EXHIBIT 4-2
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made as of the 4th day of March, 2004, between Glencoe
Skydome Holdings, L.P., a Delaware limited partnership (the "Purchaser"),
Glencoe Capital, LLC, a Delaware limited liability company, ("Glencoe") and each
of the persons set out in Schedule 2.1 hereto (collectively, the "Vendors");
WHEREAS each Vendor accepted on January 23, 2004 the written offer of
Glencoe to purchase shares of Polyair Inter Pack Inc. owned by each of the
Vendors, subject to the terms and conditions contained in the written offer (the
"Offer") executed by Glencoe and each Vendor; and
WHEREAS the Offer provided that the parties would enter into a purchase
agreement in respect thereto; and
WHEREAS Glencoe has assigned the benefit of its rights under the Offer to
the Purchaser;
NOW, THEREFORE, in consideration of the respective covenants and
agreements, herein contained and for other good and valuable consideration (the
receipt and sufficiency of which are acknowledged by each party), the parties
covenant and agree as follows:
1. Interpretation
1.1 Defined Terms. For the purpose of this Agreement, unless the context
otherwise requires, the following terms shall have the respective meanings
set out below and grammatical variations of such terms shall have
corresponding meanings:
(a) "Aggregate Purchase Price" means in respect of each Vendor the product
obtained by multiplying the Purchase Price and the number of Purchased
Shares and as set out next to each Vendor's name on Schedule 2.1;
(b) "Agreement" or "this Agreement" means this Agreement and shall include
any schedules attached hereto;
(c) "Business Day" means a day other than a Saturday, a Sunday or a day
when chartered banks are not open for business in Toronto, Ontario;
(d) "Claim" has the meaning set out in section 10.2;
(e) "Closing" has the meaning set out in section 9.1;
(f) "Closing Date" means March 10, 2004, or such other date as may be
mutually agreed upon by CMI, on behalf of the Vendors, and the
Purchaser;
(g) "Closing Time" means 10:00 a.m. (Toronto time), or such other time as
may be mutually agreed upon by CMI, on behalf of the Vendors, and the
Purchaser, on the Closing Date;
(h) "CMI" means Consolidated Mercantile Incorporated, a corporation
governed by the laws of Ontario;
(i) "Common Shares" means the common shares in the capital of the
Corporation;
(j) "Contract" means any agreement, indenture, contract, lease, deed of
trust, licence, option, instrument or other commitment, whether
written or oral;
(k) "Corporation" means Polyair Inter Pack Inc., a corporation
incorporated under the laws of Ontario;
(l) "Corporation's Disclosure Documents" means the financial statements of
the Corporation for the year ended October 31, 2003, the Annual
Information Form dated March 20, 2003 and accompanying Management
Discussion and Analysis, the Annual Report of the Corporation on Form
20-F with respect to the year ended October 31, 2002 as filed with the
Securities and Exchange Commission, the Management Information
Circular dated March 10, 2003 and the Material Change Reports as filed
with the Ontario Securities Commission filed since November 1, 2002;
(m) "Direct Claim" has the meaning set out in section 10.2;
(n) "Encumbrance" means any encumbrance, lien, charge, pledge, mortgage,
title retention agreement, security interest of any nature, adverse
claim, exception, reservation, option, privilege or any Contract to
create any of the foregoing;
(o) "Holdco Purchase Agreement" has the meaning set out in section 2.3;
(p) "Holdco Shares" has the meaning set out in section 2.3;
(q) "Indemnified Party" has the meaning set out in section 10.2;
(r) "Indemnifying Party" has the meaning set out in section 10.2;
(s) "Losses" has the meaning set out in section 10.1;
(t) "Offer" has the meaning set out in the second recital to this
Agreement;
(u) "Purchase Price" has the meaning set out in section 2.2;
(v) "Purchased Shares" has the meaning set out in section 2.1;
(w) "Purchaser" has the meaning set out in the first recital to this
Agreement;
(x) "Shareholders' Agreement" has the meaning set out in section 8.1(e);
(y) "Third Party" has the meaning set out in section 10.4;
(z) "Third Party Claim" has the meaning set out in section 10.2; and
(aa) "Vendors" has the meaning set out in the first recital to this
Agreement.
1.2 Sections and Headings. The division of this Agreement into sections and the
insertion of headings are for convenience of reference only and shall not
affect the interpretation of this Agreement. Unless otherwise indicated,
any reference in this Agreement to a section or a Schedule refers to the
specified section of, or Schedule to, this Agreement.
1.3 Currency. All amounts in this Agreement are expressed in Canadian dollars,
unless noted otherwise.
1.4 Number, Gender and Persons. In this Agreement, words importing the singular
number only shall include the plural and vice versa, words importing gender
shall include all genders and words importing persons shall include
individuals, corporations, partnerships, associations, trusts,
unincorporated organizations, governmental bodies and other legal or
business entities.
1.5 Time of Essence. Time shall be of the essence in this Agreement.
1.6 Applicable Law. This Agreement shall be construed, interpreted and enforced
in accordance with, and the respective rights and obligations of the
parties shall be governed by, the laws of the Province of Ontario and the
federal laws of Canada applicable therein, and each party hereby
irrevocably and unconditionally submits to the non-exclusive jurisdiction
of the courts of such Province and all courts competent to hear appears
therefrom.
1.7 Entire Agreement. This Agreement, together with the Holdco Purchase
Agreement (as herein defined) if applicable, constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and
discussions, whether written or oral. There are no conditions, covenants,
agreements, representations, warranties or other provisions, express or
implied, collateral, statutory or otherwise, relating to the subject matter
hereof except as herein provided.
1.8 Severability. If any provision of this Agreement is determined by a court
of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such determination shall not impair or affect the validity,
legality or enforceability of the remaining provisions hereof, and each
provision is hereby declared to be separate, severable and distinct.
1.9 Successors and Assigns. This Agreement shall enure to the benefit of and
shall be binding on and enforceable by the parties and, where the context
so permits, their respective successors and permitted assigns. Subject to
the next sentence, no party may assign any of its rights or obligations
hereunder without the prior written consent of the other party. The
Purchaser may assign the benefit of its rights under this Agreement to an
entity controlled by the Purchaser provided that any such assignment shall
not relieve the Purchaser from its obligations under this Agreement in
respect of the payment of the Purchase Price.
1.10 Amendment and Waivers. No amendment or waiver of any provision of this
Agreement shall be binding on any party unless consented to in writing by
such party. No waiver of any provision of this Agreement shall constitute a
waiver of any other provision, nor shall any waiver constitute a continuing
waiver unless otherwise expressly provided.
1.11 Several Obligations. The obligations, representations, warranties,
covenants, rights and obligations of each Vendor under this Agreement are
several and not joint and several.
1.12 Schedules. The following Schedules are attached to and form part of this
Agreement:
Schedule 2.1 - Vendors and Purchased Shares Schedule 2.3 - Holdco
Purchase Agreement Schedule 3.2 - Ownership of Purchased Shares
Schedule 3.4 - Consents and Approvals - Vendor Schedule 3.7 -
Commissions, etc. Schedule 8.1 - Shareholders' Agreement
2. Purchase and Sale of Purchased Shares
2.1 Purchase and Sale of Purchased Shares. Subject to the terms and conditions
hereof, each Vendor severally (and not jointly and severally) covenants and
agrees to sell, assign and transfer to the Purchaser and the Purchaser
covenants and agrees to purchase from each Vendor at the Closing Time all
of the right, title and interest to that number of Common Shares set out in
Schedule 2.1 next to each such Vendor's name (the "Purchased Shares").
2.2 Purchase Price. The purchase price payable by the Purchaser to each Vendor
for each Purchased Share (the "Purchase Price") shall be $15.08 to be
payable and satisfied by the payment of US$11.81 per Purchased Share. The
Purchase Price payable to each Vendor in respect of all of the Purchased
Shares to be sold by each such Vendor is set out in Schedule 2.1 next to
each such Vendor's name.
2.3 Tender of Shares of Holdco. A Vendor may, instead of selling and
transferring that number of Purchased Shares set out next to his name in
Schedule 2.1, cause a newly formed wholly-owned Ontario subsidiary to sell
and transfer the shares ("Holdco Shares") of a newly formed Nova Scotia
unlimited liability company which owns such number of Purchased Shares;
provided that such entity has no liabilities and provided further that the
Vendor (or a wholly owned subsidiary thereof holding all of the Holdco
Shares) and the Purchaser, which may transfer and assign its rights to
acquire the Holdco Shares to 3087005 Nova Scotia Company, a Nova Scotia
unlimited liability company and wholly-owned subsidiary of the Purchaser,
shall enter into a purchase agreement substantially in the form set out in
Schedule 2.3 and comply with the terms thereof (the "Holdco Purchase
Agreement"). The Purchase Price for the Holdco Shares shall be the same as
for the Purchased Shares.
3. Representations and Warranties
Each Vendor severally (and not jointly and severally) represents and
warrants to the Purchaser as follows and acknowledges that the Purchaser is
relying on such representations and warranties in connection with its purchase
of the Purchased Shares (and the Holdco Shares, in the circumstances
contemplated in section 2.3):
3.1 Authorization. This Agreement has been duly authorized, executed and
delivered by each Vendor and is a legal, valid and binding obligation of
each Vendor, enforceable against each Vendor by the Purchaser in accordance
with its terms, except as enforcement may be limited by bankruptcy,
insolvency and other laws affecting the rights of creditors generally and
except that equitable remedies may be granted only in the discretion of a
court of competent jurisdiction.
3.2 Ownership of Purchased Shares. Each Vendor is the record and beneficial
owner of the Purchased Shares set out next to its name in Schedule 2.1,
with good and marketable title thereto, free and clear of all Encumbrances
and, without limiting the generality of the foregoing, none of the
Purchased Shares, or any other Common Shares owned by such Vendor, are
subject to any restrictions on transfer, voting trust, shareholder
agreement or voting agreement other than as set out in Schedule 3.2. Upon
completion of the transactions contemplated by this Agreement, all of the
Purchased Shares (and the Holdco Shares, in the circumstances contemplated
in section 2.3) will be owned by the Purchaser as the record and beneficial
owner, with a good and marketable title thereto (except for such
Encumbrances as may have been granted by the Purchaser).
3.3 No Violation. The execution and delivery of this Agreement by each Vendor
and the consummation of the transactions herein provided for will not
result in either:
(a) the breach or violation of any of the provisions of, or constitute a
default under, or conflict with or cause the acceleration of any
obligation of such Vendor under:
(i) any Contract to which such Vendor is a party or by which any of
them is, or either of their properties are, bound;
(ii) any judgment, decree, order or award of any court, governmental
body or arbitrator having jurisdiction over such Vendor;
(iii) any applicable law, statute, ordinance, regulation or rule: or
(b) the creation or imposition of any Encumbrance on any of the Purchased
Shares.
3.4 Consents and Approvals. There is no requirement for any Vendor to make any
filing with, give notice to or to obtain any licence, permit, certificate,
registration, authorization, consent or approval of, any governmental or
regulatory authority as a condition to the lawful consummation of the
transactions contemplated by this Agreement, other than as set out in
Schedule 3.4.
3.5 Income Tax Matters. No Vendor is a non resident of Canada for the purposes
of the Income Tax Act (Canada), other than Power Capital (Americas) Ltd.
Amerifund. The applicable Purchased Shares are not "Taxable Canadian
Property" for Power Capital (Americas) Ltd. Amerifund for the purposes of
the Income Tax Act (Canada).
3.6 Disclosure with respect to the Corporation. To the best of each Vendor's
knowledge, the Corporation's Disclosure Documents did not contain any
misrepresentation on the date each were filed with the securities
regulatory authorities of Canada and with the United States Securities and
Exchange Commission and, other than as disclosed in the Corporation's
Disclosure Documents, there have been no material changes in the condition
(financial or otherwise), assets, liabilities, operations, earnings or
business of the Corporation since the date of each of the Corporation's
Disclosure Documents.
3.7 Commissions, etc. No broker, agent or other intermediary acted for the
Vendors in connection with the sale of the Purchased Shares and, except as
disclosed in Schedule 3.7 (which commission shall be payable as set out in
Schedule 3.7), no commission or other remuneration is payable or alleged to
be payable to any broker, agent or other intermediary who purports to act
or have acted for or on behalf of either party.
4. Representations and Warranties of the Purchaser
The Purchaser hereby represents and warrants to each of the Vendors as
follows and acknowledges and confirms that each Vendor is relying on such
representations and warranties in connection with the sale by the Vendors of the
Purchased Shares (and the Holdco Shares, in the circumstances contemplated in
section 2.3):
4.1 Organization. The Purchaser is a limited partnership validly subsisting
under the laws of Delaware and it has the power to enter into and perform
its obligations pursuant to this Agreement.
4.2 No Violation. The execution and delivery of this Agreement by the Purchaser
and the consummation of the transactions provided for herein will not
result in the violation of, or constitute a default under, or conflict with
or cause the acceleration of any obligation of the Purchaser under:
(a) any Contract to which the Purchaser is a party or by which it is
bound;
(b) any provision of the constating documents or by-laws or resolutions of
the board of directors (or any committee thereof) or shareholders of
the Purchaser;
(c) any judgment, decree, order or award of any court, governmental body
or arbitrator having jurisdiction over the Purchaser; or
(d) any applicable law, statute, ordinance, regulation or rule.
4.3 Authorization. This Agreement has been duly authorized, executed and
delivered by the Purchaser and is a legal, valid and binding obligation of
the Purchaser, enforceable against the Purchaser by the Vendors in
accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency and other laws affecting the enforcement of rights
of creditors generally and except that equitable remedies may only be
granted in the discretion of a court of competent jurisdiction.
4.4 Consents and Approvals. There is no requirement for the Purchaser to make
any filing with, give any notice to or obtain any licence, permit,
certificate, registration, authorization, consent or approval of, any
government or regulatory authority as a condition to the lawful
consummation of the transactions contemplated by this Agreement.
4.5 Commissions, etc. No broker, agent or other intermediary acted for the
Purchaser in connection with the purchase of the Purchased Shares and,
except as disclosed in Schedule 3.7 (which commission shall be payable as
set out in Schedule 3.7), no commission or other remuneration is payable or
alleged to be payable to any broker, agent or other intermediary who
purports to act or have acted for or on behalf of either party.
5. Representations and Warranties of Glencoe.
Glencoe hereby represents and warrants to each of the Vendors as follows
and acknowledges and confirms that each Vendor is relying upon such
representations and warranties in connection with the sale by the Vendors for
the Purchased Shares (and the Holdco Shares, and the circumstances contemplated
in Section 2.3):
5.1 Organization. Glencoe is a limited liability company validly subsisting
under the laws of Delaware and it has the power to enter into and perform
its obligations pursuant to this Agreement.
5.2 Authorization. Glencoe has obtained the required approvals of its
investment committee and has arranged the necessary financing for the
purchase of the Purchased Shares by the Purchaser under a bridge loan.
Glencoe agrees to use its best efforts to cause the Purchaser to consummate
the transactions provided for in this Agreement.
6. Survival of Representations and Warranties
6.1 Survival of Representations and Warranties. The covenants, representations
and warranties of the Vendors, Glencoe and the Purchaser contained in this
Agreement and any agreement, instrument, certificate or other document
executed or delivered pursuant hereto shall survive the closing of the
transactions contemplated hereby until the second anniversary of the
Closing Date. Notwithstanding anything herein to the contrary, the
covenants, representations and warranties relating to Tax matters, set out
in section 3.5 herein, shall expire ninety (90) days following the
expiration of the period, if any during which an assessment, reassessment
or other form of recognized document assessing liability for tax, interest
or penalties under applicable tax legislation in respect of any taxation
year to which the covenants, representations and warranties relate could be
issued. Notwithstanding anything herein to the contrary, the covenants,
representations and warranties relating to the title of the Purchased
Shares, set out in section 3.2 herein, shall survive indefinitely.
7. Covenants
7.1 Delivery of Documents. Each Vendor shall deliver to the Purchaser all
necessary transfers, assignments and other documentation reasonably
required to transfer the Purchased Shares (and the Holdco Shares, in the
circumstances contemplated in section 2.3) to the Purchaser with a good and
marketable title, free and clear of all Encumbrances, other than as set out
in Schedule 3.2.
8. Conditions Of Closing
8.1 Conditions of Closing in Favour of the Purchaser. The purchase of the
Purchased Shares (and the Holdco Shares, in the circumstances contemplated
in section 2.3) from each Vendor (referred to as the "relevant Vendor" in
this section 8.1) by the Purchaser is subject to the following terms and
conditions for the exclusive benefit of the Purchaser, to be fulfilled or
performed at or prior to the Closing Time:
(a) Representations and Warranties. The representations and warranties of
the relevant Vendor contained in this Agreement shall be true and
correct in all material respects at the Closing Time, with the same
force and effect as if such representations and warranties were made
at and as of such time, and a certificate of the relevant Vendor dated
the Closing Date to that effect shall have been delivered to the
Purchaser, such certificate to be in form and substance satisfactory
to the Purchaser, acting reasonably;
(b) Covenants. All of the terms, covenants and conditions of this
Agreement to be complied with or performed by the relevant Vendor at
or before the Closing Time shall have been complied with or performed
in all material respects and a certificate of the relevant Vendor
dated the Closing Date to that effect shall have been delivered to the
Purchaser, such certificate to be in form and substance satisfactory
to the Purchaser, acting reasonably;
(c) Material Adverse Change. There shall have been no material adverse
changes in the condition (financial or otherwise), assets,
liabilities, operations, earnings, or business of the Corporation
since the date of the audited financial statements of the Corporation
for the year ended October 31, 2003;
(d) No Action or Proceeding. No legal or regulatory action or proceeding
shall be pending or threatened by any person to enjoin, restrict or
prohibit the purchase and sale of the Purchased Shares (and the Holdco
Shares, in the circumstances contemplated by section 2.3) contemplated
hereby;
(e) Shareholders' Agreement. The Purchaser or its assignee, CMI, Xxxx
Xxxxxx and Xxxxx Xxxxxxxxxx shall have entered into a shareholders'
agreement substantially in the form attached hereto as Schedule 8.1
(the "Shareholders' Agreement") by the Closing Time;
(f) Holdco Purchase Agreement. Insofar as it relates to the obligations of
a Vendor which has entered into a Holdco Purchase Agreement, the
conditions under such Holdco Purchase Agreement shall have been waived
or satisfied in accordance with the terms therein.
If any of the conditions contained in this section 8.1 shall not be performed or
fulfilled at or prior to the Closing Time to the satisfaction of the Purchaser,
acting reasonably, the Purchaser may, by notice to the relevant Vendor,
terminate this Agreement and the obligations of such Vendor and the Purchaser
under this Agreement, provided that the Purchaser may also bring an action
pursuant to Article 10 against such Vendor for damages suffered by the Purchaser
where the non-performance or non-fulfilment of the relevant condition is as a
result of a breach of covenant, representation or warranty by such Vendor. Any
such condition may be waived in whole or in part by the Purchaser without
prejudice to any claims it may have for breach of covenant, representation or
warranty.
8.2 Conditions of Closing in Favour of the Vendors. The sale of the Purchased
Shares (and the Holdco Shares, in the circumstances contemplated in section
2.3) by each Vendor to the Purchaser is subject to the following terms and
conditions for the exclusive benefit of each Vendor, to be fulfilled or
performed at or prior to the Closing Time:
(a) Representations and Warranties. The representations and warranties of
the Purchaser contained in this Agreement shall be true and correct in
all material respects at the Closing Time, with the same force and
effect as if such representations and warranties were made at and as
of such time, and a certificate of the Purchaser dated the Closing
Date to that effect shall have been delivered to the Vendors, such
certificate to be in form and substance satisfactory to the Vendors,
acting reasonably;
(b) Covenants. All of the terms, covenants and conditions of this
Agreement to be complied with or performed by the Purchaser at or
before the Closing Time shall have been complied with or performed in
all material respects and a certificate of the President of the
Purchaser dated the Closing Date to that effect shall have been
delivered to the Vendors, such certificate to be in form and substance
satisfactory to the Vendors, acting reasonably;
(c) No Action or Proceeding. No legal or regulatory action or proceeding
shall be pending or threatened by any person to enjoin, restrict or
prohibit the purchase and sale of the Purchased Shares (or the Holdco
Shares, in the circumstances contemplated in section 2.3) contemplated
hereby;
(d) Shareholders' Agreement. In so far as it relates to the obligations of
CMI and Xxxxx Xxxxxxxxxx, the Purchaser shall have entered into the
Shareholders' Agreement; and
(e) Holdco Purchase Agreement. Insofar as it relates to the obligations of
the Purchaser who has entered into a Holdco Purchase Agreement, the
conditions under such Holdco Purchase Agreement shall have been waived
or satisfied in accordance with the terms therein.
If any of the conditions contained in this section 8.2 shall not be performed or
fulfilled at or prior to the Closing Time to the satisfaction of any Vendor,
acting reasonably, such Vendor may, by notice to the Purchaser, terminate this
Agreement and the obligations of such Vendor and the Purchaser under this
Agreement, provided that such Vendor may also bring an action pursuant to
Article 10 against the Purchaser for damages suffered by such Vendor where the
non-performance or non-fulfilment of the relevant condition is as a result of a
breach of covenant, representation or warranty by the Purchaser. Any such
condition may be waived in whole or in part by each Vendor without prejudice to
any claims it may have for breach of covenant, representation or warranty.
9. Closing
9.1 Place of Closing. The completion of the purchase and sale of the Purchased
Shares under the terms of this Agreement shall take place at the Closing
Time at the offices of Lang Xxxxxxxx LLP, 000 Xxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx (the "Closing").
9.2 Closing Deliveries.
(a) At the Closing, upon fulfillment of all of the conditions set out in
Article 7 that have not been waived in writing by the Purchaser, the
Vendors shall deliver to the Purchaser:
(i) subject to section 9.3, certificates representing the Purchased
Shares, either duly endorsed by the Vendors for transfer in blank
or accompanied by stock powers of attorney endorsed by the
applicable Vendor for transfer in blank with signatures
guaranteed by a member of the "STAMP" Medallion Program;
(ii) the certificates referred to in section 8.1(a) and 8.1(b);
(iii) the Shareholders' Agreement duly executed;
(iv) a certified copy of the authorizing resolutions of the Vendors,
where applicable;
and such other documents as the Purchaser may reasonably request.
(b) At the Closing, upon fulfillment of all of the conditions set out in
Article 8 that have not been waived in writing by each Vendor, the
Purchaser shall deliver to the Vendors:
(i) subject to section 9.3, a certified cheque, bank draft or wire
transfer in US dollars (same day funds) in an amount representing
the applicable Aggregate Purchase Price;
(ii) the certificates referred to in section 8.2(a) and 8.2(b);
(iii) the Shareholders' Agreement duly executed;
(iv) a certified copy of the authorizing resolutions of the Purchaser;
and such other documents as the Vendors may reasonably request.
9.3 Tender of Shares of Holdco. If a Vendor (or wholly-owned subsidiary
thereof) determines to tender Holdco Shares instead of Purchased Shares and
executes an agreement substantially in this form of the Holdco Purchase
Agreement, such Vendor's obligations to the Purchaser and the Purchaser's
obligations to such Vendor shall be governed by the terms of a Holdco
Purchase Agreement; provided that the representations, warranties and
covenants of such Vendor, Glencoe and the Purchaser under this Agreement
shall continue to be in effect in accordance with the terms of this
Agreement.
9.4 Further Assurances. Each party to this Agreement covenants and agrees that,
from time to time subsequent to the Closing Date, such party will, at the
request and expense of the requesting party, execute and deliver all such
documents, including, without limitation, all such additional conveyances,
transfers, consents, tax elections (or an amendment thereto) and other
assurances and do all such other acts and things as any other party hereto,
acting reasonably, may from time to time request be executed or done in
order to better evidence, perfect or effectuate any provision of this
Agreement or of any agreement or other document executed pursuant to this
Agreement or any of the respective obligations intended to be created
hereby or thereby.
10. Indemnification
10.1 Obligations to Indemnify. Subject to the terms and conditions hereof, each
Vendor agrees to indemnify and save harmless the Purchaser and its
affiliates from all claims, demands, proceedings, losses, damages,
liabilities, deficiencies, costs and expenses (including, without
limitation, all legal and other professional fees and disbursements,
interest, penalties and amounts paid in settlement) (collectively "Losses")
suffered or incurred by the Purchaser as a result of or arising directly or
indirectly out of or in connection with any breach of each such Vendor of
any representation, warranty, obligation or covenant of each such Vendor
contained in this Agreement. The Purchaser agrees to indemnify and save
harmless each Vendor from all Losses suffered or incurred by each such
Vendor as a result of or arising directly or indirectly out of or in
connection with any breach by the Purchaser of any representation,
warranty, obligation or covenant of the Purchaser contained in this
Agreement. Glencoe agrees to indemnify and save harmless each Vendor from
all Losses suffered or incurred by each such Vendor as a result of or
arising directly or indirectly out of or in connection with any breach by
Glencoe of any representation, warranty, obligation or covenant of Glencoe
contained in this Agreement.
10.2 Notice of Claim. In the event that a party (the "Indemnified Party") shall
become aware of any claim, proceeding or other matter (a "Claim") in
respect of which another party (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.
Such notice shall specify whether the Claim arises as a result of a claim
by a person against the Indemnified Party (a "Third Party Claim") or
whether the Claim does not so arise (a "Direct Claim"), and shall also
specify with reasonable particularity (to the extent that the information
is available) the factual basis for the Claim and the amount of the Claim,
if known. If, through the fault of the Indemnified Party, the Indemnifying
Party does not receive notice of any Claim in time to contest effectively
the determination of any liability susceptible of being contested, the
Indemnifying Party shall be entitled to set off against the amount claimed
by the Indemnified Party the amount of any Losses incurred by the
Indemnifying Party resulting directly from the Indemnified Party's failure
to give such notice on a timely basis. The parties acknowledge and agree
that the provisions of this Article 10 shall be the sole remedy available
to an Indemnified Party, in respect of Losses suffered or incurred by such
Indemnified Party, against an Indemnifying Party, resulting from a breach
by the Purchaser of any representation, warranty, obligation or covenant of
the Indemnifying Party contained in this Agreement.
10.3 Direct Claims. With respect to any Direct Claim, following receipt of
notice from the Indemnified Party of the Claim, the Indemnifying Party
shall have 60 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 60-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 agreed upon amount of the Claim.
10.4 Third Party Claims. With respect to any Third Party Claim, the Indemnified
Party shall have the exclusive right, at the expense of the Indemnifying
Party, to contest, settle or pay the amount claimed and to retain counsel
and other experts or advisers selected by the Indemnified Party in its sole
discretion in connection therewith; provided, however, that the Indemnified
Party shall not settle any Third Party Claim without the written consent of
the Indemnifying Party, which consent shall not be unreasonably withheld or
delayed; provided, however, that the Indemnifying Party shall remain liable
for the settlement amount even if any such consent is not obtained for any
reason. If the Indemnified Party elects to assume such control, the
Indemnifying Party shall have the right, at its sole expense, to
participate in the negotiation, settlement or defence of 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 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.
10.5 Payment and Cooperation. The Indemnifying Party shall pay to the
Indemnified Party all amounts for which the Indemnifying Party is liable
pursuant to this section promptly after the Indemnified Party incurs the
Loss in respect of which such liability arises; provided that in no event
shall the maximum liability of a Vendor exceed the Aggregate Purchase Price
paid to such Vendor. The Indemnified Party and the Indemnifying Party shall
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).
11. Miscellaneous
11.1 Notices
(a) Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be delivered in person,
transmitted by telecopy or sent by registered mail, charges prepaid,
addressed as follows:
(i) if to any Vendor: at the addresses set out in Schedule 2.1
with a copy to:
Lang Xxxxxxxx LLP
Suite 2500
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx, X0X 0X0
Attention: Xxxxxxxx Xxxxxx
Facsimile: (000) 000-0000
(ii) if to the Purchaser: c/o Glencoe Capital, LLC 000 Xxxxx XxXxxxx
Xxxxxx, Xxxxx 0000 Xxxxxxx, Xxxxxxxx 00000 Attention: Xxxxxxx X.
XxXxxxx Facsimile: (000) 000-0000
with a copy to:
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx.
Facsimile: (000) 000-0000
(b) Any such notice or other communication shall be deemed to have been
given and received on the day on which it was delivered or transmitted
(or, if such day is not a Business Day, on the next following Business
Day), or, if mailed, on the third Business Day following the date of
mailing; provided, however, that if at the time of mailing or within
three Business Days thereafter there is or occurs a labour dispute or
other event that might reasonably be expected to disrupt the delivery
of documents by mail, any notice or other communication hereunder
shall be delivered or transmitted by means of recorded electronic
communication as aforesaid.
(c) Any party may at any time change its address for service from time to
time by giving notice to the other parties in accordance with this
section 11.1.
11.2 Disclosure. Except as required by any applicable law or regulatory
requirement, none of the parties to the Agreement shall issue any press
release or make any other public announcement with respect to this
Agreement or the transactions contemplated hereby without the prior written
consent of the other parties hereto.
11.3 Binding Nature of the Agreement. The provisions of this Agreement shall
enure to the benefit of and shall be binding upon the parties hereto and
their respective heirs, legal personal representatives, successors and
assigns.
11.4 Amendment. This Agreement may not be amended except by an instrument signed
by each of the parties hereto.
11.5 Counterparts. This Agreement may be executed by facsimile and in
counterparts, each of which shall be deemed an original, and all of which
taken together shall constitute one and the same instrument.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF this Agreement has been executed by the parties as of
the date first written above.
GLENCOE SKYDOME HOLDINGS, L.P. GLENCOE CAPITAL, LLC
Per:________________________ Per:______________________
G. Xxxxxxx Xxxxxxxxx Name:
Vice President Title:
The execution of this Agreement by each of the Vendors appears in Schedule 2.1
SCHEDULE 2.1
Vendors and Purchased Shares
----------------------------- ---------------------------------- ----------------------------- ----------------------
1 2 3 4
----------------------------- ---------------------------------- ----------------------------- ----------------------
Name and Address of Vendor Signature of Vendor Number of Common Shares of Aggregate Purchase
-------------------------- ------------------- --------------------------- ------------------
Polyair Inter Pack Inc. to Price
--------------------------- -----
be sold to the Purchaser (US$)
(Purchased Shares)
----------------------------- ---------------------------------- ----------------------------- ----------------------
----------------------------- ---------------------------------- ----------------------------- ----------------------
Consolidated Mercantile 1,298,467 15,334,895.27
Incorporated per:____________________
000 Xxxxxx Xxxx Xxxxxxx, Name: Xxxx Xxxxxx
Ontario Title: President
M5R 2H3
Date:
----------------------------- ---------------------------------- ----------------------------- ----------------------
----------------------------- ---------------------------------- ----------------------------- ----------------------
Cambrelco Inc. 227,500 2,686,775.00
000 Xxxxxx Xxxx Xxxxxxx, per:____________________
Ontario Name: Xxxx Xxxxxx
M5R 2H3 Title: President
Date:
----------------------------- ---------------------------------- ----------------------------- ----------------------
----------------------------- ---------------------------------- ----------------------------- ----------------------
Xxxxx Xxxxxxxxxx 101,200 1,195,172.00
00 Xxxxxxxxx Xxxx. _______________________
Xxxxxxx, Xxxxxxx
X0X 0X0 Date:
----------------------------- ---------------------------------- ----------------------------- ----------------------
----------------------------- ---------------------------------- ----------------------------- ----------------------
Nafund Inc. 118,400 1,398,304.00
00 Xxxxxxxx Xxx. per:____________________
Toronto, Ontario Name: Xxxx Xxxxxx
M5R 2E2 Title: President
Date:
----------------------------- ---------------------------------- ----------------------------- ----------------------
----------------------------- ---------------------------------- ----------------------------- ----------------------
Power Capital (Americas) 82,100 969,601.00
Ltd. Amerifund per:____________________
Mill Mall, Wickhams Cay Name:
Road Town, Tortola Title:
British Virgin Islands
Date:
----------------------------- ---------------------------------- ----------------------------- ----------------------
Total 1,827,667 US$21,584,747.27
========= ================
----------------------------- ---------------------------------- ----------------------------- ----------------------
SCHEDULE 2.3
Holdco Purchase Agreement
See attached copy of the Holdco Purchase Agreement.
SCHEDULE 3.2
Ownership of Purchased Shares
1. The Purchased Shares owned by Consolidated Mercantile Incorporated and
Xxxxx Xxxxxxxxxx are the subject of restrictions or sale under the terms of
a Shareholder Agreement made the 20th day of February, 1996, as amended,
among the shareholders named therein, Computershare Trust Company of Canada
and Polyair Inter Pack Inc. The Purchased Shares to be sold by Consolidated
Mercantile Inc. and Xxxxx Xxxxxxxxxx will be free from the restrictions
under this agreement and will be released by Computershare Trust Company of
Canada once they confirm that they have complied with the terms thereof.
2. The Purchased Shares owned by Consolidated Mercantile Incorporated and
Cambrelco Inc. are subject to restrictions on resale pursuant to section
2.8 of Multilateral Instrument 45-102 (of the Canadian Securities
Administration). The Purchaser will be subject to similar restrictions
(upon acquisition of the Purchased Shares) applicable to affiliates, under
U.S. Securities Act of 1933.
3. The Purchased Shares will be subject to the provisions of the Shareholders
Agreement (as defined in the Agreement).
SCHEDULE 3.4
Consents and Approvals - Vendor
1. Under section 2.7 of Multilateral Instrument 45-102 (of the Canadian
Securities Administration), Consolidated Mercantile Incorporated and
Cambrelco Inc. will be required to file with applicable Canadian securities
regulatory authorities a report on Form 45-102 F2 within 10 day of the
Closing Date.
Schedule 3.7
Commissions, etc
Polyair Inter Pack Inc. retained the services of National Bank Financial Inc.
("NBF") as financial advisor under the terms of an agreement dated July 31,
2003. This agreement provides that NBF will be paid by Polyair Inter Pack Inc. a
fee of 1% of "Transaction Proceeds" upon closing of "the Transaction". A
"Transaction" includes a "take over bid (...) or other transaction involving a
third party, either alone or in combination with others, and the Company
[Polyair Inter Pack Inc.] resulting in a change of control of the Company". The
sale of the Purchased Shares does not involve the Company and is therefore not
described as a "Transaction" for the purposes of this agreement. The agreement
with NBF does not provide for the payment of a fee by any of the Vendors or the
Purchaser in any circumstance. However, Glencoe and Consolidated Mercantile
Incorporated ("CMI") have agreed to negotiate with NBF any demand it may make
for compensation for its services in introducing Glencoe to CMI.
Schedule 8.1
Shareholders' Agreement
See attached copy of the Shareholders' Agreement.
