December 21, 2000
Chancery Lane/GSC Investors L.P.
3 E. 54th Street - Suite 1700
New York, New York 10022
CLGI, Inc.
3 E. 54th Street - Suite 1700
New York, New York 10022
STANDSTILL AGREEMENT
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Reference is made to the debenture purchase agreement (the "Debenture
Purchase Agreement") made between Moore Corporation Limited (the "Company") and
Chancery Lane/GSC Investors L.P. (the "Purchaser"), dated as of December 12,
2000, pursuant to which the Purchaser has agreed to invest an aggregate of US
$70,500,000 in the Company on the terms and conditions set forth in such
Debenture Purchase Agreement. As a condition and material inducement to the
Company entering into the Debenture Purchase Agreement, each of the Purchaser
and CLGI, Inc., the sole general partner of the Purchaser (the "General
Partner"), is entering into this standstill agreement (the "Agreement"), dated
as of December 21, 2000. Capitalized terms used but not defined herein shall
have the meanings set forth in the Debenture Purchase Agreement.
Now therefore, in consideration of the foregoing and the covenants
contained herein, and intending to be legally bound, the parties to this
Agreement agree as follows:
1. RESTRICTIONS ON ACQUISITIONS.
----------------------------
Each of the Purchaser and the General Partner covenants and agrees that,
except as otherwise permitted by the terms of this Agreement, the Debenture
Purchase Agreement and the Debenture Certificate, until the Release Date occurs,
no member of the Restricted Group shall, directly or indirectly in any manner,
acquire, offer or propose to acquire or agree to acquire (whether publicly or
otherwise):
(a) Substantially all of the assets of the Company or the capital stock of
any of its Significant Subsidiaries; or
(b) Common Shares, any other capital stock of the Company or other
securities of the Company entitled to vote generally in the election of
directors of the Company ("Voting Stock"), or any direct or indirect rights,
options or warrants of the Company to acquire any Voting Stock or any securities
of the Company convertible or exercisable into or exchangeable for any of the
foregoing (whether or not currently convertible, exercisable or exchangeable)
(all of the foregoing, collectively, "Voting Securities") (including without
limitation "beneficial ownership" of any such securities, within the meaning set
forth in Rule 13d-3 under the
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Exchange Act ("Beneficial Ownership")), which acquisition would cause the
Restricted Group Ownership Percentage (as defined below) to exceed the Maximum
Permitted Ownership Percentage (as defined below) (other than pursuant to a
tender offer or other similar offer to acquire all of the outstanding Common
Shares that is made by a member of the Restricted Group to all shareholders of
the Company with the prior approval of a majority of the independent directors
of the board of directors of the Company (the "Board"), provided that no member
of the Restricted Group shall propose such a tender offer or other similar offer
to the Board unless invited to do so by the Board on an unsolicited basis);
provided, however, that any increase in Restricted Group Ownership Percentage
that (i) results in the Restricted Group Ownership Percentage exceeding 19.9%
(other than pursuant to the proviso of the definition of "Maximum Permitted
Ownership Percentage" below) and (ii) is in the aggregate greater than 5% of the
Company's outstanding Common Shares in any 12-month period shall only be made
pursuant to an offer available to all shareholders of the Company.
"Restricted Group Ownership Percentage" shall mean the aggregate percentage
Beneficial Ownership by the members of the Restricted Group of the Company's
Voting Securities, in each case calculated in the manner set forth in Rule 13d-3
under the Exchange Act.
"Maximum Permitted Ownership Percentage" shall mean the greater of (i)
19.9% or (ii) the percentage of Beneficial Ownership of Voting Securities owned
by the largest shareholder of the Company (other than any member of the
Restricted Group, and other than any other shareholder of the Company who
reports (or is eligible to report) its ownership of the Company's securities on
Form 13G under the Exchange Act or pursuant to Part 4 of National Instrument
62-103); provided, however, that, from and after the first anniversary of the
Closing, any collective investment vehicles which are controlled Affiliates of
Greenwich Street Investments II, L.L.C., and which are not also Affiliates of
the Purchaser or the General Partner (except as a result of their Affiliation
with Greenwich Street Investments II, L.L.C.), shall be permitted to acquire in
open market purchases up to an additional aggregate percentage Beneficial
Ownership of Voting Securities (in addition to the other Beneficial Ownership
otherwise permitted by the Restricted Group hereunder) equal to the positive
percentage (if any) resulting from subtracting the then-applicable Maximum
Permitted Ownership Percentage from 22.9%, provided that such additional Voting
Securities acquired pursuant to the exception contained in this proviso shall in
all other respects be subject to the provisions of this Agreement applicable to
the other Voting Securities owned by the Restricted Group.
2. RESTRICTIONS ON PROXY CONTESTS.
------------------------------
Each of the Purchaser and the General Partner covenants and agrees that,
until the Release Date occurs, no member of the Restricted Group shall propose,
participate in, make or support any "solicitation" of "proxies" to vote (as such
terms are defined in Rule 14a-1 under the Exchange Act), solicit any consent, or
communicate with or seek to advise or influence any Person (in each case other
than members of the Restricted Group) with respect to the solicitation or voting
of any Voting Securities of the Company (A) in opposition to any matter that has
been recommended to shareholders by the Board or in favor of any matter that has
not been approved
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by the Board, or otherwise become a "participant" in any "election contest" (as
such terms are defined or used in Rule 14a-11 under the Exchange Act) with
respect to the Company, or (B) in opposition to the Company's then-current
members of management; provided, however, that the restrictions set forth in
this Section 2 shall lapse in the event that (i) Robert Burton is terminated as
the Company's chief executive officer ("CEO") without "Cause" (as defined in his
employment agreement with the Company) within the twenty-four month period
immediately following the date of this Agreement, (ii) neither of the members of
the Board designated by the Restricted Group pursuant to section 6.1(b) of the
Debenture Purchase Agreement vote in favor of such termination of Mr. Burton and
(iii) neither of the members of the Board designated by the Purchaser pursuant
to section 6.1(b) of the Debenture Purchase Agreement votes in favor of the
chief executive officer (or such officer having another title but having
substantially similar responsibilities as the chief executive officer) who
replaces Mr. Burton.
3. RESTRICTION ON VOTING GROUP.
---------------------------
Each of the Purchaser and the General Partner covenants and agrees that,
until the Release Date occurs, no member of the Restricted Group shall
participate in, form, be a member of, join or encourage the formation of, any
"group" (within the meaning provided in Section 13(d)(3) of the Exchange Act)
(other than any group consisting solely of members of the Restricted Group) with
respect to any Voting Stock of the Company or the acquisition of substantially
all of the assets of the Company or any of the capital stock of its Significant
Subsidiaries (other than a group the sole purpose and activities of which are to
exercise the Restricted Group's solicitation rights permitted by the proviso
contained in Section 2 of this Agreement).
4. SHAREHOLDER PROPOSALS.
---------------------
Each of the Purchaser and the General Partner covenants and agrees that,
until the Release Date occurs, no member of the Restricted Group shall (A)
initiate, propose or otherwise solicit shareholders of the Company with respect
to, or otherwise make publicly, any shareholder proposal with respect to the
Company (including without limitation a proposal of the type described in Rule
14a-8 under the Exchange Act), or induce or attempt to induce any other Person
to initiate any such shareholder proposal or (B) solicit, seek to effect,
negotiate with or provide any information to any other Person (other than
another member of the Restricted Group) with respect to, or make any proposal,
whether written or oral, to the Board, or otherwise make any public announcement
or proposal whatsoever with respect to, a merger or acquisition of the Company
or any of its Subsidiaries, the sale of substantially all of the assets of the
Company or any capital stock of any of its Significant Subsidiaries, the
purchase of Voting Securities of the Company or any of its Significant
Subsidiaries, the liquidation or recapitalization of the Company or any of its
Subsidiaries or any similar business transactions, or take any other action
which might require or result in a public announcement with respect to any such
matters or other matters which would require a shareholder vote, or make an
announcement of the intention to make such a proposal (in each case other than
any such public
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statements or proposals necessary to the exercise of the Restricted Group's
solicitation rights permitted by the proviso contained in Section 2 of this
Agreement).
5. ELECTION OF DIRECTORS.
---------------------
Each of the Purchaser and the General Partner covenants and agrees that,
until the Release Date occurs, no member of the Restricted Group shall seek or
attempt to elect members to or place a representative on, or seek to remove
members from, the Board, in each case other than pursuant to section 6.1(b),
section 6.1(d)(i) and section 6.3 of the Debenture Purchase Agreement (in each
case other than solely pursuant to the exercise of the Restricted Group's
opposition rights permitted by the proviso contained in Section 2 of this
Agreement).
6. VOTING TRUSTS.
-------------
Each of the Purchaser and the General Partner covenants and agrees that,
until the Release Date occurs, no member of the Restricted Group shall deposit
any Voting Securities of the Company into a voting trust or subject any Voting
Securities of the Company to any arrangement or agreement with respect to the
voting thereof.
7. SHAREHOLDER MEETINGS.
--------------------
Each of the Purchaser and the General Partner covenants and agrees that,
until the Release Date occurs, no member of the Restricted Group shall call or
seek to have called any meeting of the shareholders of the Company (other than a
shareholders meeting the sole purpose and scope of which (other than to the
extent that such purpose and scope are expanded by shareholders who are not
members of the Restricted Group or by the Board, in either case without any
solicitation or encouragement to do so by any member of the Restricted Group) is
to exercise the Restricted Group's opposition rights permitted by the proviso
contained in Section 2 of this Agreement).
8. THIRD PARTY ACTIONS.
-------------------
Each of the Purchaser and the General Partner covenants and agrees that,
until the Release Date occurs, no member of the Restricted Group shall instigate
or assist, or enter into any arrangements with, any other Person to take any of
the actions described in Sections 1 through 7 or in Section 14 hereof (including
without limitation through (i) the actions of the members of the Board nominated
pursuant to Section 6.1(b) of the Debenture Purchase Agreement, acting in their
capacity as directors, or (ii) the actions of any other member of a "group"
(within the meaning provided in Section 13(d)(3) of the Exchange Act) of which
any such member of the Restricted Group is a member).
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9. RELEASE FROM RESTRICTIONS; TERMINATION.
--------------------------------------
The restrictions set forth in clause (B) of Section 4 of this Agreement
shall not prevent the Restricted Group from making a written acquisition
proposal to the Board (or from publicly announcing the making of such a written
proposal not less than eight Business Days after it has been made, if not
previously made public by the Company) that is designed to compete with a
definitive, bona fide written offer for not less than 50.1% of the capital stock
or assets of the Company that has either been made in writing by a third party
to the Board (in which event such written offer shall be required to set forth a
specific amount and form of consideration, as well as other customary material
terms, to be considered "definitive" hereunder) or has been publicly commenced
by a third party through the launching of a tender offer or by other similar
means (whether or not pursuant to an agreement with the Company), in any such
event which offer was not directly or indirectly induced by any member of the
Restricted Group (a "Third Party Offer").
10. NOTICE.
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(a) Any notice or direction or other instrument required or permitted to be
given under this Agreement shall be in writing and shall be given by delivery of
the same or by sending the same by facsimile, in each case addressed as follows:
(i) if to the Company, at:
Moore Corporation Limited
c/o Moore Executive Office
1200 Lakeside Drive
Bannockburn, IL 60015-1243
Attention: Office of General Counsel and
Chief Financial Officer
Or by facsimile at: 847-607-7113
with a copy to:
Moore Corporation Limited
Scotia Plaza
40 King St., West
Suite 3501
P.O. Box 205
Toronto, ON M5H 3Y2
Attention: Vice President and Secretary
or by facsimile at: 416-364-1667; and
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(ii) if to the Purchaser or the General Partner:
Chancery Lane/GSC Investors L.P.
c/o CLGI, Inc.
3 E. 54th Street - Suite 1700
New York, NY 10022
Attention: Michael Kraus
or by facsimile at: 212-223-4074.
(b) Any notice, direction or other instrument will be deemed to have been
given and received on the day on which it is delivered or transmitted if a
business day (being any day other than a Saturday, Sunday or a statutory or
civic holiday in Toronto, Ontario or New York, New York) and, if not a business
day, then on the next succeeding business day.
(c) Either party may at any time give to the other notice in writing of any
change of address of the party giving such notice and from and after the giving
of such notice the address therein specified will be deemed to be the address of
such party for the purposes of giving notice hereunder.
11. BENEFIT OF THIS AGREEMENT.
-------------------------
No party may assign any of its rights or obligations under this Agreement
without the prior written consent of the other party. This Agreement shall enure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
12. ENTIRE AGREEMENT.
----------------
This Agreement, the Ancillary Agreements and the Debentures constitute the
entire agreement between the parties with respect to the subject matter hereof
and replaces and supersedes all prior agreements, memoranda, correspondence,
communications, negotiations and representations, whether oral or written,
express or implied, statutory or otherwise, between the parties with respect to
such subject matter.
13. FURTHER ASSURANCES.
------------------
Upon request of one party to this Agreement from time to time, the other
party shall promptly execute and deliver such further and other documents and do
such further and other things as may be reasonably necessary or convenient in
order to fully perform the terms and carry out the intention of this Agreement.
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14. AMENDMENTS; WAIVER; TERMINATION.
-------------------------------
No amendment, modification or waiver of any provision of this Agreement or
consent to any departure by the parties hereto from any provision of this
Agreement will in any event be effective unless it is in writing signed by each
party hereto and then the amendment, modification, waiver or consent will be
effective only in the specific instance, for the specific purpose and for the
specific length of time indicated in that instrument. Each of the Purchaser and
the General Partner covenants and agrees that, until the Release Date occurs, no
member of the Restricted Group shall request or propose (in writing or
otherwise) that the Company waive, modify, amend or otherwise fail to diligently
enforce any provision of this Agreement. This Agreement shall terminate on the
Release Date, provided that such termination shall not relieve any party hereto
from liabilities arising hereunder prior to such termination.
15. SEVERABILITY.
------------
Any provision of this Agreement which is prohibited or unenforceable shall
not invalidate the remaining provisions unless its removal would substantially
defeat the basic intent, spirit and purpose of this Agreement.
16. GOVERNING LAW.
------------
This Agreement shall be governed by and construed according to the laws of
the State of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York with respect to all matters
arising hereunder.
17. TIME.
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Time shall be of the essence of all provisions of this Agreement.
18. REPRESENTATIONS AND WARRANTIES. The General Partner hereby represents and
warrants to the Company that:
(a) ORGANIZATION; POWER AND AUTHORITY. The General Partner is a corporation
duly incorporated, validly existing and in good standing under the laws of
Delaware; the General Partner has all necessary corporate power to execute and
deliver this Agreement on its own behalf and on behalf of the Purchaser and to
comply with its obligations hereunder.
(b) AUTHORIZATION, ETC. The General Partner has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement; this Agreement has been duly executed and delivered by the General
Partner on its own behalf and on behalf of the Purchaser, and constitutes the
legal, valid and binding obligation of the General Partner, enforceable by the
Company in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency or other laws of general application affecting the
enforcement
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of creditors' rights and subject to the qualification that specific performance
and injunction, being equitable remedies, may be granted only in the discretion
of a court of competent jurisdiction.
(c) COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. The authorization,
execution, delivery and performance by the General Partner on its own behalf and
on behalf of the Purchaser of this Agreement is in conflict with or will result
in any breach of, or will create a state of facts which after notice or lapse of
time or both will result in a breach of any of the terms or provisions of, the
constituent documents of the General Partner, the resolutions of the board of
directors of the General Partner or any material indenture, instrument,
agreement or undertaking to which the General Partner is a party or by which the
General Partner or the properties or assets of the General Partner are or may
become bound, or results or would result in the creation or imposition of any
security interest, mortgage, Lien, charge or encumbrance of any nature
whatsoever upon any of the material properties or assets of the General Partner
pursuant to the terms of any such indenture, instrument, agreement or
undertaking.
19. PURCHASER'S COVENANTS. The Purchaser hereby represents and warrants that
each member of the Restricted Group that is a general or limited partner of the
Purchaser has agreed to comply with the covenants and agreements contained in
this Agreement and the Debenture Purchase Agreement applicable to the actions of
such Restricted Group member. The Purchaser hereby covenants and agrees (i) to
cause each other member of the Restricted Group to comply with the covenants and
agreements contained in this Agreement and the Debenture Purchase Agreement
applicable to the actions of such Restricted Group member and (ii) to cause each
other member of the Purchaser Group to comply with the covenants and agreements
contained in the Debenture Purchase Agreement applicable to the actions of such
Purchaser Group member. Without limiting the generality of the foregoing, the
Purchaser represents and warrants that the Purchaser's constituent documents
executed by members of the Restricted Group who are general or limited partners
of the Purchaser shall at all times contain an agreement of each such Purchaser
Group member to comply with the covenants and agreements contained in this
Agreement and the Debenture Purchase Agreement applicable to such Person. The
Purchaser further covenants and agrees that the Company shall be an intended
third party beneficiary of such agreement of each such Purchaser Group member
and, prior to the Release Date, the Purchaser shall not modify, amend, waive or
otherwise fail to diligently enforce such agreement of any such Purchaser Group
member without the prior written consent of the Company. The Purchaser shall
cause each other member of the Purchaser Group who becomes a holder of
Debentures and each other member of the Restricted Group who becomes a holder of
Conversion Shares, in either such case by reason of a transfer of such
securities from the Purchaser or any other transferee of the Purchaser, to agree
in a written instrument delivered to the Company (and reasonably satisfactory in
form and substance to the Company) to be bound by the Purchaser's covenants set
forth in this paragraph as a condition to such transfer.
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MOORE CORPORATION LIMITED
By:_________________________
Name:
Title:
CHANCERY LANE/GSC INVESTORS L.P.,
BY: ITS GENERAL PARTNER, CLGI, INC.
By:________________________
Name:
Title:
CLGI, Inc.
By:________________________
Name:
Title:
