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As Of Filer Filing For·On·As Docs:Size Issuer Agent 3/23/10 7293411 Canada Inc. SC 13D 3/22/10 6:1.0M Optimal Group Inc Donnelley … Solutions/FA 7293411 Canada Inc. Eric Lau Francis Choi Richard Yanofsky |
Document/Exhibit Description Pages Size 1: SC 13D General Statement of Beneficial Ownership HTML 69K 2: EX-1 Underwriting Agreement HTML 47K 3: EX-2 Plan of Acquisition, Reorganization, Arrangement, HTML 596K Liquidation or Succession 4: EX-3 Articles of Incorporation/Organization or By-Laws HTML 60K 5: EX-4 Instrument Defining the Rights of Security Holders HTML 10K 6: EX-5 Opinion re: Legality HTML 9K
EX-3 |
(a) | Optimal Group Inc. (“Target”) owns all of the issued and outstanding shares of OGOP Payments Inc. (“Vendor”) and Vendor is the registered and beneficial owner of 1000 common shares of Optimal Merchant Services Inc. (“Corporation”), which shares represent all of the issued and outstanding shares of Corporation (collectively, the “Shares”); | ||
(b) | Pursuant to a support agreement (the “Support Agreement”) between Offeror and Target dated the date hereof, the board of directors of Target has agreed to cooperate with Offeror to support Offeror’s offer (the “Offer”) to acquire all of the outstanding Class “A” shares of Target and to recommend in the director’s circular to be prepared in connection with the Offer that all holders of Class “A” shares of Target tender their Class “A” shares to Offeror, all on and subject to the terms and conditions of the Support Agreement; | ||
(c) | Target and each of HNG entered into an Executive Employment Agreement each dated as of March 5, 2004, (collectively, the “Employment Agreements”) in respect of each of their employment with Target; | ||
(d) | Upon completion of all the transactions contemplated by the Offer, including a Subsequent Acquisition Transaction (the “Closing”), Offeror intends to cause Target to terminate HNG’s employment; | ||
(e) | The completion of the Offer in accordance with the terms and conditions of the Support Agreement will constitute a Change of Control and the Employment Agreements provide that, following a Change of Control, Target (or Offeror, as the case may be) shall, upon termination of HNG’s employment, among other things, pay to HNG the Basic Payments and the Termination Payments and perform the Insurance Covenants and the Medical Insurance Covenant; | ||
(f) | Pursuant to Letter Agreements dated July 2, 2009 (the “Letter Agreements”), each of HNG agreed to a 30% reduction on 80% of his Base Salary (the “Reduction in Salary Payments”) that would be reimbursed upon the occurrence of a Change of Control; and | ||
(g) | The Parties wish to enter into this Settlement Agreement for the purposes of settling and providing for the terms and conditions which will govern the termination of HNG’s employment with Target and the granting of mutual releases in settlement thereof. |
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Term | Reference | |
Agreement
|
First page | |
Closing
|
Recitals | |
Consideration
|
Section 6 | |
Corporation
|
Recitals | |
Employment Agreements
|
Recitals | |
Forgiveness Reorganization
|
Section 5(a) | |
Letter Agreements
|
Recitals | |
Holden
|
First page | |
HNG
|
Recitals | |
Intervenor
|
Intervention | |
Parties
|
First page | |
Plan
|
Section 5(a) | |
Portfolio
|
Section 6 | |
Offeror
|
Recitals | |
Reduction in Salary Payments
|
Recitals | |
Releasees
|
Section 17 | |
Releasors
|
Section 17 | |
Revised Settlement Agreement
|
Section 16 | |
Shares
|
Recitals | |
Superior Offeror
|
Section 16 | |
Support Agreement
|
Recitals | |
Target
|
Recitals | |
Tax Payments
|
Section 5(d) | |
Vendor
|
Recitals |
(a) | each of HNG’s employment with the Corporation shall be terminated; and | ||
(b) | the Employment Agreements and Letter Agreements shall be terminated and have no further force or effect, including (the restrictive covenants contained in Article 9 of each of the Employment Agreements) and the Employment Agreements and Letter Agreements shall be entirely replaced and superseded by the terms and conditions of this Agreement. |
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(a) | on or prior to Closing, cause the forgiveness of any outstanding intercompany debt of Corporation without consideration (the “Forgiveness Reorganization”) in accordance with the plan to be provided by RSM Richter prior to Closing and acceptable to the Parties (the “Plan”); | ||
(b) | on Closing and after completion of the Forgiveness Reorganization, cause Vendor to transfer all of the Shares to or as directed by each of HNG, in accordance with the allocations to be set out by HNG by written notice to Offeror on or prior to Closing; | ||
(c) | on Closing, cause Target to remit to the relevant Canadian and provincial tax authorities an amount equal to 35% of the value of the Consideration, on account of the withholding obligation of Target with respect to the Consideration attributable to each of HNG; and | ||
(d) | on Closing, remit or cause Target to remit, certified cheques to or as directed by each of HNG in an aggregate amount equal to 13.22% of the Consideration, in accordance with the allocations to be set out by HNG by written notice to Offeror on or prior to Closing (together with the remittance described in this Section 5(c), the “Tax Payments”). |
(a) | On the Closing Date, Offeror shall cause to be put in place medical insurance coverage for each of HNG, which coverage shall provide each of HNG and their respective families with health, life, dental and other insurance coverage in Canada and the United States equivalent to the coverage currently maintained by Target for the benefit of its senior executives and HNG. Such coverage shall be for a term of five (5) years commencing on the Closing |
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Date, which coverage shall be prepaid by Offeror or Offeror shall cause Target to prepay such coverage, as the case may be, on or prior to Closing (the “Medical Insurance Covenant”). |
(b) | On the Closing Date, Offeror shall or shall cause Target to, pay to each of HNG the aggregate amount of his respective Base Salary that was reduced during the Reduction Period (as such term is defined in the Letter Agreements), calculated up to the Closing Date. | ||
(c) | On the Closing Date, Offeror shall or shall cause Target to, pay to each of HNG their respective Forced Savings Amount, in each case, accrued from January 1, 2010 through to the Closing Date. | ||
(d) | On the Closing Date, Offeror shall or shall cause Target to, forgive the indebtedness of Holden L. Ostrin to Target on account of a home loan granted to him in 1996 and Offeror shall or shall cause Target to, reimburse Holden for any taxes incurred by Holden in connection with such forgiveness and taxes incurred by Holden as a result of the payment by Target (or Offeror, as the case may be) of such taxes. |
(a) | Incorporation and Qualification. Offeror is a corporation incorporated and existing under the laws of its jurisdiction of incorporation; | ||
(b) | Corporate Authority. The execution and delivery of and performance by Offeror of this Agreement and the transactions contemplated thereby have been authorized by all necessary corporate action on the part of Offeror ; and | ||
(c) | Execution and Binding Obligation. This Agreement has been duly executed and delivered by Offeror and constitutes a legal, valid and binding Agreement of Offeror enforceable against it in accordance with its terms subject only to any limitation under applicable laws relating to (i) bankruptcy, winding-up, insolvency, arrangement and other laws of general application affecting the enforcement of creditors’ rights, and (ii) the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction. |
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(a) | Execution and Binding Obligation. This Agreement has been duly executed and delivered by him and constitutes a legal, valid and binding Agreement enforceable against him in accordance with its terms subject only to any limitation under applicable laws relating to (i) bankruptcy, winding-up, insolvency, arrangement and other laws of general application affecting the enforcement of creditors’ rights, and (ii) the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction; | ||
(b) | Securities Laws. He is acquiring the Shares as principal and not as agent; and | ||
(c) | No Other Agreements. All outstanding agreements between any of HNG and Target have been publicly disclosed or have been provided by HNG to Offeror. |
(a) | Ownership of all electronics currently being utilized directly and regularly by HNG in carrying on their business, including computers, cell phones and Blackberries, will be transferred to HNG (to the extent not already owned); | ||
(b) | Ownership of all office furniture and contents of office (anything on walls, etc.) currently being utilized directly and regularly by HNG will be transferred to HNG (to the extent not already owned); | ||
(c) | HNG will be entitled to the office space currently being utilized directly and regularly by HNG up until the end of the Transition Period, including access to the kitchen on a rent free basis. After the Transition Period, Offeror shall or shall cause Target to, and HNG shall agree on a fair and appropriate rent for any premises still occupied by HNG. Notwithstanding the foregoing, in the event that Target (or Offeror, as the case may be) desires to abandon the lease or decides to sublease all or part of the premises occupied by HNG, Offeror shall or shall cause Target to, provide HNG with a 3 month notice setting out Target’s (or Offeror’s, as the case may be) plans in which case HNG shall either match the terms of any sublease or shall vacate the premises at the end of the period specified in the notice; | ||
(d) | Offeror shall or shall cause Target to, maintain and pay and HNG will be entitled to use the existing parking spots currently being utilized directly and regularly by HNG during the Transition Period; | ||
(e) | During the Transition Period, Offeror shall or shall cause Target to, maintain and pay and HNG will be entitled to use the existing Videotron access currently being utilized directly and regularly by them; |
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(f) | Offeror shall or shall cause Target to, transfer at no cost to HNG the Optimal Group name/URL/domain name and server with free bandwidth during the Transition Period; | ||
(g) | HNG will be entitled at no cost to technical support as needed from Costa Lappas (or any replacement) during the Transition Period, after which time such support shall be provided and billed at cost until the end of the current lease; | ||
(h) | Offeror shall or shall cause Target to, transfer at no cost to HNG individual, direct-dial, phone numbers;514-738-8885;514-738-1622 and 514-738-8355 (fax) and HNG shall be entitled, at no cost, to the use of telephone and fax services during the Transition Period, after which time such use shall be provided and billed at cost until the end of the current lease; and | ||
(i) | HNG shall be entitled at no cost to support provided by Robin Kahn (or any replacement) during the Transition Period, after which time such support shall be provided by any person designated by Target and shall be billed to HNG at cost until the end of the current lease. |
(1) | Conditions for the Benefit of HNG. The transactions contemplated hereby are subject to the following conditions to be fulfilled or performed, which conditions are for the exclusive benefit of HNG and may be waived, in whole or in part, by HNG in their sole discretion: |
(a) | The Closing shall have occurred no later than June 30, 2010; | ||
(b) | The representations and warranties of Offeror contained in this Agreement shall be true and correct as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of such date; | ||
(c) | Offeror shall not, as of the Closing Date, be in breach of any of its covenants hereunder; | ||
(d) | Offeror shall deliver or cause to be delivered to HNG the following in form and substance satisfactory to HNG: |
(i) | evidence that Vendor has completed the Forgiveness Reorganization in accordance with the Plan; | ||
(ii) | evidence that the taxes pursuant to Section 5(c) have been remitted by Target (or Offeror as the case may be) to the appropriate Canadian and provincial tax authorities; | ||
(iii) | share certificates representing the Shares duly endorsed for transfer to HNG or accompanied by an irrevocable share transfer power of attorney duly executed in blank by Vendor; |
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(iv) | resignations of the officers and directors of the Corporation (other than HNG) and releases in favour of HNG and Corporation by such officers and directors; | ||
(v) | a release signed by Target in favour of HNG in the same form set out in Section 17; and | ||
(vi) | a certified copy of the resolution of the directors (and, if required, a resolution of the shareholders) of the Corporation approving the transfer of the Shares to HNG. |
(2) | Conditions for the Benefit of Offeror. The transactions contemplated hereby are subject to the following conditions to be fulfilled or performed, which conditions are for the exclusive benefit of Offeror and may be waived, in whole or in part, by Offeror in its sole discretion: |
(a) | The Closing shall have occurred no later than June 30, 2010; | ||
(b) | The representations and warranties of HNG contained in this Agreement shall be true and correct as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of such date; and | ||
(c) | HNG shall not, as of the Closing Date, be in breach of any of its covenants hereunder. |
(i) | by mutual consent of the Parties; | ||
(ii) | by HNG if any of the conditions in Section 12(1) have not been met or satisfied on or prior to the Closing Date or if the Closing Date does not occur on or prior to June 30, 2010 or on or before such later date as the Parties agree to in writing, provided that HNG may not terminate this Agreement under this Section 14(ii) if they have failed to perform any one or more of their obligations or covenants under this Agreement to be performed at or prior to Closing and the Closing has not occurred because of such failure; | ||
(iii) | by Offeror if any of the conditions in Section 12(2) have not been met or satisfied on or before June 30, 2010 or on or before such later date as the Parties agree to in writing, provided that Offeror may not terminate this Agreement under this Section 14(iii) if it has failed to perform any one or |
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more of its obligations or covenants under this Agreement to be performed at or prior to Closing and the Closing has not occurred because of such failure; or |
(iv) | Subject to Section 16, if the Support Agreement is terminated for any reason whatsoever. |
(a) | Each Party’s right of termination under Section 14 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies. Nothing in this Article limits or affects any other rights or causes of action any Party may have with respect to the representations, warranties and covenants in its favour contained in this Agreement. If a Party waives compliance with any of the conditions, obligations or covenants contained in this Agreement, the waiver will be without prejudice to any of its rights of termination in the event of non-fulfilment, non-observance or non-performance of any other condition, obligation or covenant in whole or in part. | |
(b) | If this Agreement is terminated pursuant to Section 14, all obligations of the Parties under this Agreement will terminate, except that: |
(i) | each Party’s obligations under Section 18 and Section 19 will survive termination indefinitely; | ||
(ii) | if this Agreement is terminated under the circumstances referred to in Section 16, Section 16 will survive termination for the period indicated in such Section; and | ||
(iii) | if this Agreement is terminated by a Party because of a breach of this Agreement by the other Party or because a condition for the benefit of the terminating Party has not been satisfied because the other Party has failed to perform any of its obligations or covenants under this Agreement, the terminating Party’s right to pursue all legal remedies will survive such termination unimpaired. |
(a) | the Superior Offeror shall agree to pay for, in addition to the professional fees and expenses referred to in Section 18, all incremental professional fees and expenses incurred by HNG from the date the Support Agreement is terminated to the date the transactions contemplated by the Superior Offeror are completed without the C$200,000 limitation set out in Section 18; and |
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(b) | the Revised Settlement shall contain a closing condition in favour of HNG that as at the closing date of the transactions contemplated in the Superior Offer, no event or condition shall have occurred, or shall exist, that individually or in the aggregate is or would reasonably be expected to be material and adverse to the condition (financial or otherwise), properties, assets, liabilities, obligations, business, operations or prospects of Corporation. |
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(1) | No waiver of any of the provisions of this Agreement shall be deemed to constitute a waiver of any other provision (whether or not similar), nor shall such waiver be binding unless executed in writing by the Party to be bound by the waiver. | |
(2) | No failure on the part of any Party to exercise, and no delay in exercising any right under this Agreement shall operate as a waiver of such right; nor shall any single or partial exercise of any such right preclude any other or further exercise of such right or the exercise of any other right. |
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7293411 Canada Inc. |
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By: | /s/ Richard Yanofsky | |||
Authorized Signing Officer | ||||
/s/ Holden L. Ostrin | ||||
Holden L. Ostrin
|
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/s/ Neil Wechsler | ||||
Neil Wechsler
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/s/ Gary Wechsler | ||||
Gary Wechsler |
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Optimal Group Inc. | ||||
Authorized representative | ||||
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This ‘SC 13D’ Filing | Date | Other Filings | ||
---|---|---|---|---|
1/31/11 | ||||
6/30/10 | ||||
Filed as of: | 3/23/10 | 8-K | ||
Filed on: | 3/22/10 | 8-K, SC 13D/A | ||
1/1/10 | ||||
7/2/09 | 8-K | |||
3/5/04 | 8-K, 8-K/A | |||
List all Filings |