Exhibit 2
SHARE PURCHASE AGREEMENT
BETWEEN
LAFARGE CANADA INC.
AND
3787532 CANADA INC.
AND
XXXXXX XXX XXXXXXXX CO. LIMITED
MADE
JULY 24, 2000
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made July 24, 2000;
BETWEEN:
LAFARGE CANADA INC., a corporation
incorporated under the laws of Canada (hereinafter
referred to as "Lafarge")
OF THE FIRST PART
- and -
3787532 CANADA INC., a corporation
incorporated under the laws of Canada (hereinafter
referred to as the "Purchaser"),
OF THE SECOND PART,
- and -
XXXXXX VAN NOSTRAND CO. LIMITED, a corporation
incorporated under the laws of Ontario
(hereinafter referred to as the "Vendor")
OF THE THIRD PART,
WHEREAS the Vendor is the legal and beneficial owner of all of the
issued and outstanding shares (the "Shares") of The Xxxxxx Paving & Materials
Group Limited ("Xxxxxx");
AND WHEREAS on the Closing Date (as defined herein), the Vendor will
sell the Shares to the Purchaser on the terms and conditions contained in this
Agreement;
AND WHEREAS Lafarge will cause the Purchaser to close the transaction
contemplated by this Agreement in accordance with and subject to the terms and
conditions contained herein, including the issue of the Share Portion of the
Purchase Price (as such terms are defined herein);
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and the covenants and agreements herein contained the parties hereto
agree as follows:
2
ARTICLE 1 - INTERPRETATION
1.01 DEFINITIONS
In this Agreement, unless something in the subject matter or context is
inconsistent therewith:
(a) "Accountants" means PricewaterhouseCoopers ;
(a.1) "Additional Encumbrances" has the meaning set out in Section 2.03(3);
(b) "Aggregate" includes all processed, crushed, screened, washed,
extracted and stockpiled sand, gravel, crushed rock and oversized rock
of, on or in the Lands as well as all in situ sand, gravel, rock,
stone, unconsolidated gravel, pit run gravel, consolidated rock and
associated materials which can be removed, excavated or quarried from
or out of the Lands;
(b.1) "Aggregates Legislation" has the meaning set out in Section 3.01
(cccc);
(c) "Agreement" means this agreement and all amendments made hereto by
written agreement between the Vendor and the Purchaser;
(d) "Applicable Law" means:
(i) any applicable domestic or foreign law including any statute,
subordinate legislation or treaty and common or civil law, and
(ii) any applicable guideline, directive, rule, standard, requirement,
policy, order, judgment, injunction, award or decree of a
Governmental Authority whether or not having the force of law;
(e) "Assets" means the assets listed in Schedule 1.01(e) setting forth the
names of the legal and beneficial owners;
(f) "Balance Sheet" means the consolidated balance sheet of Xxxxxx as at
the Balance Sheet Date;
(g) "Balance Sheet Date" means December 31, 1999;
(g.1) "Benefit Plans" has the meaning set out in Section 3.01(kk);
(h) "Business" means all of the businesses and the operations heretofore
carried on by the Companies, including the aggregate, hot mix asphalt,
asphalt cement and contracting businesses of the Companies;
(i) "Business Day" means a day other than a Saturday, Sunday or statutory
holiday in Ontario;
(i.1) "Cash Portion" has the meaning set out in Section 2.01(2)(c);
(j) "Claim" has the meaning set out in Section 7.05;
3
(k) "Closing" means the completion of the purchase and sale of the Shares
and the other transactions contemplated by this Agreement;
(l) "Closing Date" means the later of (i) 15 Business Days after the Due
Diligence Date and (ii) 5 Business Days after Competition Act Approval
and approval under the Investment Canada Act, or such other date as
may be agreed to in writing between the Vendor and the Purchaser
provided that the Closing Date must occur by November 18, 2000 or such
other date as may be agreed by the parties;
(m) "Companies" means Xxxxxx and all of the companies in the Xxxxxx
corporate group, a true and complete list of such companies and their
respective jurisdictions of incorporation are set forth on Schedule
1.01(m), and "Company" means any one of them;
(m.1) "Compensation Plans" has the meaning set out in Section 3.01(ll);
(n) "Competition Act Approval" means that (i) the Purchaser and the Vendor
has given the requisite notice of the proposed sale and purchase of
the Shares under the Competition Act (Canada) (the "CA"), (ii) any
waiting periods prescribed under the CA in respect of the requisite
notice have expired; (iii) the Purchaser shall have received written
notice from the Competition Bureau to the effect that it is of the
view that there are not sufficient grounds to initiate proceedings
before the Competition Tribunal under the merger provisions of the CA,
and (iv) the Competition Bureau shall not have imposed any conditions
on, or required any undertakings from, the Purchaser or the Vendor
(other than undertakings given by the Vendor heretofore) in respect of
the transaction contemplated hereby;
(o) "Direct Claim" has the meaning set out in Section 7.05;
(p) Due Diligence Date" means the date that is the later of (i) 60 days
from the date that full and complete copies of Schedules 1.01(e),
1.01(m), 1.01(u), 1.01(v), 1.01(x) (other than the sketches of the
Parcels for Severance which will be delivered as part of Schedule
5.02(4)), 1.01(y), 1.01(mm), 1.01(zz), 1.01(aaa), 3.01(l), 3.01(t),
3.01(u), 3.01(v), 3.01(cc), 3.01(bbb), 3.01(ccc), 3.01(mmm),
3.01(nnn), 3.01(ooo), 3.01(sss) and 3.01(gggg) to this Agreement and
full and complete copies of all Due Diligence Documents are delivered
to the Purchaser or Purchaser's counsel by the Vendor, (ii) 55 days
from the date that full and complete copies of Schedules 1.01(jj),
3.01(ff), 3.01(gg), 3.01(hh), 3.01(ii), 3.01(jj), 3.01(ggg) and
3.01(hhh) to this Agreement are delivered to the Purchaser or
Purchaser's counsel by the Vendor, (iii) 50 days from the date that
full and complete copies of Schedules 1.01(kk), 3.01(s), 3.01(kk),
3.01(ll) and 3.01(aaa) to this Agreement are delivered to the
Purchaser or Purchaser's counsel by the Vendor, and (iv) 45 days from
the date that full and complete copies of Schedules 1.01(tt), 3.01(m),
3.01(y), 3.01(aa), 3.01(bb), 4 and 5.02 (4) to this Agreement are
delivered to the Purchaser or Purchaser's counsel by the Vendor;
provided, however, that the Due Diligence Date shall not be a date
that is prior to 67 days from the date hereof. Any additions or
corrections to the Schedules referred to above will not extend the Due
Diligence Date if the Purchaser determines, acting reasonably, that
such additions or corrections are immaterial. Any material additions
or corrections will extend the Due Diligence Date only to
4
the extent reasonably necessary to allow due diligence to be conducted
with respect to the additions or corrections;
(q) "Due Diligence Documents" has the meaning ascribed thereto in Section
3.01(lll);
(r) "Encumbrance" means any charge, mortgage, hypothec, lien, prior claim,
pledge, claim, restriction, security interest, servitude,
right-of-way, restrictive covenant, encroachment, option, adverse
claim or other encumbrance, whether created or arising by agreement,
statute or otherwise at law, attaching to property, interest or
rights;
(s) "Environmental Law" means all applicable statutes, regulations,
by-laws, guidelines and policies, having the force of law in existence
at the date hereof in Canada (whether federal, provincial or
municipal) relating to the protection or remediation of the
environment, occupational health and safety or Hazardous Substances,
including, without limitation, the common law and the Environmental
Protection Act (Ontario), the Ontario Water Resources Act, the
Environment Quality Act (Quebec), the Waste Management Act (British
Columbia), the Water Protection Act (British Columbia), the
Environmental Management and Protection Act (Saskatchewan), the
Mineral Resources Act (Saskatchewan), the Clean Air Act
(Saskatchewan), the Environmental Protection and Enhancement Act
(Alberta), the Water Act (Alberta), the Fisheries Act (Canada) and
similar legislation in the United States. For greater certainty, for
purposes of this Agreement, Environmental Laws do not include the
Aggregate Resources Act (Ontario) and the regulations made thereunder
or equivalent Quebec, Saskatchewan, Alberta or British Columbia
legislation;
(t) "ETA" means Part IX of the Excise Tax Act (Canada), as now in effect;
(u) "Excluded Assets" means the assets listed in Schedule 1.01(u) to be
transferred to the Vendor or a subsidiary of the Vendor pursuant to
the Pre-Closing Transactions;
(v) "Excluded Hold Properties" means the real properties listed in
Schedule 1.01(v) setting forth the names of the legal and beneficial
owners and the short legal descriptions or, if assigned, municipal
addresses thereof;
(w) [Intentionally Deleted]
(x) "Excluded Properties" means the real properties listed in Schedule
1.01(x) setting forth the names of the legal and beneficial owners and
the short legal descriptions or, where assigned, municipal addresses
thereof and, in the case of the Parcels for Severance, a sketch
showing the approximate boundaries thereof and which Excluded
Properties for greater certainty do not include any of the Excluded
Hold Properties;
(y) "Excluded Subsidiaries" means those subsidiaries owned by Xxxxxx,
directly or indirectly, to be transferred to the Vendor or a
subsidiary of the Vendor as one of the Pre-Closing Transactions, a
true and complete list of such subsidiaries is attached as Schedule
1.01(y) ;
5
(z) "Financial Statements" has the meaning set out in Section 3.01(l);
(aa) "GAAP" means generally accepted accounting principles in effect in
Canada, including the accounting recommendations published in the
Handbook of the Canadian Institute of Chartered Accountants;
(bb) "Go Firm Date" has the meaning given in 2.03(1);
(cc) "Governmental Authority" means any domestic or foreign, federal,
provincial, state or local, legislative, executive, judicial or
administrative body or person having or purporting to have
jurisdiction in the relevant circumstances;
(dd) "Hazardous Substances" means any substance, product, element or matter
included in any definition of hazardous product, dangerous goods,
waste, toxic substance, contaminant, pollutant, deleterious substance
or words of similar import under any applicable Environmental Law;
(ee) "Indemnified Party" has the meaning set out in Section 7.05;
(ff) "Indemnifying Party" has the meaning set out in Section 7.05;
(ff.1) "Independent Accountants" means KPMG LLP, or such other
internationally recognized accounting firm proposed by the Vendor and
Purchaser;
(gg) "Interim Period" means the period commencing on January 1, 2000 and
ending on the Closing Date;
(hh) "ITA" means the Income Tax Act (Canada), as now in effect;
(hh.1) "Known Environmental Problems" has the meaning set out in Section
3.01(dddd);
(ii) "Lands" means collectively, the Outright Sale Properties, the Excluded
Properties, the Excluded Hold Properties, the Residual Option
Properties and the Leased Properties;
(jj) "Leased Properties" means all real property which is leased by a
Company on the date hereof and by Xxxxxx or a Retained Subsidiary at
the Time of Closing. Schedule 1.01(jj) sets forth the municipal
addresses, where assigned and available in Xxxxxx'x records, or short
legal descriptions and the realty tax assessment roll numbers for all
Leased Properties which have a remaining term of more than one year
from the date hereof or a cost in excess of $50,000 per year;
(kk) "Leases" means all real property leases of the Leased Properties.
Schedule 1.01(kk) sets forth the dates, parties thereto, rents, term
and lands affected by all the Leases which have a remaining term of
more than one year from the date hereof or a cost in excess of $50,000
per year;
(ll) "Losses", in respect of any matter, means all claims, demands,
proceedings, losses, damages, Taxes, interest, penalties, liabilities,
deficiencies, costs and expenses (including, without limitation, all
legal and other professional fees and
6
disbursements, interest, penalties and amounts paid in settlement)
arising directly or indirectly as a consequence of such matter;
(kk.1) "Objection Notice" has the meaning set out in Schedule 4.02;
(mm) "Outright Sale Properties" means the real properties listed in
Schedule 1.01(mm) setting forth the names of the legal and beneficial
owners and the short legal descriptions and, where assigned and
available in Xxxxxx'x records, the municipal addresses and the realty
tax assessment roll numbers thereof;
(nn) "Parcels for Severance" has the meaning set out in Section 6.01(lll);
(oo) "Permits" means all permits, consents, waivers, licences,
certificates, approvals, authorizations, registrations, franchises,
rights, privileges, exemptions, qualifications and quotas or any item
with a similar effect, issued or granted by any Person;
(pp) "Permitted Encumbrances and Deficiencies" means those Encumbrances and
deficiencies designated as such by agreement between the Vendor and
the Purchaser under Section 2.03(2) of this Agreement as may be
amended under Section 2.03(3) of this Agreement;
(qq) "Permitted Personal Property Encumbrances" means the liens, charges,
encumbrances and/or rights of others set out or referred to in
Schedule 1.01(qq);
(rr) "Permitted Real Property Encumbrances" means the liens, charges,
encumbrances and/or rights of others set out or referred to in
Schedule 1.01(rr);
(ss) "Person" has the same meaning as that defined in the ITA;
(tt) "Personal Property Leases" means all leases of personal property
relating to the Business including all purchase options, prepaid rents
and security deposits relating thereto. Those Personal Property Leases
requiring a payment in excess of $1,000 per month and having a capital
value in excess of $25,000 and term of more than one year from the
date thereof are more particularly described in Schedule 1.01(tt);
(uu) "Pre-Closing Transactions" means any transactions or agreements
between or among the Companies and the Vendor or a subsidiary of the
Vendor as described in or contemplated by the memorandum prepared by
XxXxxxxx Xxxxx and attached hereto as Schedule 1.01(uu) whether or not
the transactions or agreements are completed prior to or after the
Closing Date and whether or not such transactions or agreements are
ongoing, including without limitation leases and options with respect
to Residual Option Properties or Excluded Hold Properties;
(vv) "Properties" means the Outright Sale Properties, the Residual Option
Properties and the Leased Properties;
(ww) "Purchase Price" has the meaning set out in Section 2.02(1);
7
(xx) "Release" means any release or discharge of any Hazardous Substance
including any discharge, spray, injection, abandonment, deposit,
spillage, leakage, seepage, pouring, emission, emptying, throwing,
dumping, placing, exhausting, escape, xxxxx, migration, dispersal,
dispensing or disposal;
(xx.1) "Remaining Properties" has the meaning set out in Section 3.01(fff);
(yy) "Required Consents" has the meaning set out in Section 3.01(aa);
(zz) "Residual Option Properties" means the real properties (including any
structures thereon) listed in Schedule 1.01(zz) setting forth the
names of the legal and beneficial owners and the short legal
descriptions thereof and, where assigned and available in Xxxxxx'x
records, municipal addresses thereof and the realty tax assessment
roll numbers thereof;
(aaa) "Retained Subsidiaries" means all of the subsidiaries other than the
Excluded Subsidiaries owned by Xxxxxx, directly or indirectly, at the
Time of Closing and more particularly described in Schedule 1.01(aaa)
and "Retained Subsidiary" means any one of them;
(bbb) "Share Portion" has the meaning set out in Section 2.01(2)(b);
(ccc) "Shares" means all of the issued and outstanding shares of Xxxxxx;
(ddd) "Tax" means all taxes, levies, duties, assessments, reassessments and
other charges of any nature whatsoever, whether direct or indirect,
including but not limited to, income tax, profits tax, gross receipts
tax, corporation tax, sales and use tax, goods and services tax,
harmonized sales tax, wage tax, payroll tax, employer health tax,
worker's compensation levy, capital tax, stamp duty, real and personal
property tax, land transfer tax, customs or excise duty, excise tax,
turnover or value added tax on goods sold or services rendered,
withholding tax, social security and unemployment insurance charges
and retirement contributions, and any interest, fines, additions to
tax and penalties thereon or instalments related thereto and "Taxes"
has a corresponding meaning;
(eee) "Tax Authority" means any government, quasi-governmental, provincial,
city or other political subdivision of Canada or the United States, or
any agency or statutory or regulatory body;
(fff) "Tax Elections" has the meaning set out in Section 2.01(3);
(ggg) "Tax Items" has the meaning set out in Section 4.01(a);
(hhh) "Tax Provisions" has the meaning set out in Section 4.01(n);
(iii) "Tax Returns" means all Tax returns, reports, elections, designations
and other filings with respect to Taxes;
(jjj) "Tenant Leases" has the meaning set out in Section 3.01(hhh);
(kkk) "Third Party" has the meaning set out in Section 7.07;
8
(lll) "Third Party Claim" has the meaning set out in Section 7.05;
(mmm) "Time of Closing" means 10:00 a.m. (Toronto time) on the Closing
Date;
(nnn) "Transaction Documents" means all agreements, documents, instruments,
undertakings and indemnities contemplated by this Agreement,
including, without limitation, any agreements contemplated by the
Pre-Closing Transactions memorandum attached as Schedule 1.01(uu);
(ooo) "Transaction Taxes" means any Taxes payable by Xxxxxx or the Retained
Subsidiaries as a consequence of, or in relation to, the Pre-Closing
Transactions and any Taxes payable by Xxxxxx or the Retained
Subsidiaries as a consequence of, or in relation to the grant and
exercise of any residual option granted as one of the Pre-Closing
Transactions, subject to the limitation that Transaction Taxes shall
not include (i) any Taxes payable by Xxxxxx or any Retained Subsidiary
pursuant to the terms of any Transaction Document in respect of any
use or lease by Xxxxxx or any Retained Subsidiary of any Excluded
Property or any Excluded Hold Property, or any acquisition of, or sale
(other than a sale resulting from the exercise of any residual option
granted as one of the Pre-Closing Transactions) by, Xxxxxx or a
Retained Subsidiary of any Excluded Hold Property or any Residual
Option Property; (ii) Taxes that Xxxxxx or any Retained Subsidiary is
required to pay or take responsibility for under any Transaction
Document entered into in connection with the Pre-Closing Transactions;
(iii) any Taxes payable on any rental income derived by Xxxxxx or any
Retained Subsidiary from renting or leasing any Excluded Hold Property
as contemplated by any Transaction Document; and (iv) any Taxes
payable by Xxxxxx or any Retained Subsidiary as a result of the
exercise by Xxxxxx or any Retained Subsidiary of any of its rights
under any Transaction Documents. For this purpose, Transaction Taxes
shall be calculated on the following basis:
A. in respect of assets disposed of by Xxxxxx or a Retained
Subsidiary in the Pre-Closing Transactions, the tax cost of such
asset is deducted from the proceeds of the disposition of such
asset;
B. any loss realized as a consequence of the sale of an Excluded
Property or an Excluded Asset as part of the Pre-Closing
Transactions to the extent permitted under the ITA and any
provincial Tax legislation and any capital loss related to the
investment of Xxxxxx or any Retained Subsidiary in Dura Pave
Limited, Xxxxxx Engineering and Construction Inc., Central
Asphalt Ltd. and Xxxxxx Asphalt Reforming Corporation and Remixer
Contracting Co. Inc. (each a "Loss Subsidiary", so long as such
Loss Subsidiary has not earned any operating income since January
1, 1999 and since the Balance Sheet Date such Loss Subsidiary has
not carried on active business and has not held tangible assets)
is deducted from any gain realized by Xxxxxx or a Retained
Subsidiary as a consequence of the Pre-Closing Transactions to
the extent permitted under the ITA and any applicable provincial
tax legislation; and
C. no other deductions or credits are available to reduce income,
taxable income or gain realized by Xxxxxx or a Retained
Subsidiary or any Taxes payable in respect of such Pre-Closing
Transactions;
9
(ppp) "Vendor" means Xxxxxx Van Nostrand Co. Limited; and
(qqq) "Vendor's Undertaking" has the meaning set out in Section 2.03(2), as
may be amended pursuant to the terms of Section 2.03(3).
1.02 HEADINGS
The division of this Agreement into Articles and Sections and the insertion
of a table of contents and headings are for convenience of reference only and
shall not affect the construction or interpretation of this Agreement. The terms
"this Agreement", "hereof", "hereunder" and similar expressions refer to this
Agreement and not to any particular Article, Section or other portion hereof and
include any agreement supplemental hereto. Unless something in the subject
matter or context is inconsistent therewith, references herein to Articles and
Sections are to Articles and Sections of this Agreement.
1.03 EXTENDED MEANINGS
In this Agreement words importing the singular number only shall include
the plural and vice versa, words importing the masculine gender shall include
the feminine and neuter genders and vice versa and words importing persons shall
include individuals, partnerships, associations, trusts, unincorporated
organizations and corporations.
1.04 STATUTORY REFERENCES
In this Agreement, unless something in the subject matter or context is
inconsistent therewith or unless otherwise herein provided, a reference to any
statute is to that statute as now enacted or as the same may from time to time
be amended, re-enacted or replaced and includes any regulations made thereunder.
1.05 ACCOUNTING PRINCIPLES
Wherever in this Agreement reference is made to a calculation to be made in
accordance with generally accepted accounting principles, such reference shall
be deemed to be to the generally accepted accounting principles from time to
time approved by the Canadian Institute of Chartered Accountants, or any
successor institute, applicable as at the date on which such calculation is made
or required to be made in accordance with generally accepted accounting
principles.
1.06 CURRENCY
All references to currency herein are to lawful money of Canada.
1.07 BEST OF KNOWLEDGE
Any statement in this Agreement expressed to be made to "the best of the
Vendor's knowledge" and any other references to the knowledge of the Vendor
shall be understood to be made on the basis of the Vendor's actual knowledge
(which shall be the actual knowledge of Xxxxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxx, Xxx
Xxxxxxxxx, Xxxx Xxxxxx, Xxxx Xxxxx, the General Managers, the District Managers
and the Controllers of the Companies who shall make due enquiry of their direct
reports in their areas of responsibility promptly after the date hereof). If any
statement is made in this Agreement or in any document or instrument
contemplated to be delivered in this Agreement by any individual, such statement
shall be deemed to have been
10
made in his or her capacity as an officer of the Vendor or one of the Companies
and shall be made without personal liability to that individual.
1.08 SCHEDULES
The parties acknowledge that there are numerous schedules that are
incomplete or missing at the time of execution of this Agreement. The Agreement
is conditional on the parties settling the form and content of the incomplete or
missing schedules. The parties acknowledge that any incomplete or missing
Schedules to this Agreement will be provided by the Vendor to the Purchaser
within 20 Business Days (except for Schedules 3.02(e), 6.01(o), 6.01(p) and the
subscription agreement forming part of Schedule 6.01(v), which will be delivered
by the Purchaser to the Vendor within 20 Business Days) of the date of execution
hereof. The following are the Schedules that will be annexed hereto and
incorporated by reference and deemed to be part hereof:
Schedule 1.01(e) - Assets
Schedule 1.01(m) - Companies
Schedule 1.01(u) - Excluded Assets
Schedule 1.01(v) - Excluded Hold Properties - Type A
- Type B
Schedule 1.01(x) - Excluded Properties - Type A
- Type B
Schedule 1.01(y) - Excluded Subsidiaries
Schedule 1.01(jj) - Leased Properties
Schedule 1.01(kk) - Leases
Schedule 1.01(mm) - Outright Sale Properties
Schedule 1.01(qq) - Permitted Personal Property Encumbrances
Schedule 1.01(rr) - Permitted Real Property Encumbrances
Schedule 1.01(tt) - Personal Property Leases
Schedule 1.01(uu) - Pre-Closing Transactions Memorandum
Schedule 1.01(zz) - Residual Option Properties
Schedule 1.01(aaa) - Retained Subsidiaries
Schedule 2.01(2)(a) - Preferred Share Conditions
Schedule 2.01(2)(b) Form of Promissory Note
Schedule 2.05 - Purchase Price Adjustments
Schedule 3.01(i) - Purchase Options
Schedule 3.01(l) - Financial Statements
Schedule 3.01(m) Transactions Outside Ordinary Course
Schedule 3.01(r) Unpurchased Inventory
Schedule 3.01(s) - Outstanding Governmental Authority Notices
Schedule 3.01(t) - Aggregate Reserve Quantities
Schedule 3.01(u) - Capital Expenditures
Schedule 3.01(v) - Dividends
Schedule 3.01(y) - Material Contracts
Schedule 3.01(aa) - Required Consents
Schedule 3.01(bb) - Bonds and Letters of Credit
Schedule 3.01(cc) - Agreements to Acquire
Schedule 3.01(ff) - Collective Bargaining Agreements
Schedule 3.01(gg) - Trade Unions
Schedule 3.01(hh) - Pending Organization Activities
Schedule 3.01(ii) - Changes in Remuneration
11
Schedule 3.01(jj) - Non-Arm's Length Indebtedness
Schedule 3.01(kk) - Benefit Plans
Schedule 3.01(ll) - Compensation Policies
Schedule 3.01(aaa) - Litigation and Product Liability
Schedule 3.01(bbb) - Business Jurisdictions
Schedule 3.01(ccc) - Non-compliance with Applicable Laws
Schedule 3.01 (ggg) - Notices of Assessments
Schedule 3.01(hhh) - Tenant Leases
Schedule 3.01(mmm) - Notices of Non-compliance with Site Plan,
Development and other Agreements
Schedule 3.01(nnn) - Violations of Zoning Laws
Schedule 3.01(ooo) - Non-compliance with Lease Obligations
Schedule 3.01(sss) - Environmental
Schedule 3.01(gggg) - Insurance Policies
Schedule 3.02(e) - Articles and By-laws of Purchaser
Schedule 4 - Tax Disclosure Schedule
Schedule 5.02(4) - Part I -- Sketches of Parcels for Severance
Part II -- Form of Severance Agreement
Schedule 6.01(l) - Forms of Excluded Hold Property Agreement - Type A
- Type B
Schedule 6.01(m) - Forms of Residual Option Property Agreement
Schedule 6.01(n) - Form of Transitional Lease for Certain Excluded
Properties
Schedule 6.01(o) - Form of Non-competition Agreement
Schedule 6.01(p) - Vendor's Counsel Opinion
Schedule 6.01(v) - Terms of Warrant and Subscription Agreement
Schedule 6.02(m) - Opinion(s) of Counsel to Lafarge Corporation,
Lafarge and the Purchaser
ARTICLE 2 - PURCHASE AND SALE
2.01 PURCHASE AND SALE AND PURCHASE PRICE
(1) The Vendor will sell the Shares to the Purchaser and the Purchaser
will purchase the Shares from the Vendor for a total purchase price of
$428,400,000, less $138,907,000 on account of bank debt, current
portion of long-term debt and long-term debt outstanding as at the
Balance Sheet Date and $20,203,000 being the portion of the Tax
Provisions classified as current liabilities on the Balance Sheet as
at the Balance Sheet Date, (hereinafter referred to as the "PURCHASE
PRICE") upon and subject to the terms and conditions hereof.
(2) The Purchase Price will be paid and satisfied in full by delivery by
the Purchaser to the Vendor of an aggregate of:
(a) $178,197,000 in fully paid and non-assessable preferred shares in
the capital of the Purchaser registered in the name of the Vendor
having the share conditions and attributes described in Schedule
2.01(2)(a) hereto (the "SHARE PORTION");
(b) $25,000,000 by way of a non-interest bearing promissory note of
the Purchaser in favour of the Vendor as evidenced by a
promissory note in the form attached as Schedule 2.01(2)(b)
hereto; and
12
(c) $66,093,000 by wire transfer, certified cheque or bank draft in,
immediately available funds payable to the Vendor at par in
Toronto subject to adjustment in accordance with the terms hereof
(the "CASH PORTION").
at the Time of Closing against delivery to the Purchaser of a share
certificate or certificates evidencing the Shares duly endorsed for
transfer to the Purchaser.
(3) The Vendor and the Purchaser shall execute and the Vendor shall file
with the Canada Customs and Revenue Agency and any applicable
provincial Tax authority a valid election under subsection 85(1) of
the ITA and the corresponding provisions of any applicable provincial
statute in respect of the transfer of the Shares to the Purchaser (the
"TAX ELECTIONS") in the form and manner and within the time prescribed
by the relevant statute. The elected transfer price in such Tax
Elections shall be the amount specified by the Vendor, subject to the
limitation that the elected transfer price shall not be less than the
greater of (a) the Vendor's cost amount, within the meaning of the ITA
or the applicable provincial Tax legislation, of the Shares and (b)
the Cash Portion of the Purchase Price.
2.02 CLOSING
The sale and purchase of the Shares shall be completed at the Time of
Closing at the offices of XxXxxxxx Xxxxxxxx, Xxxxx 0000, Xxxxxxx Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx-Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx.
2.03 PRE-CLOSING DUE DILIGENCE INVESTIGATIONS
(1) The Vendor will permit the Purchaser until 5:00 p.m. (Toronto time) on
the Due Diligence Date, through its agents and representatives, to
make such reasonable investigation of the undertaking, property and
assets of Xxxxxx and the Companies and of their financial, Tax,
physical, environmental, regulatory compliance and legal condition and
of the Pre-Closing Transactions as the Purchaser considers necessary
or advisable to familiarize itself with such undertaking, property and
assets, the Pre-Closing Transactions and other matters and the Vendor
will supply access to any and all documents and records of Xxxxxx and
the Companies to the Purchaser and its agents and representatives as
they may reasonably require and as may be, to the best of the Vendor's
knowledge, in the possession or control of Xxxxxx or the Companies.
Such investigations and inspections will not, however, affect or
mitigate the Vendor's covenants, representations and warranties
hereunder which will continue in full force and effect. The
Purchaser's access to the Lands shall be upon reasonable notice and
during the normal business hours for the applicable property at the
Purchaser's sole risk and expense for the purpose of making any
inspections, soil tests and environmental audits. Such access shall be
conducted in such a manner that minimizes interference with the use of
the Lands and that does not contravene any Tenant Leases or
unreasonably interfere with any tenants. Representatives of the Vendor
shall have the right to accompany the Purchaser and its advisors and
employees on any inspections and shall have the right to approve any
invasive or intrusive testing prior to such testing being undertaken.
The Purchaser and the Purchaser's consultants shall also have
reasonable access,
13
upon reasonable notice and in the accompaniment of a representative of
the Vendor designated by the Vendor, to the general managers, district
managers and controllers of the Companies with respect to the Lands.
The Purchaser agrees to promptly repair any damage caused by
inspections by its representatives and/or employees and hereby
indemnifies the Companies and the Vendor and agrees to hold them
harmless for all liabilities, actions, causes of action, expenses
(including reasonable legal fees) and costs of repairing any damage
caused by or directly attributable to such inspections, tests or
audits and all claims relating to any of the foregoing, which
indemnity shall survive termination of this Agreement. The parties
agree that the terms and conditions of the confidentiality agreement
dated December 14, 1999 between Lafarge Corporation, Lafarge, the
Vendor and Xxxxxx, as clarified in the letter agreement dated March
22, 2000 between Lafarge, the Vendor, Xxxxxx and others regarding the
offer to purchase Xxxxxx'x assets in the National Capital Region,
shall continue to apply to the non-public, confidential or proprietary
information concerning Xxxxxx and the other Companies to be provided
to Lafarge and the Purchaser. The Purchaser's due diligence teams will
be organized so that Lafarge employees who are involved in bidding
jobs in competition with the Companies will not participate in any
activities that would give them access to any competitively sensitive
information of the Companies.
The Purchaser and Lafarge shall in good faith at or before 5:00 p.m.
(Toronto time) on the Due Diligence Date advise the Vendor in writing
of any matters known to the Purchaser or Lafarge that may constitute a
misrepresentation or a breach of warranty or covenant and any other
issues of concern that they become aware of in the context of their
due diligence investigations, including the form and content of the
Schedules to this Agreement. Within five days after the Due Diligence
Date (the "GO FIRM DATE") the parties will in good faith seek to
resolve by written agreement any issues that have arisen during due
diligence, including, if mutually agreed, a good faith adjustment to
the Purchase Price. In the event that the Purchaser is not, in its
sole discretion, satisfied for any reason with either (a) the results
of its due diligence investigations, or (b) the form and content of
the Schedules to this Agreement and such issues have not been resolved
by the parties as aforesaid, the Purchaser may terminate this
Agreement by notice to the Vendor at any time prior to 5:00 p.m.
(Toronto time) on the Go Firm Date.
In the event that the Vendor is not, in its sole discretion, satisfied
for any reason with either (a) any issues raised by the Purchaser and
Lafarge in the context of their due diligence investigations; or (b)
the form and content of the Schedules to this Agreement, and such
issues have not been resolved by the parties, then the Vendor may, in
its sole discretion, terminate this Agreement by notice to the
Purchaser and Lafarge at any time prior to 5:00 p.m. (Toronto time) on
the Go Firm Date.
In the event that either party gives notice of termination to the
other pursuant to this Section 2.03, the Purchaser and the Vendor
shall be released from their respective obligations under this
Agreement and each of the Vendor and Purchaser agree to release and
forever discharge the other and their respective directors, officers
and shareholders from all actions, causes of action, liabilities,
claims and demands in connection with this Agreement, the termination
thereof and the transactions contemplated hereby, provided that the
confidentiality
14
agreement described above shall continue to apply to the non-public,
confidential or proprietary information of the parties.
(2) The Purchaser agrees to accept title to the Outright Sale Properties
and Residual Option Properties subject to the Permitted Real Property
Encumbrances. The Purchaser shall be allowed until 5:00 p.m. (Toronto
time) on the Due Diligence Date to investigate and satisfy itself with
respect to (i) the title to the Properties and all matters related
thereto; (ii) compliance of the Properties with work orders or
deficiency notices, zoning, fire, health, building, aggregate resource
regulations and other regulatory requirements and off-title matters;
(iii) that realty taxes are current and the status of any outstanding
local improvement charges or levies against the Properties; and (iv)
matters relating to plans of survey for each of the Properties, or, in
the case of the Properties in Quebec, surveyor's plans and
certificates of location. The Purchaser will not authorize or request
any Governmental Authority to inspect the Properties. The Purchaser
shall use reasonable commercial efforts to complete such
investigations and satisfy itself with respect to the foregoing
matters for all of the Properties by 5:00 p.m. (Toronto time) on the
Due Diligence Date. Based on such investigations and exercising the
standard of a reasonably prudent purchaser of commercial real estate
property, similar to the Properties and for the purposes intended, in
the applicable jurisdictions, the Purchaser shall use all reasonable
commercial efforts to deliver to the Vendor at or before 5:00 p.m.
(Toronto time) on the Due Diligence Date valid objections in writing
to title or Encumbrances (other than the Permitted Real Property
Encumbrances) to all the Properties together with a list of
requisitions and deficiencies with respect to such properties (which
list shall not include the Real Property Permitted Encumbrances).
Lafarge and the Purchaser undertake to instruct its counsel to retain
agent counsel as may be required to expeditiously proceed with the
real property due diligence contemplated by this Section 2.03(2) with
the good faith intention of completing such due diligence by the Due
Diligence Date. The Purchaser and Lafarge will advise the Vendor from
time to time and at least on a weekly basis of the results of its due
diligence investigations and deliver to the Vendor copies of the real
property searches and responses from Governmental Authorities as they
receive them on a weekly basis.
If by 5:00 p.m. on the Due Diligence Date the Purchaser,
notwithstanding its reasonable commercial efforts, has been unable to
complete its real property due diligence with respect to one or more
of the Properties, it will provide the Vendor in writing on or prior
to the Due Diligence Date with reasonable particulars of the status of
its due diligence with respect to such properties and what remains
outstanding or unresolved. The Vendor may in its sole discretion
extend the Due Diligence Date to allow the Purchaser more time to
complete its real property due diligence on such Properties. If the
Vendor elects not to extend the Due Diligence Date, the Vendor may, in
its sole discretion terminate this Agreement by notice in writing to
the Purchaser and Lafarge, in which case no party will have a claim
for damages against the other.
Subject to any extension granted by the Vendor as contemplated by the
preceding paragraph, by 5:00 p.m. (Toronto time) on the Go Firm Date,
the Vendor and the Purchaser, shall in good faith seek to resolve by
written agreement (a) a list of permitted encumbrances and
deficiencies with respect to the Properties, which
15
shall include the Real Property Permitted Encumbrances (the "PERMITTED
ENCUMBRANCES AND DEFICIENCIES"); and (b) an undertaking by the Vendor
to use reasonable commercial efforts to remove, prior to or after
Closing (as agreed upon by the Vendor and the Purchaser), those
Encumbrances and title and other deficiencies with respect to the
Properties which are not Permitted Encumbrances and Deficiencies (the
"VENDOR'S UNDERTAKING"). The Vendor acknowledges the Purchaser may
requisition in connection with Encumbrances on a landlord's interest
in a Leased Property, the delivery of a valid non-disturbance
agreement in a form acceptable to Lafarge and the Purchaser. The
Purchaser acknowledges the Vendor may be unwilling or unable to obtain
any non-disturbance agreement. The Vendor's Undertaking shall also
include, if applicable, the agreement of the Vendor referred to below
in this subsection in respect of the Additional Encumbrances.
In the event that there are requisitions to remove Encumbrances and
rectify deficiencies with respect to the Properties which the Vendor
in its sole discretion shall be unwilling or unable to remove or
satisfy, whether by undertaking or title insurance or otherwise, and
which despite any proposal to remove or satisfy such matter, the
Purchaser will not waive, or either party is not satisfied, in its
sole discretion, that sufficient searches and inquiries have not been
completed and responses obtained in respect of the Properties, then,
at either party's option, exercisable by written notice to the other
by 5:00 p.m. (Toronto time) on the Go Firm Date this Agreement shall,
notwithstanding any intermediate acts or negotiations in respect of
such requisitions, be null and void and the Purchaser and the Vendor
shall be released from all obligations under this Agreement (except
for those obligations which survive termination of this Agreement).
(3) Encumbrances relating to the Properties arising after the date of the
Purchaser's search of title and before Closing other than encumbrances
caused by the Purchaser or its lenders are hereinafter called the
"ADDITIONAL ENCUMBRANCES". In the event that, on the Closing Date,
there are any Additional Encumbrances, the Vendor having regard to the
standard of a reasonably prudent vendor, and the Purchaser, having
regard to the standard of a reasonably prudent purchaser, in each case
of commercial real property similar to the Properties and for the
purposes intended, in the applicable jurisdictions, will in good faith
seek to resolve by written agreement that any Additional Encumbrances
will be either designated as Permitted Encumbrances and Deficiencies
or will be added to the Vendor's Undertaking for removal by the Vendor
prior to or after Closing (as agreed upon by the Vendor and the
Purchaser). If by applying the applicable standard it is agreed that
an Additional Encumbrance should be added to the Vendor's Undertaking
and should be removed on or before Closing, the Purchaser agrees to
extend the date for Closing if requested to do so by the Vendor for
such reasonable period of time as the Vendor requires to remove the
Additional Encumbrances, provided that in no event shall the Closing
Date be extended for more than 30 days. In the event that on the
Closing Date, the Vendor and the Purchaser have not agreed on
designating the Additional Encumbrances as Permitted Encumbrances and
Deficiencies or on adding the Additional Encumbrances to the Vendor's
Undertaking by Closing, then, at either party's option, exercisable by
written notice this Agreement shall be terminated, null and void and
of no further force and effect, the Purchaser and the
16
Vendor shall be released from all obligations under this Agreement
(except for those obligations which survive the termination of this
Agreement).
2.04 ACKNOWLEDGEMENT OF PURCHASER
The Purchaser acknowledges and agrees that on Closing, title to the
Properties shall be subject to the Permitted Encumbrances and Deficiencies and
those title and other deficiencies, if any, which remain to be rectified by the
Vendor after Closing by the terms of the Vendor's Undertaking.
2.05 PURCHASE PRICE ADJUSTMENT
The Cash Portion of the Purchase Price will be adjusted in accordance with
the terms and conditions set forth in Schedule 2.05 attached hereto.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
3.01 VENDOR'S REPRESENTATIONS AND WARRANTIES
The Vendor represents and warrants to the Purchaser as follows and
acknowledges that the Purchaser is relying on these representations and
warranties in entering into this Agreement and the transactions contemplated
under this Agreement:
Corporate
(a) Xxxxxx is a corporation duly incorporated, organized and subsisting
under the laws of the Province of Ontario and the Retained
Subsidiaries are corporations duly incorporated, organized and
subsisting under the laws of the jurisdictions as set out in Schedule
1.01(m), each as a private company as that term is defined in the
Securities Act (Ontario) (or the corresponding legislation affecting
the Retained Subsidiaries) with the corporate power to own their
respective assets and to carry on the Business and each has made all
necessary filings under all applicable corporate, securities and
taxation laws or any other laws to which Xxxxxx or the Retained
Subsidiaries are subject;
(b) no bankruptcy, insolvency or receivership proceedings have been
instituted or are pending against Xxxxxx or any of the Companies and
Xxxxxx is able to satisfy their liabilities as they become due;
(c) the authorized capital of Xxxxxx consists solely of 44,999,998 Class
"A" Special Shares, 150 Class "B" Special Shares, 999,925 Class "C"
Special Shares, an unlimited number of Class "D" Special Shares and
10,000 Common Shares of which only 150 Class "B" Special Shares, 75
Class "C" Special Shares and 16,101,216 Class "D" Special Shares have
been validly issued and immediately prior to the Time of Closing will
be outstanding as fully paid and non-assessable, with the Vendor being
the only beneficial and registered owner thereof;
(d) the issued capital of the Retained Subsidiaries has been validly
issued and outstanding as fully paid and non-assessable, with Xxxxxx
or another Retained Subsidiary as set out in Schedule 1.01(m) being
the only beneficial and registered
17
owners thereof, with good and marketable title thereto, free and clear
of all Encumbrances;
(e) the Vendor is the beneficial and registered owner of the Shares, with
good and marketable title thereto, free and clear of all Encumbrances
and, without limiting the generality of the foregoing, none of the
Shares is subject to any voting trust, shareholder agreement or voting
agreement;
(f) the Vendor is a corporation duly incorporated, organized and
subsisting under the laws of Ontario and has good and sufficient
power, authority and right to enter into, execute and deliver this
Agreement and the Transaction Documents to which it is a party and to
transfer the legal and beneficial title and ownership of the Shares to
the Purchaser free and clear of all Encumbrances;
(g) the execution and delivery of this Agreement, the Transaction
Documents to which the Vendor is a party and the consummation of the
transactions contemplated hereby or thereby have been duly and validly
authorized by the Vendor and, if applicable, by its shareholders and
no other corporate proceedings or approvals are necessary to authorize
this Agreement, the Transaction Documents to which the Vendor is a
party or the transactions contemplated hereby or thereby;
(h) this Agreement and the Transaction Documents to which the Vendor is a
party constitute valid and legally binding obligations of the Vendor,
enforceable against the Vendor in accordance with their terms subject
to applicable bankruptcy and other laws of general application
limiting the enforcement of creditors' rights generally and to the
fact that specific performance is an equitable remedy available only
in the discretion of the court;
(i) there is no contract, option or any other right of another binding
upon or which at any time in the future may become binding upon:
(i) the Vendor to sell, transfer, assign, pledge, charge, mortgage or
in any other way dispose of or encumber any of the Shares other
than pursuant to the provisions of this Agreement, or
(ii) except as described in Schedule 3.01(i), the Companies to sell,
transfer, assign, pledge, charge, mortgage or in any other way
dispose of or encumber any of the Assets or the Lands other than
pursuant to the Pre-Closing Transactions or in the ordinary
course of business;
(iii) Xxxxxx or any Retained Subsidiary to allot or issue any of the
unissued shares of Xxxxxx or any Retained Subsidiary or to create
any additional class of shares;
(j) neither the entering into nor the delivery of this Agreement, the
Transaction Documents nor the completion of the transactions
contemplated hereby or thereby by the Vendor or by Xxxxxx will result
in the violation of:
(i) any of the provisions of the constating documents or by-laws of
the Vendor, the Companies or Xxxxxx;
18
(ii) any agreement or other instrument to which Xxxxxx, the Companies
or the Vendor is a party or by which Xxxxxx, the Companies or the
Vendor is bound, or
(iii) any Applicable Law;
(k) on the Closing Date, except for Smelter Bay Aggregates Inc. and Xxxxx
Brothers Construction Limited, each Retained Subsidiary will be owned
by Xxxxxx as a wholly-owned subsidiary of Xxxxxx;
Financial
(l) the audited consolidated financial statements of Xxxxxx consisting of
the Balance Sheet and statements of income, retained earnings and
changes in financial position for the period ended on the Balance
Sheet Date, together with the report of the Accountants thereon and
the notes thereto (hereinafter collectively referred to as the
"Financial Statements"), a copy of which is attached hereto as
Schedule 3.01(l):
(i) are in accordance with the books and accounts of Xxxxxx as at the
Balance Sheet Date,
(ii) present fairly the assets, liabilities (including, to the extent
required by GAAP, all contingent liabilities) and financial
position of Xxxxxx as at the Balance Sheet Date, and
(iii) have been prepared in accordance with GAAP consistently applied;
(m) except as disclosed in Schedule 3.01(m), since the Balance Sheet Date
the Business has been carried on in its usual and ordinary course and
except for the Pre-Closing Transactions, neither Xxxxxx nor any
Company has entered into any material transaction out of the usual and
ordinary course of business (it being acknowledged by the Purchaser
that acquisitions and investments that are not material to the
operations of Xxxxxx or any Company are made in the ordinary course of
the Business);
(n) since the Balance Sheet Date there has been no material change in the
affairs, business, prospects, operations or condition of Xxxxxx and
the Companies or the Business taken as a whole, financial or
otherwise, whether arising as a result of any legislative or
regulatory change, revocation of any licence or right to do business,
fire, explosion, accident, casualty, labour dispute, flood, drought,
riot, storm, condemnation, act of God, public force or otherwise,
except changes occurring in the usual and ordinary course of business
which have not materially adversely affected the affairs, business,
prospects, operations or condition of Xxxxxx, the Companies and the
Business, taken as a whole, financial or otherwise;
Condition of Assets
(o) all of the undertaking, property and assets comprising the Business,
including the Leases and the Assets as set forth in Schedule 1.01(e)
(prepared as at the Balance Sheet Date and with such additions and
disposals thereafter in the ordinary
19
course of business), (other than the Lands and subject to the
immediately following sentence) are owned by the Companies, each
having title, free and clear of all Encumbrances and any rights of
others except for Permitted Personal Property Encumbrances and except
that immediately prior to the Time of Closing, Xxxxxx and the
Companies will effect the Pre-Closing Transactions. No other person
now owns or on the Closing Date will own assets which are being used
by Xxxxxx or any Company in the Business, except for the Leased
Properties, the personal property leased pursuant to the Personal
Property Leases and the property interests to be transferred to the
Vendor or a subsidiary of the Vendor pursuant to the Pre-Closing
Transactions (it being acknowledged by the Purchaser and Lafarge that
subcontractors' equipment may be used from time to time in the
Business in the ordinary course of the Business but it is
impracticable to attempt to list such particulars). Subject to the
exceptions listed in the preceding sentence, the Assets and the Lands
are substantially all of the assets that have been used to conduct the
Business as it was conducted by the Companies prior to the date
hereof;
(p) all machinery, asphalt equipment, aggregate plants and equipment and
other equipment used in the Business, taken as a whole, has been, and
until Closing will be, properly maintained by Xxxxxx and the Retained
Subsidiaries in all material respects and are generally in good
working order for the purposes of on-going operation, subject to the
ordinary wear and tear for machinery and equipment of comparable age
and indicated value. For greater certainty, some equipment is not in
good working order but that has been reflected in the indicated value;
(q) all of the accounts receivable of Xxxxxx and the Companies on the date
hereof have been accurately reflected in the books and records of
Xxxxxx and the Companies on the date hereof and will be accurately
reflected in the books and records of Xxxxxx and the Retained
Subsidiaries at the Time of Closing, and are valid accounts receivable
which have been adequately reserved and are not subject to any
defence, counterclaim or set-off which is not adequately reserved;
(r) all of the inventories of the Companies are reflected in the Financial
Statements or in the books and records of the Companies on the basis
of accounting procedures and valuation methods used on a basis
consistent with past practice and except as may be sold in the
ordinary course of business, all inventories of the Companies on the
date hereof, and immediately prior to the Time of Closing, will be
owned by Xxxxxx or a Retained Subsidiary at the Time of Closing;
(s) except as disclosed in Schedule 3.01(s), to the knowledge of the
Vendor, there are no outstanding orders, notices or similar
requirements relating to the Companies or Xxxxxx issued by any
building, environmental, fire, health, labour or police authorities or
from any other Governmental Authority out of the ordinary course of
business and there are no matters out of the ordinary course of
business under discussion with any such authorities relating to any
such orders, notices or similar requirements;
(t) the Aggregate reserve estimates as at the Balance Sheet Date for each
business unit of Xxxxxx taken as a whole as described in Schedule
3.01(t) are at least equal to the quantities set forth in Schedule
3.01(t), provided, however, that the
20
parties agree that the procedures described in Schedule 3.01(t) will
apply to any determination of damages for breach of the foregoing;
Contracts and Commitments
(u) except as disclosed in Schedule 3.01(u), no single capital expenditure
in excess of $1,000,000 has been made or authorized by Xxxxxx or any
of the Retained Subsidiaries since the Balance Sheet Date (it being
acknowledged by the Purchaser that additional single capital
expenditures in excess of $1,000,000 in the ordinary course of the
Business may be made or authorized by Xxxxxx or any of the Retained
Subsidiaries with the consent of the Purchaser, not to be unreasonably
withheld or delayed);
(v) except as disclosed in Schedule 3.01(v), no dividends have been
declared or paid on or in respect of the Shares and no other
distribution on any of its securities or shares has been made by
Xxxxxx or any of the Retained Subsidiaries since the Balance Sheet
Date, other than those that may have been made to another Retained
Subsidiary or Xxxxxx, and all dividends which to the date hereof have
been declared or paid by Xxxxxx or any of the Retained Subsidiaries
have been duly and validly declared or paid (it being agreed by the
Purchaser that the Vendor shall be entitled to dividends at a rate of
up to $200,000 per month and management fees at a rate of up to
$100,000 per month for the period from the Balance Sheet Date to the
Closing Date and that Xxxxxx and the Retained Subsidiaries may make
donations to The Xxxxxxxx Xxxxxxxxx Family Charitable Foundation of up
to $500,000 in aggregate during the period from the Balance Sheet Date
to the Closing Date and any dividends, management fees and charitable
donations to such foundation in excess of such amounts will reduce the
Cash Portion of the Purchase Price);
(w) there are no outstanding liabilities against Xxxxxx or any Retained
Subsidiary except liabilities incurred in the usual and ordinary
course of business and those liabilities shown or reflected on or
provided for in the books and records of Xxxxxx or a Retained
Subsidiary;
(x) except as contemplated by the Transaction Documents, after the Closing
Date neither Xxxxxx nor any Retained Subsidiary will be liable or
responsible for any liabilities or obligations (whether absolute,
contingent, accrued or otherwise) of any Excluded Subsidiary or of or
in connection with any Excluded Assets, Excluded Hold Properties or
Excluded Properties;
(y) neither Xxxxxx nor any Retained Subsidiary is a party to (i) any
construction contract generating gross revenues for Xxxxxx or a
Retained Subsidiary in excess of $100,000; (ii) any other contract or
commitment (including without limitation any contract or commitment to
pay any royalty, licence fee or management fee but excluding those in
connection with any construction contract) extending for a period
longer than March 31, 2001 and involving expenditures by Xxxxxx or a
Retained Subsidiary in excess of $60,000, or (iii) any contract or
commitment which could reasonably be expected to materially affect the
business, affairs or prospects, financial or otherwise, of the
Business, except such contracts or commitments as are disclosed in
Schedules 1.01(kk) and 3.01(y) attached hereto, true and complete
copies of which will be made available to the Purchaser as
21
soon as practicable following execution of this Agreement and in any
event at least 30 days prior to the Due Diligence Date;
(z) neither Xxxxxx nor any Company is in material default or breach of any
contract or commitment disclosed in Schedules 1.01(kk) and 3.01(y) to
which it is a party and there exists no condition, event or act which,
with the giving of notice or lapse of time or both would constitute
such a default or breach and all such contracts and commitments are in
good standing in all material respects and in full force and effect
without amendment thereto and as of the date hereof a Company is, and,
except as disclosed in Schedule 1.01(kk), at the Time of Closing
Xxxxxx or a Retained Subsidiary will be entitled to all benefits
thereunder;
(aa) Schedule 3.01(aa) sets forth a complete list of all notices, consents,
authorizations, licenses, franchise agreements, permits, approvals or
orders of any person or government required to permit the Vendor to
complete this transaction with the Purchaser (the "REQUIRED
CONSENTS");
(bb) attached as Schedule 3.01(bb) is a list of all bonds, letters of
credit or similar surety arrangements outstanding or in effect for the
Business (it being acknowledged by the Purchaser and Lafarge that this
schedule may be updated to reflect additions and deletions in the
ordinary course of the Business up to the Closing Date);
(cc) except as contemplated by the Pre-Closing Transactions and as
disclosed in Schedule 3.01(cc), neither Xxxxxx nor any Retained
Subsidiary owns or has any agreements of any nature to acquire,
directly or indirectly, any shares in the capital of or other equity
or proprietary interests in any person, firm or corporation, and
neither Xxxxxx nor any Retained Subsidiary has any agreements to
acquire any other business operations;
(dd) except as contemplated by the Pre-Closing Transactions and as
disclosed in Schedule 3.01(cc), there is no agreement, option,
understanding or commitment, or any right or privilege capable of
becoming an agreement, for the purchase from Xxxxxx or the Companies
of any portion of or interest in the Business or any of the Assets or
the Properties other than in the usual and ordinary course of
business;
Employees
(ee) within 10 Business Days of the date hereof, the Vendor will provide
the Purchaser with a true and complete list setting out as of June 30,
2000:
(i) the names of all employees or consultants of Xxxxxx or a Retained
Subsidiary,
(ii) their annual salary or remuneration,
(iii) their job title,
(iv) their total length of employment including any prior employment
as disclosed in Xxxxxx'x or any Company's records that would
affect
22
calculation of years of service for purposes of benefit
entitlement (including statutory notice or statutory severance
pay) or pension entitlement,
(v) the length of any consulting contract,
(vi) whether the employees are union or non-union,
(vii) whether any such employees are on any approved or statutory
leave of absence and, if so, the reason for the absence, and
(viii) other terms and conditions of their employment.
(ff) neither Xxxxxx nor any Company is bound by or a party to any
collective bargaining agreement, except such agreements and plans as
are listed in Schedule 3.01(ff) attached hereto;
(gg) except as set out in Schedule 3.01(gg), no trade union, council of
trade unions, employee bargaining agency or affiliated bargaining
agent:
(i) holds bargaining rights with respect to any of Xxxxxx'x or any
Company's employees by way of certification, interim
certification, voluntary recognition, designation or successor
rights,
(ii) to the Vendor's knowledge has applied to be certified as the
bargaining agent of any of Xxxxxx'x or any Company's employees,
or
(iii) to the Vendor's knowledge has applied to have Xxxxxx or any
Company declared a related employer pursuant to Section 1(4) of
the Labour Relations Act (Ontario) and the equivalent legislation
in Quebec, Saskatchewan, Alberta and British Columbia;
(hh) except as disclosed in Schedule 3.01(hh), there are no actual, or to
the Vendor's knowledge, threatened or pending organizing activities of
any trade union, council of trade unions, employee bargaining agency
or affiliated bargaining agent or any actual, or to the Vendor's
knowledge, threatened or pending unfair labour practice complaints,
strikes, work stoppages, picketing, lock-outs, boycotts, slowdowns,
arbitrations, grievances, charges or similar labour related disputes
or proceedings pertaining to the Business;
(ii) since the Balance Sheet Date there have been no material changes in
the terms and conditions of employment of any employees of Xxxxxx or
the Companies including their salaries, remuneration and any other
payments to them, and there have been no material changes in any
remuneration payable or benefits provided to any officer, director,
consultant, independent or dependent contractor or agent of Xxxxxx or
any of the Companies, and neither Xxxxxx nor any Company has agreed or
otherwise become committed to change any of the foregoing, except in
the ordinary course of business or as described in Schedule 3.01(ii);
(jj) except as disclosed in Schedule 3.01(jj), no director, former
director, officer, shareholder or employee (or relative of any of the
foregoing) of Xxxxxx or any
23
Company or any person not dealing at arm's length within the meaning
of the ITA with any such person is indebted to Xxxxxx or any Company;
Benefits Plans
(kk) Schedule 3.01(kk) contains a list of every benefit plan, program,
agreement or arrangement (whether written or unwritten) maintained,
contributed to, or provided by Xxxxxx or any Company for the benefit
of any of its employees or dependent or independent contractors of
Xxxxxx or any Company or their respective dependants or beneficiaries
(the "BENEFIT PLANS") including all bonus, deferred compensation,
incentive compensation, share purchase, share option, stock
appreciation, phantom stock, savings, profit sharing, severance or
termination pay, health or other medical, life, disability or other
insurance (whether insured or self-insured), supplementary
unemployment benefit, pension, retirement and supplementary retirement
plans, programs, agreements and arrangements;
(ll) Schedule 3.01(ll) contains a list of all compensation policies and
practices of Xxxxxx ("COMPENSATION POLICIES") applicable to employees
and dependent and independent contractors of Xxxxxx or any Company;
(mm) the Vendor has delivered to the Purchaser true, complete and
up-to-date copies of all Benefit Plans and Compensation Policies and
all amendments thereto together with, as applicable, all funding
agreements, all summary descriptions of the Benefit Plans and
Compensation Policies provided to present participants therein and, if
applicable, the two most recent actuarial reports, the financial
statements and evidence of any registration in respect thereof;
(nn) to Vendor's knowledge, no fact, condition or circumstance exists that
would materially affect the information contained in the documents
provided pursuant to Section 3.01(kk) and, in particular, except as
required by Applicable Law or collective agreement no promises or
commitments have been made by the Vendor, Xxxxxx or any Company to
amend any Benefit Plan or Compensation Policy;
(oo) except as disclosed on Schedule 3.01(kk), all of the Benefit Plans are
duly registered where required by Applicable Law (including
registration with the relevant tax authorities where such registration
is required to qualify for tax exemption or other beneficial tax
status) and together with the applicable funding arrangements are in
compliance in all material respects with all Applicable Law and the
requirements of Canada Customs and Revenue Agency and its predecessor;
(pp) all the contribution obligations of the Vendor, Xxxxxx and each
Company to any of the Benefit Plans that are multi-employer plans are
set out accurately in the collective bargaining agreements listed in
Schedule 3.01(ff);
(qq) any Benefit Plan that is a pension plan registered under the ITA which
has been created as a result of the division of a predecessor pension
plan or the merger of one or more pension plans, has received approval
therefor from all appropriate regulatory authorities;
24
(rr) to the Vendor's knowledge, without material exception, the investments
held in respect of a Benefit Plan are qualified or eligible
investments and are not prohibited investments under the terms of the
Benefit Plan and all supporting documents or any applicable
legislation, and each Benefit Plan has or had the power and authority
to make such investments and is permitted under all Applicable Law and
the terms of the Benefit Plan and all supporting documents to continue
to hold such investments;
(ss) except as permitted by the Benefit Plans and Applicable Law, there has
been no withdrawal of surplus assets or any other amounts from any of
the Benefit Plans other than proper payments of benefits to eligible
beneficiaries, refunds of over-contributions to plan members and
permitted payments of reasonable expenses incurred by or in respect of
such Benefit Plan;
(tt) all employer contribution holidays have been permitted by the terms of
the Benefit Plans and have been in accordance with Applicable Law;
(uu) no order has been made or notice given pursuant to any Applicable Law
requiring (or proposing to require) the Vendor, Xxxxxx or any Company
to take (or refrain from taking) any action in respect of any Benefit
Plan;
(vv) all employer and, if applicable, employee contributions under the
Benefit Plans (including, without limitation, all current service
costs and any special payments required to be made) have been remitted
in a timely manner (other than current contributions not in arrears),
the Benefit Plans have been funded in accordance with their terms;
(ww) to Vendor's knowledge, all material returns, filings, reports and
disclosures relating to the Benefit Plans required pursuant to the
terms of the Benefit Plans, applicable legislation or any regulatory
authority, have been filed or distributed in accordance with all
requirements, all filing fees and levies imposed on the Benefit Plans
by the regulatory authorities or applicable legislation have been made
on a timely basis and the funds of the Benefit Plans are not exposed
to any late filing fees that have not been remitted;
(xx) to Vendor's knowledge, there are no actions, suits, claims, trials,
demands, investigations, arbitrations or other proceedings pending or,
threatened with respect to the Benefit Plans against the Vendor,
Xxxxxx, any Company, the funding agent, the insurers or the fund of
such Benefit Plans, other than claims for benefits in the ordinary
course or as disclosed in writing by the Vendor to the Purchaser;
(yy) to Vendor's knowledge, no event has occurred and no condition or
circumstance exists that has resulted or could reasonably be expected
to result in any Benefit Plan being ordered or required to be
terminated or wound-up in whole or in part or having its registration
under any Applicable Law being refused or revoked or being placed
under the administration of any trustee or receiver or any regulatory
authority or being required to pay any material taxes or penalties
under any applicable legislation;
25
(zz) to Vendor's knowledge, no event has occurred and there has been no
failure to act on the part of the Vendor, Xxxxxx, any Company, any
funding agent or any administrator of any of the Benefit Plans that
could subject to the Vendor, Xxxxxx, any Company or the fund of any
Benefit Plan to the imposition of any material Tax or other disability
with respect to any Benefit Plans, whether by way of indemnity or
otherwise;
Litigation and Proceedings
(aaa) except for the matters referred to in Schedule 3.01(aaa), there are
no actions, suits or proceedings, judicial or administrative (whether
or not purportedly on behalf of Xxxxxx or any Company) pending or, to
the Vendor's knowledge, threatened, by or against or affecting Xxxxxx,
any Company or the Business, at law or in equity, or before or by any
court of Governmental Authority which could reasonably be expected to
materially and adversely affect the business, affairs or prospects of
Xxxxxx, any Company or the Business, financial or other or which might
adversely affect the ability of the Vendor to enter into this
Agreement or to consummate the transactions contemplated hereby, and
the Vendor is not aware of any existing ground on which any action,
suit or proceeding may be commenced with any reasonable likelihood of
success. Without restricting the generality of the foregoing, except
as disclosed in Schedule 3.01(aaa), no material product liability
claims outside the ordinary course of business have been asserted or
made, and continue to be outstanding, against Xxxxxx or any Company
alleging any defect in the design, manufacture or materials of any of
the products of the Business;
Conduct of Business
(bbb) neither Xxxxxx nor any Company is conducting the Business nor does
Xxxxxx or any Company have a permanent establishment (as defined in
the ITA) in any jurisdiction except those jurisdictions disclosed in
Schedule 3.01(bbb);
(ccc) except as disclosed in Schedule 3.01(ccc), on the date hereof the
Companies are, and at the Time of Closing Xxxxxx and the Retained
Subsidiaries will be, conducting the Business in compliance with all
Applicable Laws of each jurisdiction in which the Business is carried
on, except for violations which could not reasonably be expected to
have a material adverse effect on the Business;
(ddd) on the date hereof the Companies are, and at the Time of Closing
Xxxxxx and the Retained Subsidiaries will be duly licensed, registered
or qualified, and duly possess all material Permits, in all provinces
and municipalities thereof in which the Business is carried on to
enable the Business to be carried on substantially as now conducted
and its assets to be owned, leased and operated;
(eee) all Permits described above are valid and subsisting and in good
standing in all material respects and none of the same contains or is
subject to any term, provision, condition or limitation which has or
may have a materially adverse effect on the operation of the Business
by Xxxxxx or the Retained Subsidiaries or which may materially
adversely change or terminate such Permit by virtue of the completion
of the transactions contemplated hereby;
26
Realty
(fff) for those Outright Sale Properties and Residual Option Properties on
which the parties have not agreed on Permitted Encumbrances and
Deficiencies and on a Vendor's Undertaking as contemplated by Section
2.03 (the "REMAINING PROPERTIES") and provided the Vendor has not
terminated this Agreement pursuant to Section 2.03, on the Closing
Date, Xxxxxx or the Retained Subsidiaries will have good and
marketable title to the Remaining Properties free of any Encumbrances
subject only to (i) any Permitted Real Property Encumbrances; and (ii)
any other Encumbrances which are not in the aggregate material and
which do not materially impair the present use or marketability of the
relevant Property for its present use. For greater certainty, the
foregoing representation and warranty shall not apply to any Outright
Sale Properties or Residual Option Properties for which the parties
have agreed on Permitted Encumbrances and Deficiencies and, subject to
the terms thereof, on a Vendor's Undertaking as contemplated by
Section 2.03;
(ggg) to the Vendor's knowledge, except as disclosed in Schedule 3.01(ggg)
neither Xxxxxx nor any Retained Subsidiary has received notice of any
material assessment or any material capital charges or levies assessed
or proposed to be assessed against any of the assets of Xxxxxx or any
Retained Subsidiary by a Governmental Authority or that any
Governmental Authority intends to require Xxxxxx or any Retained
Subsidiary to pay any material charges for any future roads, utilities
or services relating to the Properties;
(hhh) the Vendor has not granted any material real property leases relating
to parts of the Lands, except those described in Schedule 3.01(hhh)
(the "TENANT LEASES"), complete copies of which will be provided to
the Purchaser within 15 days of the execution of this Agreement;
(iii) except as otherwise disclosed in this Agreement or the Schedules
hereto, neither Xxxxxx nor any Retained Subsidiary own or lease, and
has not agreed to acquire or lease, any material real property or
material interest in real property other than the Properties;
(jjj) except for the Permitted Real Property Encumbrances and the Permitted
Encumbrances and Deficiencies, the Vendor agrees on or before the
Closing Date at its sole cost and expense, to discharge any
Encumbrances, mortgages, liens, charges, security interests or
hypothecs affecting title to any of the Outright Sale Properties and
Residual Option Properties and the Companies' leasehold interest with
respect to Leased Properties to the extent provided in the Vendor's
Undertaking;
(kkk) the parties agree to act reasonably in attempting to resolve any
valid objections to title or Encumbrances the Purchaser, Lafarge or
their solicitors may submit to the Vendor or its solicitors in writing
as provided in Section 2.03 and, in particular, if any problem
directly affects the quantity or cost of accessing the legally
mineable Aggregates reserves on a property, such problem may be
addressed if both parties agree at such time by way of the reserve
adjustment formula under Section 3.01(t);
27
(lll) within 15 days of the execution and delivery by the Purchaser to the
Vendor of this Agreement, the Vendor will provide to the Purchaser
true and complete copies of all surveys and surveyors' reports with
respect to the Properties, or, in the case of Properties in Quebec,
surveyors' plans and certificates of location, complete copies of all
Leases and Tenant Leases, all environmental reports with respect to
the Properties and all legal opinions as to title to the Properties,
in each case which, to the best of the Vendor's knowledge, are in the
Vendor's possession or control and valid authorizations with respect
to the release of information (but not to authorize or request any
inspections) retained in the files of Governmental Authorities with
respect to the Properties (all items referenced in this paragraph are,
collectively, the "DUE DILIGENCE DOCUMENTS");
(mmm) to the Vendor's knowledge, except as disclosed in Schedule 3.01(mmm),
Xxxxxx and the Retained Subsidiaries have not received any notices of
non-compliance or outstanding matters of a material nature with
respect to site plan, development and other agreements with
Governmental Authorities affecting the Properties;
(nnn) to the Vendor's knowledge, except as disclosed in Schedule 3.01(nnn),
Xxxxxx and the Retained Subsidiaries have not received any
notification alleging any violation of Applicable Laws relating to
zoning or building and there are no expropriation, condemnation or
similar proceedings pending with respect to any of the Properties or
any part thereof;
(ooo) except as disclosed in Schedule 3.01(ooo), Xxxxxx and the Retained
Subsidiaries have complied in all material respects with all of the
tenant obligations in connection with the Leases for the Leased
Properties and, to the Vendor's knowledge, the landlords thereunder
have complied in all material respects with their obligations
thereunder;
(ppp) Xxxxxx and the Retained Subsidiaries have complied in all material
respects with all of the landlord obligations in connection with the
Tenant Leases and, to the Vendor's knowledge, the tenants thereunder
have complied in all material respects with their obligations
thereunder;
(qqq) Schedules 1.01(mm), 1.01(zz), and 1.01(jj) are a fully complete and
accurate list of the municipal addresses, where assigned and available
in Xxxxxx'x records, and the short legal descriptions and realty tax
assessment numbers for all the Outright Sale Properties, Residual
Option Properties and Leased Properties, respectively;
(rrr) the Vendor does not own, legally or beneficially, any land abutting
the Properties;
Environmental
(sss) except as disclosed in Schedule 3.01(sss), the Business, as carried
on by the Xxxxxx and the Companies, and the Assets and the Lands are
and have been in compliance in all material respects with all
applicable Environmental Laws;
28
(ttt) Schedule 3.01(sss) contains a complete list of all Permits required
by Xxxxxx and the Companies under applicable Environmental Laws used
to carry on the Business in its usual and ordinary course. Such
Permits are in full force and effect, and there are no other Permits
required by Xxxxxx and the Companies under applicable Environmental
Laws to carry on the Business in its usual and ordinary course;
(uuu) except as disclosed in Schedule 3.01(sss), Xxxxxx and the Companies
have not used any of the Assets or Lands, or permitted them to be
used, to generate, manufacture, refine, treat, transport, store,
handle, dispose, transfer, produce or process Hazardous Substances,
except in compliance in all material respects with all applicable
Environmental Laws. None of the Lands has been used for or been
designated as a waste disposal site under applicable Environmental
Laws, except that the Lands have been used as snow dumps and to store
recyclable construction material and salt intended for use in the
conduct of the Business;
(vvv) except as disclosed in Schedule 3.01(sss) and minor infractions for
dust, noise, vibration and odour, in the three years preceding the
date hereof, neither Xxxxxx nor any Company has been convicted of an
offence in relation to the Business under any Environmental Laws or
been subjected in relation to the Business to any judgment, injunction
or other proceeding for non-compliance with any Environmental Laws,
and neither Xxxxxx nor any Company has settled any prosecution or
other proceeding short of conviction in connection therewith, in
relation to the Business, in each case which could reasonably be
expected to have a material adverse effect on the Business or a
particular site. Xxxxxx and the Companies are not now and have never
been subject to any administrative order under Environmental Laws from
any Governmental Authority in relation to the Business that could
reasonably be expected to materially adversely affect the Business or
a particular site. Except as disclosed in Schedule 3.01(sss) there is
no existing condition at, on or under the Lands that it is reasonable
to expect would give rise to an administrative order under
Environmental Laws from any Governmental Authority in relation to the
Business that could reasonably be expected to materially adversely
affect the Business or a particular site;
(www) except as described in Schedule 3.01(sss), Xxxxxx and the Companies
have not caused or permitted the Release of any Hazardous Substances
at, on or under the Lands, except in compliance in all material
respects with applicable Environmental Laws;
(xxx) except as disclosed in Schedule 3.01(sss), there are no Hazardous
Substances in groundwater migrating from the Lands (i) in Ontario in
excess of the applicable Table A or Table B Criteria
(industrial/commercial land uses) in the Guidelines for Use at
Contaminated Sites in Ontario (Ontario Ministry of the Environment and
Energy, February 1997, as revised), or (ii) in Quebec in excess of the
applicable standard in the Politique de Protection des sols et de
rehabilitation des terrains contamines, 1998 as revised, or (iii) in
British Columbia in excess of concentrations such that the Lands would
be considered to be contaminated sites for the purposes of the
Contaminated Sites Regulation under the Waste Management Act (British
Columbia); or (iv) in Saskatchewan in excess of the applicable
standard in the Risk-Based Corrective Actions for Petroleum
Contaminated Sites (Saskatchewan Environment and Resource Management,
29
November 1995), or (v) in Alberta at concentration levels in excess of
the applicable groundwater quality standards established by Alberta
Environmental Protection and published in March 1994 under the title
"Alberta Tier I Criteria for Contaminated Soil Assessment and
Remediation";
(yyy) except as disclosed in Schedule 3.01(sss), there are no Hazardous
Substances in surface water migrating from the Lands (i) in Ontario in
breach of the Provincial Water Quality Objectives (including Interim
Provincial Water Quality Objectives) of the Ontario Ministry of the
Environment and Energy (July 1994, as revised), or (ii) in Quebec in
breach of the applicable standard in the Politique de Protection des
sols et de rehabilitation des terrains contamines, 1998 as revised, or
(iii) in British Columbia in excess of concentrations such that the
Lands would be considered to be contaminated sites for the purposes of
the Contaminated Sites Regulation under the Waste Management Act
(British Columbia), or (iv) in Saskatchewan in breach of the Surface
Water Quality Objectives (Saskatchewan Environment and Resource
Management, August 1997), or (v) in Alberta in breach of the Surface
Water Quality Guidelines for use in Alberta (Alberta Environment,
1999), that could reasonably be expected to give rise to an
administrative order under applicable Environmental Laws from any
Governmental Authority or that presents a material risk of a
prosecution or other enforcement action under applicable Environmental
Laws;
(zzz) except as disclosed in Schedule 3.01(sss), there are no Hazardous
Substances in soil at, on or under any of the Lands in concentrations
and amounts that present a material risk to the health or safety of
any person;
(aaaa) neither Xxxxxx nor any Company has received written notice, nor does
the Vendor have knowledge of any conditions or circumstances that
could reasonably be expected to give rise to any notice, that Xxxxxx
or a Company or its predecessors are potentially responsible for any
remedial action under any applicable Environmental Law in connection
with the Business, except as disclosed in Schedule 3.01(sss);
(bbbb) the Vendor will provide the Purchaser promptly after execution of
this Agreement with copies of all analyses and monitoring data for
soil, groundwater and surface water and all reports pertaining to any
environmental assessments or audits relating to the Business that are
in the possession or control of any of Xxxxxx or the Companies;
(cccc) Xxxxxx and each Retained Subsidiary has made all royalty payments
required to be made under the Aggregate Resources Act (Ontario), as
amended, the Mines and Minerals Act (Alberta), Guidelines for
Environmental Protection During Development and Restoration of Sand
and Gravel Pits (Sask. Environment and Resource Management, September
1983), and similar legislation in Quebec and British Columbia
(collectively, the "AGGREGATES LEGISLATION") and are in compliance in
all material respects with the terms and conditions of all Permits
issued to Xxxxxx and the Retained Subsidiaries under the Aggregates
Legislation;
(dddd) during the Due Diligence Period, the Purchaser and its environmental
consultants shall be permitted at the Purchaser's expense to conduct
environmental
30
inspections of the Lands and to make inquiries with relevant
Governmental Authorities including the Ministry of the Environment,
the Ministry of National Resources and the local municipality and the
Vendor shall provide reasonable access to the Lands and facilitate
such inquiries for such purpose. The Vendor shall be entitled to have
a representative at any meetings held by the Purchaser and/or its
representatives with such Governmental Authorities. The Purchaser will
provide the Vendor with copies of any written reports of the
environmental consultants resulting from such due diligence promptly
after such reports become available and the Purchaser shall provide
written notice to the Vendor of any environmental problems (the "KNOWN
ENVIRONMENTAL PROBLEMS") disclosed by its due diligence that
constitute a breach of the Vendor's representations and warranties in
Sections 3.01(sss) through 3.01(bbbb), inclusive, or, if not
addressed, that could reasonably be expected to constitute a breach of
the Vendor's representations and warranties in Sections 3.01(sss)
through 3.01(bbbb), inclusive, within a period of four years after the
Closing Date (for greater certainty excluding as a Known Environmental
Problem any petroleum product and road salt contamination and
recyclable construction materials that reflects the uses in the
ordinary course of the business of the Companies of the Lands as
described in Schedule 3.01(sss) provided that it does not otherwise
constitute a breach at the Closing Time of the Vendor's
representations and warranties in Sections 3.01(xxx), (yyy) and (zzz).
Notwithstanding any other provision of this Agreement, the Purchaser
acknowledges the prior and continuing uses of the Lands as described
in Schedule 3.01(sss) and accepts the petroleum product and road salt
contamination and recyclable construction materials that reflects such
uses of the Lands in the ordinary course of the business of the
Companies over the period of use by the Companies or their
predecessors except to the extent that such contamination breaches at
the Closing Time, or could reasonably be expected to breach within
four years of the Closing Date, the Vendor's representation and
warranties in Sections 3.01(xxx), (yyy) and (zzz).
Intellectual Property
(eeee) Neither Xxxxxx nor any Retained Subsidiary has received any notice,
complaint, threat or claim alleging infringement of, any patent, trade
xxxx, trade name, copyright, industrial design, trade secret or other
proprietary right of any other person;
(ffff) at the Time of Closing, Xxxxxx or a Retained Subsidiary will legally
and beneficially own or be entitled to use free of restrictions (other
than those set forth in any licence, details of which have been made
available to the Purchaser) all computer software included in the
Assets. Nothing has come to the attention of the Vendor to the effect
that (A) any product, licence, patent, process, method, substance,
part or other material may infringe on any rights owned, held or
claimed by any other person; (B) there is pending or threatened any
claim or litigation against Xxxxxx or any Retained Subsidiary
contesting the right of Xxxxxx or any Retained Subsidiary to use or
sell any such product, licence, patent, process, method, substance,
part or material in the Business; (C) any product, licence, patent,
process, method, substance, part or material currently
31
being used or sold by any other person may infringe any rights of
Xxxxxx or any Retained Subsidiary; and
General
(gggg) attached hereto as Schedule 3.01(gggg) is a true and complete list
of all insurance policies maintained by Xxxxxx or a Retained
Subsidiary that also specifies the insurer, the amount of the
coverage, the type of insurance, the policy number and any pending
claims thereunder.
3.02 LAFARGE AND PURCHASER'S REPRESENTATIONS AND WARRANTIES
Lafarge and the Purchaser jointly and severally represent and warrant to the
Vendor that:
(a) each of Lafarge and the Purchaser is a corporation duly incorporated,
organized and subsisting under the laws of Canada;
(b) each of Lafarge and the Purchaser has good and sufficient power,
authority and right to enter into and deliver this Agreement and to
complete the transactions to be completed by the Purchaser
contemplated hereby;
(c) this Agreement constitutes a valid and legally binding obligation of
Lafarge and the Purchaser, enforceable against Lafarge and the
Purchaser in accordance with its terms subject to applicable
bankruptcy and other laws of general application limiting the
enforcement of creditors' rights generally and to the fact that
specific performance is an equitable remedy available only in the
discretion of the court;
(d) neither the entering into nor the delivery of this Agreement nor the
completion of the transactions contemplated hereby by Lafarge and the
Purchaser will result in the violation of:
(i) any of the provisions of the constating documents or by-laws of
Lafarge or the Purchaser;
(ii) any agreement or other instrument to which Lafarge or the
Purchaser is a party or by which Lafarge or the Purchaser is
bound; or
(iii) any Applicable Law.
(e) the articles and by-laws of the Purchaser are attached hereto as
Schedule 3.02(e);
(f) by the Time of Closing the authorized capital of the Purchaser will
consist of an unlimited number of common shares and $178,197,000 of
preferred shares, of which only common shares will be issued and
outstanding and registered in the name of Lafarge; and
(g) by the Time of Closing the Purchaser will have taken all necessary
action to authorize the issuance of the preferred shares comprising
Share Portion of the Purchase Price in accordance with the terms
hereof; all such preferred shares will, at the time of issuance on
Closing, be validly issued, fully paid and non-assessable and such
shares will be issued and outstanding and registered in the name of
the Vendor free and clear of all Encumbrances.
32
ARTICLE 4 - TAX MATTERS
4.01 TAX REPRESENTATIONS AND WARRANTIES REGARDING XXXXXX AND THE RETAINED
SUBSIDIARIES
The Vendor represents and warrants to the Purchaser as follows and
acknowledge that the Purchaser is relying on these representations and
warranties in entering into this Agreement and the transactions contemplated
under this Agreement:
(a) except as set forth in Schedule 4, (i) all Tax Returns required to be
filed by or with respect to any of Xxxxxx or the Retained Subsidiaries
as of the date hereof have been duly and timely filed, (ii) all items
of income, gain, loss, deduction and credit or other items ("TAX
ITEMS") required to be included in each such Tax Return have been so
included and such Tax Returns are correct and complete in all material
respects, (iii) all Taxes owed by Xxxxxx or any of the Retained
Subsidiaries which are or have become due under such Tax Returns have
been timely paid in full, and all assessments and reassessments have
been fully paid, (iv) no penalty, interest or other charge is or will
become due with respect to the late filing of any such Tax Return or
late payment of such Tax, and (v) all Tax withholding and deposit
requirements imposed on or with respect to Xxxxxx or any of the
Retained Subsidiaries as of the date hereof have been satisfied in
full;
(b) Schedule 4 lists all income Tax Returns filed with respect to Xxxxxx
or the Retained Subsidiaries for the six taxation years ending prior
to the Balance Sheet Date, indicates those Tax Returns have been
audited, indicates those Tax Returns that are currently the subject of
audit, and indicates those Tax Returns whose audits have been closed;
(c) there is no claim against Xxxxxx or the Retained Subsidiaries for any
Taxes, and no assessment, deficiency or adjustment has been asserted,
proposed or threatened with respect to any Tax Return of or with
respect to Xxxxxx or the Retained Subsidiaries, other than those
disclosed in Schedule 4;
(d) no claim has ever been made by a Tax Authority in a jurisdiction where
Xxxxxx or the Retained Subsidiaries does not file Tax Returns that
Xxxxxx or a Retained Subsidiary is or may be subject to taxation in
that jurisdiction;
(e) except as set forth in Schedule 4 there is not in force any extension
of time with respect to the due date for the filing of any Tax Return
of or with respect to any of Xxxxxx or the Retained Subsidiaries or
any waiver or agreement for any extension of time for the assessment
or payment of any Tax or with respect to any of Xxxxxx or the Retained
Subsidiaries;
(f) neither Xxxxxx nor the Retained Subsidiaries will be required to
include any amount in income following the Balance Sheet Date as a
result of a change in accounting method for any taxable period ending
on or before the Balance Sheet Date or pursuant to any agreement with
any Tax Authority with respect to any such taxable period;
33
(g) except as set forth in Schedule 4, neither Xxxxxx nor the Retained
Subsidiaries has any liability for the Taxes of any Person (other than
Xxxxxx or the Retained Subsidiaries) by law, by contract or otherwise;
(h) except as set forth in Schedule 4, neither Xxxxxx nor the Retained
Subsidiaries have entered into any agreement or arrangement with any
Tax Authority that requires any of Xxxxxx or Retained Subsidiaries to
take any action or to refrain from taking any action, including any
arrangement or agreement which would affect the subsequent Tax
liabilities of Xxxxxx and the Retained Subsidiaries;
(i) no amount in respect of any outlay or expense that is deductible for
the purposes of computing the income of each of Xxxxxx and the
Retained Subsidiaries for the purpose of the ITA has been owing by
such entity for longer than two years to a person with whom such
entity was not dealing at arm's length for the purposes of the ITA at
the time the outlay or expense was incurred;
(j) the Vendor is not and on the Closing Date will not be a non-resident
of Canada within the meaning of the ITA;
(k) except as set forth in Schedule 4, Section 80 of the ITA has not
applied to any of Xxxxxx or the Retained Subsidiaries and Xxxxxx and
the Retained Subsidiaries have not taken any action or step which
would result in or which has resulted in section 80 of the ITA
applying to any of Xxxxxx or the Retained Subsidiaries in a manner
other than a reduction of the "cost amount" (as defined by the ITA) of
any of the assets held by Xxxxxx and the Companies which are the
subject of the representation and warranty in Section 4.01(m);
(l) Xxxxxx and the Retained Subsidiaries are each a registrant for the
purposes of the ETA and are each not a financial institution within
the meaning of the ETA. Xxxxxx and the Retained Subsidiaries have not
made any elections under the ETA;
(m) the aggregate "cost amount" as defined by the ITA of the assets held
by Xxxxxx and the Companies, excluding the cost amount of the shares
of the Companies and the cost amount of the Excluded Properties and
the Excluded Hold Properties and reduced in accordance with the ITA
for the Excluded Assets, as of the Balance Sheet Date is not less than
the amount disclosed on Schedule 4. Such assets are more particularly
described by asset classification and prescribed classes for capital
cost allowance purposes in Schedule 4 (on the assumption that all such
assets that are "industrial mineral mines" are included in one class),
and the cost amount of each such class is not less than the amount set
out in Schedule 4;
(n) the income taxes payable and the portion of the future income taxes
classified as current liabilities aggregating $20,203,000 and the
portion of the future income taxes classified as non-current
liabilities (the "TAX PROVISIONS") shown on the Balance Sheet have
been prepared in accordance with GAAP consistently applied and
adequately provide for the Tax liabilities of Xxxxxx and the Retained
Subsidiaries for the period ended on the Balance Sheet Date; and
34
(o) except as set forth in Schedule 4, there are no Tax allocation or
sharing agreements affecting Xxxxxx or the Retained Subsidiaries.
4.02 TAX COVENANTS
(a) The Vendor and Purchaser agree that, except as provided in Article
4.02(b) in respect of the taxation year of Xxxxxx and the Retained
Subsidiaries ending as a result of the acquisition of control, the
Vendor will cause to be prepared any Tax Returns in respect of any
period which ends after the Balance Sheet Date and which is due, or
the Vendor chooses to file, before the Closing Date (other than the
Tax Returns for those Companies described on Schedule 4 which the
Purchaser acknowledges have been filed before the date hereof) and
that, at least 90 days prior to the earlier of due filing date for, or
the date on which the Vendor wishes to file, any such return, copies
of such Tax Returns will be provided forthwith to the Purchaser. The
Purchaser shall have 30 days to review the Tax Returns and may deliver
to the Vendor a notice (an "OBJECTION NOTICE"), stating that it
objects to such Tax Returns, which notice shall set out in reasonable
detail the basis for such objection. If the Purchaser does not deliver
an Objection Notice within a 30 day period following receipt of the
Tax Returns, the Purchaser will be deemed to have consented to the
filing of such return. If the Vendor and Purchaser cannot agree on the
Tax Returns within the 15 days following the delivery of an Objection
Notice, then, the Tax Returns, and all other relevant documentation
shall be delivered to the Independent Accountant. The Independent
Accountant shall determine and provide written notice to the Vendor
and Purchaser or its decision in respect of the disputed items in the
Tax Returns within 30 days of receipt of such documents. Such
determination shall, in the absence of manifest error, determine the
basis for the filing of the Tax return and the payment of Taxes.
(b) With respect to the Tax Returns for the taxation years of Xxxxxx and
the Retained Subsidiaries ending as a result of the acquisition of
control of Xxxxxx and the Retained Subsidiaries, the Purchaser shall
cause such Tax Returns to be prepared at least 90 days prior to the
due filing date. The reporting of the Pre-Closing Transactions in such
Tax Returns will be based on the memorandum referred to in Section
6.01(q) of this Agreement. The Vendor shall have 30 days to review the
reporting of the Pre-Closing Transactions only in the Tax Returns and
may deliver to the Purchaser a notice (an "OBJECTION NOTICE") stating
that it objects to reporting of the Pre-Closing Transactions in such
Tax Returns which notice shall set out in reasonable detail the basis
for such objection. If the Vendor does not deliver an Objection Notice
within a 30 day period following receipt of the Tax Returns, the
Vendor will be deemed to have consented to the reporting of the
Pre-Closing Transactions in such Tax Returns. If the Vendor and
Purchaser cannot agree on the Tax Returns within 15 days following the
delivery of an Objection Notice, then, the Tax returns, and all other
relevant documentation shall be delivered to the Independent
Accountant. The Independent Accountant shall determine and provide
written notice to the Vendor and Purchaser of its decision in respect
of disputed items in the Tax Returns within 30 days of receipt of such
documents. Such determination shall, in the absence of manifest error
determine the basis for the filing of the Tax Returns and the payment
of Taxes. The Purchaser shall cause Xxxxxx or the Retained
Subsidiaries to file each such Tax Returns and, to the extent the
35
Purchaser has received a Purchase Price adjustment pursuant to Section
2.05 hereof or the Vendor has previously paid to the Purchaser the
amount of the Taxes owing in respect of the Pre-Closing Transactions,
pay the Taxes owing in respect of the Pre-Closing Transactions.
(c) Any deemed or actual consent of the Purchaser to the filing of any Tax
Return shall not in any way whatsoever limit its entitlement to claim
indemnification pursuant to Article 7 hereof.
(d) Where, pursuant to the ITA or Tax legislation of any relevant
jurisdiction, any deduction, allowance, credit, limit or threshold (a
"TAX AMOUNT") must be shared among or allocated between related,
affiliated or associated persons and the Vendor (and/or its
affiliates) and the Purchaser (and/or its affiliates) are related,
affiliated or associated for purposes of determining such Tax Amount,
the Tax Amount will be shared or allocated 50% to the Purchaser
(and/or its affiliates) and 50% to the Vendor (and its affiliates).
(e) The Purchaser and the Vendor agree that they will provide each other
with all such information as may be required in order to properly
complete any future Tax Returns for any of the Companies and any
applicable schedules to such Tax Returns.
(f) In the Interim Period, Xxxxxx and the Retained Subsidiaries will pay
and remit all Taxes by their due date.
ARTICLE 5 - COVENANTS
5.01 TAXES
For greater certainty, the Purchaser does not assume and will not be liable
for any Taxes whatsoever which may be or become payable by the Vendor or Xxxxxx
or any Retained Subsidiary resulting from or arising as a consequence of the
sale by the Vendor to the Purchaser of the Shares herein contemplated and the
filing of the Tax Elections and the Vendor will indemnify and save harmless the
Purchaser, Xxxxxx and the Retained Subsidiaries from and against all such Taxes.
5.02 COVENANTS OF THE VENDOR
(1) During the period from the date of this Agreement to the Time of
Closing, the Vendor shall do or cause Xxxxxx and the Companies to do
the following:
(a) except as otherwise contemplated or permitted by this Agreement,
Xxxxxx and the Companies will conduct the Business in the ordinary and
normal course and will not, without the prior written consent of the
Purchaser, enter into any transaction which, if entered into before
the date of this Agreement, would cause any representations or
warranties of the Vendor contained in this Agreement to be incorrect
or constitute a breach of any covenant or agreement of the Vendor
contained in this Agreement;
36
(b) the Vendor will use all reasonable commercial efforts to preserve
intact Xxxxxx, the Companies and the Business and the relationships
existing with the customers of Xxxxxx and the Companies;
(c) Xxxxxx and/or the Companies will continue in force and in good
standing all existing insurance maintained by it;
(d) Xxxxxx and the Companies will comply in all material respects with all
Applicable Laws;
(e) neither Xxxxxx nor any Company will take any action which would result
in any material adverse change in or to the Business or sell,
transfer, or dispose of any of the assets of Xxxxxx or any Company,
other than in the ordinary course of business or with the Purchaser's
consent except for the property interests to be transferred to the
Vendor or a subsidiary of the Vendor pursuant to the Pre-Closing
Transactions;
(f) neither Xxxxxx nor any Company will suffer or permit any mortgages,
pledges, hypothecs, security interests, deemed trusts, liens, charges,
rights or claims of other persons, or any other Encumbrances
whatsoever, to attach to or affect the assets of Xxxxxx or the
Companies except for Permitted Encumbrances and Deficiencies,
Permitted Personal Property Encumbrances or those other Encumbrances
affecting the Outright Sale Properties and the Residual Option
Properties referred to in Section 3.01(fff) (it being acknowledged and
agreed by the Purchaser that the foregoing covenant shall cease to
have any application to any Outright Sale Properties or Residual
Option Properties for which the parties have agreed on Permitted
Encumbrances and Deficiencies and the Vendor's Undertaking as
contemplated by Section 2.03 and, unless otherwise agreed by the
Vendor, the Purchaser's termination rights under Section 2.03 shall be
the sole remedy of the Purchaser with respect to any breach of the
foregoing covenant that is disclosed in writing to the Purchaser by
the Vendor prior to the Go Firm Date relating to the Vendor's title to
the Outright Sale Properties or the Residual Option Properties);
(g) other than in the ordinary course of business, and except as described
in Schedule 3.01(ii) neither Xxxxxx nor any Company will increase the
compensation or improve the Benefit Plans or pay or agree to pay any
pension or retirement allowance or other employee benefit not required
by the existing Benefit Plan or agreement to any of their employees,
or commit to any new or renewed employee pension, disability, bonus,
deferred or incentive compensation, profit sharing, share purchase,
stock option, retirement, group insurance, death benefit, vacation,
health and welfare or other employee benefit plan, agreement, policy,
practice or other arrangement or to any employment or consulting
agreement (or amendment, renewal or extension thereof) with or for the
benefit of any officer, employee or other Person or to amend any of
the foregoing now in existence;
(h) neither Xxxxxx nor any Company will effect any transaction resulting
in a taxation or fiscal year end except as disclosed in the memorandum
attached as Schedule 1.01(uu) describing the Pre-Closing Transactions;
37
(i) the Vendor will not suffer or permit any mortgages, pledges,
hypothecs, security interests, deemed trusts, liens, charges, rights
or claims of other persons, or any other Encumbrances whatsoever, to
attach or to affect the Shares;
(j) neither Xxxxxx nor any Company or the Vendor will, directly or
indirectly,
(i) solicit, initiate or entertain inquiries or proposals from, or
provide non-public information to, any Person with respect to, or
(ii) participate in any negotiations regarding, or otherwise cooperate
in any way with or assist or participate in or take any steps to
bring about,
the direct or indirect acquisition of all or any substantial part of
the Business (for greater certainty excluding the Excluded Properties
and Excluded Assets) by any Person, other than the Purchaser,
including, without limitation, by way of the acquisition of the
outstanding shares of any of the Companies or Xxxxxx or the
amalgamation or merger of any of the Companies or Xxxxxx, or any plan
of arrangement or other reorganization involving any of the Companies
or Xxxxxx; and
(k) on or before the Closing Date, reorganize the share capital of Xxxxxx
into a single class of common shares.
(2) The Vendor will use all reasonable commercial efforts to ensure that
the representations and warranties of the Vendor set out in Section
3.01 over which the Vendor has reasonable control are true and correct
at the Time of Closing and that the conditions of closing for the
benefit of the Purchaser set out in Section 6.01 over which the Vendor
has reasonable control have been performed or complied with by the
Time of Closing. The Vendor may make corrections or additions to the
schedules (which are not in the aggregate material) prior to the Due
Diligence Date (by providing the Purchaser with a blacklined copy
showing the changes or additions). In addition, the Vendor may make
immaterial changes or additions to the schedules (which are not in the
aggregate material) up to the Time of Closing (by providing the
Purchaser with a blacklined copy showing the changes or additions). If
any proposed changes or additions to a schedule or schedules after the
Due Diligence Date are material and adverse and the Purchaser, acting
reasonably, is not satisfied with the changes, the parties agree in
good faith to negotiate an appropriate abatement to the Purchase
Price, if appropriate, failing which this Agreement, notwithstanding
any intermediate acts or negotiations, shall be null and void.
(3) The Vendor will complete, or cause to be completed, the Pre-Closing
Transactions in accordance with the memorandum of XxXxxxxx Binch
attached as Schedule 1.01(uu) prior to the Time of Closing, subject to
such changes as may be approved by the Purchaser or the Purchaser's
counsel, acting reasonably.
(4) The Purchaser acknowledges that certain parcels of land adjoining
certain of the Lands are not intended to form part of the Lands as
described in the sketches attached as Schedule 5.02(4). The Vendor
confirms that it will have submitted applications prior to the Due
Diligence Date to obtain consents to severance of such parcels (the
"PARCELS FOR SEVERANCE") but that such consents may not be
38
obtained with all applicable periods having expired as of the Closing
Date. The Vendor will with due diligence take all such action as may
be reasonably required in order to obtain such consent before the
Closing Date, if applicable, under the Planning Act (Ontario) and the
equivalent legislation in each of Quebec, Saskatchewan, Alberta and
British Columbia to permit a severance of the Parcels for Severance
from other lands of Xxxxxx or the Retained Subsidiaries so that the
transactions contemplated by this Agreement can be effected. In the
event that all required consents for severance are not available in
final and binding form prior to Closing the Vendor and the Purchaser
agree that Xxxxxx or the applicable Retained Subsidiary owning the
relevant Lands shall execute and deliver an agreement with the Vendor
or a subsidiary of the Vendor with respect to each Parcel for
Severance substantially in the form attached as Schedule 5.02(4) with
respect to each such Parcel for Severance.
(5) No later than 5 Business Days prior to the Closing Date, the Vendor
will provide the Purchaser with a true and complete listing showing:
(i) the name of each bank, trust company or similar institution in
which Xxxxxx or a Retained Subsidiary has accounts or safe
deposit boxes, the number or designation of each such account and
safety deposit box and the names of all persons authorized to
draw thereon or to have access thereto;
(ii) the name of each person, firm, corporation or business
organization holding a general or special power of attorney from
Xxxxxx or a Retained Subsidiary and a summary of the terms
thereof; and
(iii) the names and titles of all the officers and directors of Xxxxxx
and the Retained Subsidiaries.
(6) Within 10 Business Days of the date hereof, the Vendor will provide
the Purchaser with (a) a true and complete list setting forth the
municipal addresses, where assigned and available in Xxxxxx'x records,
and the short legal descriptions of each of the Excluded Hold
Properties and those Excluded Properties that are the subject to the
lease agreements described in Section 6.01(n), and (b) copies of all
documents relating to Encumbrances on title to any of the Properties
heretofore granted by any Company and not registered on title to the
Lands so encumbered in the Vendor's possession or control.
5.03 COVENANTS OF THE PURCHASER
(1) Lafarge and the Purchaser will use all reasonable commercial efforts
to ensure that the representations and warranties of Lafarge and the
Purchaser set out in Section 3.02 over which Lafarge and the Purchaser
has reasonable control are true and correct at the Time of Closing and
that the conditions of closing for the benefit of the Vendor set out
in Section 6.02(1) over which Lafarge and the Purchaser have
reasonable control have been performed or complied with by the Time of
Closing.
(2) Lafarge will cause the Purchaser to close the transaction contemplated
by this Agreement in accordance with and subject to the terms and
conditions contained
39
in this Agreement, including funding the Cash Portion and the issue of
the Share Portion of the Purchase Price.
ARTICLE 6 - CONDITIONS
6.01 CONDITIONS FOR THE BENEFIT OF THE PURCHASER
The sale by the Vendor and the purchase by the Purchaser of the Shares is
subject to the following conditions which are for the exclusive benefit of the
Purchaser to be performed or complied with at or prior to the Time of Closing:
(a) the representations and warranties of the Vendor set forth in Sections
3.01 and 4.01 shall be true and correct at the Time of Closing with
the same force and effect as if made at and as of such time;
(b) the Vendor shall have performed or complied with all of the terms,
covenants and conditions of this Agreement to be performed or complied
with by the Vendor at or prior to the Time of Closing;
(c) the Purchaser shall be furnished with such certificates, affidavits or
statutory declarations of Xxxxxx and of the Vendor or of officers of
Xxxxxx as the Purchaser or the Purchaser's counsel may reasonably
think necessary in order to establish that the terms, covenants and
conditions contained in this Agreement to have been performed or
complied with by the Vendor or by Xxxxxx, as the case may be, at or
prior to the Time of Closing have been performed and complied with and
that the representations and warranties of the Vendor herein given are
true and correct at the Time of Closing;
(d) where the leases of Leased Premises requires the landlord's consent on
a change of control, the Vendor shall have delivered to the Purchaser
the landlord's consent to the change of control;
(e) the Purchaser and its counsel shall be satisfied that the Pre-Closing
Transactions have been effected in accordance with the memorandum of
XxXxxxxx Xxxxx attached as Schedule 1.01(uu), as amended or changed in
accordance with Section 5.02(3), except as otherwise agreed by the
Purchaser or Purchaser's counsel, acting reasonably;
(f) subject to Section 5.02(4) hereof, the subdivision control provisions
of the Planning Act (Ontario) and equivalent legislation in each of
Quebec, Saskatchewan, Alberta and British Columbia will have been
complied with prior to the Time of Closing or after as provided in
Section 5.02(4) hereof, such compliance to be effected by the Vendor
at the Vendor's expense, and the Purchaser shall be satisfied that
transactions involving the Lands have been carried out in compliance
with such provisions;
(g) there shall have been no material adverse change in the affairs,
assets, liabilities, financial condition or Business of Xxxxxx or any
Retained Subsidiary from that shown on or reflected in the Financial
Statements;
40
(h) no material damage by fire or other hazard to the assets used in the
Business shall have occurred from the date hereof to the Time of
Closing;
(i) all directors and the Chairman, Vice-Chairman, President and Secretary
of Xxxxxx and all outside directors of the Retained Subsidiaries
(except Smelter Bay Aggregates Inc. and Xxxxx Brothers Construction
Limited) shall resign from all their respective positions with Xxxxxx
and the Retained Subsidiaries;
(j) [Intentionally Deleted];
(k) all necessary steps and proceedings shall have been taken to permit
the Shares to be duly and regularly transferred free and clear of all
liens, charges, encumbrances and any other rights of others to, and
registered in the name of, the Purchaser;
(l) the Vendor or a subsidiary of the Vendor shall have delivered an
executed counterpart of an agreement substantially on the terms and
conditions set forth in Schedule 6.01(l) with respect to each of the
Type A Excluded Hold Properties and Schedule 6.01(l) with respect to
each of the Type B Excluded Hold Properties;
(m) the Vendor or a subsidiary of the Vendor shall have delivered an
executed option agreement substantially on the terms and conditions
set forth in Schedule 6.01(m) with respect to each of the Residual
Option Properties;
(n) the Vendor shall have delivered an executed lease agreement
substantially on the terms and conditions set forth in Schedule
6.01(n) with respect to each of the Excluded Properties providing for
their use by Xxxxxx or a Retained Subsidiary for a transitional period
following the Closing Date;
(o) there shall be a non-competition agreement entered into between the
Purchaser, and the Vendor substantially in the form attached hereto as
Schedule 6.01(o);
(p) the Vendor shall have delivered to the Purchaser a favourable opinion
of the Vendor's counsel substantially in the form attached hereto as
Schedule 6.01(p);
(q) by August 21, 2000, XxXxxxxx Xxxxx shall have delivered to Xxxxxx a
draft tax memorandum summarizing the income and other Tax consequences
of the Pre-Closing Transactions to Xxxxxx and the Retained
Subsidiaries in connection with the Pre-Closing Transactions which
will be subject to discussion and agreement by the parties, acting
reasonably and finalization by XxXxxxxx Binch before the Go Firm Date;
(r) all Required Consents shall have been obtained (including for greater
certainty, consents of third parties under any material contracts
which provide for cancellation in the event of a change in control of
Xxxxxx or a Retained Subsidiary);
(s) the Purchaser shall have obtained a notice from the Minister under the
Investment Canada Act (Canada) that he/she is satisfied, or deemed to
be satisfied, that the transactions contemplated herein are likely to
be of net benefit to Canada;
41
(t) the parties shall have obtained Competition Act Approval;
(u) the satisfactory completion of due diligence investigations of Xxxxxx,
the Companies and the Business by the Purchaser prior to 5:00 p.m.
(Toronto time) on the Due Diligence Date;
(v) the Vendor shall have subscribed and paid for warrants to purchase
shares of common stock of Lafarge Corporation for an aggregate
subscription price of Cdn. $28,400,000, such warrants and the
associated subscription agreement having the terms and conditions
described in Schedule 6.01(v);
(w) approval of the board of directors of Lafarge prior to 5:00 p.m.
(Toronto time) on July 25, 2000 to the transactions contemplated
herein subject to satisfactory due diligence; and
(x) the form and legality of all matters incidental to the sale by the
Vendor and the purchase by the Purchaser of the Shares and the
Pre-Closing Transactions shall be subject to the approval of the
Purchaser's counsel, acting reasonably.
(2) In case any term or covenant of the Vendor or condition to be
performed or complied with for the benefit of the Purchaser at or
prior to the Time of Closing shall not have been performed or complied
with at or prior to the Time of Closing, the Purchaser may, without
limiting any other right that the Purchaser may have, at its sole
option, either:
(a) terminate this Agreement by notice to the Vendor, and in such event
the Purchaser shall be released from all obligations hereunder; or
(b) waive compliance with any such term, covenant or condition in whole or
in part on such terms as may be agreed upon without prejudice to any
of its rights of rescission in the event of non-performance of any
other term, covenant or condition in whole or in part;
and, if the Purchaser terminates this Agreement pursuant to Section
6.01(2)(a) and the term, covenant or condition for which the Purchaser has
terminated this Agreement was one that the Vendor had covenanted, pursuant
to Section 5.02(2), to ensure had been performed or complied with, the
Vendor shall be liable to the Purchaser for any losses, damages or expenses
incurred by the Purchaser as a result of such breach.
6.02 CONDITIONS FOR THE BENEFIT OF THE VENDOR
(1) The sale by the Vendor and the purchase by the Purchaser of the Shares
is subject to the following conditions which are for the exclusive
benefit of the Vendor to be performed or complied with at or prior to
the Time of Closing:
(a) the representations and warranties of the Purchaser set forth in
Section 3.03 shall be true and correct at the Time of Closing with the
same force and effect as if made at and as of such time;
(b) the Purchaser shall have performed or complied with all of the terms,
covenants and conditions of this Agreement to be performed or complied
with by the Purchaser at or prior to the Time of Closing;
42
(c) the Vendor shall be furnished with such certificates, affidavits or
statutory declarations of the Purchaser or of officers of the
Purchaser as the Vendor or the Vendor's counsel may reasonably think
necessary in order to establish that the terms, covenants and
conditions contained in this Agreement to have been performed or
complied with by the Purchaser at or prior to the Time of Closing have
been performed and complied with and that the representations and
warranties of the Purchaser herein given are true and correct at the
Time of Closing;
(d) the Vendor and its counsel shall be satisfied that the Pre-Closing
Transactions have been effected in accordance with the memorandum of
XxXxxxxx Xxxxx attached as Schedule 1.01(uu), as amended or changed in
accordance with Section 5.02(3), except as otherwise agreed by the
Vendor or Vendor's counsel, acting reasonably;
(e) Xxxxxx or a Retained Subsidiary shall have delivered an executed
counterpart of an agreement substantially on the terms and conditions
set forth in Schedule 6.01(l) with respect to each of the Type A
Excluded Hold Properties and Schedule 6.01(l) with respect to each of
the Type B Excluded Hold Properties;
(f) Xxxxxx or a Retained Subsidiary or a subsidiary of Xxxxxx or a
Retained Subsidiary shall have delivered an executed option agreement
substantially on the terms and conditions set forth in Schedule
6.01(m) with respect to each of the Residual Option Properties;
(g) Xxxxxx or a Retained Subsidiary shall have delivered an executed lease
agreement substantially on the terms and conditions set forth in
Schedule 6.01(n) with respect to each of the Excluded Properties
providing for their use by Xxxxxx or a Retained Subsidiary for a
transitional period following the Closing Date;
(h) Lafarge Corporation shall have accepted the subscription of the Vendor
for warrants to purchase shares of common stock of Lafarge Corporation
for an aggregate subscription price of Cdn. $28,400,000, such warrants
and the associated subscription agreement having the terms and
conditions described in Schedule 6.01(v), and such warrants shall have
been duly granted to the Vendor in compliance with all Applicable
Laws;
(i) the Purchaser shall have issued as fully paid and non-assessable and
delivered certificates representing the Share Portion of the Purchase
Price registered in the name of the Vendor;
(j) the parties shall have obtained Competition Act Approval;
(k) the Purchaser shall have obtained a notice from the Minister under the
Investment Canada Act (Canada) that he is satisfied, or deemed to be
satisfied, that the transactions contemplated herein are likely to be
of net benefit to Canada.
(l) there shall have been no material adverse change in the affairs,
assets, liabilities, financial condition or business of Lafarge
Corporation, Lafarge or the Purchaser since December 31, 1999;
43
(m) the Purchaser shall have delivered favourable opinions of counsel to
Lafarge Corporation, Lafarge and the Purchaser substantially in the
form(s) attached as Schedule 6.02(m);
(n) approval of the board of directors of Xxxxxx prior to 5:00 p.m.
(Toronto time) by July 25, 2000 to the transactions contemplated
herein; and
(o) the form and legality of all matters incidental to the issuance of the
Share Portion of the Purchase Price, the issuance of warrants to the
Vendor by Lafarge Corporation and the Pre-Closing Transactions shall
be subject to the approval of the Vendor's counsel, acting reasonably;
(2) In case any term or covenant of the Purchaser or condition to be
performed or complied with for the benefit of the Vendor at or prior
to the Time of Closing shall not have been performed or complied with
at or prior to the Time of Closing, the Vendor may, without limiting
any other right that the Vendor may have, at its sole option, either:
(a) terminate this Agreement by notice to the Purchaser, and in such event
the Vendor shall be released from all obligations hereunder; or
(b) waive compliance with any such term, covenant or condition in whole or
in part on such terms as may be agreed upon without prejudice to any
of its rights of rescission in the event of non-performance of any
other term, covenant or condition in whole or in part;
and, if the Vendor terminates this Agreement pursuant to Section 6.02(2)(a)
and the term, covenant or condition for which the Vendor has terminated
this Agreement was one that the Purchaser had covenanted, pursuant to
Section 5.03(1), to ensure had been performed or complied with, the
Purchaser shall be liable to the Vendor for any losses, damages or expenses
incurred by the Vendor as a result of such breach.
(3) If the condition described in Section 6.01(w) (directors' approval) is
not satisfied or waived by the Purchaser prior to 5:00 p.m. on July
25, 2000 or if the due diligence condition described in Section
6.01(u) is not waived by the Due Diligence Date, subject to any
extension thereof in accordance with the terms hereof, the Vendor may
at its sole option terminate this Agreement by notice to the
Purchaser, and in such event the parties shall be released from all
obligations hereunder.
ARTICLE 7 - - SURVIVAL AND INDEMNITY
7.01 SURVIVAL OF VENDOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS
(1) The representations and warranties of the Vendor set forth in Section
3.01 and Section 4.01 shall survive the completion of the sale and
purchase of the Shares herein provided for and, notwithstanding such
completion:
(a) the representations and warranties of the Vendor relating to the Tax
liability of Xxxxxx and the Companies, including, without limiting the
generality of the foregoing, those set forth in Article 4 shall,
unless such representations and
44
warranties prove to be false as a result of any misrepresentation made
or fraud committed in filing a return or supplying information for the
purposes of the ITA or any other legislation imposing Tax on Xxxxxx,
continue in full force and effect for the benefit of the Purchaser
until the expiration of the last of the limitation periods contained
in the ITA and any legislation imposing Tax on Xxxxxx or a Retained
Subsidiary subsequent to the expiration of which an assessment,
reassessment or other form of recognized document assessing liability
for Tax, thereunder for any period in respect of which the Vendor has
an indemnity obligation pursuant to Article 7 cannot be issued to
Xxxxxx and the Retained Subsidiaries;
(b) the representations and warranties of the Vendor relating to the Tax
liability of Xxxxxx and the Retained Subsidiaries, including, without
limiting the generality of the foregoing, those set forth in Article
4, which prove to be false as a result of any misrepresentation made
or fraud committed in filing a return or in supplying information for
the purposes of the ITA or any other legislation imposing Tax on
Xxxxxx or a Retained Subsidiary shall continue in full force and
effect for the benefit of the Purchaser and be unlimited as to
duration;
(c) the representations and warranties of the Vendor relating to
environmental matters, including, without limiting the generality of
the foregoing, those set forth in Sections 3.01(sss) through (bbb),
inclusive and (ddd) shall continue in full force and effect for the
benefit of the Purchaser for a period of 4 years from the Closing
Date;
(d) the representations and warranties contained in Section 3.01(fff)
relating to title to the Remaining Properties shall continue in full
force and effect for the benefit of the Purchaser until July 31, 2001;
and
(e) the remaining representations and warranties of the Vendor set forth
in Section 3.01 shall continue in full force and effect for the
benefit of the Purchaser for a period of 2 years from the Closing
Date.
(2) The covenants of the Vendor set forth in this Agreement shall survive
the completion of the sale and purchase of the Shares herein provided
for and, notwithstanding such completion, shall continue in full force
and effect for the benefit of the Purchaser in accordance with the
terms thereof.
7.02 SURVIVAL OF PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
(1) The representations and warranties of the Purchaser set forth in
Section 3.02 shall survive the completion of the sale and purchase of
the Shares herein provided for and, notwithstanding such completion,
shall continue in full force and effect for the benefit of the Vendor
for a period of 2 years from the Closing Date.
(2) The covenants of the Purchaser set forth in this Agreement shall
survive the completion of the sale and purchase of the Shares herein
provided for and, notwithstanding such completion, shall continue in
full force and effect for the benefit of the Vendor in accordance with
the terms thereof.
45
7.03 INDEMNIFICATION BY THE VENDOR
The Vendor hereby agrees to indemnify and save harmless the Purchaser from
all Losses suffered or incurred by the Purchaser and any affiliate thereof as a
result of or arising directly or indirectly out of or in connection with:
(1) any breach by the Vendor or any inaccuracy of any representation or
warranty of the Vendor contained in this Agreement or in any
agreement, certificate or other document delivered pursuant hereto
other than any representation or warranty in Section 4.01(a) to (e),
inclusive and Section 4.01(g) and (n);
(2) any breach or non-performance by the Vendor of any covenant to be
performed by the Vendor that is contained in this Agreement or in any
agreement, certificate or other document delivered pursuant hereto
other than any covenant contained in Section 4.02;
(3) all claims commenced by third parties within 4 years of the Closing
Date for personal injury (including death) or property damage
(including, without limitation, any present or future legal
proceedings related thereto) as a result of the Release of any
Hazardous Substances by any Company which was not in compliance with
Applicable Laws (which for purposes of this Section 7.03(3) shall be
construed to include all predecessors of the Companies whether by way
of amalgamation, merger or other form of business combination) where
such personal injury or property damage arose or occurred prior to the
Closing Date;
(4) Any liability of Xxxxxx and/or any Retained Subsidiary for Taxes in
excess of the Tax Provision in respect of:
(i) taxation years ending on or before the Balance Sheet Date; and
(ii) taxation years which end after the Balance Sheet Date, to the
extent such Taxes relate to the period or periods ending on or
prior to the Balance Sheet Date;
(5) any interest or penalty be payable by Xxxxxx or a Retained Subsidiary
as a result of a failure by Xxxxxx or the Retained Subsidiary to make
any Tax remittance or file any Tax return when due in the Interim
Period or any error contained in any such Tax return that is due to
the gross negligence or wilful default of Xxxxxx or the Retained
Subsidiary;
(6) the Pre-Closing Transactions excluding, for greater certainty, the
intended commercial consequences of such transactions as contemplated
by the Transaction Documents, including for greater certainty any
Transaction Taxes payable by or on behalf of Xxxxxx or a Retained
Subsidiary in excess of the amount of any credit in favour of the
Purchaser reducing the Purchase Price pursuant to Section 2.05 for the
amount of such Transaction Taxes;
(7) any liability of Xxxxxx or any Retained Subsidiary for Taxes incurred
or assessed for the Interim Period on behalf or as a consequence of
the activities of any Company incorporated or carrying on business in
a jurisdiction other than Canada, other than in respect of income,
sales, use, payroll, customs and excise
46
taxes or duties and taxes on capital or other similar Taxes incurred
by such Company in the ordinary course of its business;
(8) any breach or non-performance by the Vendor of any covenant to be
performed by the Vendor in Section 4.02; and
(9) any Encumbrance that Xxxxxx or any Retained Subsidiary has granted
that is not registered on title to any Property unless such
Encumbrance is disclosed on the Schedule of Permitted Encumbrances and
Deficiencies.
7.04 INDEMNIFICATION BY THE PURCHASER
The Purchaser agrees to indemnify and save harmless the Vendor from all
Losses suffered or incurred by the Vendor and any affiliate thereof as a result
of or arising directly or indirectly out of or in connection with:
(1) any breach by the Purchaser of or any inaccuracy of any representation
or warranty contained in this Agreement or in any agreement,
instrument, certificate or other document delivered pursuant hereto;
(2) any breach or non-performance by the Purchaser of any covenant to be
performed by it that is contained in this Agreement or in any
agreement, certificate or other document delivered pursuant hereto.
7.05 NOTICE OF CLAIM
If a party (in this Article 7 the "INDEMNIFIED PARTY") shall become aware
of any claim, proceeding or other matter (in this Article 7 a "CLAIM") in
respect of which the other party (in this Article 7 the "INDEMNIFYING PARTY")
agreed to indemnify the Indemnified Party pursuant to this Agreement, the
Indemnified Party shall promptly give written notice thereof to the Indemnifying
Party (provided that any failure to so notify shall not affect the Indemnifying
Party's liability unless such delay has prejudiced the defence to such Claim).
Such notice shall specify whether the Claim arises as a result of a claim by a
Person, including a Tax Authority, against the Indemnified Party (in this
Article 7 a "THIRD PARTY CLAIM") or whether the Claim does not so arise (in this
Article 7 a "DIRECT CLAIM"), and shall also specify with reasonable
particularity (to the extent that the information is available):
(1) the factual basis for the Claim; and
(2) the amount of the Claim, if known.
7.06 DIRECT CLAIMS
With respect to any Direct Claim, following receipt of notice from the
Indemnified Party of the Claim, the Indemnifying Party shall have 30 days to
make such investigation of the Claim as is considered necessary or desirable.
For the purpose of such investigation, the Indemnified Party shall make
available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both parties
agree at or prior to the expiration of such 30 day period (or any mutually
agreed upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
47
agreed upon amount of the Claim, failing which the matter shall be referred to
binding arbitration in accordance with Section 8.02.
7.07 THIRD PARTY CLAIMS
With respect to any Third Party Claim, the Indemnifying Party shall have
the right, at its expense, to participate in or assume control of the
negotiation, settlement or defence of the Claim and, in such event, the
Indemnifying Party shall reimburse the Indemnified Party for all the Indemnified
Party's out-of-pocket expenses as a result of such participation or assumption.
If the Indemnifying Party elects to assume such control, the Indemnified Party
shall have the right to participate in the negotiation, settlement or defence of
such Third Party Claim and to retain counsel to act on its behalf, provided that
the fees and disbursements of such counsel shall be paid by the Indemnified
Party unless the Indemnifying Party consents to the retention of such counsel.
If the Indemnifying Party, having elected to assume such control, thereafter
fails to defend the Third Party Claim within a reasonable time, the Indemnified
Party shall be entitled to assume such control and the Indemnifying Party shall
be bound by the results obtained by the Indemnified Party with respect to such
Third Party Claim. If any Third Party Claim is of a nature such that the
Indemnified Party is required by Applicable Law to make a payment to any person
(a "THIRD PARTY") with respect to the Third Party Claim before the completion of
settlement negotiations or related legal proceedings, the Indemnified Party may
make such payment and the Indemnifying Party shall, forthwith after demand by
the Indemnified Party, reimburse the Indemnified Party for such payment. If the
amount of any liability of the Indemnified Party under the Third Party Claim in
respect of which such a payment was made, as finally determined, is less than
the amount that was paid by the Indemnifying Party to the Indemnified Party, the
Indemnified Party shall, forthwith after receipt of the difference from the
Third Party, pay the amount of such difference to the Indemnifying Party.
7.08 SETTLEMENT OF THIRD PARTY CLAIMS
If the Indemnifying Party fails to assume control of the defence of any
Third Party Claim for any reason, the Indemnified Party shall have the exclusive
right to contest, settle or pay the amount claimed without prejudice to its
rights of indemnification hereunder. Whether or not the Indemnifying Party
assumes control of the negotiation, settlement or defence of any Third Party
Claim, the Indemnifying Party shall not settle any Third Party Claim without the
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld or delayed; provided, however, that the liability of the
Indemnifying Party shall be limited to the proposed settlement amount if any
such consent is not obtained for any reason.
7.09 CO-OPERATION
The Indemnified Party and the Indemnifying Party shall use all reasonable
efforts to co-operate fully with each other with respect to Third Party Claims,
and shall keep each other fully advised with respect thereto (including
supplying copies of all relevant documentation promptly as it becomes available
and making available those employees whose assistance is necessary to evaluate
and defend Third Party Claims). The Indemnifying Party shall be responsible for
all reasonable expenses associated with supplying copies of documentation and
for all reasonable out-of-pocket expenses of any employees made available by the
Indemnified Party.
48
7.10 SUBROGATION
Upon making a full indemnity payment, the Indemnifying Party shall, to the
extent of such indemnity payment, be subrogated to all rights of the Indemnified
Party against any third party in respect of the Loss to which the indemnity
payment relates. Until the Indemnified Party recovers full payment of its Loss,
any and all claims of the Indemnifying Party against any such third party on
account of such indemnity payment shall be postponed and subordinated in right
of payment to the Indemnified Party's rights against such third party.
7.11 INTEREST
All amounts to be paid by an Indemnifying Party hereunder shall bear
interest at a rate per annum equal to the prime rate established by The
Toronto-Dominion Bank at its head office in Xxxxxxx, Xxxxxxx, calculated and
payable monthly, both before and after judgment, with interest on overdue
interest at the same rate, from the date that the Indemnified Party disbursed
funds, suffered damages or losses or incurred a loss, liability or expense to
the date of payment by the Indemnifying Party to the Indemnified Party.
7.12 LIMITATIONS
(1) No claims for indemnification may be made by the Purchaser against the
Vendor under Section 7.03(1), 7.03(2), 7.03(3) or 7.03(4) of this
Agreement in respect of any Losses referred to therein unless the
aggregate of all such Losses suffered or incurred by the Purchaser as
a consequence of a Loss described therein exceeds Cdn. $7,000,000 (the
"$7,000,000 BASKET") in which event the amount of such Losses in
excess of Cdn. $7,000,000 may be recovered by the Purchaser, provided,
however, that notwithstanding the foregoing, with respect to any
claims for indemnification for Losses suffered or incurred by the
Purchaser with respect to the breach of the representations and
warranties in Section 4.01 and any claim under Section 7.03(4), (i)
50% of such Losses otherwise recoverable from the Vendor will reduce
the $7,000,000 Basket; (ii) any claims for the remaining 50% of such
Losses must be paid by the Vendor, and (iii) after the $7,000,000
Basket is reduced to nil pursuant to the terms of this Agreement, all
of such Losses must be paid by the Vendor and may be recovered by the
Purchaser from the Vendor.
(2) If there is a breach of the representations and warranties in Section
4.01(f), (h) to (m), inclusive or (o), then the amount of the
indemnification obligation otherwise payable shall be reduced by the
amount, if any, by which the Tax Provision exceeds the Taxes (as
finally determined) in respect of:
(i) taxation years ending on or before the Balance Date; and
(ii) taxation years which end after the Balance Sheet Date, to the
extent such Taxes relate to the period or periods ending on or
prior to the Balance Sheet Date.
(3) The maximum aggregate liability of the Vendor to the Purchaser and the
Purchaser to the Vendor hereunder shall not exceed an amount equal to
the Purchase Price plus interest thereon as applicable.
49
(4) No claim may be asserted by either the Vendor or the Purchaser in
respect of the breach of any representation or warranty after the
expiration of the applicable time periods referred to in Sections 7.01
and 7.02 except in respect of any breach, written notice of which has
been given to the other within the applicable time period.
Notwithstanding the foregoing and for greater certainty, rights to
indemnification in respect of a breach of any covenant shall survive
indefinitely.
ARTICLE 8 - - GENERAL
8.01 FURTHER ASSURANCES
Each of the Vendor, Lafarge and the Purchaser shall from time to time
execute and deliver all such further documents and instruments and do all acts
and things as the other party may, either before or after the Closing Date,
reasonably require to effectively carry out or better evidence or perfect the
full intent and meaning of this Agreement.
8.02 ARBITRATION
(1) If any dispute or question arises between the parties concerning the
interpretation or application of this Agreement or the rights or
obligations of the parties hereunder, the parties to such dispute or
question shall attempt in good faith to resolve the same. If within 30
days the dispute or question is not satisfactorily resolved, either
party shall be entitled to submit the matter for final arbitration
pursuant to the Arbitration Act, 1991 (Ontario). The following rules
shall apply to the arbitration:
(a) the arbitration shall be heard by a single arbitrator appointed by
mutual agreement of the parties. In the event of failure to reach such
agreement within ten days, any party may apply to the court to appoint
the arbitrator;
(b) the arbitration shall be held in private and no person except the
parties and their respective representatives and witnesses shall be
present unless authorized by the arbitrator;
(c) subject to the provisions of this Section 8.02, the parties will
agree, in consultation with the arbitrator, on the rules of the
arbitration. Absent such agreement, the arbitrator will be entitled to
establish the procedures to be followed, provided that in doing so,
the arbitrator shall be guided by the parties' mutual intention that
such procedures should be designed to expedite the proceedings and
minimize to the extent practicable the expenses for the parties;
(d) the arbitration award shall be final and binding on the parties and
shall not be subject to appeal (those provisions of the Arbitration
Act, 1991 (Ontario) necessary to achieve such result are hereby
expressly excluded); and
(e) the costs of the arbitration shall be in the discretion of the
arbitrator.
(2) The procedures specified in this Section 8.02 are the only procedures
for the resolution of any dispute or claim arising out of or related
to this Agreement, or the breach, termination or validity thereof. If
any party attempts to have issues resolved in court, the parties agree
that this Section 8.02 can be used to stay any
50
such proceedings. Notwithstanding the foregoing, before or during the
time that the parties follow such procedures, either party shall be
entitled to go to the appropriate court to get a preliminary
injunction or other preliminary judicial relief if such party
reasonably believes that such a step is necessary to avoid irreparable
damage or harm.
8.03 TIME OF THE ESSENCE
Time shall be of the essence of this Agreement.
8.04 ACCESS TO RECORDS
The Purchaser shall preserve and keep all books and records relating to the
Business for a period of six years after the Closing Date, or for any longer
periods as may be required by any Applicable Law or ongoing litigation. The
Purchaser shall make such books and records available to the Vendor as may be
reasonably required by the Vendor in connection with any insurance claims by,
legal proceedings by or against or governmental investigations of the Vendor or
the Companies and any tax or regulatory matter or any Applicable Law.
8.05 BROKERS
Each of the parties represents to the other that it has not employed any
broker, finder, investment banker or other intermediary in connection with the
transaction contemplated by this Agreement who might be entitled to a fee from
the other or any commission upon consummation of the transaction and each agrees
to indemnify the other with respect to such representation.
8.06 LEGAL FEES
Each of the parties hereto shall pay their respective legal and accounting
costs and expenses incurred in connection with the preparation, execution and
delivery of this Agreement and all documents and instruments executed pursuant
hereto and any other costs and expenses whatsoever and howsoever incurred.
8.07 DISCLOSURE
Except as may be required by Applicable Law, no public announcement or
press release concerning the sale and purchase of the Shares shall be made by
the Vendor or the Purchaser to suppliers, customers or employees of the Vendor
or others without the prior consent and joint approval of the Vendor and the
Purchaser.
8.08 BENEFIT OF THE AGREEMENT
This Agreement shall enure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties hereto.
8.09 ENTIRE AGREEMENT
This Agreement and the agreements contemplated herein constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and cancels and supersedes any prior understandings and agreements between the
parties hereto with respect thereto; provided that the March 22, 2000 letter
agreement between Lafarge, the Vendor, Xxxxxx and others and the confidentiality
agreement of December 14, 1999 described above shall remain in
51
full force and effect. There are no representations, warranties, terms,
conditions, undertakings or collateral agreements, express, implied or
statutory, between the parties other than as expressly set forth in this
Agreement or the agreements contemplated herein.
8.10 AMENDMENTS AND WAIVER
No modification of or amendment to this Agreement shall be valid or binding
unless set forth in writing and duly executed by the Vendor, Lafarge and the
Purchaser and no waiver of any breach of any term or provision of this Agreement
shall be effective or binding unless made in writing and signed by the party
purporting to give the same and, unless otherwise provided, shall be limited to
the specific breach waived.
8.11 ASSIGNMENT
This Agreement may not be assigned by the Vendor without the written
consent of the Purchaser but may be assigned by the Purchaser without the
consent of the Vendor to an affiliate of the Purchaser, as determined by the
provisions of the Canada Business Corporations Act (Canada), provided that such
affiliate enters into a written agreement with the Vendor to be bound by the
provisions of this Agreement in all respects and to the same extent as the
Purchaser is bound and provided that Lafarge and the Purchaser shall continue to
be bound by all the obligations hereunder as if such assignment had not occurred
and perform such obligations to the extent that such affiliate fails to do so.
8.12 NOTICES
Any demand, notice or other communication to be given in connection with
this Agreement shall be given in writing and shall be given by personal
delivery, by registered mail or by electronic means of communication addressed
to the recipient as follows:
To the Vendor:
Xxxxxx Xxx Xxxxxxxx Xx. Xxxxxxx
0xx Xxxxx, 00 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: President
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
XxXxxxxx Xxxxx
Barristers and Solicitors
Xxxxx Xxxx Xxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: X.X. Xxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
52
To Lafarge or the Purchaser:
Lafarge Canada Inc.
Construction Materials Group
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: President
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
XxXxxxxx Xxxxxxxx
Xxxxx 0000
Xxxxxxx-Xxxxxxxx Bank Tower
Toronto Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx Xxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
or to such other address, individual or electronic communication number as may
be designated by notice given by either party to the other. Any demand, notice
or other communication given by personal delivery shall be conclusively deemed
to have been given on the day of actual delivery thereof and, if given by
registered mail, on the fifth Business Day following the deposit thereof in the
mail and, if given by electronic communication, on the day of transmittal
thereof if given during the normal business hours of the recipient and on the
Business Day during which such normal business hours next occur if not given
during such hours on any day. If the party giving any demand, notice or other
communication knows or ought reasonably to know of any difficulties with the
postal system which might affect the delivery of mail, any such demand, notice
or other communication shall not be mailed but shall be given by personal
delivery or by electronic communication.
8.13 CONFIDENTIALITY
Notwithstanding anything contained in this Agreement, if the purchase and
sale of the Shares is not completed for any reason, the parties hereto shall
hold in strict confidence, and shall not disclose to any person or use any
confidential information obtained by a party from another party with respect to
the transactions contemplated by this Agreement, the Business and its affairs.
Upon completion of the purchase and sale of the Shares, the Vendor shall hold in
strict confidence and shall not disclose to any person (other than the
Purchaser) or use any confidential information of the Business.
8.14 GOVERNING LAW
Except for title and other matters which under the laws of Quebec,
Saskatchewan, Alberta and British Columbia are required to be governed by the
laws of Quebec, Saskatchewan, Alberta or British Columbia, respectively (which
matters will be governed by the laws of the
53
applicable province), this Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
8.15 ATTORNMENT
For the purpose of all legal proceedings this Agreement shall be deemed to
have been performed in the Province of Ontario and the courts of the Province of
Ontario shall have jurisdiction to entertain any action arising under this
Agreement. the Vendor, Lafarge and the Purchaser each hereby attorns to the
jurisdiction of the courts of the Province of Ontario.
54
8.16 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which taken together shall be
deemed to constitute one and the same instrument. Counterparts may be executed
either in original or faxed form and the parties adopt any signatures received
by a receiving fax machine as original signatures of the parties; provided
however, that any party providing its signature in such manner shall promptly
forward to the other party and original of the signed copy of this Agreement
which was so faxed.
IN WITNESS WHEREOF the parties have executed this Agreement.
LAFARGE CANADA INC.
Per:
-----------------------------------
Per:
-----------------------------------
3787532 CANADA INC.
Per:
-----------------------------------
Per:
-----------------------------------
XXXXXX XXX XXXXXXXX CO. LIMITED
Per:
-----------------------------------
Xxxxxxxx X. Xxxxxxxxx
President
TABLE OF CONTENTS
ARTICLE 1 - INTERPRETATION................................................. 2
1.01 Definitions...................................................... 2
1.02 Headings......................................................... 9
1.03 Extended Meanings................................................ 9
1.04 Statutory References............................................. 9
1.05 Accounting Principles............................................ 9
1.06 Currency......................................................... 9
1.07 Best of Knowledge................................................ 9
1.08 Schedules........................................................ 10
ARTICLE 2 - PURCHASE AND SALE.............................................. 11
2.01 Purchase and Sale and Purchase Price............................. 11
2.02 Closing.......................................................... 12
2.03 Pre-Closing Due Diligence Investigations......................... 12
2.04 Acknowledgement of Purchaser..................................... 16
2.05 Purchase Price Adjustment........................................ 16
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES................................. 16
3.01 Vendor's Representations and Warranties.......................... 16
3.02 Lafarge and Purchaser's Representations and Warranties........... 31
ARTICLE 4 - TAX MATTERS.................................................... 32
4.01 Tax Representations and Warranties Regarding Xxxxxx and the
Retained Subsidiaries............................................ 32
4.02 Tax Covenants.................................................... 34
ARTICLE 5 - COVENANTS...................................................... 35
5.01 Taxes............................................................ 35
5.02 Covenants of the Vendor.......................................... 35
5.03 Covenants of the Purchaser....................................... 38
ARTICLE 6 - CONDITIONS..................................................... 39
6.01 Conditions for the Benefit of the Purchaser...................... 39
6.02 Conditions for the Benefit of the Vendor......................... 41
ARTICLE 7 - - SURVIVAL AND INDEMNITY....................................... 43
7.01 Survival of Vendor's Representations, Warranties and Covenants... 43
7.02 Survival of Purchaser's Representations, Warranties and
Covenants........................................................ 44
7.03 Indemnification by the Vendor.................................... 45
7.04 Indemnification by the Purchaser................................. 46
7.05 Notice of Claim.................................................. 46
7.06 Direct Claims.................................................... 46
7.07 Third Party Claims............................................... 47
7.08 Settlement of Third Party Claims................................. 47
7.09 Co-operation..................................................... 47
7.10 Subrogation...................................................... 48
ii
7.11 Interest......................................................... 48
7.12 Limitations...................................................... 48
ARTICLE 8 - - GENERAL...................................................... 49
8.01 Further Assurances............................................... 49
8.02 Arbitration...................................................... 49
8.03 Time of the Essence.............................................. 50
8.04 Access to Records................................................ 50
8.05 Brokers.......................................................... 50
8.06 Legal Fees....................................................... 50
8.07 Disclosure....................................................... 50
8.08 Benefit of the Agreement......................................... 50
8.09 Entire Agreement................................................. 50
8.10 Amendments and Waiver............................................ 51
8.11 Assignment....................................................... 51
8.12 Notices.......................................................... 51
8.13 Confidentiality.................................................. 52
8.14 Governing Law.................................................... 52
8.15 Attornment....................................................... 53
8.16 Counterparts..................................................... 54
AMENDING AGREEMENT
This Agreement is made as of October 21, 2000 among
LAFARGE CANADA INC., a corporation incorporated under
the laws of Canada
- and -
3787532 CANADA INC., a corporation incorporated under
the laws of Canada
- and -
XXXXXX VAN NOSTRAND CO. LIMITED, a corporation
incorporated under the laws of the Province of Ontario.
RECITALS
A. The parties hereto have entered into a Share Purchase Agreement dated July
24, 2000, as amended by Confirmations and Agreements dated October 11,
2000, October 16, 2000 and October 19, 2000 (the "SHARE PURCHASE
AGREEMENT"); and
B. The parties wish to further amend the Share Purchase Agreement in
accordance with the terms of this Amending Agreement.
FOR VALUE RECEIVED, the parties hereto agree as follows:
SECTION 1 - INTERPRETATION
1.1 Unless otherwise defined herein, capitalised terms used in this Amending
Agreement shall have the respective meanings set forth in the Share Purchase
Agreement.
1.2 Unless otherwise specified, references in this Amending Agreement to
Paragraphs, Sections and Schedules are to paragraphs and sections of, and
schedules to, the Share Purchase Agreement.
SECTION 2 - AMENDMENTS
2.1 DEFINITIONS
(a) Section 1.01(1) being the "Closing Date" definition, is amended to
read as follows:
"CLOSING DATE" means December 29, 2000 or such other date as may be
agreed by the parties."
-2-
(b) Section 1.01(ooo), being the "Transaction Taxes" definition, is
amended as follows:
(i) by adding after the words "Pre-Closing Transactions" in the fifth
line the words "or as a consequence of, or in relation to the
entering into and completion of any residual purchase agreement
entered into as one of the Pre-Closing Transactions," and
(ii) by amending the list of "Loss Subsidiaries" in paragraph B to
read as follows:
"Durapave Ltd., Xxxxxx Engineering and Construction Inc., Central
Asphalt Ltd., Xxxxxx Asphalt Reforming Corporation, Remixer
Contracting Co., Inc. and Eco-Mat Restoration Inc."
(c) Section 1.01 is amended by adding the following definitions:
"(n.1) "DEEMED TAX AMOUNT", in relation to the sale of a Remaining
Excluded Property or an Excluded Asset (a "SALE PROPERTY") by Xxxxxx
or a Retained Subsidiary, means the amount of Taxes that would be
payable by Xxxxxx or the Retained Subsidiary as a consequence of the
sale of the Sale Property if such Taxes were calculated on the basis
of the following assumptions:
(i) the amount of gain or loss realized by Xxxxxx or the Retained
Subsidiary on the sale of the Sale Property is the amount by
which the Net Proceeds from the sale exceed or are less than the
deemed tax base of the Sale Property determined in accordance
with (iv) below;
(ii) the amount of any gain or loss referred to in (i) is a capital
gain or a capital loss;
(iii) any capital losses realized on the sale of other Sale Properties
to the extent not previously utilized in determining another
Deemed Tax Amount is applied to offset any capital gain on the
relevant Sale Property;
(iv) the deemed tax base of the Sale Property is:
(A) for a Remaining Excluded Property that is land, the cost
amount of the property for the purposes of the Income Tax
Act (Canada) (the "ITA") on the Closing Date;
(B) for a Remaining Excluded Property that is an industrial
mineral mine or a building included in a separate class for
capital cost allowance purposes, the undepreciated capital
cost of the property for the purposes of the ITA on the
Closing Date;
-3-
(C) for an Excluded Asset or a Remaining Excluded Property that
is a building that is not included in a separate class for
capital cost allowance purposes, the amount that would have
been the undepreciated capital cost of the property for the
purposes of the ITA immediately prior to the sale if (x) the
property had been included in a separate class for capital
cost allowance purposes throughout the period from the date
on which the property was purchased (the "Purchase Date") to
immediately prior to the sale and (y) Xxxxxx or the Retained
Subsidiary had claimed (i) the maximum amount of capital
cost allowance permitted by the ITA in computing its income
for the purposes of the ITA for each of its taxation years
ending in the period commencing on the Purchase Date and
ending on the Closing Date and (ii) 50% of the maximum
amount of capital cost allowance permitted by the ITA in
computing its income for the purposes of the ITA for each of
its taxation years ending in the period commencing on the
Closing Date and ending immediately prior to the sale; and
(v) the applicable tax rate is the effective combined
federal/provincial tax rate applicable to Xxxxxx or the Retained
Subsidiary at the time of the sale.
(n.2) "DEEMED TAXES" attributable to the Vendor's share of the Net
Proceeds from the sale of a Sale Property means that portion of the
Deemed Tax Amount related to the sale of the Sale Property that is
equivalent to the Vendor's share of the Net Proceeds from the sale of
the Sale Property.
(ll.1) "NET PROCEEDS" means the amount which is the sum of (i) the
total sale proceeds of a Sale Property; plus (ii) in the case of a
Sale Property that is a Transitional Use Property, the Transitional
Use Charges (if any) for the period from the first anniversary of the
Closing Date to the end of the Transitional Use Period; plus (iii) the
income (if any) received from a third party in respect of the Sale
Property during the period from the Closing Date (or in the case of a
Sale Property that is a Transitional Use Property from the end of the
applicable Transitional Use Period) to the completion of the sale of
the Sale Property, minus (iv) the aggregate of all direct costs and
expenses of Xxxxxx or the Retained Subsidiary that are incurred in
connection with the ownership, operation and sale of the Sale Property
from the Closing Date (or in the case of a Sale Property that is a
Transitional Use Property from the end of the applicable Transitional
Use Period) until the completion of the sale of the Sale Property.
(ll.2) "NOTE" has the meaning set out in Section 6.01(v);
(xx.2) "REMAINING EXCLUDED PROPERTIES" means the Excluded Properties
other than the Brampton Pit and the Xxxxx Yard.
-4-
(ooo.1) "TRANSITIONAL USE CHARGES" in respect of a Transitional Use
Property means the monthly amount described in Schedule 1.01(ooo.3);
(ooo.2) "TRANSITIONAL USE PERIOD" in respect of a Transitional Use
Property means the transitional use period described in Schedule
1.01(ooo.3);
(ooo.3) "TRANSITIONAL USE PROPERTIES" means those Remaining Excluded
Properties described in Schedule 1.01(ooo.3);
(rrr) "WILL-KARE TAXES" means any Taxes payable by Xxxxxx or a
Retained Subsidiary that are attributable to the decision of the
Supreme Court of Canada in Will-Kare Paving & Contracting Limited v.
The Queen including, without limitation, any such Taxes that are
attributable to a determination that (a) Xxxxxx or a Retained
Subsidiary is not entitled to the "manufacturing and processing
profits deduction" under section 125.1 of the Tax Act or the
equivalent provisions of any applicable provincial tax legislation in
respect of its income from its asphalt manufacturing activities and
(b) any depreciable property held by Xxxxxx or a Retained Subsidiary,
used by Xxxxxx or the Retained Subsidiary in its asphalt manufacturing
activities and included in Class 29, Class 39 or Class 43 is not
properly included in that class."
2.2 SCHEDULES
Section 1.08 is amended by deleting the reference to "Schedule 3.01(r) --
Unpurchased Inventory" from the list of Schedules in Section 1.08 and adding
reference to "Schedule 1.01(ooo.3) -- Transitional Use Properties".
1.01 MISCELLANEOUS
The following Sections are added as Section 1.09 and 1.10 to the Share
Purchase Agreement:
"1.09 OUTSTANDING SCHEDULES
The parties acknowledge that the forms of the following Schedules remain
unsettled as of October 21, 2000 and agree to act reasonably and in good faith
to settle such Schedules by November 10, 2000:
Schedule 1.01(qq) - Permitted Personal Property Encumbrances
1.01(rr) - Permitted Real Property Encumbrances
1.01(uu) - Pre-Closing Transaction Memorandum
2.01(2)(a) - Preferred Share Conditions
2.05 - Purchase Price Adjustments (settled in principle)
-5-
5.02(4) - Severance Agreement
6.01(1) - Lease Agreement and Retained Rights Agreement
6.01(m) - Residual Option Agreement and Residual Purchase Agreement
6.01(n) - Transitional Use Agreement
6.01(o) - Non-Competition Agreement
6.01(p) - Vendor's Counsel Opinion
6.02(m) - Opinions of Counsel to Lafarge Corporation, Lafarge and the
Purchaser
1.10 LEASE AGREEMENT AND RETAINED RIGHTS AGREEMENT
With respect to the Lease Agreement and the Retained Rights Agreement under
negotiation with respect to the Excluded Hold Properties, the Vendor and
Purchaser agree that the Purchaser will have a right of first refusal, and
not a right of first offer, and that the Purchaser will be required to
respond to the presentation of a bona fide third party offer within 10
Business Days."
2.3 SALE OF EXCLUDED PROPERTIES AND EXCLUDED ASSETS
Section 2.01 is amended by renumbering the existing Section 2.01 as
"Section 2.01(a)" and adding the following Sections 2.01(b), 2.01(c), 2.01(d)
and 2.01(e):
"2.01(B) REMAINING EXCLUDED PROPERTIES
The Remaining Excluded Properties will be sold by Xxxxxx or the
applicable Retained Subsidiaries under the joint supervision of the
Vendor and the Purchaser as soon as practicable after Closing or, in
the case of the Transitional Use Properties, after the end of the
applicable Transitional Use Period. The parties will agree in writing
as to the process for the sale of the Remaining Excluded Properties
prior to November 10, 2000, including the most tax-effective way
possible of paying the following amounts to the Vendor as such
properties are sold having regard to the after-tax effect of the
payment on the Vendor, the Purchaser and Lafarge.
The Vendor shall be entitled to receive in respect of each sale of a
Remaining Excluded Property an amount equal to (a) 50% of the Net
Proceeds from the sale of the Remaining Excluded Property up to a
cumulative maximum of $10,000,000, less the Deemed Taxes attributable
to the Vendor's share of such Net Proceeds, and (b) once the Vendor's
portion of the Net Proceeds from the Sale of Remaining Excluded Assets
exceeds such $10,000,000 cumulative maximum amount, 100% of the excess
Net Proceeds from the sale of the Remaining Excluded Properties,
-6-
less the Deemed Taxes attributable to the Vendor's share of such Net
Proceeds.
2.01(C) EXCLUDED ASSETS
The Excluded Assets will be sold by Xxxxxx or the applicable Retained
Subsidiaries under the joint supervision of the Vendor and the
Purchaser as soon as practicable after Closing. The parties will agree
in writing as to the process for the sale of the Excluded Assets prior
to November 10, 2000, including the most tax-effective way possible of
paying the following amounts to the Vendor as such assets are sold
having regard to the after-tax effect of the payment on the Vendor,
the Purchaser and Lafarge.
The Vendor shall be entitled to receive in respect of each sale of an
Excluded Asset an amount equal to (a) 50% of the Net Proceeds from the
sale of the Excluded Assets up to a cumulative maximum of $5,000,000,
less the Deemed Taxes attributable to the Vendor's share of such Net
Proceeds, and (b) once the Vendor's share of the Net Proceeds from the
sale of Excluded Assets exceeds such $5,000,000 cumulative maximum
amount, 100% of the excess Net Proceeds from the sale of the Excluded
Assets, less the Deemed Taxes attributable to the Vendor's share of
such Net Proceeds.
2.01(D) RECALCULATION OF PAYMENTS
If, after the date on which a payment is made pursuant to Section
2.01(b) or 2.01(c), the Canada Customs and Revenue Agency or another
taxation authority makes a determination to which the Vendor and the
Purchaser acquiesce or from which there is no further objection or
appeal to the effect that, or that establishes that, the Deemed Tax
Amount in respect of a Sale Property is greater or less than the
Deemed Tax Amount used to determine the amount of such payment, then
the amount of the payment to which the Vendor was entitled shall be
recalculated on the basis of the redetermined Deemed Tax Amount (a
"RECALCULATED PAYMENT") and
(a) where the Recalculated Payment exceeds the original payment, the
Vendor shall be entitled to receive an amount equal to the
excess; and
(b) where the original payment exceeds the Recalculated Payment, the
Vendor shall be required to refund the excess amount less the
amount of any Taxes paid by the Vendor on the refunded amount
that are not recoverable as a result of having made the refund
payment.
2.01(E) EXCLUDED SUBSIDIARIES
-7-
One Remaining Excluded Property, namely the Xxxxxxxx Plant Site, is
held by Xxxxxxxx Properties Inc. which Company has been defined as an
Excluded Subsidiary. Such Company is hereby deleted from the Excluded
Subsidiaries Schedule 1.01(y) and included in Schedule 1.01(aaa) as a
Retained Subsidiary. If the net proceeds from the sale of the
Remaining Excluded Property held by Xxxxxxxx Properties Inc. would be
increased by selling the shares of such company, then the sale of such
Remaining Excluded Property will be effected by way of a sale of such
shares and the Net Proceeds dealt with as described under Section
2.01(b) above."
2.4 PURCHASE PRICE
(a) Section 2.01(1) is amended by deleting the reference to "$428,400,000"
and substituting "$416,637,000", and
(b) Section 2.01(2)(a) is amended by deleting the reference to
"$178,197,000" and substituting "$166,434,000".
2.5 PRE-CLOSING DUE DILIGENCE INVESTIGATIONS
Section 2.03 is amended by adding thereto the following subsection 2.03(4):
"2.03(4) The Purchaser has not yet conducted real property and related
searches of the following properties:
D1-90151-ON: Pit #00 (Xxxxxxx), Xxx. xx Xxxxxxx
X0-00000-XX: Pit #23, Twp. of Manvers
D5-90653-ON: Pit #28
E1-90611-ON: Pit #21
E2-90620-ON: Pit #22
D1-91456-Q: Aylmer Essroc Quarry
(such six properties being referred to as the "FORMERLY EXCLUDED
PROPERTIES") or of the Xxxxx Pit, Township of Bedford, County of
Frontenac.
The Purchaser will proceed to conduct its title searches with respect
to such properties and the parties will negotiate in good faith and
settle by November 10, 2000 the Permitted Encumbrances and
Deficiencies and Vendor's Undertaking for such properties on the same
basis and consistent with the principles used to agree on such matters
for the other Properties.
If the parties are unable to agree on the Permitted Encumbrances and
Deficiencies and the Vendor's Undertaking with respect to any such
property such property will be treated as an Excluded Property and
conveyed to the Vendor or a subsidiary of the Vendor in the same
manner as the Brampton Pit and the Xxxxx Yard, and the parties will
adjust for the
-8-
exclusion of such property based on the aggregates reserve formula
used in Schedule 3.01(t).
Lafarge and the Purchaser have agreed that the titles to the
properties E4-90623-ON (Emedi Lands), G2-90626-ON (Xxxxxxxx) and
G3-90624-ON (Wrzenewskyhj) are accepted "as is".
Lafarge and the Purchaser consent to the acquisition after the date
hereof by Xxxxxx or a Retained Subsidiary of the A21-XX Xxxxxx
Property, the A22-AL Day Property and the A23-XX Xxxxxx Property,
particulars of which have been provided to Lafarge and the Purchaser.
Xxxxxx and the Retained Subsidiaries will not purchase any real or
immovable properties after November 10, 2000 without the prior written
consent of Lafarge, not to be unreasonably withheld or delayed."
2.6 REPRESENTATIONS AND WARRANTIES
Section 3.01(t) is amended by adding the following concluding sentence:
"The Purchaser and Lafarge acknowledge that they have completed their
due diligence on the Aylmer (Vanier-Pink Property), TRT West (Mosport
Pit 20), Westcoast Aggregates (Telford Farms Property) and Municipal
Aggregates (Xxxxxx Pit) pits and, for purposes of the foregoing
representation and warranty in this Section 3.01(t), the Aggregate
reserves for such properties shall be deemed to be 32.7 million
tonnes, 160 million tonnes, 14 million tonnes and 6 million tonnes,
respectively."
2.7 EXCLUDED SUBSIDIARIES, EXCLUDED ASSETS, EXCLUDED HOLD PROPERTIES AND
EXCLUDED PROPERTIES
Section 3.01(x) is amended by deleting the reference to "any Excluded
Assets, Excluded Hold Properties or Excluded Properties" and substituting
therefor a reference to "any Excluded Hold Properties, the Brampton Pit or the
Xxxxx Yard".
2.8 ENVIRONMENTAL
Section 3.01 is amended by adding the following as a preface to modify
Section 3.01(s), Section 3.01(ccc) and Sections 3.01(sss) to 3.01(dddd),
inclusive in their entirety:
"Notwithstanding the provisions of the Share Purchase Agreement in
Section 3.01(s), Section 3.01(ccc), and Sections 3.01(sss) to
3.01(dddd), inclusive, Lafarge and the Purchaser accept the existing
environmental condition of the following properties:
000 Xxxxxxxxxx Xxxx
000 Xxxxxx Xxxxxx
000 Xxxxxx Xxxxxx
000 Xxxxx
-0-
000 Xxxxx XxXxxx
058 Tarmac XxXxxx
033 Esso Dock
573 through 582 collectively, TSMI Depots or Yards".
Section 3.01(uuu) is amended so that the second sentence begins "Except as
disclosed in Schedule 3.01(sss),..."
2.9 PERMITS
Section 3.01 is amended to provide at the end thereof immediately prior to
Section 3.02 the following sentence:
"Lafarge and the Purchaser acknowledge that they have completed their
due diligence on the status of Xxxxxx'x and the Retained Subsidiaries'
Permits and, notwithstanding any other provision of the Share Purchase
Agreement, the Vendor's representations and warranties with respect to
Permits only in Sections 3.01(ddd), 3.01(eee), 3.01(ttt) and
3.01(cccc) shall be deemed to be correct."
2.10 PREFERRED SHARES
Section 3.02 (f) is amended by changing the reference to "$178,197,000" to
"$166,434,000".
2.11 DUE DILIGENCE CONDITION
The parties acknowledge that the condition in Section 6.01(u) has been
fulfilled.
2.12 SUBSCRIPTION FOR WARRANTS
(a) Section 6.01(v) is deleted and the following substituted therefor:
"(v) the Vendor shall have subscribed for warrants to purchase shares
of common stock of Lafarge Corporation for an aggregate subscription
price of Cdn$21,637,000, with the subscription price payable by the
issuance of a non-interest bearing promissory note (the "Note") of the
Vendor due and payable December 31, 2001 and the warrants having the
terms and conditions described in Schedule 6.01(v);"
(b) Schedule 6.01(v) is amended by changing the exercise price from U.S.
$32 per share to U.S. $29 per share.
(c) Section 6.02(h) is amended by changing the reference to Cdn$28,400,000
to Cdn$21,637,000.
(d) All payments made by the Vendor to Lafarge Corporation under the Note
will be made without set-off, counterclaim or other defence and free
and clear of, and without deduction or withholding for, any present or
future Taxes imposed by the Government of Canada or any political
subdivision or taxing authority thereof or
-10-
therein, other than any Tax imposed on or measured by the net income
or net profits of Lafarge Corporation (such non-excluded Taxes
hereinafter referred to as "CANADIAN TAXES"). If any Canadian Taxes
are so levied or imposed on such payments, the Vendor agrees to pay
the full amount of such Canadian Taxes, and such additional amounts as
may be necessary so that every payment of all amounts due under the
Note, after withholding or deduction for or on account of any Canadian
Taxes, will not be less than the amount provided for in the Note. The
Vendor will furnish to Lafarge Corporation within 15 days after the
date of the payment of any Canadian Taxes receipts evidencing such
payment. The Vendor agrees to indemnify and hold harmless Lafarge
Corporation and reimburse Lafarge Corporation upon its written
request, for the amount of any Canadian Taxes so levied or imposed and
paid by Lafarge Corporation, and any Canadian Taxes so levied or
imposed and paid by Lafarge Corporation with respect to such
reimbursement so that the net amount received will not be less than
the net amount Lafarge Corporation would have received if Canadian
Taxes on such reimbursement had not been imposed.
(e) Any claim for indemnity made by Lafarge Corporation under this Section
shall be made and pursued in accordance with the procedures set out in
Sections 7.05 to 7.11 of the Share Purchase Agreement.
2.13 SURVIVAL OF REPRESENTATIONS, ETC.
Section 7.01(1)(c) is amended by changing the references to "(bbb)" and
"(ddd)" to references to "(bbbb)" and "(dddd)".
2.14 TAX INDEMNIFICATION
(a) Section 7.03(4) is amended to read as follows:
"(4) any liability of Xxxxxx and/or any Retained Subsidiary for Taxes
(other than Will-Kare Taxes) in excess of the Tax Provision in
respect of:
(i) taxation years ended on or before the Balance Sheet Date;
and
(ii) taxation years which end after the Balance Sheet Date, to
the extent that such Taxes relate to the period or periods
ending on or prior to the Balance Sheet Date."
(b) Section 7.03 is amended by adding the following as paragraph (10):
"(10) any liability of Xxxxxx and/or any Retained Subsidiary for
Will-Kare Taxes in respect of taxation years ending in 1997 and
1998. For greater certainty and notwithstanding any other
provision of this Agreement, the Vendor shall not be obligated to
indemnify the Purchaser or any other person for any liability of
Xxxxxx or any Retained Subsidiary for Will-Kare Taxes in respect
of taxation years ending after 1998. Such
-11-
rights of the Purchaser and obligations of the Vendor will not be
affected by Xxxxxx and/or any Retained Subsidiaries taking a
different position in filing its tax returns for taxation years
ending after the Balance Sheet Date than in tax returns for
taxation years in 1998 and prior thereto."
2.15 GENERAL
Section 8.12 is amended as follows and the following Sections 8.17 and 8.18
are added to the Share Purchase Agreement:
"8.12 NOTICES
By deleting the first four lines of the address of the Vendor and
replacing them with the following:
"Xxxxxx Van Nostrand Co. Limited
Scotia Plaza, Suite 2700
X.X. Xxx 000
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0"
8.17 COMPLETION
Subject to the limitations set out in the following sentence, the
effective date of the transaction contemplated by this Share Purchase
Agreement for financial reporting purposes for Lafarge is October 21,
2000 (or such other date as may be agreed in writing by the parties).
The parties will use their reasonable best efforts to achieve the
foregoing result subject to the limitation that such effective date
would not, in the reasonable opinion of the Vendor, create any
significant risk that the income tax consequences of such transaction
would be other than the following:
(a) for the purposes of the ITA and the corresponding provisions of
any applicable tax legislation, the Vendor will be considered to
have disposed of, and the Purchaser to have acquired, the Shares
on the Closing Date;
(b) the Purchaser and Lafarge will be considered to have acquired
control of Xxxxxx and the Retained Subsidiaries for the purposes
of the ITA and the corresponding provisions of any applicable
provincial tax legislation on the Closing Date; and
(c) other than transactions that the Pre-Closing Transactions
Memorandum attached as Schedule 1.01 (uu) specifically
contemplates will occur after the Closing Date, all of the
Pre-Closing Transactions will be completed before Lafarge and the
Purchaser acquire control of Xxxxxx and the Retained
Subsidiaries.
-12-
8.18 XXXXXXX DEVELOPMENT FEE
The parties acknowledge that there may be a dispute with the Township
of Oro in respect of an alleged obligation to share charges of
approximately $420,000 to construct a road serving the Xxxxxxx
Property and which may be a condition for the issuance of the
Aggregates licence for the property. The Vendor shall indemnify and
save the Purchaser, Xxxxxx, the Retained Subsidiaries and Lafarge
harmless from any claim made by the Township of Oro in respect of
these charges so long as the Purchaser, Xxxxxx, the Retained
Subsidiaries and Lafarge do not thereafter cause or take any action
that would require the Vendor or a subsidiary of the Vendor acquiring
the Xxxxxxx Property to make any payments to the Township of Oro in
respect of such charges. The parties acknowledge that Xxxxxx and the
Retained Subsidiaries are express third party beneficiaries of this
Section 8.18. The Purchaser and Lafarge will not, nor will they cause
or permit Xxxxxx and the Retained Subsidiaries to, cause or take any
action that would require the Vendor or a subsidiary of the Vendor
acquiring the Xxxxxxx Property to make any payments to the Township of
Oro in respect of such charges.
2.16 All other terms of the Share Purchase Agreement remain in full force and
effect.
The parties have executed this Amending Agreement as of the first date written
above.
LAFARGE CANADA INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
3787532 CANADA INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXX XXX XXXXXXXX CO. LIMITED
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-13-
