Document:

exv10w22

 

Exhibit 10.22

DEBT REPAYMENT AND CONVERSION AGREEMENT

     THIS AGREEMENT is made as of this • day of , 2007

BETWEEN:

PHOTOWATT TECHNOLOGIES INC., a corporation incorporated

under the laws of Canada

(hereinafter referred to as “Photowatt”)

- and -

ATS AUTOMATION TOOLING SYSTEMS INC., a corporation incorporated under the laws of
Ontario

(hereinafter referred to as “ATS”)

     WHEREAS Photowatt is undertaking an initial public offering (the “Offering”) of its common
shares pursuant to a registration statement on Form F-1 under the U.S. Securities Act of 1933 and a
prospectus filed with Canadian securities regulatory authorities;

     AND WHEREAS Photowatt and ATS contemplate entering into an underwriting agreement relating to
the Offering with BMO Nesbitt Burns Inc. and UBS Securities LLC as managing underwriters (the
“Underwriting Agreement”);

     AND WHEREAS ATS contemplates transferring certain of its solar energy assets to Photowatt
immediately prior to or concurrent with completion of the Offering;

     AND
WHEREAS Photowatt is indebted to ATS in the aggregate amount of approximately $• as at the date of
this Agreement pursuant to an intercompany loan from ATS to Photowatt
as evidenced by a promissory note dated •, 2007 (the “Debt”);

     AND WHEREAS the parties have agreed that the Debt will be repaid or converted into common
shares in the capital of Photowatt or a combination thereof following the completion of the
Offering, depending upon the aggregate amount of gross proceeds received by Photowatt pursuant to
the Offering;

     NOW THEREFORE in consideration of the mutual covenants and agreements contained herein and
other good and valuable consideration (the receipt and sufficiency of which is hereby
acknowledged), the parties hereto covenant and agree with each other as follows:

 

 

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ARTICLE 1

REPAYMENT AND CONVERSION OF DEBT

     1.1 Agreement to Repay and Convert Debt by Photowatt. Immediately following the earlier of the
exercise in full and the expiration (the “Debt Settlement Time”) of the over-allotment option to be
granted by Photowatt to the underwriters of the Offering pursuant to the Underwriting Agreement
(the “Over-Allotment Option”), the parties agree that such portions of the Debt determined in
accordance with this Section shall be repaid and converted into common shares in the capital of
Photowatt respectively as follows:

	 	(a)	 	the portion, if any, of the amount of the Debt equal
to the lesser of: (x) the excess, if any, of (i) the aggregate amount of gross proceeds
received by Photowatt pursuant to the Offering including the aggregate amount of gross
proceeds, if any, received by Photowatt pursuant to the exercise of the Over-Allotment
Option over (ii) $175,000,000.00; and (y) the amount of the Debt, shall be repaid in cash by
certified cheque or wire transfer by Photowatt to ATS or, at the
option of ATS, upon the instruction of Photowatt to the underwriters
of the Offering, by such underwriters to ATS (the “Repaid Debt”); and
	 
	 	(b)	 	the excess, if any, of the amount of the Debt over the Repaid Debt (the “Converted Debt”) shall be converted into
such number of fully paid and non-assessable common shares in the capital of Photowatt
equal to the quotient obtained by dividing an amount equal to the Converted Debt by an
amount equal to the initial public offering price per common share established pursuant
to the Offering (before deduction of any amount including underwriting commissions),
with any fraction of a share to be rounded to the nearest whole number (the “Shares”).

1.2 Surrender of Debt. Upon conversion of the Converted Debt in accordance with Section 1.1, ATS
acknowledges and agrees that its right and/or entitlement in and to repayment of the Converted Debt
shall have been surrendered and that Photowatt shall be released from any liability relating to the
Converted Debt.

1.3 Payment for Shares. The parties to this Agreement hereby acknowledge and agree that the
surrender and release of the Converted Debt by ATS for conversion into the Shares will constitute
full repayment of the Converted Debt by Photowatt and payment by ATS of the consideration for the
Shares.

1.4 Delivery of Share Certificates. Photowatt agrees to deliver to ATS certificates representing
the Shares forthwith following the conversion contemplated by Section 1.1.

1.5 Payment of Interest on Debt. Photowatt agrees to pay to ATS in cash, by certified cheque
or wire transfer by to ATS at the Debt Settlement Time, an amount equal to the interest at the Bank
of Nova Scotia’s U.S. dollar base rate in Canada that has accrued on the Debt after the date of
this Agreement to and including the Debt Settlement Time.

ARTICLE 2

GENERAL

2.1 Assignment. Neither party shall assign, transfer or otherwise alienate any or all of its
rights or interest under this Agreement without the express prior written consent of the other
party, which may be granted or withheld in such other party’s sole discretion. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and

 

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permitted assigns, and any permitted assignee shall agree to perform the obligations of the
assignor of this Agreement. Any attempted transfer, assignment or alienation in violation of this
Section 2.1 shall be invalid and ineffective ab initio.

2.2 Further Assurances. On and after the date hereof, each party hereto shall cooperate with the
other party, and without any further consideration, but at the expense of the requesting party, to
execute and deliver, or use its commercially reasonable efforts to cause to be executed and
delivered, all instruments, including instruments of conveyance, assignment and transfer, and to
make all filings with, and to obtain all consents of, any governmental authority or any other
person under any permit, license, agreement, indenture or other instrument (including any consents
or consents, approvals, rulings or decisions of any governmental authority), and to take all such
other actions as such party may reasonably be requested to take by any other party hereto from time
to time, consistent with the terms of this Agreement, in order to effectuate the provisions and
purposes of this Agreement and the other transactions contemplated hereby.

2.3 Notices. Any notice, instruction, direction, demand or other communication to any party under
the terms of this Agreement shall be in writing and shall be deemed properly delivered, given and
received: (a) when delivered by hand; (b) on the day sent by facsimile provided that the sender has
received confirmation of transmission from the recipient as at or prior to 5:00 p.m. Toronto time
on such day; (c) the first business day after sent by facsimile (to the extent that the sender has
received confirmation of transmission from the recipient after 5:00 p.m. Toronto time on the day
sent by facsimile); or (d) the next business day after sent by registered mail (at any time other
than during a general discontinuance of postal service due to strike, lockout or otherwise) or by
courier or express delivery service, in any case to the address or facsimile telephone number set
forth beneath the name of such party below (or to such other address or facsimile telephone number
as such party shall have specified in a written notice given to the other parties hereto):

	 	(a)	 	if to ATS, to:
	 
	 	 	 	ATS Automation Tooling Systems Inc.

250 Royal Oak Road

Cambridge, Ontario N3H 4R6

Attention: General Counsel

Fax No.: (519) 650-6520
	 
	 	(b)	 	if to Photowatt, to:
	 
	 	 	 	Photowatt Technologies, Inc.

25 Reuter Drive

Cambridge, Ontario N3E 1A9

Attention: President and Chief Executive Officer

Fax No.: (519) 650-6535

In the event of a general discontinuance of registered mail service due to strike, lock out or
otherwise, any notice, instruction, direction, demand or other communication will be delivered by

 

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hand, courier or express delivery service or sent by facsimile and will be deemed to have been
received in accordance with this Section.

2.4 Time of Essence. Time is of the essence of this Agreement.

2.5 Governing Law. This Agreement shall be construed in accordance with and governed by the laws
of the Province of Ontario and the federal laws of Canada applicable therein.

2.6 Specific Performance. In the event of any actual or threatened default in, or breach of, any
of the terms, conditions and provisions of this Agreement, the party or parties who are or are to
be thereby aggrieved shall have the right to specific performance and injunctive or other equitable
relief of its rights under this Agreement, in addition to any and all other rights and remedies at
law or in equity, and all such rights and remedies shall be cumulative. The parties agree that the
remedies at law for any breach or threatened breach, including monetary damages, are inadequate
compensation for any loss and that any defense in any action for specific performance that a remedy
at law would be adequate is waived. Any requirements for security or posting of any bond with such
remedy are waived.

2.7 Currency. Except as expressly provided in this Agreement, all amounts in this Agreement are
stated and will be paid in currency of the United States of America.

2.8 Time Periods. Unless otherwise specified, time periods within or following which any payment
is to be made or act is to be done shall be calculated by excluding the day on which the period
commences and including the day on which the period ends.

2.9 Amendment. This Agreement may only be modified, amended by, altered or supplemented by the
execution and delivery of a written agreement executed by both the parties.

2.10 Counterparts. This Agreement may be executed in separate counterparts, each of which shall be
deemed an original and all of which, when taken together, shall constitute one and the same
agreement.

2.11 Authority. Each party represents to the other party that (a) it has the corporate power and
authority to execute, deliver and perform this Agreement, (b) the execution, delivery and
performance of this Agreement by it have been duly authorized by all necessary corporate or other
actions, (c) it has duly and validly executed and delivered this Agreement and (d) this Agreement
is legal, valid and binding obligation, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally and general equitable principles.

2.12 Binding Effect. This Agreement binds and benefits the parties and their respective successors
and permitted assigns. This Agreement is for the sole benefit of the parties and nothing in this
Agreement, express or implied, confers or intends to confer any rights or remedies of any nature
whatsoever in favour of any person (including any employee or shareholder of ATS or Photowatt)
other than the parties.

 

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2.13 Waiver. A provision of this Agreement may be waived only by a writing signed by the party or
parties intended to be bound by the waiver. A party is not prevented from enforcing any right,
remedy or condition in the party’s favour because of any failure or delay in exercising any right
or remedy or in requiring satisfaction of any condition, except to the extent that the party
specifically waives the same in writing. No waiver of any provision of this Agreement shall
constitute a waiver of any other provision nor shall any waiver constitute a continuing waiver
unless otherwise expressly provided. Any enumeration of a party’s rights and remedies in this
Agreement is not intended to be exclusive, and a party’s rights and remedies are intended to be
cumulative to the extent permitted by law and include any rights and remedies authorized in law or
in equity.

          IN WITNESS WHEREOF this Agreement has been executed by the parties hereto on the date first
written above.

	 	 	 	 	 
	 	PHOTOWATT TECHNOLOGIES INC.

 	 
	 	By:  	
 	 
	 	 	Name: 	 
	 

	 	 	 	 	 
	 	ATS AUTOMATION TOOLING SYSTEMS INC.

 	 
	 	By:  	
 	 
	 	 	Name:RESTRICTED STOCK AGREEMENT

      UNDER THE YOUNG INNOVATIONS, INC. 

      2006 LONG-TERM INCENTIVE PLAN

       

       

      

      	
                  Name of Grantee:
 	
                  ________________________________
 

      

      

      	
                  Social Security No.: 
 	
                  ________________________________
 

      

      

      	
                  No. of Shares:
 	
                  ________________________________
 

      

      

      	
                  Grant Date:
 	
                  ________________________________
 

      

      Vested Shares

      

      	
                  (from continuous service):
 	
                  «%» of Shares one year from the Grant Date
 

      

      

      	
                   
 	
                  «%» of Shares two years from the Grant Date
 

      

      

      	
                   
 	
                  «%» of Shares three years from the Grant Date
 

      

       

                      

       

      This Restricted Stock Agreement is between Young Innovations, Inc., a Missouri corporation (the “Company”), and you, the Grantee named above.

      This Agreement is effective as of the date of grant indicated above (the “Grant Date”).

      The Company wishes to award to you a number of shares of the Company’s Common Stock, par value ($0.01) (the “Common Stock”), subject to certain restrictions as provided in this Agreement, in order to carry out the purpose of the Young Innovations, Inc. 2006 Long-Term Incentive Plan (the “Plan”).

      Accordingly, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and you hereby agree as follows:

      

      	
                   
 	
                  1.
 	
                  Award of Restricted Stock.
 

      

      The Company hereby grants to you, effective as of the Grant Date, an Award of Restricted Stock for that number of shares of Common Stock indicated above (the “Shares”), on the terms and conditions set forth in this Agreement and in accordance with the terms of the Plan.

       

      
      

      

      

      

      	
                   
 	
                  2.
 	
                  Rights with Respect to the Shares.
 

      

      With respect to the Shares, you shall be entitled effective as of the Grant Date to exercise the rights of a shareholder of Common Stock of the Company, including the right to vote the Shares and the right, subject to Section 8(b) below, to receive dividends on the Shares, unless and until the Shares are forfeited under Section 5 below.  Notwithstanding the foregoing, you shall be subject to the transfer restrictions in Section 6.  Your rights with respect to the Shares shall remain forfeitable at all times prior to the date or dates on which such rights become vested under this Agreement. 

      

      	
                   
 	
                  3.
 	
                  Vesting.
 

      

      Subject to the terms and conditions of this Agreement, Shares shall become vested in the amount or amounts set forth herein if you remain in continuous service of the Company or a Subsidiary until the respective date or dates described in this Agreement.  Vesting or becoming vested entitles you to transfer your Shares, and to retain your Shares after termination of service with the Company and its Subsidiaries subject to Section 10 below.  Shares that vest under this Agreement are referred to as “Vested Shares.”

      

      	
                   
 	
                  4.
 	
                  Change in Control.
 

      

      In the event of a Change in Control while you are in service hereunder, all of your Shares, to the extent then unvested, shall immediately prior to such Change in Control become Vested Shares.  For purposes of this Agreement, “Change in Control” shall have the same definition as set forth in the Plan.

      

      	
                   
 	
                  5.
 	
                  Forfeiture.
 

      

      Your rights to Shares that become Vested Shares shall not be subject to forfeiture.  Your rights to Shares that are not Vested Shares shall be immediately and irrevocably forfeited upon your termination of service, including the right to vote such Shares and the right to receive cash dividends on such Shares as provided in Section 8(b) of this Agreement; provided, however, that if your service terminates due to death, your Shares, to the extent not then vested, will immediately become Vested Shares.  No transfer by will or the applicable laws of descent and distribution of any Shares which vest by reason of your death shall be effective to bind the Company unless the Committee administering the Plan shall have been furnished with written notice of such transfer and a copy of the will or such other evidence as the Committee may deem necessary to establish the validity of the transfer.

      

      	
                   
 	
                  6.
 	
                  Transfer Restrictions.
 

      

      Notwithstanding anything to the contrary in Section 2 and 3 of this Agreement, the Shares may not be sold, assigned, transferred, pledged, or otherwise encumbered by you (collectively, the “Transfer Restrictions”) during the period commencing on the Grant Date and terminating at the end of the Restricted Period.  The Committee shall have the authority, in its discretion, to accelerate the time at which any or all of the Transfer Restrictions shall lapse with respect to any Shares, or to remove any or all such restrictions, whenever the Committee may determine that such action is appropriate by reason of any changes in circumstances occurring after the commencement of the Restricted Period.

       

      

      	
                   
 	
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                  7.
 	
                  Issuance and Custody of Certificates.
 

      

      (a)          The Company shall cause the Shares to be issued in your name, either by book-entry registration or issuance of a stock certificate or certificates, which certificate or certificates shall be held by the Company.  The Shares shall be restricted from transfer during the Restricted Period and shall be subject to an appropriate stop-transfer order.  If any certificate is issued, the certificate shall bear an appropriate legend referring to the restrictions applicable to the Shares.

      (b)          If any certificate is issued, you shall be required to execute and deliver to the Company a stock power or stock powers relating to the Shares.

      (c)          Upon vesting and upon your request, the Company shall promptly cause your Vested Shares (less any Shares that may have been withheld to pay taxes) to be delivered to you, free of the restrictions and/or legend described in Section 7(a) hereof, either by book-entry registration or in the form of a certificate or certificates, registered in your name or in the names of your legal representatives, beneficiaries or heirs, as applicable.

      

      	
                   
 	
                  8.
 	
                  Distributions and Adjustments.
 

      

      (a)          If any Shares vest subsequent to any change in the number or character of the Common Stock of the Company without additional consideration paid to the Company (through any stock dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares or otherwise), you shall then receive upon such vesting the number and type of securities or other consideration which you would have received if such Shares had vested prior to the event changing the number or character of the outstanding Common Stock.

      (b)          Unless the Committee determines otherwise, payment of any cash dividend, additional share of Common Stock of the Company, any other securities of the Company and any other property distributed with respect to the Shares shall be deferred until such shares become Vested Shares (and shall be subject to forfeiture upon forfeiture under Section 5 above of any unvested Shares to which such deferred dividends relate).  Any deferred payments under this Section 8(b) shall be held by the Company on your behalf and, to the extent practicable, shall be reinvested in Common Stock.  The dividends allocable to the Shares shall be paid to you (without interest) upon the vesting date for such shares.

      

      	
                   
 	
                  9.
 	
                  Taxes.
 

      

      (a)          You acknowledge that you will consult with your personal tax advisor regarding the federal, state and local tax consequences of the grant of the Shares, payment of dividends on the Shares, the vesting of the Shares and any other matters related to this Agreement.  You are relying solely on your advisors and not on any statements or representations of the Company or any of its agents.  You understand that you are responsible for your own tax liability that may arise as a result of this grant of the Shares or any other matters related to this Agreement.  You understand that Section 83 of the Code treats as taxable ordinary income the fair market value of the Shares as of the date the Shares vest hereunder.  Alternatively, you understand that you may elect to be taxed at the time the Shares
      are granted rather than when the Shares vest hereunder by filing an election 

       

      

      	
                   
 	
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      under Section 83(b) of the Code with the Internal Revenue Service within 30 days from the Grant Date.

      (b)          In order to comply with all applicable federal, state or local income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all income and payroll taxes, which are your sole and absolute responsibility, are withheld or collected from you at the minimum required withholding rate, subject to any minimum statutory withholding limits.  In no event shall the amount withheld for taxes exceed the minimum statutory withholding limit.

      (c)          In accordance with the terms of the Plan, and such rules as may be adopted by the Committee administering the Plan, the amount of Shares to be paid to you will be reduced by the number of Shares with a Fair Market Value necessary to satisfy the minimum statutory federal and state withholding amounts triggered by your receipt of, or lapse of restrictions relating to, the Shares (including property attributable to the Shares described in Section 8(b) above); provided, however, that you may elect, within 30 calendar days before the date that the amount of tax to be withheld is determined, to satisfy such withholding requirements in cash.  Fractional Shares, if any, will be paid in cash and applied towards withholding.

      

      	
                   
 	
                  10.
 	
                  General Provisions.
 

      

      (a)          Interpretations.  This Agreement is subject in all respects to the terms of the Plan.  A copy of the Plan is available upon your request.  Terms used herein which are defined in the Plan shall have the respective meanings given to such terms in the Plan, unless otherwise defined herein.  In the event that any provision of this Agreement is inconsistent with the terms of the Plan, the terms of the Plan shall govern.  Any question of administration or interpretation arising under this Agreement shall be determined by the Committee administering the Plan, and such determination shall be final, conclusive and binding upon all parties in interest.

      (b)          Integrated Agreement.  This Agreement and the Plan constitute the entire understanding and agreement between you and the Company with respect to the subject matter contained herein and supersedes any prior agreements, understandings, restrictions, representations, or warranties between you and the Company with respect to such subject matter other than those as set forth or provided for herein.

      (c)          No Right to Employment.  Nothing in this Agreement or the Plan shall be construed as giving you the right to be retained as an employee of the Company or a Subsidiary of the Company.  In addition, the Company or a Subsidiary of the Company may at any time dismiss you from employment free from any liability or any claim under this Agreement, unless otherwise expressly provided in this Agreement.

      (d)          Securities Matters.  The Company shall not be required to deliver any Shares until the requirements of any federal or state securities or other laws, rules or regulations (including the rules of any securities exchange) as may be determined by the Company to be applicable are satisfied.

       

      

      	
                   
 	
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      (e)          Headings.  Headings are given to the sections and subsections of this Agreement solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Agreement or any provision hereof.

      (f)           Saving Clause.  If any provision(s) of this Agreement shall be determined to be illegal or unenforceable, such determination shall in no manner affect the legality or enforceability of any other provision hereof.

      (g)          Governing Law.  The internal law, and not the law of conflicts, of the State of Missouri will govern all questions concerning the validity, construction and effect of this Agreement.

      (h)          Notices.  You should send all written notices regarding this Agreement or the Plan to the Company at the following address:

      Young Innovations, Inc.

      500 N. Michigan Ave., Suite 2204

      

      	
                   
 	
                  Chicago, IL  60611
 

      

      

      	
                   
 	
                  Attn:
 	
                  Christine R. Boehning
 

      

      (i)           Benefit and Binding Effect.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their respective successors, permitted assigns, and legal representatives.  The Company has the right to assign this Agreement, and such assignee shall become entitled to all the rights of the Company hereunder to the extent of such assignment.

      [Signature Pages to Follow]

       

      

      	
                   
 	
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      IN WITNESS WHEREOF, the Company has executed this Agreement in duplicate as of the day and year first above written.

       

      YOUNG INNOVATIONS, INC.

       

      By: _______________________________________

       

      

      	
                   
 	
                  Its:
 

      

       

       

      Please indicate your acceptance of the terms and conditions of this Agreement by signing in the space provided below and returning a signed copy of this Agreement to the Company. IF A FULLY EXECUTED COPY OF THIS AGREEMENT HAS NOT BEEN RECEIVED BY THE PRESIDENT AND SECRETARY OF THE COMPANY, THE COMPANY SHALL REVOKE ALL SHARES ISSUED TO YOU, AND AVOID ALL OBLIGATIONS, UNDER THIS AGREEMENT.

      The undersigned hereby accepts, and agrees to, all terms and provisions of this Agreement.

       

       

      

      	
                   
 	
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