Exhibit 2.2
INTERCOMPANY DEBT REPAYMENT AGREEMENT
THIS INTERCOMPANY DEBT REPAYMENT AGREEMENT (this "Agreement"), dated
June 13, 1997, is made by and among XXXXXXXX CAPITAL LIMITED, a corporation
incorporated under the laws of the Province of Ontario ("SCL"), SCL ELECTRONICS
LTD., a corporation incorporated under the laws of Canada ("SCLE"), and XXXXXXXX
TECHNOLOGIES INC., a corporation amalgamated under the laws of the Province of
Ontario ("STI"), with reference to the following facts:
A. STI is a wholly-owned subsidiary of Xxxxxx Electronics, Inc., a
Delaware corporation ("Xxxxxx").
B. SCLE is a wholly-owned subsidiary of SCL.
C. As of the date hereof, STI is indebted to SCL and its affiliates
(other than SCLE) and to SCLE for borrowed money and for payables net of
receivables in the following amounts: (i) $8,313,247 to SCL and its affiliates
(other than SCLE) (the "SCL Intercompany Debt") and (ii) $3,833,275 to SCLE
(the "SCLE Intercompany Debt"). Such amounts and all other dollar amounts
referred to in this Agreement are expressed in Canadian funds.
D. The parties desire to provide for the repayment of such
intercompany debt on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:
ARTICLE I
THE WARRANT
1.1. XXXXXX WARRANT. STI is the holder of a warrant issued by Xxxxxx
in connection with a portion of Xxxxxx'x capitalization of STI (the "Xxxxxx
Warrant"). Pursuant to the Xxxxxx Warrant, STI has the right to purchase shares
of common stock of Xxxxxx as provided therein.
1.2. ASSIGNMENT OF XXXXXX WARRANT. Concurrently herewith, STI shall
assign to SCL all of its rights under the Xxxxxx Warrant.
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ARTICLE II
THE SEGREGATED INVENTORY
2.1. SEGREGATED INVENTORY. STI will physically segregate certain
inventory at the warehouse which it shares with X.X. Xxxxxxxx & Sons Limited
("ACS") in Pickering, Ontario (the "Pickering Warehouse") and at its warehouses
in Calgary and Edmonton. The aggregate value of such inventory as reflected on
STI's books is $4,700,000, of which (i) $2,366,725 will be allocated to SCL and
its affiliates (other than SCLE) (the "SCL Segregated Inventory") and (ii)
$2,333,275 will be allocated to SCLE (the "SCLE Segregated Inventory").
2.2. SALE OF SEGREGATED INVENTORY. STI hereby sells the SCL
Segregated Inventory to SCL and the SCLE Segregated Inventory to SCLE, which in
each case has become non-core inventory for STI. Such inventory which is at the
Pickering Warehouse shall be moved to ACS's portion of such Warehouse, within 90
days after the date of this Agreement and, at the request and expense of SCL and
SCLE, the inventory segregated at STI's warehouses in Calgary and Edmonton will
be moved to ACS's portion of the Pickering Warehouse. During such 90-day
period, STI shall have the right to substitute other non-core inventory for such
inventory, provided that such substitutions do not reduce the aggregate value of
the SCL Segregated Inventory and the SCLE Segregated Inventory to less than the
respective amounts thereof as specified above.
ARTICLE III
OBLIGATION TO PAY
3.1. OBLIGATION TO PAY. STI hereby promises to pay to SCL on March
31, 2002, a sum which shall be determined as provided in Exhibit 1 hereto. On
the date on which such payment is due, STI shall have the right (but not the
obligation) to offset against such payment, in whole or in part, amounts then
due from SCL or SCLE to Xxxxxx or STI under the terms of the Share Purchase
Agreement of even date herewith pursuant to which Xxxxxx acquired STI or under
the terms of the related letter agreement among SCL, SCLE, STI and Xxxxxx of
even date herewith and SCL shall have the right (but not the obligation) to
offset such payment against amounts, in whole or in part, then due by it to
Xxxxxx or STI under such Share Purchase Agreement or letter agreement. For
purposes hereof, amounts then due from SCL or SCLE shall include interest at the
Prime Rate plus five percent (5%), from the date on which such amounts became
due to the date on which such payment is made. As used herein, "Prime Rate"
means the rate per annum quoted by Canadian Imperial Bank of Commerce from time
to time as its prime rate for Canadian Dollar commercial loans made in Canada.
3.2. RELATED TERMS. With respect to such obligation to pay, STI
hereby expressly waives diligence, presentment for payment, notice of
non-payment and protest.
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ARTICLE IV
CASH PAYMENT
On the date of this Agreement, STI will pay the sum of $1,500,000 to
SCLE or as it may direct in writing.
ARTICLE V
ACKNOWLEDGMENT
5.1. SATISFACTION OF SCL INTERCOMPANY DEBT. SCL on behalf of itself
and its affiliates (other than SCLE) hereby (i) accepts the foregoing in
complete satisfaction of the SCL Intercompany Debt which is hereby discharged
and (ii) releases all agreements relating to such indebtedness and all liens and
security interests in respect of properties of STI.
5.2. SATISFACTION OF SCLE INTERCOMPANY DEBT. SCLE hereby (i) accepts
the foregoing in complete satisfaction of the SCLE Intercompany Debt which is
hereby discharged and (ii) releases all agreements relating to such indebtedness
and all liens and security interests in respect of properties of STI.
ARTICLE VI
MISCELLANEOUS
Section 6.1. GOVERNING LAW. This Agreement shall be construed,
interpreted and enforced in accordance with, and the 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 appeals therefrom.
Section 6.2. CAPTIONS. The Article and Section captions used herein
are for reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement. All references to exhibits in this Agreement
are references to exhibits attached to this Agreement, which exhibits are
incorporated herein by this reference.
Section 6.3. PARTIES IN INTEREST. Except as hereinafter provided,
this Agreement may not be transferred, assigned, pledged or hypothecated by any
party hereto, other than by operation of law. Each of SCL and SCLE shall have
the right, on notice to but without the consent of STI, to make a collateral
assignment of its rights hereunder to one or more institutional lenders and to
assign its rights hereunder to any of its affiliates or to any person that
acquires all or
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substantially all of its assets. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
Section 6.4. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, all of which taken together shall constitute one instrument.
Signatures may be exchanged by telecopy, and each party agrees to be bound by
its own telecopied signature and to accept the telecopied signatures of the
other parties.
Section 6.5. AMENDMENTS. This Agreement may not be changed orally,
but only by an agreement in writing signed by the parties hereto.
Section 6.6. ATTORNEYS' FEES. In the event any party brings any
suit or other proceeding with respect to the subject matter or enforcement of
this Agreement, the prevailing party (as determined by the court, agency or
other authority before which such suit or proceeding is commenced) shall, in
addition to such other relief as may be awarded, be entitled to recover
attorneys' fees, expenses and costs of investigation as actually incurred
(including, without limitation, attorneys' fees, expenses and costs of
investigation incurred in appellate proceedings, costs incurred in establishing
the right to indemnification, or in any action or participation in, or in
connection with, any bankruptcy case or proceeding).
Section 6.7. CONSTRUCTION. Each party has reviewed and revised this
Agreement and, therefore, the rule of construction requiring that any ambiguity
be resolved against the drafting party shall not be employed in the
interpretation of this Agreement.
Section 6.8. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties hereto with respect to the subject matter contained
herein.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
SCL
XXXXXXXX CAPITAL LIMITED
By:
-------------------------------------
Xxxxx X. X'Xxxx
Executive Vice President
and Secretary
SCLE
SCL ELECTRONICS LTD.
By:
-------------------------------------
Xxxxx X. X'Xxxx
Executive Vice President
and Secretary
STI
XXXXXXXX TECHNOLOGIES INC.
By:
-------------------------------------
Xxxxxxx X. Xxxxxx
Vice President and
Chief Financial Officer
[Signature Page to Intercompany Debt Repayment Agreement]
