumbrances of any kind, nature and description whatsoever
other than a moveable hypothec in favour of the Bank of Nova Scotia
which will be released immediately prior to the occurrence of the
Event;
7.1.2 no person, firm or corporation has any agreement, option or right
capable of becoming an agreement or option of the purchase for any of
the Hosposable Shares;
7.1.3 the Company has a full right, authority and capacity
to enter into this present agreement;
7.1.4 all requirements of applicable law permitting the sale of the
Hosposable Shares have been complied with or shall be complied with in
a timely manner.
ARTICLE 8
MISCELLANEOUS
8.1. Lynneco acknowledges that any subsequent sale or transfer of the Hosposable
Shares shall be subject to applicable securities law in addition to any other
conditions mentioned herein, in the Agreement and in the Plan.
8.2 All notices or other communications authorized or required to be given
pursuant to this Agreement shall be in writing and either delivered by hand,
sent by telecommunication or mailed by prepaid registered mail as follows:
8.2.1 in the case of the Company:
G.H. WOOD + WYANT INC.
1475 32nd Avenue
Lachine, Quebec H8T 3J1
Attention: Mr. Jim Wyant
8.2.2 in the case of Lynneco:
3287858 CANADA INC.
407 Morningside Crescent
D.D.O., Quebec H9G 1J9
Attention: Ms. Lynne Emond
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<PAGE>
With copy to:
MENDELSOHN ROSENTZVEIG SHACTER
1000 Sherbrooke West, 27th Floor
Montreal, Quebec H3A 3G4
Attention: Mr. Michael L. Garonce
8.3 Any notice or other communication shall conclusively be deemed to have been
given and received, if delivered, on the day on which it was delivered, if sent
by telecommunications, on the first business day following the day on which it
was dispatched, and if mailed, on the fifth business day following the day on
which it was mailed.
8.4 No party shall mail any notice or other communication when a threatened or
actual work stoppage exists at the post office form, or to, which the notice or
other communication is being sent, but shall use one of the other above referred
to means of communication.
8.5 Any party may change its address for receipt of notices or other
communications hereunder by giving notice thereof to the other party.
8.6 The representations and warranties contained herein shall survive the
execution of this present agreement and shall continue to remain in full force
and effect.
8.7 The provisions herein shall enure to the benefit of the successors and
assigned and shall be binding upon the heirs, executors, administrators and
legal personal representatives of the parties hereto.
8.8 This agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the province of Quebec.
8.9 The parties hereto have requested that these presents and all Court
proceedings thereto related be drafted in English. Que les parties aux presentes
ont requis que cette entente et toutes les procedures judiciaires y afferentes
soient redigees en anglais.
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<PAGE>
IN WITNESS WHEREOF the parties hereto have duly executed this agreement on the
date and at the place first hereinabove mentioned.
3287858 CANADA INC.
Per: Lynne Emond
-------------------------------
G.H. WOOD + WYANT INC.
Per: Jim Wyant
--------------------------------
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<PAGE>
SCHEDULE A
MEMORANDUM OF AGREEMENT ENTERED INTO AS OF THE 2ND DAY OF MAY, 1996
BY AND BETWEEN: DEREK WYANT, hereinafter referred to as
"Derek"
AND: LYNNE EMOND, hereinafter referred to as
"Lynne"
AND: JIM WYANT, hereinafter referred to as
"Jim"
AND: GERALD WYANT, hereinafter referred to as
"Gerald"
AND: G.H. WOOD + WYANT INC., herein
represented by Jim Wyant and hereinafter
referred to as the "Company"
WHEREAS Lynne and Derek each own 100 Class "B"
preferred shares of the Company;
WHEREAS Jim owns 100 common shares of the Company;
WHEREAS Gerald owns 100 Class "A" preferred shares of
the Company;
WHEREAS the Company is considering approaching Hosposable
Products, Inc. (hereinafter "Hosposable") about selling its assets or
transferring control of the Company to Hosposable in return for, inter alia,
shares exchangeable into Hosposable stock (hereinafter the "Hosposable
transaction") although the parties recognize that no decision has been made
until there are discussions with the Hosposable management and directors
regarding its strategic objectives, and there is no way to predict what the
terms or structure of any particular transaction with Hosposable might be;
WHEREAS if the Hosposable transaction proceeds, Derek, Lynne
and Gerald have agreed to exchange their existing stock in the Company for cash,
promissory notes or preferred shares of the Company and shares of Hosposable,
and the Company has agreed to acquire the stock of Derek, Lynne and Gerald, the
whole under the terms and conditions hereafter mentioned.
NOW, THEREFORE, THIS AGREEMENT WITNESSETH AS FOLLOWS:
1. The preamble shall form an integral part hereof.
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<PAGE>
2. It is agreed that if the Hosposable transaction is completed, then each of
Derek and Lynne will exchange, at the time of completion of the Hosposable
transaction ("Closing"), their shareholdings in the Company, and the Company
shall acquire such shareholdings, the whole for a consideration, payable to each
of Derek and Lynne, of the aggregate of the following:
i) $1 million cash, payable at the Closing;
ii) $1,750,000 worth of preferred shares or promissory
notes of the Company, or a combination of both,
which will bear an interest rate (or a dividend
rate) of a minimum of 4% per annum, payable
monthly, or such greater amount as is received by
the Company from Hosposable on the debt or
preferred shares the Company may received on the
Hosposable transaction. Such notes or preferred
shares totalling $1,750,000 to each of Lynne and
Derek will be repaid or redeemed over a maximum
period of ten years (i.e. one-tenth of the capital
per year) commencing on the first anniversary of
the Closing. However, should the Company receive
an earlier payment from Hosposable on its balance
of sale or preferred shares from the Hosposable
transaction, then the Company will accelerate the
payments to Derek and Lynne to match its cash
receipts from Hosposable. It is further agreed
that Derek and Lynne acting together can choose
whether or not they wish to hold preferred shares
or promissory notes, or a combination of both, of
the Company totalling $1,750,000 as long as the
total amount of interest or dividends paid is as
indicated above and that the rhythm of the payment
of capital is in accordance with the above. The
obligation to pay the dividend on the preferred
shares and/or the interest on the promissory notes
and the obligation to redeem the preferred shares
and/or repay the promissory notes, as
aforementioned, shall be secured by a first-
ranking charge on all of the assets and
undertakings of the Company and the assets of any
holding company used by Jim Wyant in structuring
the contemplated transactions. Accordingly, at
the option of either Derek or Lynne, the
transaction described in this paragraph 2 shall be
structured in a manner with the intent that such
security may be lawfully granted and may be
lawfully exercisable in circumstances of a
default; such structure may include, without
limitation, the interposition of one or more
subsidiaries of the Company, the acquisition of
shares by each of Derek and Lynne in the
applicable subsidiary, the obligation of the
Company to acquire such shares under certain
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<PAGE>
circumstances and the securitizing of such
obligation by a first-ranking charge on all of the
assets and undertakings of the Company. The
agreements to be executed at Closing shall provide
for appropriate and reasonable covenants, default
and acceleration clauses; and
iii) 238,000 shares of Hosposable plus one-twelfth of any
additional Hosposable shares (or shares exchangeable
into Hosposable stock) which may be received by the
Company or by Jim's holding company for value in
excess of the book value of the Company on the
Hosposable transaction (including any "earn-out
shares).
3. It is agreed that if the Hosposable transaction is
completed, then Gerald will exchange his shareholding in the
Company for the following:
i) $2.4 million cash; and
ii) 146,000 shares of Hosposable;
To the extent the Company has any amount in its capital dividend account, the
first $2.4 million in the capital divided account will be transferred to Gerald.
Any excess in the capital dividend account remaining shall be divided equally
amount Jim, Derek and Lynne. The parties recognize that this streaming of the
capital dividend account to Gerald may take place regardless of whether or not
there is a completion of the transactions contemplated herein.
4. The parties acknowledge that if the transactions described above proceeds,
each of Derek, Lynne, Gerald and the Company will hold Hosposable shares. Derek
and Lynne agree to transfer the voting rights attached to their Hosposable
shares to a voting trust which would give Jim voting rights over the said
Hosposable shares for a term not exceeding 15 years. On the sixth anniversary
date of the Closing, Lynne and Derek will each receive one-tenth of their shares
out of the voting trust and they will then be free to deal with these shares as
they see fit save and except that Jim will have a right of first refusal over
such shares. Similarly, every year thereafter (on the anniversary date of the
Closing) an additional 10% of the Hosposable shares will be released from the
voting trust to each of Lynne and Derek subject to the right of first refusal to
Jim contemplated herein. It is further agreed that Jim will have the power to
sell the shares in the voting trust as long as the said shares are sold on the
same terms and conditions as Jim sells Hosposable shares held by either him
(directly or indirectly) or the Company and provided further that such sale is
made at no less than fair market value and otherwise on commercially reasonable
terms. (This obligation on Jim shall also apply to any Hosposable shares he may
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<PAGE>
wish to sell.) It is agreed that any sale of Hosposable shares will be done on a
one-third, one-third, one-third basis as between Jim (and the Company), Derek
and Lynne until such time as there are no remaining shares of Derek and Lynne in
the voting trust. It is expressly acknowledged that Gerald will be free to sell
his shares of Hosposable as he sees fit and he will not be subject to the voting
trust hereunder. The rights granted to Jim under this paragraph 4 shall be
non-transferable and non-assignable. The voting trust and the rights granted to
Jim under this paragraph shall terminate in the event of default in the payments
contemplated at subsection 2(ii) above, with provision for a grace period and
reinstatement of the voting trust in the event the default is cured.
5. It is recognized by all of the parties hereto that the contemplated
transactions of Lynne, Derek and Gerald should be done on a tax-effective basis.
It is further acknowledged that the consent of Derek and Lynne to the proposed
transactions has been based on assurances to them that the contemplated
transactions can be structured by using holding companies and, at the corporate
level, should result in no immediate tax to either of them, either as the result
of the transaction described in paragraph 2 hereof (including the receipt of the
Hosposable shares and the shares exchangeable into Hosposable stock as mentioned
in subparagraph (iii) of said paragraph 2) or with respect to any dividends
received by such holding companies on the preferred shares respectively held by
them. Jim undertakes to engage tax counsel immediately after the signing of this
agreement which tax counsel is to determine the tax liability, if any, of Derek
and Lynne to the proposed transactions and shall render a written opinion
thereon. Such tax counsel will fully cooperate with any tax advisors appointed
by Derek or Lynne and will provide full details and explanations on any matters
requested by them. The opinions of such tax counsel shall be subject to the
review and concurrence of the tax advisors of Lynne and Derek as to the
conclusions reached and the opinions expressed. If it is then determined that
there is any tax liability to them, then Derek and Lynne will be entitled to
cancel the transactions contemplated herein or to reach some other mutually
satisfactory arrangement.
6. It is recognized that each of Derek and Lynne will require their own
professional advisers for the transactions contemplated herein and the Company
agrees to pay the reasonable fees and disbursements of such advisers based on
hourly rates, with no premium. Further, if all transactions contemplated herein
close, then an additional $10,000 shall be paid to B.D.O. Dunwoody in
recognition of previous services rendered to the Company and its shareholders.
7. The parties acknowledge that if the Hosposable transaction closes, it should
take place in November or December 1996 and that the transactions of Derek,
Lynne and Gerald are dependent on the Hosposable transaction closing. If both
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<PAGE>
the Hosposable transaction and the transactions involving Lynne and Derek's
shares do not close by January 31st, 1997 (or such later date as is mutually
acceptable to the parties hereto) for any reason other than the unjustifiable
refusal of Derek and Lynne to sign, then Derek and Lynne will have the right to
cancel this agreement with retroactive effect (save and except the possible
payment of the capital dividend account to Gerald as contemplated by paragraph 3
hereof). The closing of the transaction relating to the sale of the shares of
Derek and Lynne is further conditional upon the negotiation and execution of
agreements in order to give effect to the subject matter hereof, in form and
substance acceptable to the parties, acting reasonably and if the structure of
the Hosposable transaction conforms in essence to that contemplated herein.
8. This agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the Province of Quebec.
All dollar amounts herein are expressed in Canadian dollars.
9. The parties hereto have requested this agreement and all court proceedings
thereto related be drafted in English. Les parties aux presentes ont demande a
ce que ce contrat et toutes procedures y afferentes soient redigees en anglais.
10. The parties herein agree to keep the contents of this agreement strictly
confidential expect where disclosures are required in conformity with the
securities law of any jurisdiction.
11. It is acknowledged by the parties hereto that Gerald Wyant has recently
suffered a medical setback and may be unable to sign this agreement for the
foreseeable future. Notwithstanding his lack of signature to this agreement, it
shall be binding on Jim, Derek, Lynne and the Company.
12. (a) This agreement may be executed in a number of
counterparts, each of which shall be deemed an original
and all of which shall constitute one and the same
agreement;
(b) This agreement may not be amended expect by instrument
in writing signed by all of the parties hereto;
(c) Delivery of an executed copy of this agreement by way
of telecopier facsimile shall constitute valid delivery
thereof.
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<PAGE>
IN WITNESS WHEREOF the parties hereto have signed as of the
2nd day of May, 1996.
DEREK WYANT
----------------------------
LYNNE EMOND
----------------------------
JIM WYANT
----------------------------
GERALD WYANT
----------------------------
G.H. WOOD + WYANT INC.
Per:------------------------
JIM WYANT
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SCHEDULE B
REVISED PLAN - AUGUST 16, 1996
NOTE: ALL NUMBERS USED HEREIN ARE FOR PURPOSES OF EXAMPLE ONLY.
1. Estimated share of safe income as at May 23, 1996 =
Approx
Lynne $4,054,000
Derek $4,054,000
Jim $4,054,000
Gerry Over $5,000,000
2. Estimated FMV of 100 Class "B" shares owned by Lynne and Derek equals
$5,788,502 ($5,757,677 + [50% of $61,650]), (that is, $1,000,000 cash,
$1,750,000 note, $2,227,680 re Hosposable shares, $779,997 re exchangeable
shares of Hos-sub and [50% of $61,650]).
3. The tax attributes attaching to Gerry's 100 Class "A" shares
in Wyant are as follows:
ACB PUC FMV SAFE INCOME
$2,500,000 (+) $1,504,999 $3,399,000 $5,000,000 (+)
4. Current Structure
Lynne Derek Jim Gerry
100 "B" 100 "B" 100 Common 100 "A" 9% div.-
| | (1000 Votes) retraction price
| | | $33,990 per share
| | | FMV $3,399,000
| | | |
| | | |
| | | |
| | ----------- |
| -------- WYANT | |
------------------------ ----------------------
-----------
----------------
| HOSPOSABLE |
----------------
Step 1: Lynne and Derek will transfer their shares of Wyant to two holding
companies (herein LynneCo and DerekCo, respectively), the whole on a tax-free
basis pursuant to subsection 85(1) of the
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Income Tax Act (Canada) (the "Act"). As consideration therefor, LynneCo and
DerekCo will issue additional common shares to Lynne and Derek. Gerry will also
transfer his 100 Class "A" shares to GerryCo on a tax-free basis pursuant to
subsection 85(1) of the Act. As consideration therefor, Gerry will receive
additional shares of GerryCo.
Lynne Derek Gerry
| | |
--------- --------- ---------
|LynneCo| |DerekCo| |GerryCo|
--------- --------- ---------
| | |
| 100 | 100 | 100
| "B" | "B" Jim | "A"
| | | 100 |
| | ---------- Common |
| ----------- |
----------------- WYANT -----------------------
-----------
| 937,690 Shares
----------------
| HOSPOSABLE |
----------------
Step 2: Declaration of a dividend by Wyant to GerryCo in the amount of
$305,910.
Step 3: Purchase by GerryCo of 146,000 common shares of Hosposable for
$1,366,560 Cdn. in consideration of two notes in the aggregate amount of
$1,366,560 Cdn. (or $683,280 each) (herein "Note 1 and Note 2"). Purchase by
each of LynneCo and DerekCo of 238,000 common shares of Hosposable for
$2,227,680 Cdn. in consideration of a note issued by each of LynneCo and DerekCo
to Wyant in the amount of $2,227,680 Cdn. each (herein "Note 3 and Note 4",
respectively). The sales will be subject to a resolutory clause.
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<PAGE>
[Chart describing Step 3]
[GRAPHIC OMITTED]
Step 4: GerryCo will transfer its Class "A" shares of Wyant equally to each of
LynneCo and DerekCo pursuant to subsection 85(1) of the Act. Upon the transfer,
each of LynneCo and DerekCo will issue preferred shares to GerryCo (the "Class
"G" shares") retractable for $1,699,500.
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[Chart describing Step 4]
[GRAPHIC OMITTED]
Step 5: LynneCo and DerekCo will convert their 100 Class "B" shares and 50 Class
"A" shares in Wyant into 50 Class "X" shares and 50 Class "X1" shares,
respectively, (the Class "X" shares and Class "X1" shares) with the following
attributes:
a) non-voting;
b) redeemable for an amount equal to $14,976,004 (that is,
$3,399,000 + [2 x 5,757,677] + $61,650). This amount
is to be adjusted upwards or downwards by the increase
or decrease in the value of the 166,666 exchangeable
shares of Hos-sub which are notionally to be allocated
to Lynne and Derek;
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<PAGE>
c) the redemption value of the preferred shares will be reduced
by the value of dividends paid and PUC reductions effected on
same. We will have two classes of shares so that the directors
of Wyant can pay dividends on either Class "X" or Class "X1
shares.
The articles of Wyant will be amended to allow for the
issuance of two classes of the "X" and "X1" shares. The articles will only state
that the redemption price will be set by the directors and the shareholder. The
actual redemption value will be set by agreement.
It is arguable that the Class "X" share and Class "X1" shares
will then have the following tax attributes:
ACB PUC FMV SAFE INCOME
$2,500,000 (+) $1,504,999 $14,976,004 (+)(-) $5,000,000 (+)
[Chart describing Step 5]
[GRAPHIC OMITTED]
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<PAGE>
Step 6: Wyant will cause a decrease of the paid-up capital on the Class "X"
shares and Class "X1" shares and in an amount equal to $1,504,999. As well, a
dividend will be paid by Wyant on the Class "X" share and Class "X1" shares in
the amount of $11,911,011. The redemption value of the Class "X" shares and
Class "X1" shares will be reduced to $1,559,994 (as adjusted from time to time).
The amounts of $1,504,000 and $11,911,011 will be paid by two notes in the
aggregate amount of $13,416,010 (that is, $6,708,005 each).
Step 7: Wyant will sell all of its assets other than shares of Hosposable to
Hos-sub. As at December 31, 1995, the assets had an approximate FMV of
$30,590,000 (excluding Hosposable shares) and $20,775,099 of liabilities for a
net of $9,816,194. Assume $3,000,000 of profits after tax for the year. Thus,
can assume about $13,000,000 of other assets to transfer. Robert used
$13,6000,000 in his memo so we have used the same number here for purposes of
example only.
Upon the transfer of $33,600,000 of assets (excluding goodwill) Hos-sub
will:
(a) assume liabilities of $20,000,000;
(b) pay $5,000,000 in cash;
(c) issue 2,299,911 Class "B" shares redeemable for
$2,299,911;
(d) issue a note for $6,300,089.
Then the note will be converted into 6,300,089 preferred shares (the Class "A"
shares).
Wyant will also roll goodwill to Hos-Sub. In consideration therefor, Hos-sub
will issue $1,000,000 Class "E" shares to Wyant (the Class "E" shares). The
1,000,000 Class "E" shares held by Wyant in Hos-sub will be convertible into
common shares of Hosposable.
Query - any Part VI.1 tax on these dividends re 1,000,000
convertible shares (redeemable for approx. $10
each). Any Part IV tax.
NOTE:
1) The deal with Hosposable calls for 4% cum. shares redeemed
over 10 years. We would like to redeem the Class "A" shares
(tax paid) fir st and then redeem the Class "B" shares. On the
redemption of the Class "B" shares, capital gains tax will be
payable by the recipient.
Page 38
<PAGE>
2) Wyant will have no problem with dividends paid on the Class
"B" shares and the Class "A" shares with respect to Part VI.1
and Part IV.1 due to the application of subsection 191(5).
Wyant might have a subsection 55(2) problem in years 7 to 10.
3) To avoid an averaging re paid up capital, the Class "B" shares
will have a 3.999999% dividend entitlement and the Class "A"
shares will have a 4% entitlement.
4) Also check Part IV tax issues on final dividends paid,
i.e. 10% votes and value if not related.
Subsequent to the above, the shareholdings of Wyant will be as follows:
[Chart describing shareholdings of Wyant]
[GRAPHIC OMITTED]
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<PAGE>
Step 8: Wyant will pay the notes owing by LynneCo and DerekCo in the amount of
$6,708,005 as follows:
a) $2,047,045 in cash (that is $1,000,000 plus the
$1,047,045) to be paid to Gerry);
b) transfer of $1,750,000 Class "A" shares of Hos-sub with
a redemption value of $1,750,000;
c) release of the note receivable in the amount of
$2,227,680 (i.e. Note 3 or Note 4);
d) transfer of the note to be transferred to GerryCo in
the amount of $683,280, (Note 1 or Note 2).
Step 9: LynneCo and DerekCo will pay a dividend on the Class "G" shares owned by
GerryCo in the amount of $30,825 each. Gerry will have received total dividends
of $367,560. LynneCo and DerekCo will redeem the Class "G" shares owned by
GerryCo in their capital stock and will transfer to GerryCo $2,032,440 (i.e.
$1,016,220 each) and the note in the amount of $683,280 (i.e.
Note 1 and Note 2).
Accordingly, GerryCo will have $2,400,000 in cash and 146,000
common shares of Hosposable.
As well, LynneCo and DerekCo will each own:
a) $1,000,000 of cash;
b) $1,750,000 Class "A" shares of Hos-sub with a ACB, PUC
and FMV of $1,750,000;
c) 238,000 common shares of Hosposable with a cost base of
$9.36 each;
d) 50 Class "X" shares (or Class "X1" shares) of Wyant
which will be entitled to the net proceeds of the
83,333 exchangeable shares of Hos-sub.
Page 40
<PAGE>
The structure will be as follows:
[Chart describing Step 9]
[GRAPHIC OMITTED]
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<PAGE>
EXHIBIT F
MEMORANDUM OF AGREEMENT ENTERED INTO AT THE CITY OF
MONTREAL, PROVINCE OF QUEBEC, ON THE 3RD DAY OF
SEPTEMBER 1996.
- --------------------------------------------------------------------------------
BETWEEN: 3271706 CANADA INC., a body corporate
and politic duly incorporated according
to law, herein represented by Gerald
Wyant, its representative duly
authorized as he so declares
(hereinafter referred to as "Geraldco")
AND: G.H. WOOD + WYANT INC., a body corporate
and politic duly incorporated according
to law, herein represented by Jim Wyant,
its representative duly authorized as he
so declares
(hereinafter referred to as the
"Company")
----------------------------------------
WHEREAS the shareholdings of the Company are as follows:
Lynne Emond: 100 Class B preferred shares;
Derek Wyant: 100 Class B preferred shares;
Jim Wyant: 100 common shares; and
Gerald Wyant: 100 Class A preferred shares;
WHEREAS Derek Wyant, Lynne Emond, Jim Wyant, Gerald Wyant and
the Company entered into an agreement (the "Agreement") dated May 2, 1996, a
copy of which is attached hereto as Schedule A, whereby the parties agreed that
if the Company sold its assets to Hosposable Products Inc. (hereinafter
"Hosposable"), a public company whose shares are traded on a recognized
exchange, or to a subsidiary thereof, other than its shares of Hosposable, Lynne
Emond, Derek Wyant and Gerald Wyant would sell to the Company their shares of
the Company for the consideration and in the manner set forth in the Agreement
(hereinafter the "Transaction");
WHEREAS the parties to the Agreement wish that the Transaction
be executed in the manner set forth in a step by step plan, a copy of which is
attached hereto as Schedule B, or in any other manner agreed to by the parties
to the Agreement (hereinafter the "Plan");
Page 42
<PAGE>
WHEREAS the Plan provides that, as a first step, the shares in
the Company held by Lynne Emond, Derek Wyant and Gerald Wyant would be
transferred to their respective holding companies;
WHEREAS the Agreement provides that as part of the
consideration for the sale of their shares in the capital stock of the Company
to the Company, Derek Wyant's holding company and Lynne Emond's holding company
would receive each 238,000 common shares of Hosposable and Gerald Wyant's
holding company, namely Geraldco would receive 146,000 common shares of
Hosposable, which shares are currently held by the Company;
WHEREAS the parties hereto wish that the 146,000 common shares
of Hosposable be transferred to Geraldco immediately instead of in the sequence
provided for in the Plan;
WHEREAS the parties hereto wish that in the event that the
Transaction is not completed to the satisfaction of the parties to the Agreement
and in accordance with the Agreement and the Plan, the sale contemplated herein
shall be retroactively resolved as if never entered into.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
ARTICLE 1
PREAMBLE
1.1 The preamble hereto shall form an integral part hereof
as if recited herein at length.
ARTICLE 2
SALE AND PURCHASE
2.1 The Company hereby sells, transfers and assigned unto Geraldco and Geraldco
hereby purchases from the Company, 146,000 common shares in the capital stock of
Hosposable (the "Hosposable Shares").
2.2 The sale contemplated herein is subject to the fulfillment of the conditions
set forth in the Agreement and in the Plan, and without limiting the generality
of the foregoing, the sale of the Hosposable Shares shall be subject to the
provisions of paragraph 4 of the Agreement and the granting of the security in
favor of Geraldco mentioned in paragraph 2(ii) of the Agreement.
ARTICLE 3
PURCHASE PRICE AND PAYMENT
3.1 The purchase price for the Hosposable Shares shall be the sum of $814,680
dollars $U.S. being $1,114,808 Canadian based on the exchange rate of 1.3684
being the Bank of Canada noon rate on August 30, 1996 payable to the Company by
the issuance of a non interest bearing promissory note (the "Promissory Note")
Page 43
<PAGE>
of Geraldco in the amount of $1,114,808 Cdn. It is hereby acknowledged that the
purchase price for the Hosposable shares was determined based on the weighted
average trading price of shares of Hosposable for the last thirty (30) trading
days ended August 30, 1996.
3.2 Upon the occurrence of the Event, as defined in Article 4.1, the Promissory
Note shall become payable by Geraldco on demand by the Company. For greater
certainty, the Promissory Note shall not be payable prior to the occurrence of
the Event.
ARTICLE 4
RESOLUTION OF SALE
4.1 The completion and closing of the Transaction in accordance with the
Agreement and the Plan shall, for purposes of this agreement, be referred to as
the "Event".
4.2 The parties hereto agree that in the event that the Event does not occur
prior to January 30, 1997, or by such later date as is agreed to by the parties
to the Agreement, the sale contemplated herein shall be resolved, in which case
the present agreement shall be retroactively resolved ab initio and shall be
deemed never to have existed and any prestations received by either of the
parties hereto shall be returned to the other.
ARTICLE 5
THE EVENT
5.1 Upon occurrence of the Event, the Company shall notify the transfer agent of
the Hosposable Shares to register the Hosposable Shares to Geraldco and to
deliver same to Geraldco.
ARTICLE 6
RIGHTS ATTACHING TO HOSPOSABLE SHARES
6.1 It is hereby acknowledged that until the occurrence of the Event, Wyant
shall act as prete-nom and nominee of Geraldco with respect to the Hosposable
Shares.
6.2 Subject to the following, Geraldco hereby grants to Wyant a proxy to vote
the Hosposable Shares. Prior to the occurrence of the Event, Wyant shall be
entitled, and hereby undertakes, to exercise all rights and powers to vote the
Hosposable Shares and to assent to or dissent from any corporate or shareholder
action of any kind whatsoever, whenever such vote, assent or dissent is required
or permitted by law or otherwise.
6.3 Prior to the occurrence of the Event, in the event that any dividends are
declared on the Hosposable Shares, such dividends shall be held in trust by
Wyant in an interest bearing account. In the event that the sale is resolved in
accordance with Article 4, the dividends and any interest thereon shall be
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<PAGE>
paid to the Company. In the event that the Event occurs, the dividends and any
interest thereon shall be paid to Geraldco.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
7.1 The Company hereby represents, warrants and guarantees to Geraldco the
following:
7.1.1 the Company is the beneficial owner of all of the Hosposable
Shares and the same are free and clear of all liens, charges, pledges
or other encumbrances of any kind, nature and description whatsoever
other than a moveable hypothec in favour of the Bank of Nova Scotia
which will be released immediately prior to the occurrence of the
Event;
7.1.2 no person, firm or corporation has any agreement, option or right
capable of becoming an agreement or option of the purchase for any of
the Hosposable Shares;
7.1.3 the Company has a full right, authority and capacity
to enter into this present agreement;
7.1.4 all requirements of applicable law permitting the sale of the
Hosposable Shares have been complied with or shall be complied with in
a timely manner.
ARTICLE 8
MISCELLANEOUS
8.1. Geraldco acknowledges that any subsequent sale or transfer of the
Hosposable Shares shall be subject to applicable securities law in addition to
any other conditions mentioned herein, in the Agreement and in the Plan.
8.2 All notices or other communications authorized or required to be given
pursuant to this Agreement shall be in writing and either delivered by hand,
sent by telecommunication or mailed by prepaid registered mail as follows:
8.2.1 in the case of the Company:
G.H. WOOD + WYANT INC.
1475 32nd Avenue
Lachine, Quebec H8T 3J1
Attention: Mr. Jim Wyant
8.2.2 in the case of Geraldco:
3271706 CANADA INC.
Attention: Mr. Gerald Wyant
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<PAGE>
8.3 Any notice or other communication shall conclusively be deemed to have been
given and received, if delivered, on the day on which it was delivered, if sent
by telecommunications, on the first business day following the day on which it
was dispatched, and if mailed, on the fifth business day following the day on
which it was mailed.
8.4 No party shall mail any notice or other communication when a threatened or
actual work stoppage exists at the post office form, or to, which the notice or
other communication is being sent, but shall use one of the other above referred
to means of communication.
8.5 Any party may change its address for receipt of notices or other
communications hereunder by giving notice thereof to the other party.
8.6 The representations and warranties contained herein shall survive the
execution of this present agreement and shall continue to remain in full force
and effect.
8.7 The provisions herein shall enure to the benefit of the successors and
assigned and shall be binding upon the heirs, executors, administrators and
legal personal representatives of the parties hereto.
8.8 This agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the province of Quebec.
8.9 The parties hereto have requested that these presents and all Court
proceedings thereto related be drafted in English. Que les parties aux presentes
ont requis que cette entente et toutes les procedures judiciaires y afferentes
soient redigees en anglais.
Page 46
<PAGE>
IN WITNESS WHEREOF the parties hereto have duly executed this agreement on the
date and at the place first hereinabove mentioned.
3271706 CANADA INC.
Per: Gerald Wyant
------------------------------
G.H. WOOD + WYANT INC.
Per: Jim Wyant
------------------------------
Page 47
<PAGE>
SCHEDULE A
MEMORANDUM OF AGREEMENT ENTERED INTO AS OF THE 2ND DAY OF MAY, 1996
BY AND BETWEEN: DEREK WYANT, hereinafter referred to as
"Derek"
AND: LYNNE EMOND, hereinafter referred to as
"Lynne"
AND: JIM WYANT, hereinafter referred to as
"Jim"
AND: GERALD WYANT, hereinafter referred to as
"Gerald"
AND: G.H. WOOD + WYANT INC., herein
represented by Jim Wyant and hereinafter
referred to as the "Company"
WHEREAS Lynne and Derek each own 100 Class "B"
preferred shares of the Company;
WHEREAS Jim owns 100 common shares of the Company;
WHEREAS Gerald owns 100 Class "A" preferred shares of
the Company;
WHEREAS the Company is considering approaching Hosposable
Products, Inc. (hereinafter "Hosposable") about selling its assets or
transferring control of the Company to Hosposable in return for, inter alia,
shares exchangeable into Hosposable stock (hereinafter the "Hosposable
transaction") although the parties recognize that no decision has been made
until there are discussions with the Hosposable management and directors
regarding its strategic objectives, and there is no way to predict what the
terms or structure of any particular transaction with Hosposable might be;
WHEREAS if the Hosposable transaction proceeds, Derek, Lynne
and Gerald have agreed to exchange their existing stock in the Company for cash,
promissory notes or preferred shares of the Company and shares of Hosposable,
and the Company has agreed to acquire the stock of Derek, Lynne and Gerald, the
whole under the terms and conditions hereafter mentioned.
NOW, THEREFORE, THIS AGREEMENT WITNESSETH AS FOLLOWS:
1. The preamble shall form an integral part hereof.
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<PAGE>
2. It is agreed that if the Hosposable transaction is completed, then each of
Derek and Lynne will exchange, at the time of completion of the Hosposable
transaction ("Closing"), their shareholdings in the Company, and the Company
shall acquire such shareholdings, the whole for a consideration, payable to each
of Derek and Lynne, of the aggregate of the following:
i) $1 million cash, payable at the Closing;
ii) $1,750,000 worth of preferred shares or promissory
notes of the Company, or a combination of both,
which will bear an interest rate (or a dividend
rate) of a minimum of 4% per annum, payable
monthly, or such greater amount as is received by
the Company from Hosposable on the debt or
preferred shares the Company may received on the
Hosposable transaction. Such notes or preferred
shares totalling $1,750,000 to each of Lynne and
Derek will be repaid or redeemed over a maximum
period of ten years (i.e. one-tenth of the capital
per year) commencing on the first anniversary of
the Closing. However, should the Company receive
an earlier payment from Hosposable on its balance
of sale or preferred shares from the Hosposable
transaction, then the Company will accelerate the
payments to Derek and Lynne to match its cash
receipts from Hosposable. It is further agreed
that Derek and Lynne acting together can choose
whether or not they wish to hold preferred shares
or promissory notes, or a combination of both, of
the Company totalling $1,750,000 as long as the
total amount of interest or dividends paid is as
indicated above and that the rhythm of the payment
of capital is in accordance with the above. The
obligation to pay the dividend on the preferred
shares and/or the interest on the promissory notes
and the obligation to redeem the preferred shares
and/or repay the promissory notes, as
aforementioned, shall be secured by a first-
ranking charge on all of the assets and
undertakings of the Company and the assets of any
holding company used by Jim Wyant in structuring
the contemplated transactions. Accordingly, at
the option of either Derek or Lynne, the
transaction described in this paragraph 2 shall be
structured in a manner with the intent that such
security may be lawfully granted and may be
lawfully exercisable in circumstances of a
default; such structure may include, without
limitation, the interposition of one or more
subsidiaries of the Company, the acquisition of
shares by each of Derek and Lynne in the
applicable subsidiary, the obligation of the
Company to acquire such shares under certain
Page 49
<PAGE>
circumstances and the securitizing of such
obligation by a first-ranking charge on all of the
assets and undertakings of the Company. The
agreements to be executed at Closing shall provide
for appropriate and reasonable covenants, default
and acceleration clauses; and
iii) 238,000 shares of Hosposable plus one-twelfth of any
additional Hosposable shares (or shares exchangeable
into Hosposable stock) which may be received by the
Company or by Jim's holding company for value in
excess of the book value of the Company on the
Hosposable transaction (including any "earn-out
shares).
3. It is agreed that if the Hosposable transaction is completed, then Gerald
will exchange his shareholding in the Company for the following:
i) $2.4 million cash; and
ii) 146,000 shares of Hosposable;
To the extent the Company has any amount in its capital dividend account, the
first $2.4 million in the capital divided account will be transferred to Gerald.
Any excess in the capital dividend account remaining shall be divided equally
amount Jim, Derek and Lynne. The parties recognize that this streaming of the
capital dividend account to Gerald may take place regardless of whether or not
there is a completion of the transactions contemplated herein.
4. The parties acknowledge that if the transactions described above proceeds,
each of Derek, Lynne, Gerald and the Company will hold Hosposable shares. Derek
and Lynne agree to transfer the voting rights attached to their Hosposable
shares to a voting trust which would give Jim voting rights over the said
Hosposable shares for a term not exceeding 15 years. On the sixth anniversary
date of the Closing, Lynne and Derek will each receive one-tenth of their shares
out of the voting trust and they will then be free to deal with these shares as
they see fit save and except that Jim will have a right of first refusal over
such shares. Similarly, every year thereafter (on the anniversary date of the
Closing) an additional 10% of the Hosposable shares will be released from the
voting trust to each of Lynne and Derek subject to the right of first refusal to
Jim contemplated herein. It is further agreed that Jim will have the power to
sell the shares in the voting trust as long as the said shares are sold on the
same terms and conditions as Jim sells Hosposable shares held by either him
(directly or indirectly) or the Company and provided further that such sale is
made at no less than fair market value and otherwise on commercially reasonable
terms. (This obligation on Jim shall also apply to any Hosposable shares he may
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<PAGE>
wish to sell.) It is agreed that any sale of Hosposable shares will be done on a
one-third, one-third, one-third basis as between Jim (and the Company), Derek
and Lynne until such time as there are no remaining shares of Derek and Lynne in
the voting trust. It is expressly acknowledged that Gerald will be free to sell
his shares of Hosposable as he sees fit and he will not be subject to the voting
trust hereunder. The rights granted to Jim under this paragraph 4 shall be
non-transferable and non-assignable. The voting trust and the rights granted to
Jim under this paragraph shall terminate in the event of default in the payments
contemplated at subsection 2(ii) above, with provision for a grace period and
reinstatement of the voting trust in the event the default is cured.
5. It is recognized by all of the parties hereto that the contemplated
transactions of Lynne, Derek and Gerald should be done on a tax-effective basis.
It is further acknowledged that the consent of Derek and Lynne to the proposed
transactions has been based on assurances to them that the contemplated
transactions can be structured by using holding companies and, at the corporate
level, should result in no immediate tax to either of them, either as the result
of the transaction described in paragraph 2 hereof (including the receipt of the
Hosposable shares and the shares exchangeable into Hosposable stock as mentioned
in subparagraph (iii) of said paragraph 2) or with respect to any dividends
received by such holding companies on the preferred shares respectively held by
them. Jim undertakes to engage tax counsel immediately after the signing of this
agreement which tax counsel is to determine the tax liability, if any, of Derek
and Lynne to the proposed transactions and shall render a written opinion
thereon. Such tax counsel will fully cooperate with any tax advisors appointed
by Derek or Lynne and will provide full details and explanations on any matters
requested by them. The opinions of such tax counsel shall be subject to the
review and concurrence of the tax advisors of Lynne and Derek as to the
conclusions reached and the opinions expressed. If it is then determined that
there is any tax liability to them, then Derek and Lynne will be entitled to
cancel the transactions contemplated herein or to reach some other mutually
satisfactory arrangement.
6. It is recognized that each of Derek and Lynne will require their own
professional advisers for the transactions contemplated herein and the Company
agrees to pay the reasonable fees and disbursements of such advisers based on
hourly rates, with no premium. Further, if all transactions contemplated herein
close, then an additional $10,000 shall be paid to B.D.O. Dunwoody in
recognition of previous services rendered to the Company and its shareholders.
7. The parties acknowledge that if the Hosposable transaction closes, it should
take place in November or December 1996 and that the transactions of Derek,
Lynne and Gerald are dependent on the Hosposable transaction closing. If both
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<PAGE>
the Hosposable transaction and the transactions involving Lynne and Derek's
shares do not close by January 31st, 1997 (or such later date as is mutually
acceptable to the parties hereto) for any reason other than the unjustifiable
refusal of Derek and Lynne to sign, then Derek and Lynne will have the right to
cancel this agreement with retroactive effect (save and except the possible
payment of the capital dividend account to Gerald as contemplated by paragraph 3
hereof). The closing of the transaction relating to the sale of the shares of
Derek and Lynne is further conditional upon the negotiation and execution of
agreements in order to give effect to the subject matter hereof, in form and
substance acceptable to the parties, acting reasonably and if the structure of
the Hosposable transaction conforms in essence to that contemplated herein.
8. This agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the Province of Quebec.
All dollar amounts herein are expressed in Canadian dollars.
9. The parties hereto have requested this agreement and all court proceedings
thereto related be drafted in English. Les parties aux presentes ont demande a
ce que ce contrat et toutes procedures y afferentes soient redigees en anglais.
10. The parties herein agree to keep the contents of this agreement strictly
confidential expect where disclosures are required in conformity with the
securities law of any jurisdiction.
11. It is acknowledged by the parties hereto that Gerald Wyant has recently
suffered a medical setback and may be unable to sign this agreement for the
foreseeable future. Notwithstanding his lack of signature to this agreement, it
shall be binding on Jim, Derek, Lynne and the Company.
12. (a) This agreement may be executed in a number of
counterparts, each of which shall be deemed an original
and all of which shall constitute one and the same
agreement;
(b) This agreement may not be amended expect by instrument
in writing signed by all of the parties hereto;
(c) Delivery of an executed copy of this agreement by way
of telecopier facsimile shall constitute valid delivery
thereof.
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<PAGE>
IN WITNESS WHEREOF the parties hereto have signed as of the
2nd day of May, 1996.
DEREK WYANT
----------------------------------
LYNNE EMOND
----------------------------------
JIM WYANT
----------------------------------
GERALD WYANT
----------------------------------
G.H. WOOD + WYANT INC.
Per:------------------------------
JIM WYANT
Page 53
<PAGE>
SCHEDULE B
REVISED PLAN - AUGUST 16, 1996
NOTE: ALL NUMBERS USED HEREIN ARE FOR PURPOSES OF EXAMPLE ONLY.
1. Estimated share of safe income as at May 23, 1996 =
Approx
Lynne $4,054,000
Derek $4,054,000
Jim $4,054,000
Gerry Over $5,000,000
2. Estimated FMV of 100 Class "B" shares owned by Lynne and Derek equals
$5,788,502 ($5,757,677 + [50% of $61,650]), (that is, $1,000,000 cash,
$1,750,000 note, $2,227,680 re Hosposable shares, $779,997 re exchangeable
shares of Hos-sub and [50% of $61,650]).
3. The tax attributes attaching to Gerry's 100 Class "A" shares
in Wyant are as follows:
ACB PUC FMV SAFE INCOME
$2,500,000 (+) $1,504,999 $3,399,000 $5,000,000 (+)
4. Current Structure
Lynne Derek Jim Gerry
100 "B" 100 "B" 100 Common 100 "A" 9% div.-
| | 1000 Votes) retraction price
| | | $33,990 per share
| | | FMV $3,399,000
| | | |
| | | |
| | | |
| | ----------- |
| -------- WYANT | |
------------------------ ----------------------
-----------
----------------
| HOSPOSABLE |
----------------
Step 1: Lynne and Derek will transfer their shares of Wyant to two holding
companies (herein LynneCo and DerekCo, respectively), the whole on a tax-free
basis pursuant to subsection 85(1) of the Income Tax Act (Canada) (the "Act").
Page 54
<PAGE>
As consideration therefor, LynneCo and DerekCo will issue additional common
shares to Lynne and Derek. Gerry will also transfer his 100 Class "A" shares to
GerryCo on a tax-free basis pursuant to subsection 85(1) of the Act. As
consideration therefor, Gerry will receive additional shares of GerryCo.
Lynne Derek Gerry
| | |
--------- --------- ---------
|LynneCo| |DerekCo| |GerryCo|
--------- --------- ---------
| | |
| 100 | 100 | 100
| "B" | "B" Jim | "A"
| | | 100 |
| | ---------- Common |
| ----------- |
----------------- WYANT -----------------------
-----------
| 937,690 Shares
----------------
| HOSPOSABLE |
----------------
Step 2: Declaration of a dividend by Wyant to GerryCo in the amount of $305,910.
Step 3: Purchase by GerryCo of 146,000 common shares of Hosposable for
$1,366,560 Cdn. in consideration of two notes in the aggregate amount of
$1,366,560 Cdn. (or $683,280 each) (herein "Note 1 and Note 2"). Purchase by
each of LynneCo and DerekCo of 238,000 common shares of Hosposable for
$2,227,680 Cdn. in consideration of a note issued by each of LynneCo and DerekCo
to Wyant in the amount of $2,227,680 Cdn. each (herein "Note 3 and Note 4",
respectively). The sales will be subject to a resolutory clause.
Page 55
<PAGE>
[Chart describing Step 3]
[GRAPHIC OMITTED]
Step 4: GerryCo will transfer its Class "A" shares of Wyant equally to each of
LynneCo and DerekCo pursuant to subsection 85(1) of the Act. Upon the transfer,
each of LynneCo and DerekCo will issue preferred shares to GerryCo (the "Class
"G" shares") retractable for $1,699,500.
Page 56
<PAGE>
[Chart describing Step 4]
[GRAPHIC OMITTED]
Step 5: LynneCo and DerekCo will convert their 100 Class "B" shares and 50 Class
"A" shares in Wyant into 50 Class "X" shares and 50 Class "X1" shares,
respectively, (the Class "X" shares and Class "X1" shares) with the following
attributes:
a) non-voting;
b) redeemable for an amount equal to $14,976,004 (that is,
$3,399,000 + [2 x 5,757,677] + $61,650). This amount
is to be adjusted upwards or downwards by the increase
or decrease in the value of the 166,666 exchangeable
shares of Hos-sub which are notionally to be allocated
to Lynne and Derek;
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<PAGE>
c) the redemption value of the preferred shares will be reduced
by the value of dividends paid and PUC reductions effected on
same. We will have two classes of shares so that the directors
of Wyant can pay dividends on either Class "X" or Class "X1
shares.
The articles of Wyant will be amended to allow for the
issuance of two classes of the "X" and "X1" shares. The articles will only state
that the redemption price will be set by the directors and the shareholder. The
actual redemption value will be set by agreement.
It is arguable that the Class "X" share and Class "X1" shares
will then have the following tax attributes:
ACB PUC FMV SAFE INCOME
$2,500,000 (+) $1,504,999 $14,976,004 (+)(-) $5,000,000 (+)
[Chart describing Step 5]
[GRAPHIC OMITTED]
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<PAGE>
Step 6: Wyant will cause a decrease of the paid-up capital on the Class "X"
shares and Class "X1" shares and in an amount equal to $1,504,999. As well, a
dividend will be paid by Wyant on the Class "X" share and Class "X1" shares in
the amount of $11,911,011. The redemption value of the Class "X" shares and
Class "X1" shares will be reduced to $1,559,994 (as adjusted from time to time).
The amounts of $1,504,000 and $11,911,011 will be paid by two notes in the
aggregate amount of $13,416,010 (that is, $6,708,005 each).
Step 7: Wyant will sell all of its assets other than shares of Hosposable to
Hos-sub. As at December 31, 1995, the assets had an approximate FMV of
$30,590,000 (excluding Hosposable shares) and $20,775,099 of liabilities for a
net of $9,816,194. Assume $3,000,000 of profits after tax for the year. Thus,
can assume about $13,000,000 of other assets to transfer. Robert used
$13,6000,000 in his memo so we have used the same number here for purposes of
example only.
Upon the transfer of $33,600,000 of assets (excluding goodwill) Hos-sub
will:
(a) assume liabilities of $20,000,000;
(b) pay $5,000,000 in cash;
(c) issue 2,299,911 Class "B" shares redeemable for
$2,299,911;
(d) issue a note for $6,300,089.
Then the note will be converted into 6,300,089 preferred shares (the Class "A"
shares).
Wyant will also roll goodwill to Hos-Sub. In consideration therefor, Hos-sub
will issue $1,000,000 Class "E" shares to Wyant (the Class "E" shares). The
1,000,000 Class "E" shares held by Wyant in Hos-sub will be convertible into
common shares of Hosposable.
Query - any Part VI.1 tax on these dividends re 1,000,000
convertible shares (redeemable for approx. $10
each). Any Part IV tax.
NOTE:
1) The deal with Hosposable calls for 4% cum. shares redeemed
over 10 years. We would like to redeem the Class "A" shares
(tax paid) fir st and then redeem the Class "B" shares. On the
redemption of the Class "B" shares, capital gains tax will be
payable by the recipient.
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2) Wyant will have no problem with dividends paid on the Class
"B" shares and the Class "A" shares with respect to Part VI.1
and Part IV.1 due to the application of subsection 191(5).
Wyant might have a subsection 55(2) problem in years 7 to 10.
3) To avoid an averaging re paid up capital, the Class "B" shares
will have a 3.999999% dividend entitlement and the Class "A"
shares will have a 4% entitlement.
4) Also check Part IV tax issues on final dividends paid,
i.e. 10% votes and value if not related.
Subsequent to the above, the shareholdings of Wyant will be as follows:
[Chart describing shareholdings of Wyant]
[GRAPHIC OMITTED]
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Step 8: Wyant will pay the notes owing by LynneCo and DerekCo in the amount of
$6,708,005 as follows:
a) $2,047,045 in cash (that is $1,000,000 plus the
$1,047,045) to be paid to Gerry);
b) transfer of $1,750,000 Class "A" shares of Hos-sub with
a redemption value of $1,750,000;
c) release of the note receivable in the amount of
$2,227,680 (i.e. Note 3 or Note 4);
d) transfer of the note to be transferred to GerryCo in
the amount of $683,280, (Note 1 or Note 2).
Step 9: LynneCo and DerekCo will pay a dividend on the Class "G" shares owned by
GerryCo in the amount of $30,825 each. Gerry will have received total dividends
of $367,560. LynneCo and DerekCo will redeem the Class "G" shares owned by
GerryCo in their capital stock and will transfer to GerryCo $2,032,440 (i.e.
$1,016,220 each) and the note in the amount of $683,280 (i.e.
Note 1 and Note 2).
Accordingly, GerryCo will have $2,400,000 in cash and 146,000
common shares of Hosposable.
As well, LynneCo and DerekCo will each own:
a) $1,000,000 of cash;
b) $1,750,000 Class "A" shares of Hos-sub with a ACB, PUC
and FMV of $1,750,000;
c) 238,000 common shares of Hosposable with a cost base of
$9.36 each;
d) 50 Class "X" shares (or Class "X1" shares) of Wyant
which will be entitled to the net proceeds of the
83,333 exchangeable shares of Hos-sub.
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The structure will be as follows:
[Chart describing Step 9]
[GRAPHIC OMITTED]
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EXHIBIT G
MEMORANDUM OF AGREEMENT ENTERED INTO AT THE CITY OF
MONTREAL, PROVINCE OF QUEBEC, ON THE 3RD DAY OF
SEPTEMBER 1996.
- --------------------------------------------------------------------------------
BETWEEN: 1186020 ONTARIO LIMITED, a body
corporate and politic duly incorporated
according to law, herein represented by
Dr. Derek Wyant, its representative duly
authorized as he so declares
(hereinafter referred to as "Derekco")
AND: G.H. WOOD + WYANT INC., a body corporate
and politic duly incorporated according
to law, herein represented by Jim Wyant,
its representative duly authorized as he
so declares
(hereinafter referred to as the
"Company")
WHEREAS the shareholdings of the Company are as follows:
Lynne Emond: 100 Class B preferred shares;
Derek Wyant: 100 Class B preferred shares;
Jim Wyant: 100 common shares; and
Gerald Wyant: 100 Class A preferred shares;
WHEREAS Derek Wyant, Lynne Emond, Jim Wyant, Gerald Wyant and
the Company entered into an agreement (the "Agreement") dated May 2, 1996, a
copy of which is attached hereto as Schedule A, whereby the parties agreed that
if the Company sold its assets to Hosposable Products Inc. (hereinafter
"Hosposable"), a public company whose shares are traded on a recognized
exchange, or to a subsidiary thereof, other than its shares of Hosposable, Lynne
Emond, Derek Wyant and Gerald Wyant would sell to the Company their shares of
the Company for the consideration and in the manner set forth in the Agreement
(hereinafter the "Transaction");
WHEREAS the parties to the Agreement wish that the Transaction
be executed in the manner set forth in a step by step plan, a copy of which is
attached hereto as Schedule B, or in any other manner agreed to by the parties
to the Agreement (hereinafter the "Plan");
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WHEREAS the Plan provides that, as a first step, the shares in
the Company held by Lynne Emond, Derek Wyant and Gerald Wyant would be
transferred to their respective holding companies;
WHEREAS the Agreement provides that as part of the
consideration for the sale of their shares in the capital stock of the Company
to the Company, Derek Wyant's holding company, namely Derekco, and Lynne Emond's
holding company would receive each 238,000 common shares of Hosposable and
Gerald Wyant's holding company would receive 146,000 common shares of
Hosposable, which shares are currently held by the Company;
WHEREAS the parties hereto wish that the 238,000 common shares
of Hosposable be transferred to Derekco immediately instead of in the sequence
provided for in the Plan;
WHEREAS the parties hereto wish that in the event that the
Transaction is not completed to the satisfaction of the parties to the Agreement
and in accordance with the Agreement and the Plan, the sale contemplated herein
shall be retroactively resolved as if never entered into.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
ARTICLE 1
PREAMBLE
1.1 The preamble hereto shall form an integral part hereof as if recited herein
at length.
ARTICLE 2
SALE AND PURCHASE
2.1 The Company hereby sells, transfers and assigned unto Derekco and Derekco
hereby purchases from the Company, 238,000 common shares in the capital stock of
Hosposable (the "Hosposable Shares").
2.2 The sale contemplated herein is subject to the fulfillment of the conditions
set forth in the Agreement and in the Plan, and without limiting the generality
of the foregoing, the sale of the Hosposable Shares shall be subject to the
provisions of paragraph 4 of the Agreement and the granting of the security in
favor of Derekco mentioned in paragraph 2(ii) of the Agreement.
ARTICLE 3
PURCHASE PRICE AND PAYMENT
3.1 The purchase price for the Hosposable Shares shall be the sum of $1,328,040
dollars $U.S. being $1,817,290 Canadian based on the exchange rate of 1.3684
being the Bank of Canada noon rate on August 30, 1996 payable to the Company by
the issuance of a non interest bearing promissory note (the "Promissory Note")
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of Derekco in the amount of $1,817,290 Cdn. It is hereby acknowledged that the
purchase price for the Hosposable shares was determined based on the weighted
average trading price of shares of Hosposable for the last thirty (30) trading
days ended August 30, 1996.
3.2 Upon the occurrence of the Event, as defined in Article 4.1, the Promissory
Note shall become payable by Derekco on demand by the Company. For greater
certainty, the Promissory Note shall not be payable prior to the occurrence of
the Event.
ARTICLE 4
RESOLUTION OF SALE
4.1 The completion and closing of the Transaction in accordance with the
Agreement and the Plan shall, for purposes of this agreement, be referred to as
the "Event".
4.2 The parties hereto agree that in the event that the Event does not occur
prior to January 30, 1997, or by such later date as is agreed to by the parties
to the Agreement, the sale contemplated herein shall be resolved, in which case
the present agreement shall be retroactively resolved ab initio and shall be
deemed never to have existed and any prestations received by either of the
parties hereto shall be returned to the other.
ARTICLE 5
THE EVENT
5.1 Upon occurrence of the Event, the Company shall notify the transfer agent of
the Hosposable Shares to register the Hosposable Shares to Derekco and to
deliver same to Derekco.
ARTICLE 6
RIGHTS ATTACHING TO HOSPOSABLE SHARES
6.1 It is hereby acknowledged that until the occurrence of the Event, Wyant
shall act as prete-nom and nominee of Derekco with respect to the Hosposable
Shares.
6.2 Subject to the following, Derekco hereby grants to Wyant a proxy to vote the
Hosposable Shares. Prior to the occurrence of the Event, Wyant shall be
entitled, and hereby undertakes, to exercise all rights and powers to vote the
Hosposable Shares and to assent to or dissent from any corporate or shareholder
action of any kind whatsoever, whenever such vote, assent or dissent is required
or permitted by law or otherwise.
6.3 Prior to the occurrence of the Event, in the event that any dividends are
declared on the Hosposable Shares, such dividends shall be held in trust by
Wyant in an interest bearing account. In the event that the sale is resolved in
accordance with Article 4, the dividends and any interest thereon shall be
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paid to the Company. In the event that the Event occurs, the dividends and any
interest thereon shall be paid to Derekco.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
7.1 The Company hereby represents, warrants and guarantees to Derekco the
following:
7.1.1 the Company is the beneficial owner of all of the Hosposable
Shares and the same are free and clear of all liens, charges, pledges
or other encumbrances of any kind, nature and description whatsoever
other than a moveable hypothec in favour of the Bank of Nova Scotia
which will be released immediately prior to the occurrence of the
Event;
7.1.2 no person, firm or corporation has any agreement, option or right
capable of becoming an agreement or option of the purchase for any of
the Hosposable Shares;
7.1.3 the Company has a full right, authority and capacity
to enter into this present agreement;
7.1.4 all requirements of applicable law permitting the sale of the
Hosposable Shares have been complied with or shall be complied with in
a timely manner.
ARTICLE 8
MISCELLANEOUS
8.1. Derekco acknowledges that any subsequent sale or transfer of the Hosposable
Shares shall be subject to applicable securities law in addition to any other
conditions mentioned herein, in the Agreement and in the Plan.
8.2 All notices or other communications authorized or required to be given
pursuant to this Agreement shall be in writing and either delivered by hand,
sent by telecommunication or mailed by prepaid registered mail as follows:
8.2.1 in the case of the Company:
G.H. WOOD + WYANT INC.
1475 32nd Avenue
Lachine, Quebec H8T 3J1
Attention: Mr. Jim Wyant
8.2.2 in the case of Derekco:
1186020 ONTARIO LIMITED
202 Hinton Avenue
Thunder Bay, Ontario P7A 7E4
Attention: Dr. Derek Wyant
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<PAGE>
8.3 Any notice or other communication shall conclusively be deemed to have been
given and received, if delivered, on the day on which it was delivered, if sent
by telecommunications, on the first business day following the day on which it
was dispatched, and if mailed, on the fifth business day following the day on
which it was mailed.
8.4 No party shall mail any notice or other communication when a threatened or
actual work stoppage exists at the post office form, or to, which the notice or
other communication is being sent, but shall use one of the other above referred
to means of communication.
8.5 Any party may change its address for receipt of notices or other
communications hereunder by giving notice thereof to the other party.
8.6 The representations and warranties contained herein shall survive the
execution of this present agreement and shall continue to remain in full force
and effect.
8.7 The provisions herein shall enure to the benefit of the successors and
assigned and shall be binding upon the heirs, executors, administrators and
legal personal representatives of the parties hereto.
8.8 This agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the province of Quebec.
8.9 The parties hereto have requested that these presents and all Court
proceedings thereto related be drafted in English. Que les parties aux presentes
ont requis que cette entente et toutes les procedures judiciaires y afferentes
soient redigees en anglais.
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<PAGE>
IN WITNESS WHEREOF the parties hereto have duly executed this agreement on the
date and at the place first hereinabove mentioned.
1186020 ONTARIO LIMITED
Per: Dr. Derek Wyant
------------------------------
G.H. WOOD + WYANT INC.
Per: Jim Wyant
------------------------------
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<PAGE>
SCHEDULE A
MEMORANDUM OF AGREEMENT ENTERED INTO AS OF THE 2ND DAY OF MAY, 1996
BY AND BETWEEN: DEREK WYANT, hereinafter referred to as
"Derek"
AND: LYNNE EMOND, hereinafter referred to as
"Lynne"
AND: JIM WYANT, hereinafter referred to as
"Jim"
AND: GERALD WYANT, hereinafter referred to as
"Gerald"
AND: G.H. WOOD + WYANT INC., herein
represented by Jim Wyant and hereinafter
referred to as the "Company"
WHEREAS Lynne and Derek each own 100 Class "B" preferred
shares of the Company;
WHEREAS Jim owns 100 common shares of the Company;
WHEREAS Gerald owns 100 Class "A" preferred shares of
the Company;
WHEREAS the Company is considering approaching Hosposable
Products, Inc. (hereinafter "Hosposable") about selling its assets or
transferring control of the Company to Hosposable in return for, inter alia,
shares exchangeable into Hosposable stock (hereinafter the "Hosposable
transaction") although the parties recognize that no decision has been made
until there are discussions with the Hosposable management and directors
regarding its strategic objectives, and there is no way to predict what the
terms or structure of any particular transaction with Hosposable might be;
WHEREAS if the Hosposable transaction proceeds, Derek, Lynne
and Gerald have agreed to exchange their existing stock in the Company for cash,
promissory notes or preferred shares of the Company and shares of Hosposable,
and the Company has agreed to acquire the stock of Derek, Lynne and Gerald, the
whole under the terms and conditions hereafter mentioned.
NOW, THEREFORE, THIS AGREEMENT WITNESSETH AS FOLLOWS:
1. The preamble shall form an integral part hereof.
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2. It is agreed that if the Hosposable transaction is completed, then each of
Derek and Lynne will exchange, at the time of completion of the Hosposable
transaction ("Closing"), their shareholdings in the Company, and the Company
shall acquire such shareholdings, the whole for a consideration, payable to each
of Derek and Lynne, of the aggregate of the following:
i) $1 million cash, payable at the Closing;
ii) $1,750,000 worth of preferred shares or promissory
notes of the Company, or a combination of both,
which will bear an interest rate (or a dividend
rate) of a minimum of 4% per annum, payable
monthly, or such greater amount as is received by
the Company from Hosposable on the debt or
preferred shares the Company may received on the
Hosposable transaction. Such notes or preferred
shares totalling $1,750,000 to each of Lynne and
Derek will be repaid or redeemed over a maximum
period of ten years (i.e. one-tenth of the capital
per year) commencing on the first anniversary of
the Closing. However, should the Company receive
an earlier payment from Hosposable on its balance
of sale or preferred shares from the Hosposable
transaction, then the Company will accelerate the
payments to Derek and Lynne to match its cash
receipts from Hosposable. It is further agreed
that Derek and Lynne acting together can choose
whether or not they wish to hold preferred shares
or promissory notes, or a combination of both, of
the Company totalling $1,750,000 as long as the
total amount of interest or dividends paid is as
indicated above and that the rhythm of the payment
of capital is in accordance with the above. The
obligation to pay the dividend on the preferred
shares and/or the interest on the promissory notes
and the obligation to redeem the preferred shares
and/or repay the promissory notes, as
aforementioned, shall be secured by a first-
ranking charge on all of the assets and
undertakings of the Company and the assets of any
holding company used by Jim Wyant in structuring
the contemplated transactions. Accordingly, at
the option of either Derek or Lynne, the
transaction described in this paragraph 2 shall be
structured in a manner with the intent that such
security may be lawfully granted and may be
lawfully exercisable in circumstances of a
default; such structure may include, without
limitation, the interposition of one or more
subsidiaries of the Company, the acquisition of
shares by each of Derek and Lynne in the
applicable subsidiary, the obligation of the
Company to acquire such shares under certain
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circumstances and the securitizing of such
obligation by a first-ranking charge on all of the
assets and undertakings of the Company. The
agreements to be executed at Closing shall provide
for appropriate and reasonable covenants, default
and acceleration clauses; and
iii) 238,000 shares of Hosposable plus one-twelfth of any
additional Hosposable shares (or shares exchangeable
into Hosposable stock) which may be received by the
Company or by Jim's holding company for value in
excess of the book value of the Company on the
Hosposable transaction (including any "earn-out
shares).
3. It is agreed that if the Hosposable transaction is
completed, then Gerald will exchange his shareholding in the
Company for the following:
i) $2.4 million cash; and
ii) 146,000 shares of Hosposable;
To the extent the Company has any amount in its capital dividend account, the
first $2.4 million in the capital divided account will be transferred to Gerald.
Any excess in the capital dividend account remaining shall be divided equally
amount Jim, Derek and Lynne. The parties recognize that this streaming of the
capital dividend account to Gerald may take place regardless of whether or not
there is a completion of the transactions contemplated herein.
4. The parties acknowledge that if the transactions described above proceeds,
each of Derek, Lynne, Gerald and the Company will hold Hosposable shares. Derek
and Lynne agree to transfer the voting rights attached to their Hosposable
shares to a voting trust which would give Jim voting rights over the said
Hosposable shares for a term not exceeding 15 years. On the sixth anniversary
date of the Closing, Lynne and Derek will each receive one-tenth of their shares
out of the voting trust and they will then be free to deal with these shares as
they see fit save and except that Jim will have a right of first refusal over
such shares. Similarly, every year thereafter (on the anniversary date of the
Closing) an additional 10% of the Hosposable shares will be released from the
voting trust to each of Lynne and Derek subject to the right of first refusal to
Jim contemplated herein. It is further agreed that Jim will have the power to
sell the shares in the voting trust as long as the said shares are sold on the
same terms and conditions as Jim sells Hosposable shares held by either him
(directly or indirectly) or the Company and provided further that such sale is
made at no less than fair market value and otherwise on commercially reasonable
terms. (This obligation on Jim shall also apply to any Hosposable shares he may
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wish to sell.) It is agreed that any sale of Hosposable shares will be done on a
one-third, one-third, one-third basis as between Jim (and the Company), Derek
and Lynne until such time as there are no remaining shares of Derek and Lynne in
the voting trust. It is expressly acknowledged that Gerald will be free to sell
his shares of Hosposable as he sees fit and he will not be subject to the voting
trust hereunder. The rights granted to Jim under this paragraph 4 shall be
non-transferable and non-assignable. The voting trust and the rights granted to
Jim under this paragraph shall terminate in the event of default in the payments
contemplated at subsection 2(ii) above, with provision for a grace period and
reinstatement of the voting trust in the event the default is cured.
5. It is recognized by all of the parties hereto that the contemplated
transactions of Lynne, Derek and Gerald should be done on a tax-effective basis.
It is further acknowledged that the consent of Derek and Lynne to the proposed
transactions has been based on assurances to them that the contemplated
transactions can be structured by using holding companies and, at the corporate
level, should result in no immediate tax to either of them, either as the result
of the transaction described in paragraph 2 hereof (including the receipt of the
Hosposable shares and the shares exchangeable into Hosposable stock as mentioned
in subparagraph (iii) of said paragraph 2) or with respect to any dividends
received by such holding companies on the preferred shares respectively held by
them. Jim undertakes to engage tax counsel immediately after the signing of this
agreement which tax counsel is to determine the tax liability, if any, of Derek
and Lynne to the proposed transactions and shall render a written opinion
thereon. Such tax counsel will fully cooperate with any tax advisors appointed
by Derek or Lynne and will provide full details and explanations on any matters
requested by them. The opinions of such tax counsel shall be subject to the
review and concurrence of the tax advisors of Lynne and Derek as to the
conclusions reached and the opinions expressed. If it is then determined that
there is any tax liability to them, then Derek and Lynne will be entitled to
cancel the transactions contemplated herein or to reach some other mutually
satisfactory arrangement.
6. It is recognized that each of Derek and Lynne will require their own
professional advisers for the transactions contemplated herein and the Company
agrees to pay the reasonable fees and disbursements of such advisers based on
hourly rates, with no premium. Further, if all transactions contemplated herein
close, then an additional $10,000 shall be paid to B.D.O. Dunwoody in
recognition of previous services rendered to the Company and its shareholders.
7. The parties acknowledge that if the Hosposable transaction closes, it should
take place in November or December 1996 and that the transactions of Derek,
Lynne and Gerald are dependent on the Hosposable transaction closing. If both
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the Hosposable transaction and the transactions involving Lynne and Derek's
shares do not close by January 31st, 1997 (or such later date as is mutually
acceptable to the parties hereto) for any reason other than the unjustifiable
refusal of Derek and Lynne to sign, then Derek and Lynne will have the right to
cancel this agreement with retroactive effect (save and except the possible
payment of the capital dividend account to Gerald as contemplated by paragraph 3
hereof). The closing of the transaction relating to the sale of the shares of
Derek and Lynne is further conditional upon the negotiation and execution of
agreements in order to give effect to the subject matter hereof, in form and
substance acceptable to the parties, acting reasonably and if the structure of
the Hosposable transaction conforms in essence to that contemplated herein.
8. This agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the Province of Quebec.
All dollar amounts herein are expressed in Canadian dollars.
9. The parties hereto have requested this agreement and all court proceedings
thereto related be drafted in English. Les parties aux presentes ont demande a
ce que ce contrat et toutes procedures y afferentes soient redigees en anglais.
10. The parties herein agree to keep the contents of this agreement strictly
confidential expect where disclosures are required in conformity with the
securities law of any jurisdiction.
11. It is acknowledged by the parties hereto that Gerald Wyant has recently
suffered a medical setback and may be unable to sign this agreement for the
foreseeable future. Notwithstanding his lack of signature to this agreement, it
shall be binding on Jim, Derek, Lynne and the Company.
12. (a) This agreement may be executed in a number of
counterparts, each of which shall be deemed an original
and all of which shall constitute one and the same
agreement;
(b) This agreement may not be amended expect by instrument
in writing signed by all of the parties hereto;
(c) Delivery of an executed copy of this agreement by way
of telecopier facsimile shall constitute valid delivery
thereof.
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IN WITNESS WHEREOF the parties hereto have signed as of the
2nd day of May, 1996.
DEREK WYANT
----------------------------------
LYNNE EMOND
----------------------------------
JIM WYANT
----------------------------------
GERALD WYANT
----------------------------------
G.H. WOOD + WYANT INC.
Per:------------------------------
JIM WYANT
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<PAGE>
SCHEDULE B
REVISED PLAN - AUGUST 16, 1996
NOTE: ALL NUMBERS USED HEREIN ARE FOR PURPOSES OF EXAMPLE ONLY.
1. Estimated share of safe income as at May 23, 1996 =
Approx
Lynne $4,054,000
Derek $4,054,000
Jim $4,054,000
Gerry Over $5,000,000
2. Estimated FMV of 100 Class "B" shares owned by Lynne and Derek equals
$5,788,502 ($5,757,677 + [50% of $61,650]), (that is, $1,000,000 cash,
$1,750,000 note, $2,227,680 re Hosposable shares, $779,997 re exchangeable
shares of Hos-sub and [50% of $61,650]).
3. The tax attributes attaching to Gerry's 100 Class "A" shares
in Wyant are as follows:
ACB PUC FMV SAFE INCOME
$2,500,000 (+) $1,504,999 $3,399,000 $5,000,000 (+)
4. Current Structure
Lynne Derek Jim Gerry
100 "B" 100 "B" 100 Common 100 "A" 9% div.-
| | (1000 Votes) retraction price
| | | $33,990 per share
| | | FMV $3,399,000
| | | |
| | | |
| | | |
| | ----------- |
| -------- WYANT | |
------------------------ ----------------------
-----------
----------------
| HOSPOSABLE |
----------------
Step 1: Lynne and Derek will transfer their shares of Wyant to two holding
companies (herein LynneCo and DerekCo, respectively), the whole on a tax-free
basis pursuant to subsection 85(1) of the
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Income Tax Act (Canada) (the "Act"). As consideration therefor, LynneCo and
DerekCo will issue additional common shares to Lynne and Derek. Gerry will also
transfer his 100 Class "A" shares to GerryCo on a tax-free basis pursuant to
subsection 85(1) of the Act. As consideration therefor, Gerry will receive
additional shares of GerryCo.
Lynne Derek Gerry
| | |
--------- --------- ---------
|LynneCo| |DerekCo| |GerryCo|
--------- --------- ---------
| | |
| 100 | 100 | 100
| "B" | "B" Jim | "A"
| | | 100 |
| | ---------- Common |
| ----------- |
----------------- WYANT -----------------------
-----------
| 937,690 Shares
----------------
| HOSPOSABLE |
----------------
Step 2: Declaration of a dividend by Wyant to GerryCo in the amount of
$305,910.
Step 3: Purchase by GerryCo of 146,000 common shares of Hosposable for
$1,366,560 Cdn. in consideration of two notes in the aggregate amount of
$1,366,560 Cdn. (or $683,280 each) (herein "Note 1 and Note 2"). Purchase by
each of LynneCo and DerekCo of 238,000 common shares of Hosposable for
$2,227,680 Cdn. in consideration of a note issued by each of LynneCo and DerekCo
to Wyant in the amount of $2,227,680 Cdn. each (herein "Note 3 and Note 4",
respectively). The sales will be subject to a resolutory clause.
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[Chart describing Step 3]
[GRAPHIC OMITTED]
Step 4: GerryCo will transfer its Class "A" shares of Wyant equally to each of
LynneCo and DerekCo pursuant to subsection 85(1) of the Act. Upon the transfer,
each of LynneCo and DerekCo will issue preferred shares to GerryCo (the "Class
"G" shares") retractable for $1,699,500.
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<PAGE>
[Chart describing Step 4]
[GRAPHIC OMITTED]
Step 5: LynneCo and DerekCo will convert their 100 Class "B" shares and 50 Class
"A" shares in Wyant into 50 Class "X" shares and 50 Class "X1" shares,
respectively, (the Class "X" shares and Class "X1" shares) with the following
attributes:
a) non-voting;
b) redeemable for an amount equal to $14,976,004 (that is,
$3,399,000 + [2 x 5,757,677] + $61,650). This amount
is to be adjusted upwards or downwards by the increase
or decrease in the value of the 166,666 exchangeable
shares of Hos-sub which are notionally to be allocated
to Lynne and Derek;
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c) the redemption value of the preferred shares will be reduced
by the value of dividends paid and PUC reductions effected on
same. We will have two classes of shares so that the directors
of Wyant can pay dividends on either Class "X" or Class "X1
shares.
The articles of Wyant will be amended to allow for the
issuance of two classes of the "X" and "X1" shares. The articles will only state
that the redemption price will be set by the directors and the shareholder. The
actual redemption value will be set by agreement.
It is arguable that the Class "X" share and Class "X1" shares
will then have the following tax attributes:
ACB PUC FMV SAFE INCOME
$2,500,000 (+) $1,504,999 $14,976,004 (+)(-) $5,000,000 (+)
[Chart describing Step 5]
[GRAPHIC OMITTED]
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<PAGE>
Step 6: Wyant will cause a decrease of the paid-up capital on the Class "X"
shares and Class "X1" shares and in an amount equal to $1,504,999. As well, a
dividend will be paid by Wyant on the Class "X" share and Class "X1" shares in
the amount of $11,911,011. The redemption value of the Class "X" shares and
Class "X1" shares will be reduced to $1,559,994 (as adjusted from time to time).
The amounts of $1,504,000 and $11,911,011 will be paid by two notes in the
aggregate amount of $13,416,010 (that is, $6,708,005 each).
Step 7: Wyant will sell all of its assets other than shares of Hosposable to
Hos-sub. As at December 31, 1995, the assets had an approximate FMV of
$30,590,000 (excluding Hosposable shares) and $20,775,099 of liabilities for a
net of $9,816,194. Assume $3,000,000 of profits after tax for the year. Thus,
can assume about $13,000,000 of other assets to transfer. Robert used
$13,6000,000 in his memo so we have used the same number here for purposes of
example only.
Upon the transfer of $33,600,000 of assets (excluding goodwill) Hos-sub
will:
(a) assume liabilities of $20,000,000;
(b) pay $5,000,000 in cash;
(c) issue 2,299,911 Class "B" shares redeemable for
$2,299,911;
(d) issue a note for $6,300,089.
Then the note will be converted into 6,300,089 preferred shares (the Class "A"
shares).
Wyant will also roll goodwill to Hos-Sub. In consideration therefor, Hos-sub
will issue $1,000,000 Class "E" shares to Wyant (the Class "E" shares). The
1,000,000 Class "E" shares held by Wyant in Hos-sub will be convertible into
common shares of Hosposable.
Query - any Part VI.1 tax on these dividends re 1,000,000
convertible shares (redeemable for approx. $10
each). Any Part IV tax.
NOTE:
1) The deal with Hosposable calls for 4% cum. shares redeemed
over 10 years. We would like to redeem the Class "A" shares
(tax paid) fir st and then redeem the Class "B" shares. On the
redemption of the Class "B" shares, capital gains tax will be
payable by the recipient.
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<PAGE>
2) Wyant will have no problem with dividends paid on the Class
"B" shares and the Class "A" shares with respect to Part VI.1
and Part IV.1 due to the application of subsection 191(5).
Wyant might have a subsection 55(2) problem in years 7 to 10.
3) To avoid an averaging re paid up capital, the Class "B" shares
will have a 3.999999% dividend entitlement and the Class "A"
shares will have a 4% entitlement.
4) Also check Part IV tax issues on final dividends paid,
i.e. 10% votes and value if not related.
Subsequent to the above, the shareholdings of Wyant will be as follows:
[Chart describing shareholdings of Wyant]
[GRAPHIC OMITTED]
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<PAGE>
Step 8: Wyant will pay the notes owing by LynneCo and DerekCo in the amount of
$6,708,005 as follows:
a) $2,047,045 in cash (that is $1,000,000 plus the
$1,047,045) to be paid to Gerry);
b) transfer of $1,750,000 Class "A" shares of Hos-sub with
a redemption value of $1,750,000;
c) release of the note receivable in the amount of
$2,227,680 (i.e. Note 3 or Note 4);
d) transfer of the note to be transferred to GerryCo in
the amount of $683,280, (Note 1 or Note 2).
Step 9: LynneCo and DerekCo will pay a dividend on the Class "G" shares owned by
GerryCo in the amount of $30,825 each. Gerry will have received total dividends
of $367,560. LynneCo and DerekCo will redeem the Class "G" shares owned by
GerryCo in their capital stock and will transfer to GerryCo $2,032,440 (i.e.
$1,016,220 each) and the note in the amount of $683,280 (i.e.
Note 1 and Note 2).
Accordingly, GerryCo will have $2,400,000 in cash and 146,000
common shares of Hosposable.
As well, LynneCo and DerekCo will each own:
a) $1,000,000 of cash;
b) $1,750,000 Class "A" shares of Hos-sub with a ACB, PUC
and FMV of $1,750,000;
c) 238,000 common shares of Hosposable with a cost base of
$9.36 each;
d) 50 Class "X" shares (or Class "X1" shares) of Wyant
which will be entitled to the net proceeds of the
83,333 exchangeable shares of Hos-sub.
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<PAGE>
The structure will be as follows:
[Chart describing Step 9]
[GRAPHIC OMITTED]
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<PAGE>
EXHIBIT H
MEMORANDUM OF AGREEMENT ENTERED INTO AT THE CITY OF MONTREAL, PROVINCE OF
QUEBEC, ON THE 16TH DAY OF SEPTEMBER, 1996.
- --------------------------------------------------------------------------------
BETWEEN: 1186020 ONTARIO LIMITED, a body corporate and
politic duly incorporated according to law,
herein represented by Dr. Derek Wyant, its
representative duly authorized as he so
declares
(hereinafter referred to as "Derekco")
AND: G.H. WOOD + WYANT INC., a body corporate and
politic duly incorporated according to law,
herein represented by Jim Wyant, its
representative duly authorized as he so
declares
(hereinafter referred to as the "Company")
---------------------------------------------
WHEREAS the parties hereto entered into an agreement (hereinafter the
"Agreement") dated September 3rd, 1996 whereby Derekco purchased from the
Company shares in the capital stock of Hosposable Products Inc. (hereinafter
"Hosposable Shares");
WHEREAS the parties hereto wish to make certain changes to
the Agreement;
WHEREAS paragraph 6.2 of the Agreement provides that Derekco grants to
the Company a proxy to vote the Hosposable Shares subject to the occurrence of
the Event, as such term is defined in the Agreement;
WHEREAS the parties hereto wish that the said proxy be irrevocable;
WHEREAS subparagraph 7.1.4 of the Agreement provides that all
requirements of applicable law permitting the sale of the Hosposable Shares have
been complied with or shall be complied with in a timely manner;
WHEREAS the parties hereto wish to replace subparagraph
7.1.4 of the Agreement;
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
1. The preamble hereto shall form an integral part hereof as if recited herein
at length.
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<PAGE>
2. The parties hereto agree that the proxy granted to the Company by Derekco
pursuant to the Agreement shall be irrevocable prior to the occurrence of the
Event, as such term is defined in the Agreement. In the event that Derekco
revokes or attempts to revoke the proxy granted pursuant to the Agreement, the
sale of the Hosposable Shares contemplated in the Agreement shall be
automatically resolved and paragraphs 4.2 and 6.3 of the Agreement shall apply
mutatis mutandis.
3. The parties hereto hereby agree to replace subparagraph 7.1.4 of the
Agreement by the following:
"The parties shall, from time to time, at the request of the other
party and without further consideration, execute such further
instruments of conveyance and take such other actions as such party may
reasonably require to give effect to the transaction contemplated
herein. The parties will furthermore sign all documents and do all
things necessary to give effect to the present transaction.
Furthermore, Derekco and the Company, as the case may be, hereby
undertake to comply with applicable securities legislation in a timely
manner, including the filing of notices disclosing the transaction
contemplated herein; the Company hereby agrees at its sole cost and
expense, to cause its legal counsel to prepare all required filings to
be executed by Derekco"
4. This agreement may be executed by the parties hereto in separate
counterparts, each of which, when so executed, shall be an original, but all
such counterparts together shall constitute this agreement.
5. The parties hereto have requested that these presents and all Court
proceedings thereto related be drafted in English. Que les parties aux presentes
ont requis que cette entente et toutes les procedures judiciaries y afferentes
soient redigees en anglais.
IN WITNESS WHEREOF the parties hereto have duly executed this agreement on the
date and at the place first hereinabove mentioned.
1186020 ONTARIO LIMITED
--------------------------
Per: Dr. Derek Wyant
G.H. WOOD + WYANT INC.
--------------------------
Per: Jim Wyant
Page 85
<PAGE>
EXHIBIT I
MEMORANDUM OF AGREEMENT ENTERED INTO AT THE CITY OF MONTREAL, PROVINCE OF
QUEBEC, ON THE 16TH DAY OF SEPTEMBER, 1996.
- --------------------------------------------------------------------------------
BETWEEN: 3271706 CANADA INC., a body corporate and
politic duly incorporated according to law,
herein represented by Gerald Wyant, its
representative duly authorized as he so
declares
(hereinafter referred to as "Geraldco")
AND: G.H. WOOD + WYANT INC., a body corporate and
politic duly incorporated according to law,
herein represented by Jim Wyant, its
representative duly authorized as he so
declares
(hereinafter referred to as the "Company")
-------------------------------------------
WHEREAS the parties hereto entered into an agreement (hereinafter the
"Agreement") dated September 3rd, 1996 whereby Geraldco purchased from he
Company shares in the capital stock of Hosposable Products Inc. (hereinafter
"Hosposable Shares");
WHEREAS the parties hereto wish to make certain changes to the
Agreement;
WHEREAS paragraph 6.2 of the Agreement provides that Geraldco grants to
the Company a proxy to vote the Hosposable Shares subject to the occurrence of
the Event, as such term is defined in the Agreement;
WHEREAS the parties hereto wish that the said proxy be
irrevocable;
WHEREAS subparagraph 7.1.4 of the Agreement provides that all
requirements of applicable law permitting the sale of the Hosposable Shares have
been complied with or shall be complied with in a timely manner;
WHEREAS the parties hereto wish to replace subparagraph
7.1.4 of the Agreement;
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. The preamble hereto shall form an integral part hereof as if recited herein
at length.
2. The parties hereto agree that the proxy granted to the Company by Geraldco
pursuant to the Agreement shall be irrevocable prior to the occurrence of the
Page 86
<PAGE>
Event, as such term is defined in the Agreement. In the event that Geraldco
revokes or attempts to revoke the proxy granted pursuant to the Agreement, the
sale of the Hosposable Shares contemplated in the Agreement shall be
automatically resolved and paragraphs 4.2 and 6.3 of the Agreement shall apply
mutatis mutandis.
3. The parties hereto hereby agree to replace subparagraph 7.1.4 of the
Agreement by the following:
"The parties shall, from time to time, at the request of the other
party and without further consideration, execute such further
instruments of conveyance and take such other actions as such party may
reasonably require to give effect to the transaction contemplated
herein. The parties will furthermore sign all documents and do all
things necessary to give effect to the present transaction.
Furthermore, Geraldco and the Company, as the case may be, hereby
undertake to comply with applicable securities legislation in a timely
manner, including the filing of notices disclosing the transaction
contemplated herein; the Company hereby agrees, at its sole cost and
expense, to cause its legal counsel to prepare all required filings to
be executed by Geraldco."
4. This agreement may be executed by the parties hereto in separate
counterparts, each of which, when so executed, shall be an original, but all
such counterparts together shall constitute this agreement.
5. The parties hereto have requested that these presents and all Court
proceedings thereto related be drafted in English. Que les parties aux presentes
ont requis que cette entente et toutes les procedures judiciaries y afferentes
soient redigees en anglais.
IN WITNESS WHEREOF the parties hereto have duly executed this agreement on the
date at the place first hereinabove mentioned.
3271706 CANADA INC.
--------------------------
Per: Gerald Wyant
G.H. WOOD + WYANT INC.
--------------------------
Per: Jim Wyant
Page 87
<PAGE>
EXHIBIT J
MEMORANDUM OF AGREEMENT ENTERED INTO AT THE CITY OF MONTREAL, PROVINCE OF
QUEBEC, ON THE 16TH DAY OF SEPTEMBER, 1996.
- --------------------------------------------------------------------------------
BETWEEN: 3287858 CANADA INC., a body corporate and
politic duly incorporated according to law,
herein represented by Lynne Emond, its
representative duly authorized as she so
declares
(hereinafter referred to as "Lynneco")
AND: G.H. WOOD + WYANT INC., a body corporate and
politic duly incorporated according to law,
herein represented by Jim Wyant, its
representative duly authorized as he so
declares
(hereinafter referred to as the "Company")
--------------------------------------------
WHEREAS the parties hereto entered into an agreement (hereinafter the
"Agreement") dated September 3rd, 1996 whereby Lynneco purchased from the
Company shares in the capital stock of Hosposable Products Inc. (hereinafter
"Hosposable Shares");
WHEREAS the parties hereto wish to make certain changes to
the Agreement;
WHEREAS paragraph 6.2 of the Agreement provides that Lynneco grants to
the Company a proxy to vote the Hosposable Shares subject to the occurrence of
the Event, as such term is defined in the Agreement;
WHEREAS the parties hereto wish that the said proxy be
irrevocable;
WHEREAS subparagraph 7.1.4 of the Agreement provides that all
requirements of applicable law permitting the sale of the Hosposable shares have
been complied with or shall be complied with in a timely manner;
WHEREAS the parties hereto wish to replace subparagraph
7.1.4 of the Agreement;
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
1. The preamble hereto shall form an integral part hereof as if
recited herein at length.
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<PAGE>
2. The parties hereto agree that the proxy granted to the Company by Lynneco
pursuant to the Agreement shall be irrevocable prior to the occurrence of the
Event, as such term is defined in the Agreement. In the event Lynneco revokes or
attempts to revoke the proxy granted pursuant to the Agreement, the sale of the
Hosposable Shares contemplated in the Agreement shall be automatically resolved
and paragraph 4.2 and 6.3 of the Agreement shall apply mutatis mutandis.
3. The parties hereto hereby agree to replace subparagraph 7.1.4 of the
Agreement by the following:
"The parties shall, from time to time, at the request of the other
party and without further consideration, execute such further
instruments of conveyance and take such other actions as such party may
reasonably require to give effect to the transaction contemplated
herein. The parties will furthermore sign all documents and do all
things necessary to give effect to the present transaction.
Furthermore, Lynneco and the Company, as the case may be, hereby
undertake to comply with applicable securities legislation in timely
manner, including the filing of notices disclosing the transaction
contemplated herein; the Company hereby agrees, at its sole cost and
expense, to cause its legal counsel to prepare all required filings to
be executed by Lynneco."
4. This agreement may be executed by the parties hereto in separate
counterparts, each of which, when so executed, shall be an original, but all
such counterparts together shall constitute this agreement.
5. The parties hereto have requested that these presents and all Court
proceedings thereto related be drafted in English. Que les parties aux presentes
ont requis que cette entente et toutes les procedures judiciaries y afferentes
soient redigees en anglais.
IN WITNESS WHEREOF the parties hereto have duly executed this agreement on the
date at the place first hereinabove mentioned.
3287858 CANADA INC.
--------------------------
Per: Lynne Emond
G.H. WOOD + WYANT INC.
--------------------------
Per: Jim Wyant
Page 89
<PAGE>
EXHIBIT K
MEMORANDUM OF AGREEMENT ENTERED INTO AT THE CITY OF MONTREAL PROVINCE OF QUEBEC,
ON THE 16TH DAY OF SEPTEMBER, 1996.
- --------------------------------------------------------------------------------
BETWEEN: 1186020 ONTARIO LIMITED, a body corporate
and politic duly incorporated according to
law, herein represented by Dr. Derek Wyant,
its representative duly authorized as he so
declares
(hereinafter referred to as "Derekco")
AND: 3271706 CANADA INC., a body corporate and
politic duly incorporated according to law,
herein represented by Gerald Wyant, its
representative duly authorized as he so
declares
(hereinafter referred to as "Geraldco")
AND: 3287858 CANADA INC., a body corporate and
politic duly incorporated according to law,
herein represented by Lynne Emond, its
representative duly authorized as she so
declares
(hereinafter referred to as "Lynneco")
(hereinafter collective referred to as the
"Holdcos")
AND: G.H. WOOD + WYANT INC., a body corporate and
politic duly incorporated according to law,
herein represented by Jim Wyant, its
representative duly authorized as he so
declares
(hereinafter referred to as the "Company")
--------------------------------------------
1. The Holdcos hereby agree to grant a proxy to the Company for purposes of
voting shares in the capital stock of Hosposable Products Inc. and that said
proxy shall be irrevocable prior to the occurrence of the Event, as such term is
defined in those agreements entered into by each of the Holdcos and the Company
on even date (the "Agreements").
2. The parties hereto hereby agree that in the event that anyone of the Holdcos
revoke or attempt to revoke the proxy granted pursuant to the Agreements, the
provisions of paragraph 2 of the Agreements shall apply.
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<PAGE>
3. The parties hereto have requested that these presents and all Court
proceedings thereto related be drafted in English. Que les parties aux presentes
ont requis que cette entente et toutes les procedures judiciaries y afferentes
soient redigees en anglais.
IN WITNESS WHEREOF the parties hereto have duly executed this agreement on the
date and at the place first hereinabove mentioned.
1186020 ONTARIO LIMITED
-----------------------------
Per: Dr. Derek Wyant
3271706 CANADA INC.
-----------------------------
Per: Gerald Wyant
3287858 CANADA INC.
-----------------------------
Per: Lynne Emond
G.H. WOOD & WYANT INC.
-----------------------------
Per: Jim Wyant
Page 91
<PAGE>
