Exhibit 2.2
Execution Copy
SHARE PURCHASE AGREEMENT
CELESTICA INTERNATIONAL INC.
- and -
CELESTICA INC.
- and -
C&D POWER SYSTEMS (CANADA) ULC
- and -
C&D TECHNOLOGIES, INC.
September 23, 2004
TABLE OF CONTENTS
ARTICLE 1
INTERPRETATION
1.1 Definitions...........................................................2
1.2 Currency..............................................................8
1.3 Sections and Headings.................................................8
1.4 Number, Gender and Persons............................................8
1.5 Accounting Principles.................................................9
1.6 Knowledge.............................................................9
1.7 Entire Agreement......................................................9
1.8 Time of Essence.......................................................9
1.9 Applicable Law........................................................9
1.10 Severability..........................................................9
1.11 Successors and Assigns................................................9
1.12 Calculation of Time..................................................10
1.13 Amendment and Waivers................................................10
1.14 Schedules............................................................10
ARTICLE 2
PURCHASE AND SALE
2.1 Purchase and Sale of Purchased Shares................................11
2.2 Purchase Price.......................................................11
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE VENDOR
3.1 Representations and Warranties of the Vendor.........................11
3.2 Survival of Representations and Warranties of the Vendor.............23
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
4.1 Representations and Warranties.......................................24
4.2 Survival of Representations and Warranties of the Purchaser..........25
ARTICLE 5
COVENANTS
5.1 Access to the Company................................................25
5.2 Delivery of Books and Records........................................25
5.3 Conduct Prior to Closing.............................................26
5.4 Delivery of Documents................................................27
5.5 Employee Plans.......................................................27
5.6 Use of Name..........................................................27
5.7 Tax Matters..........................................................27
5.8 Product Warranty Claims..............................................28
-i-
5.9 Shanghai Employees...................................................28
5.10 Leave Employees......................................................29
5.11 Insurance............................................................29
5.12 Survival of Covenants................................................29
ARTICLE 6
CONDITIONS OF CLOSING
6.1 Conditions of Closing in Favour of the Purchaser.....................29
6.2 Conditions of Closing in Favour of the Vendor........................32
ARTICLE 7
CLOSING ARRANGEMENTS
7.1 Place of Closing.....................................................34
7.2 Transfer.............................................................34
7.3 Further Assurances...................................................34
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by the Vendor........................................34
8.2 Tax Indemnification by the Vendor....................................35
8.3 Indemnification by the Purchaser.....................................36
8.4 Notice of Claim......................................................37
8.5 Direct Claims........................................................38
8.6 Third Party Claims...................................................38
8.7 Settlement of Third Party Claims.....................................38
8.8 Co-operation.........................................................39
8.9 Monetary Limit on Indemnification....................................39
8.10 Exclusivity..........................................................40
ARTICLE 9
GENERAL
9.1 Confidentiality of Information.......................................40
9.2 Notices..............................................................40
9.3 Commissions, etc.....................................................41
9.4 Consultation and Public Announcements................................41
9.5 Disclosure...........................................................42
9.6 Celestica Parent Guarantee...........................................42
9.7 C&D Parent Guarantee.................................................42
9.8 Counterparts..........................................................1
-ii-
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made the 23rd day of September, 0000,
X X X X X X X:
CELESTICA INTERNATIONAL INC.,
a corporation existing under the laws of the Province of
Ontario,
(hereinafter referred to as the "Vendor"),
- and -
CELESTICA INC.,
a corporation existing under the laws of the Province of
Ontario,
(hereinafter referred to as "Celestica Parent"),
- and -
C&D POWER SYSTEMS (CANADA) ULC,
an unlimited liability company existing under the laws of the
Province of Nova Scotia,
(hereinafter referred to as the "Purchaser"),
- and -
C&D TECHNOLOGIES, INC.,
a corporation existing under the laws of the State of
Delaware,
(hereinafter referred to as "C&D Parent").
THIS AGREEMENT WITNESSES THAT in consideration of the respective
covenants, agreements, representations, warranties and indemnities 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:
-2-
ARTICLE 1
INTERPRETATION
1.1 Definitions.
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:
"Accounts Receivable" means, on any date, all accounts receivable of the
Vendor or the Company, as the case may be, relating to the Business as at
such date;
"Affiliate" with respect to a party, means any corporation, partnership,
limited liability company or partnership, association, trust or other
organization which, directly or indirectly, controls, is controlled by, or
is under common control with, such party. For purposes of the preceding
sentence, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to
any entity or organization, shall mean the possession, directly or
indirectly, of the power (i) to vote more than 50% of the securities
having ordinary voting power for the election of directors of the
controlled entity or organization, or (ii) to direct or cause the
direction of the management and policies of the controlled entity or
organization, whether through the ownership of voting securities or by
contract or otherwise;
"Agreement of Manufacture" has the meaning set out in Section 6.1(j);
"arm's length" has the meaning attributed to that term in the Tax Act and
the related jurisprudence;
"Asian Assets" means the assets to be sold by the Vendor, Celestica
Corporation and Celestica (Thailand) Limited to Dynamo Acquisition Corp.
pursuant to the Asian Purchase Agreement;
"Asian Purchase Agreement" means the asset purchase agreement dated the
date hereof between the Vendor, Celestica Corporation, Celestica
(Thailand) Limited and Dynamo Acquisition Corp.;
"Assumed Liabilities" has the meaning set out in the Canadian Drop-Down
Agreement;
"Audited Closing Date Statement" has the meaning set out in the Purchase
Price Adjustment Agreement;
"Business" means the business collectively carried on by the Power Vendors
through their respective power operations on the date hereof, consisting
of the engineering, development, design, promotion, marketing,
distribution and sale of Power Products to original equipment
manufacturers and other customers, including, without limitation, the
"build-to-print" business, consisting of the facilitation and management,
on behalf of the Power Vendors' customers, of the manufacture (including
applicable testing) by third party contract manufacturers, of such
customers' Power Products in accordance with such
-3-
customers' specifications and without any design contribution from the
Power Vendors, or any of them, but for certainty excluding the manufacture
or repair of Power Products under such "build-to-print" arrangement, it
being understood and agreed by the parties that none of the Power Vendors
conducts the Business in its entirety and each only conducts a part of the
Business such that collectively they conduct the Business;
"Business Day" means any day, other than a Saturday or a Sunday, on which
banks are open for business in Toronto, Ontario;
"Canadian Drop-Down" means the transfer of assets and assumption of
liabilities pursuant to the Canadian Drop-Down Agreement;
"Canadian Drop-Down Agreement" means the agreement to be entered into
between the Vendor and the Company substantially in the form attached as
Schedule 1.1(a);
"Celestica Group" means the Vendor and, as of the Effective Time, all past
or present Affiliates of the Vendor;
"Claim" has the meaning set out in Section 8.4;
"Closing" means the closing of the purchase and sale of the Purchased
Shares contemplated hereby;
"Closing Date" means September 30, 2004 or such other date as may be
mutually agreed upon by the Vendor and the Purchaser;
"Closing Date Transactions" means, collectively, the transactions
contemplated by this Agreement, the U.S. Purchase Agreement, the Shanghai
Purchase Agreement and the Asian Purchase Agreement;
"Company" means Dynamo Power Systems (Canada) ULC, an unlimited liability
company formed under the laws of the Province of Nova Scotia;
"Contract" means any agreement, indenture, contract, lease, deed of trust,
licence, option, instrument or other commitment, whether written or oral,
but not including any Licence;
"Direct Claim" has the meaning set out in Section 8.4;
"Drop-Downs" means, collectively, the completion of the transfers or
contributions of assets and assumptions of liabilities pursuant to the
Canadian Drop-Down Agreement and the U.S. Drop-Down Agreement;
"Effective Time" means the time that is immediately after the Effective
Time under the Canadian Drop-Down Agreement;
"Employees" has the meaning set out in Section 3.1(aa);
-4-
"Encumbrance" means any encumbrance, lien, charge, hypothec, pledge,
mortgage, title retention agreement, security interest of any nature,
adverse claim, exception, reservation, easement, right of occupation, any
matter capable of registration against title, privilege or any Contract to
create any of the foregoing;
"Environmental Law" means any statute, regulation, rule, order, directive
or other requirement of a Governmental Entity in each case having the
force of law, as in effect on the Closing Date to the extent that such
statute, regulation, rule, order, directive or other requirement relates
to the protection of the environment or occupational health and safety
matters, including, without limitation, legislation governing the
labelling, use, storage, treatment and disposal of Hazardous Substances;
"Environmental Order" means an applicable order or decision rendered by
any Governmental Entity under or pursuant to any Environmental Law;
"Environmental Permit" means any Licence required under Environmental Law
in connection with the operation of the portion of the Business operated
by the Vendor;
"ETA" means the Excise Tax Act (Canada), as amended from time to time;
"Excluded Liabilities" means all of the liabilities and obligations of the
Vendor other than the liabilities and obligations of the Vendor to be
assumed by the Company pursuant to the Canadian Drop-Down Agreement;
"Financial Information" means the pro forma financial information for the
Business for each of the months in the period commencing January 1, 2004
and ending August 20, 2004 delivered to the Purchaser by the Vendor, in
each case consisting of statements of revenue and profitability, adjusted
to give effect to the PIP, and statements of invested capital copies of
which are attached as Schedule 1.1(b) hereto;
"Governmental Entity" means any federal, provincial, local, municipal,
foreign or other government, and any body lawfully exercising any
administrative, judicial, legislative or regulatory authority or power;
"GST" means any and all Taxes payable under Part IX of the ETA or under
any provincial legislation similar to Part IX of the ETA;
"Hazardous Substance" means PCBs, asbestos, urea formaldehyde foam
insulation, lead or any substance or material that is prohibited,
controlled or regulated as hazardous, toxic, a pollutant or a contaminant
under Environmental Law;
"Indemnified Party" has the meaning set out in Section 8.4;
"Indemnifying Party" has the meaning set out in Section 8.4;
"Intellectual Property" has the meaning set out in Section 3.1(n)(i);
-5-
"Laws" means any applicable laws (including common law), statutes,
by-laws, rules, regulations, orders, ordinances, protocols, codes,
guidelines, treaties, policies, notices, directions and judicial,
arbitral, administrative, ministerial or departmental judgements, awards
or other requirements of any Governmental Entity, in each case which have
the force of law;
"Leave Employees" means all employees of the Vendor who, on the day
immediately preceding the Closing Date, are on a leave, including, without
limitation, parental or pregnancy leave or leave related to receipt of
short term or long term disability benefits or workers' compensation
benefits. The employment of the Leave Employees has not been transferred
to and assumed by the Company pursuant to the Canadian Drop-Down Agreement
as a result of such employees being on leave;
"Leave Expiry Date" has the meaning set out in Section 5.10;
"Licences" has the meaning set out in Section 3.1(r);
"Licensed Intellectual Property" has the meaning set out in Section
3.1(n)(i);
"Losses", in respect of any matter, means all losses, damages,
liabilities, penalties and expenses (including reasonable legal fees and
out-of-pocket disbursements) arising as a result of such matter (but
excluding any lost profits or other consequential or indirect losses);
"Material Adverse Effect" has the meaning set out in Section 3.1(f);
"Material Contract" means any Contract to which the Company will,
immediately following the Canadian Drop-Down, be a party, or by which it
will, immediately following the Canadian Drop-Down, be bound or of which
it will, immediately following the Canadian Drop-Down, have the benefit,
and which:
(i) in the most recently completed fiscal year of the Vendor
involved expenditures by the Vendor, or which the Vendor
currently expects will involve expenditures by the Company in
the fiscal year of the Company commencing on the Closing Date,
in each case in excess of $100,000; or
(ii) in the most recently completed fiscal year of the Vendor
involved revenues to the Vendor, or which the Vendor currently
expects will involve revenues to the Company in the fiscal
year of the Company commencing on the Closing Date, in each
case in excess of $500,000;
"OBCA" means the Business Corporations Act (Ontario), as in effect on the
date hereof;
"Other Purchase Agreements" means, collectively, the U.S. Purchase
Agreement, the Shanghai Purchase Agreement, the Asian Purchase Agreement
and the Suzhou Purchase Agreement;
"Owned Intellectual Property" has the meaning set out in Section
3.1(n)(i);
-6-
"Owned Patent" has the meaning set out in Section 3.1(n)(iv);
"Pension Documents" means all Plans and amendments thereto;
"Permitted Encumbrances" means:
(iii) liens for taxes, assessments and governmental charges due and
being contested in good faith and diligently by appropriate
proceedings;
(iv) liens for taxes either not due and payable or due but for
which notice of assessment has not been given;
(v) undetermined or inchoate liens, charges and privileges
incidental to current construction or current operations and
statutory liens, charges, adverse claims, security interests
or encumbrances of any nature whatsoever claimed or held by
any Governmental Entity which have not at the time been filed
or registered against the title to the asset or served upon
the Company to the Vendor pursuant to law or which relate to
obligations not due or delinquent; and
(vi) the security interests listed on Schedule 3.1(k);
"Person" means an individual, body corporate with or without share
capital, partnership, joint venture, unincorporated association,
syndicate, sole proprietorship, trust, pension fund, union, governmental
agency, board, tribunal, ministry, commission or department and the heirs,
beneficiaries, executors, legal personal representatives and
administrators of an individual;
"PIP" means the profit improvement plan to be implemented by the Business
and involving, among other things, a reduction in employees of the
Business;
"Plans" means a plan or plans established, organized and administered to
provide pensions for Employees and their beneficiaries and, where
applicable, includes:
(i) the assets and funds maintained to provide benefits under or
related to Plans; and
(ii) Plan Terms;
"Plan Terms" means the terms and conditions of all Plan texts and
amendments thereto;
"Power Products" means power supply, regulation and conversion products
excluding products (or components of products) whose principal function or
use is not power supply, regulation or conversion but which contain or
incorporate power circuitry, or power supply, regulation or conversion
components, including without limitation, printers and communications
circuit boards and servers;
-7-
"Power Vendors" means, collectively, the Vendor, Celestica Corporation and
Celestica Electronics (Shanghai) Co. Ltd.;
"Pre-Closing Tax Claims" has the meaning set out in Section 5.7(b);
"Purchase Price" has the meaning set out in Section 2.2;
"Purchase Price Adjustment Agreement" means the agreement dated the date
hereof between the Power Vendors, Celestica (Thailand) Limited, Celestica
Suzhou Technology Ltd., Celestica Parent, the Purchaser, C&D Parent, Datel
Electronic Technology (Shanghai) Co., Ltd. and Dynamo Acquisition Corp.
relating to, among other things, the adjustment of the Purchase Price;
"Purchased Entities" means, collectively, the Company and Dynamo Power
System (USA) LLC;
"Purchased Shares" means 100 common shares without nominal or par value in
the capital of the Company;
"Release" means a releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing
or dumping which is in breach of any Environmental Law or Environmental
Order;
"Shanghai Assets" means the assets that are to be sold to Datel Electronic
Technology (Shanghai) Co., Ltd. by Celestica Electronics (Shanghai) Co.
Ltd. pursuant to the Shanghai Purchase Agreement;
"Shanghai Purchase Agreement" means the asset purchase agreement dated the
date hereof between Celestica Electronics (Shanghai) Co. Ltd., Celestica
Parent, Datel Electronic Technology (Shanghai) Co., Ltd. and C&D Parent;
"Subsidiary" has the meaning attributed to that term in the OBCA;
"Suzhou Assets" means the assets that are to be sold to Dynamo Acquisition
Corp. by Celestica Suzhou Technology Ltd. pursuant to the Suzhou Purchase
Agreement;
"Suzhou Purchase Agreement" means the inventory purchase agreement dated
the date hereof between Celestica Suzhou Technology Ltd., Celestica
Parent, Dynamo Acquisition Corp. and C&D Parent;
"Tax Returns" means all returns, reports, declarations, elections,
notices, filings, information returns and statements filed or required to
be filed in respect of Taxes under all applicable Laws;
"Taxes" means all federal, provincial, state, local and foreign taxes,
governmental premiums and fees, levies and duties, including, but not
limited to income tax, profits tax, corporation tax, sales and use tax,
payroll tax, worker's compensation levy, capital tax, stamp duty, real and
personal property tax, land transfer tax, customs or excise duty,
-8-
excise tax, value added tax on goods sold or services rendered, sales tax,
harmonized sales tax, surtax, withholding tax, employer health tax,
payroll tax, education, social security and employment insurance charges,
health insurance and Canada and other government pension plan premiums or
contributions and any interest, fines, additions to tax and penalties
thereon, whether disputed or not;
"Tax Act" means the Income Tax Act (Canada), as amended from time to time;
"Third Party Claim" has the meaning set out in Section 8.4;
"Time of Closing" means the time at which the Closing occurs, which is
proposed to be 10:00 a.m. (Toronto time) on the Closing Date;
"Toronto Lease" means the lease by the Company from 1204362 Ontario Inc.
of certain premises at 0000 Xxxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx, to be
more particularly described in such lease, to be entered into by the
Company, 1204362 Ontario Inc., Celestica Parent and C&D Parent effective
at the Effective Time under the Canadian Drop-Down Agreement;
"U.S. Drop-Down" has the meaning set out in the U.S. Purchase Agreement;
"U.S. Drop-Down Agreement" has the meaning set out in the U.S. Purchase
Agreement; and
"U.S. Purchase Agreement" means the LLC interest purchase agreement dated
the date hereof between Celestica Corporation, Celestica Parent and C&D
Parent.
1.2 Currency.
Unless otherwise indicated, all dollar amounts referred to in this
Agreement are expressed in the lawful currency of the United States of America.
1.3 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, subsection, clause or a Schedule refers to the
specified section, subsection or clause of or Schedule to this Agreement.
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.
-9-
1.5 Accounting Principles.
Any reference in this Agreement to generally accepted accounting
principles refers to generally accepted accounting principles as approved from
time to time by the Canadian Institute of Chartered Accountants or any successor
institute.
1.6 Knowledge.
For the purposes of this Agreement, the knowledge of the Vendor or
the Company, with respect to any matter, shall mean the actual knowledge of
Xxxxx Xxxxxxx, Xxxx Xxxxxxx and Xxxxxx Xxxxxxxxxxxx, and the knowledge that such
individuals reasonably ought to have, with respect to such matter, after making
all reasonable inquiries in respect thereof.
1.7 Entire Agreement.
This Agreement, together with the Purchase Price Adjustment
Agreement, 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 Time of Essence.
Time shall be of the essence of this Agreement.
1.9 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 State of New York without regard to conflicts of
law principles, and each party hereby irrevocably and unconditionally submits to
the non-exclusive jurisdiction of the federal District Court for the Southern
District of New York and, if such court does not accept jurisdiction, of the
courts of the State of New York sitting in the Borough of Manhattan in The City
of New York, and all courts competent to hear appeals therefrom.
1.10 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.
1.11 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. No party may assign any of its
rights or obligations hereunder, without the
-10-
prior written consent of the other parties, provided that the Purchaser shall
have the right to assign its rights hereunder to any of its Affiliates. No such
assignment shall, however, relieve the Purchaser of any of its obligations
hereunder. The Vendor may, with the prior written consent of the Purchaser
(which consent shall not be unreasonably withheld), at any time prior to the
Time of Closing, sell, assign or otherwise transfer the Purchased Shares and
assign its rights and obligations under this Agreement to any Affiliate of the
Vendor, provided that notwithstanding any such assignment and assumption the
Vendor shall remain liable for all its obligations hereunder (other than the
obligation to sell the Purchased Shares to the Purchaser). Each of the parties
acknowledges that there are no third party beneficiaries of this Agreement.
1.12 Calculation of Time.
Unless otherwise specified, time periods within or following which
any payment is to be made or act is to be done shall be calculated by excluding
the day on which the period commences and including the day on which the period
ends. When the last day of any such time period is not a Business Day, such time
period shall be extended to the next Business Day following the day on which it
would otherwise end.
1.13 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.
1.14 Schedules.
The following Schedules are attached to and form part of this
Agreement:
Schedule 1.1(a) Canadian Drop-Down Agreement
Schedule 1.1(b) Financial Information
Schedule 3.1(k)(i) Permitted Encumbrances
Schedule 3.1(k)(ii) Excluded Assets
Schedule 3.1(n)(i) Intellectual Property
Schedule 3.1(n)(iii) Notice of Claims
Schedule 3.1(n)(v) Rights in Intellectual Property
Schedule 3.1(n)(vi) Exceptions
Schedule 3.1(q) Agreements and Commitments
Schedule 3.1(r) Licences
Schedule 3.1(s) Consents and Approvals
Schedule 3.1(u) Changes
Schedule 3.1(v) Leased Property
Schedule 3.1(w) Fixed Assets
Schedule 3.1(z) Accounts Receivable
Schedule 3.1(aa) Employees
Schedule 3.1(bb) Pension and Benefit Plans
Schedule 3.1(cc) Non-Arm's Length Contracts
-11-
Schedule 3.1(dd) Bank Accounts
Schedule 3.1(gg) Environmental Matters
Schedule 3.1(hh) Product Compliance and Warranty Claims
Schedule 3.1(jj) Litigation
Schedule 3.1(mm) Tax Matters
Schedule 3.1(nn) Customers and Suppliers
Schedule 5.3(d) Contractual Consents
Schedule 6.1(h)(i) Form of Corporate Non-Competition and Non-
Solicitation Agreement
Schedule 6.1(h)(ii) Form of Individual Non-Competition and Non-
Solicitation Agreement
Schedule 6.1(j) Form of Agreement for Manufacture
Schedule 6.1(k) Form of Transition Services Agreement
Schedule 6.1(l)(i) Form of U.S. Employee Services Agreement
Schedule 6.1(l)(ii) Form of Canadian Employee Services Agreement
Schedule 6.1 (m) Form of Toronto Lease
Schedule 6.1(n) Form of Shanghai Occupancy Agreement
ARTICLE 2
PURCHASE AND SALE
2.1 Purchase and Sale of Purchased Shares.
Subject to the terms and conditions hereof, the Vendor covenants and
agrees to sell, assign and transfer the Purchased Shares to the Purchaser, and
the Purchaser covenants and agrees to purchase the Purchased Shares from the
Vendor, effective at the Effective Time.
2.2 Purchase Price.
The purchase price payable by the Purchaser to the Vendor in respect
of the Purchased Shares (the "Purchase Price") shall be $16,000,000. At the Time
of Closing, the Purchaser shall pay $16,000,000 on account of the Purchase Price
to the Vendor (or as the Vendor may direct) by wire transfer of immediately
available funds in accordance with instructions delivered by the Vendor to the
Purchaser not less than two Business Days prior to the Closing Date, or in such
manner as the Vendor may in writing direct not less than two Business Days prior
to the Closing Date.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE VENDOR
3.1 Representations and Warranties of the Vendor.
The Vendor 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, regardless
of any independent investigation made by the Purchaser:
-12-
(a) Existence and Capacity. The Vendor is a corporation validly existing
under the laws of the Province of Ontario and has the corporate
power to enter into this Agreement and to perform its obligations
hereunder;
(b) Authorization. This Agreement has been duly authorized, executed and
delivered by the Vendor and is a legal, valid and binding obligation
of the Vendor, enforceable against the 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;
(c) No Other Agreements to Purchase. No Person other than the Purchaser
has any written or oral agreement or option or any right or
privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement or option for the purchase or acquisition from
the Vendor of any of the Purchased Shares or any of the assets to be
transferred to the Company pursuant to the Canadian Drop-Down
Agreement other than sales of products in the ordinary course of
business;
(d) Ownership of Purchased Shares. As at the Effective Time, the Vendor
will be the beneficial owner of record of the Purchased Shares, 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 will be subject to any voting trust,
shareholder agreement or voting agreement;
(e) No Violation. The execution and delivery of this Agreement by the
Vendor and Celestica Parent and the consummation by the Vendor of
the transaction of purchase and sale of the Purchased Shares herein
provided for do not result in the violation by the Vendor or
Celestica Parent of, or constitute a default under or conflict with:
(i) any provision of the constating documents or by-laws or
resolutions of the board of directors (or any committee
thereof) or shareholders of the Vendor or Celestica Parent;
(ii) any judgement, decree, order or award of any court,
governmental body or arbitrator having jurisdiction over the
Vendor or Celestica Parent; or
(iii) any law, statute, ordinance, regulation or rule applicable to
the Vendor or Celestica Parent;
(f) Organization of the Company. The Company is validly existing under
the laws of the Province of Nova Scotia and has the power to own or
lease its property and to carry on the portion of the Business
conducted by the Vendor as now being conducted by the Vendor. The
Company is duly registered or qualified to do business in each
jurisdiction in which the nature of the Business or the property and
assets owned or leased by it makes such qualification necessary,
except to the extent that failure to be so registered or qualified
would not reasonably be
-13-
expected to have a material adverse effect on the business,
financial condition or results of operations of the Company (a
"Material Adverse Effect");
(g) Authorized and Issued Capital. The authorized capital of the Company
consists of 1,000,000,000 common shares without nominal or par
value, of which (a) as of the date hereof, one common share without
nominal or par value has been validly issued and is outstanding as
fully paid and is legally owned by the Vendor and (b) prior to the
Effective Time, 100 common shares without nominal or par value will
be validly issued and outstanding as fully paid and will be legally
and beneficially owned by the Vendor. Immediately prior to the
Effective Time of the Canadian Drop-Down Agreement, the Vendor shall
be the sole shareholder of the Company. On the Closing Date, the
Purchased Shares shall constitute all of the issued and outstanding
shares in the capital of the Company;
(h) No Options. No Person has any agreement or option or any right or
privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement, including convertible securities, warrants or
convertible obligations of any nature, for the purchase,
subscription, allotment or issuance of any unissued shares or other
securities of the Company;
(i) Subsidiaries. The Company does not own or have 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, and the
Company does not have any agreements to acquire any other business
operations;
(j) No Violation by the Company. The execution and delivery of this
Agreement by the Vendor and the consummation by the Vendor of the
transaction of purchase and sale of the Purchased Shares herein
provided for do not result in the violation of, or constitute a
default under or conflict with or cause the acceleration of any
obligations of the Company under:
(i) any Material Contract;
(ii) any provision of the constating documents or by-laws or
resolutions of the board of directors (or any committee
thereof) or shareholders of the Company;
(iii) any judgment, decree, order or award of any court,
governmental body or arbitrator having jurisdiction over the
Company; or
(iv) any law, statute, ordinance, regulation or rule applicable to
the Company,
except, in the case of section (i), where such violation, default,
conflict or acceleration would not reasonably be expected to have a
Material Adverse Effect;
-14-
(k) Title to Personal and Other Property and Sufficiency of Assets.
(i) all of the property and assets owned by the Company
immediately after the Canadian Drop-Down and immediately prior
to the Closing will be owned beneficially by the Company with
a good and marketable title thereto, free and clear of all
Encumbrances, other than Permitted Encumbrances; and
(ii) the property and assets that will, immediately after the
Drop-Downs, be owned by the Purchased Entities or of which the
Purchased Entities will, immediately after the Drop-Downs and
immediately prior to the Closing, have the use in connection
with the operation of the Business, together with the Shanghai
Assets, the Suzhou Assets, the Asian Assets and the assets
identified in Schedule 3.1(k)(i), constitute all of the
property and assets necessary to operate the Business in
substantially the same manner as it is operated by the Power
Vendors on the date of this Agreement, and includes all
property and assets that were used either exclusively or
primarily in the operation of the Business prior to the
Closing;
(l) Real Property. The Company does not lease and has not agreed to
lease any real property prior to the Effective Time except pursuant
to the Toronto Lease;
(m) Owned Real Property. The Company is not the beneficial or registered
owner of and has not agreed to acquire any real property or any
interest in any real property;
(n) Intellectual Property.
(i) Attached hereto as Part 1 of Schedule 3.1(n)(i) is a complete
and accurate list of all registered or pending trade-marks,
trade-xxxx applications, trade names, business names, patents,
patent applications, registered copyrights, service marks,
brand names, domain names, url's and registered industrial
designs owned by the Vendor and used by it in the conduct of
the Business all of which will be transferred to the Company
pursuant to the Canadian Drop-Down Agreement (collectively,
the "Owned Intellectual Property"), including registration
numbers and dates in respect of any registrations or
applications for registration thereof. Attached as Part 2 of
Schedule 3.1(n)(i) is a complete list of all trade-marks,
patents, copyrights and software licensed to the Vendor, its
Affiliates or the Company for use in carrying on the Business
(collectively, the "Licensed Intellectual Property" and,
together with the Owned Intellectual Property, the
"Intellectual Property");
(ii) to the knowledge of the Vendor, there has been no infringement
or violation of the Company's or the Vendor's right in and to
the Owned Intellectual Property;
-15-
(iii) except as set out in Schedule 3.1(n)(iii), neither the Company
nor the Vendor has received written notice of any claim within
the 48 months immediately preceding the date hereof that the
use of the Owned Intellectual Property infringes or breaches
any industrial or intellectual property rights of any other
Person;
(iv) there are no interferences or other contested inter parties
proceedings either pending or, to the knowledge of the Company
and the Vendor, threatened, in any domestic or foreign patent
office in which the Vendor or the Company has filed an
application for registration of any patent included in Owned
Intellectual Property (an "Owned Patent"), or before any court
or administrative tribunal, relating to any pending
application with respect to any of the Owned Intellectual
Property. Each Owned Patent has been maintained and renewed by
the Vendor or the Company in all material respects in
accordance with all applicable provisions of law and
administrative regulations in all jurisdictions in which such
Owned Patent is registered;
(v) except as set forth in Schedule 3.1(n)(v) and except in
relation to the Licensed Intellectual Property, neither the
Company nor the Vendor has any obligation to compensate any
Person for the use of any of the Intellectual Property, nor
has the Company or the Vendor granted to any Person any
licence, option or other rights to use any of the Intellectual
Property in any manner, whether requiring the payment of
royalties or not;
(vi) except as set out in Schedule 3.1(n)(vi), immediately after
the Canadian Drop-Down the Company will own or have a valid
right to use the Intellectual Property; and
(vii) the Intellectual Property, together with the "Intellectual
Property" as defined in the U.S. Purchase Agreement, consists
of all of the Intellectual Property necessary for the
Purchased Entities to conduct the Business in all material
respects as presently conducted by the Vendor and Celestica
Corporation.
(o) Insurance. The Company has all of its property and assets insured
against loss or damage by all insurable hazards or risks on a
replacement cost basis and such insurance coverage will be continued
in full force and effect to and including the Time of Closing. The
Company is not in default with respect to any of the provisions
contained in any such insurance policy and has not failed to give
any notice or present any claim under any such insurance policy in a
due and timely fashion, except where such default would not, either
individually or collectively with other such defaults, reasonably be
expected to have a Material Adverse Effect;
-16-
(p) No Expropriation. No property or asset of the Company has been taken
or expropriated by any federal, provincial, state, municipal or
other authority nor has any notice or proceeding in respect thereof
been given or commenced;
(q) Material Contracts. Schedule 3.1(q) is a true and complete list of
all Material Contracts. All such Material Contracts are in good
standing and in full force and effect, and the Company is not in
breach, and there exists no condition, event or act which, with the
giving of notice or lapse of time or both, would constitute a breach
by the Company of any covenants, conditions or obligations contained
therein, except where such breach would not be reasonably expected
to have a Material Adverse Effect. The Company is not a party to or
bound by any Contract, the terms of which prevent the Company from
conducting the portion of the Business conducted by the Vendor as it
is currently conducted by the Vendor;
(r) Compliance with Laws; Licences. Each of the Vendor and the Company
has complied in all material respects with the Laws that are
applicable to it and, in the case of the Vendor, to the conduct or
operation of the Business and to the ownership or use by it of any
of its properties owned or used by it in its conduct of the
Business. Schedule 3.1(r) sets out a complete and accurate list of
all material governmental and regulatory licences, permits,
approvals, consents, certificates, registrations and authorizations
(the "Licences") held by or granted to the Vendor in the conduct the
Business. Such Licences collectively constitute all of the Licences
that will be necessary to permit the Company to lawfully conduct the
portion of the Business conducted by the Vendor in the manner in
which the Vendor conducts such portion of the Business, and to
permit the Company to own and use the properties to be transferred
to it under the Canadian Drop-Down Agreement in the manner in which
the Vendor currently owns and uses such properties in its conduct of
the portion of the Business conducted by it. All such Licences are
in good standing and the Company is not in default or breach of any
Licence in any material respect;
(s) Consents and Approvals. There is no requirement to make any filing
with, give any 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 by the Vendor of the transaction of purchase and
sale of the Purchased Shares contemplated by this Agreement except
for the filings, notifications, licences, permits, certificates,
registrations, consents and approvals described in Schedule 3.1(s)
or which relate solely to the identity of the Purchaser or the
nature of any business carried on by the Purchaser in respect of
which no representation or warranty is provided herein. There is no
requirement under any Material Contract listed in Schedule 3.1(q) to
give any notice to, or to obtain the consent or approval of, any
party to such Material Contract relating to the consummation of the
transactions contemplated by this Agreement except for the
notifications, consents and approvals described in Schedule 3.1(s);
(t) Financial Information.
-17-
(i) The Financial Information has been prepared in accordance with
internal accounting principles historically used in the
Business, which are in accordance with generally accepted
accounting principles, using the financial information
contained in, and the format of, the internal management
financial reports used by the current management of the
Business in the conduct of the Business. The Financial
Information accurately sets forth the results of the
operations of the Business throughout the periods covered
thereby, subject to adjustment for the PIP; and
(ii) except for the Assumed Liabilities, the Company does not have,
and will not have on the Closing Date any other liabilities;
and
(iii) prior to the Effective Time under the Canadian Drop-Down
Agreement the Company will not have had any liabilities or
obligations and will not have owned or held any property or
assets or any interests therein of any nature or kind
whatsoever, other than cash, and will not have carried on any
business;
(u) Absence of Changes. Except as disclosed in Schedule 3.1(u), during
the period after August 20, 2004 to the date of this Agreement, no
material adverse change has occurred in any of the assets, business,
financial condition or results of operation of the Business;
(v) Leases of Personal Property. Schedule 3.1(v) sets forth a true and
complete list in all material respects of the leases, licences and
agreements relating to personal property and fixtures leased by or
licensed to the Vendor in the conduct by the Vendor of the Business
which leases or licences will be assigned or sublicensed to the
Company;
(w) Fixed Assets. Schedule 3.1(w) lists, in all material respects, all
of the tangible assets, machinery, equipment, vehicles, furniture,
office equipment, computer hardware and software that will be owned
by the Company immediately after the Canadian Drop-Down and wherever
situate;
(x) Condition of Assets. All the property and assets listed in Schedules
3.1(v) and 3.1(w) are in operating condition, having regard to the
use and age thereof, except only for reasonable wear and tear;
(y) Inventories. Except as disclosed in Schedule 3.1(u), the raw
materials, work-in-process and finished goods inventories owned by
the Vendor and used by it in the conduct by it of the portion of the
Business carried on by it which are to be transferred to the Company
pursuant to the Canadian Drop-Down Agreement are of a quality and
quantity that is useable or saleable in the ordinary course of the
Business, are fit for the purposes for which they are intended
(except to the extent, if any, written down to net realizable value
on the Financial Information) and are carried on the books of the
Vendor (and will be reflected on the Audited Closing
-18-
Date Statement for the transaction of purchase and sale contemplated
hereunder) at the lower of cost and net realizable value. Such
inventories are labelled and stored in compliance in all material
respects with applicable Laws;
(z) Accounts Receivable and Prepaid Expenses. Schedule 3.1(z) sets forth
a detailed list of the Accounts Receivable as at September 15, 2004,
which list was true and correct as of such date. The Accounts
Receivable set out in Schedule 3.1(z) are bona fide, good and
legally enforceable. Except as set out in Schedule 3.1(z), the
Vendor does not have any prepaid expenses relating to its conduct of
the Business as at September 15, 2004. All accounts receivable of
the Vendor relating to the portion of the Business conducted by the
Vendor immediately prior to the Effective Time will be transferred
to the Company pursuant to the Canadian Drop-Down Agreement;
(aa) Employment Matters.
(i) Schedule 3.1(aa) contains a complete and accurate list of all
employees of the Vendor whose employment will be transferred
to and assumed by the Company pursuant to the Canadian
Drop-Down Agreement (the "Employees"), their respective
positions, current salaries, bonuses, sales incentives and
other remunerations with the Vendor, and all stock options,
dates of last salary increases, and dates of hire with the
Vendor. For greater certainty, none of the Leave Employees
will be included among the Employees;
(ii) except as disclosed in Schedule 3.1(aa) and except for written
offer letters which do not (i) specify a fixed or minimum
period of employment, or (ii) contain any provisions regarding
notice of dismissal or payment in lieu thereof, the Company is
not currently a party to any written agreements with any
Employees;
(iii) all liabilities of the Vendor in respect of the Employees,
including insurance premium contributions and assessments for
employment insurance, employer health tax, Canada Pension
Plan, income tax, workers' compensation and any other
employment related legislation, wages, Taxes, salaries,
commissions and employee benefit plan payments, in each case
which have become due and payable prior to the date hereof
have been paid in full and all such liabilities which become
due and payable prior to the Closing Date will have been paid
in full on or prior to the Closing Date or will be reflected
as an accrued liability on the Audited Closing Date Statement
for the transaction of purchase and sale contemplated
hereunder;
(iv) except as disclosed in Schedule 3.1(aa), there are no
outstanding, pending, or, to the Vendor's knowledge,
threatened, actions, claims, complaints, demands, orders,
prosecutions or suits against the Company or the Vendor or any
of their respective directors or officers in respect of the
-19-
employment of the Employees in the conduct by the Vendor of
the portion of the Business conducted by it, pursuant to or
under any applicable rules, regulations, orders or laws
relating to employment, including Canada Pension Plan,
employment insurance, employment standards, labour relations,
occupational health and safety, human rights, workers'
compensation or pay equity laws; and
(v) all vacation pay, bonuses and commissions and other amounts
paid or payable by the Vendor to the Employees in connection
with their employment are accurately reflected in the
financial records of the Vendor and will be so reflected on
the financial records of the Company after the Canadian
Drop-Down;
(bb) Pension and Benefit Matters. Schedule 3.1(bb) contains a complete
and accurate list of all Plans. All Pension Documents delivered to
the Purchaser are true, correct, complete and, where applicable,
up-to-date;
(cc) Contracts with Non-Arm's Length Persons. Except as set forth in
Schedule 3.1(cc), there are no existing contracts or arrangements to
which the Company will, immediately following the Canadian
Drop-Down, be a party or by which the Company will be bound in which
the Vendor, any director or officer of the Company or any other
Person not dealing at arm's length with the Vendor, the Company or
any director or officer of the Company, has an interest, whether
directly or indirectly, including, without limitation, arrangements
for the payment of management or consulting fees of any kind
whatsoever;
(dd) Bank Accounts, etc. Schedule 3.1(dd) sets forth the name of each
bank or other depository at which the Company will, immediately
after the Canadian Drop-Down, maintain any bank account, trust
account or safety deposit box and the names of all Persons
authorized to draw thereon or who have authorized access thereto;
(ee) Absence of Guarantees. The Company has not given or agreed to give,
or will immediately following the Canadian Drop-Down, be a party to
or bound by, any guarantee of indebtedness, indemnity, bond or
suretyship or other obligations of another Person or Persons or any
other commitment by which the Company is or will be, or is or will
be contingently, responsible for such indebtedness or other
obligations except as specifically provided for or referred to in
this Agreement or in any schedule hereto;
(ff) Corporate Records. The minute books of the Company contain, and will
contain at the Closing Date, accurate and complete minutes of all
meetings and resolutions of its directors and shareholders held
since the date of its incorporation. All resolutions of the Company
were duly passed and all meetings of the Company were duly held, and
the Company's share certificate book and share certificate register
are, and will at the Closing Date be, complete and accurate and
shall reflect all transactions contemplated by this Agreement;
-20-
(gg) Environmental Matters.
(i) Except as disclosed in Schedule 3.1(gg), the portion of the
Business conducted by the Vendor has been and is being carried
on by the Vendor and the processes and undertakings of the
Vendor relating to such portion of the Business have been and
are being conducted in all material respects in compliance
with all applicable Environmental Laws and Environmental
Orders. To the Vendor's knowledge, there is no fact which
would reasonably be expected to give rise to a notice by a
Governmental Authority to the Company of non-compliance with
any Environmental Laws or Environmental Orders;
(ii) the Environmental Permits held by the Vendor and listed in
Schedule 3.1(gg) constitute all Environmental Permits which
are required for the operation by the Vendor of the portion of
the Business as it is presently being conducted by the Vendor.
All such Environmental Permits are valid and in full force and
effect and the Vendor is not, in connection with the operation
of the portion of the Business conducted by it, in material
breach thereof and no proceedings are pending or, to the
Vendor's knowledge, threatened to revoke or limit any of the
Environmental Permits;
(iii) except as disclosed in Schedule 3.1(gg), to the Vendor's
knowledge, the Vendor has not caused or permitted the Release
of any Hazardous Substances used in the conduct of the portion
of the Business conducted by the Vendor on or off-site from
the location from which the Vendor conducts such portion of
the Business as at the Closing Date or any other place or
places from which the Vendor conducts the portion of the
Business conducted by it, and all such Hazardous Substances
disposed of, treated or stored by the Vendor in relation to
the portion of the Business conducted by the Vendor have been
disposed of, treated and stored in material compliance with
all Environmental Laws;
(iv) the Vendor and the Company have provided to the Purchaser full
and complete copies of (a) any hazardous waste shipping
manifests for the portion of the Business conducted by the
Vendor from its current location for the past three years, (b)
any Environmental Permits in connection with the portion of
the Business conducted by the Vendor from its current location
(including, without limitation, air, water and waste permits),
and (c) any hazardous waste generation reports to Governmental
Entities for the portion of the Business conducted by the
Vendor from its current location, to the extent any of the
foregoing are in their respective possession, custody or
control and relate to environmental conditions and
environmental compliance of the portion of the Business
conducted by the Vendor from its current location. The only
chemicals used and stored at the Vendor's current location in
respect of the portion of the Business conducted by the Vendor
are nominal amounts of lead solder and flux; and
-21-
(v) there has never been a conviction of an offence for
non-compliance with any Environmental Law or a fine imposed or
a sentence or settlement of any prosecution in respect of any
Environmental Law in connection with the conduct of the
Business by the Vendor.
The representations and warranties in this Section 3.1(gg) are the
only representations and warranties of the Vendor with respect to
environmental matters including, without limitation, with respect to
Environmental Laws, Hazardous Substances, Environmental Orders or
Environmental Permits, and all other representations and warranties
of the Vendor in this Agreement shall be interpreted in a manner
consistent with such limitations;
(hh) Product Compliance and Warranties. Except as set forth in Schedule
3.1(hh) and Schedule 3.1(u), in the last 12 months no product
warranty, product defect or similar claim in an amount in excess of
$100,000 has been made against the Company or the Vendor or against
any of the other Power Vendors with respect to any Power Products
sold by the Vendor or any of the other Power Vendors in the course
of conducting the Business;
(ii) Books and Records. The books and records of the Company accurately
set out and disclose the financial position of the Company as at the
date of such books and records;
(jj) Litigation. Except as described in Schedule 3.1(jj), there are no
actions, suits or proceedings (whether or not purportedly on behalf
of the Company or the Vendor or any of the other Power Vendors)
pending or, to the Vendor's knowledge, threatened against or
affecting the Company or the Vendor or any of the other Power
Vendors (to the extent resulting from the conduct of the Business),
at law or in equity or before or by any federal, provincial, state,
municipal or other governmental department, court, commission,
board, bureau, agency or instrumentality, domestic or foreign, or by
or before an arbitrator or arbitration board;
(kk) Collective Agreements. Neither the Company nor the Vendor (with
respect to the conduct of the portion of the Business conducted by
it) has entered into any Contracts with any labour union or employee
association. To the Vendor's knowledge, there are not any current
attempts to organize or establish any labour union or employee
association with respect to any Employees, nor is there any
certification of any such union with regard to a bargaining unit;
(ll) Residency. The Vendor is not a non-resident of Canada for purposes
of the Tax Act;
(mm) Tax Matters.
(i) Since the date of incorporation of the Company to the Time of
Closing:
-22-
(A) except as set out on Schedule 3.1(mm), the Company has
not filed or been required to file any Tax Returns;
(B) no payment, instalment or remittance of Taxes has become
due and payable by the Company;
(C) there are no outstanding waivers or agreements to extend
the statutory period of limitations applicable to the
assessment of any Taxes or deficiencies against the
Company;
(D) neither the Company nor the Vendor has received any
written notice that any claim has been made by any
foreign Governmental Entity that the Company is subject
to taxation by that jurisdiction; and
(E) the Company is and has been a disregarded entity for
U.S. federal Tax purposes within the meaning of Treasury
Regulation Section 301.7701-3(b)(2)(C); and
(ii) as at the Effective Time under the Canadian Drop-Down
Agreement, the Company will be duly registered under
subdivision (d) of Division V of Part IX of the ETA with
respect to the GST;
(nn) Customers and Suppliers. Except as set out in Schedule 3.1(nn),
neither the Company nor the Vendor has received written notice from
any current customer or supplier of the Business, threatening to
cancel or otherwise terminate such customer's or supplier's
relationship with the Company or the Vendor (with respect to the
Vendor's conduct of the Business), nor does the Vendor have
knowledge of any such threat;
(oo) Dividends. The Company has never, directly or indirectly, declared
or paid any dividends or declared or made any other distribution on
any of its shares of any class and the Company has not directly or
indirectly redeemed, purchased or otherwise acquired any of its
outstanding shares of any class or agreed to do so; and
(pp) Full Disclosure. None of the foregoing representations and
statements of fact contains any untrue statement of a material fact
or omits to state any material fact necessary to make any such
statement or representation not misleading.
Between the date of this Agreement and the Closing Date, the
Purchaser shall promptly notify the Vendor in writing if it becomes aware (a)
that any representation or warranty of the Vendor is incorrect or inaccurate, or
(b) of the occurrence after the date of this Agreement of any fact or condition
that would be reasonably likely to result in any representation or warranty of
the Vendor being incorrect or inaccurate had such representation or warranty
been made as of the time of the occurrence of, or the Purchaser's discovery of,
such fact or condition. No knowledge of the Purchaser shall, however, be implied
solely as a result of the due diligence investigations undertaken by or on
behalf of the Purchaser or its Affiliates prior to Closing.
-23-
3.2 Survival of Representations and Warranties of the Vendor.
The representations and warranties of the Vendor 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 March 31, 2006, unless a bona fide notice of a claim
shall have been made in writing before such date, in which case the
representation and warranty to which such notice applies shall survive in
respect of that claim until the final determination or settlement of the claim,
and, notwithstanding such closing nor any investigation made by or on behalf of
the Purchaser, shall continue in full force and effect for the benefit of the
Purchaser during such period, except that:
(a) the representations and warranties set out in Section 3.1(mm) shall
survive for a period of ninety days after the relevant authorities
shall no longer be entitled to assess liability for Tax against the
Company for any particular taxation year ended on or prior to the
Closing Date unless a bona fide notice of a claim shall have been
made in writing before such date, in which case the representation
and warranty to which such notice applies shall survive in respect
of that claim until the final determination or settlement of the
claim and, notwithstanding such closing nor any investigation made
by or on behalf of the Purchaser, shall continue in full force and
effect for the benefit of the Purchaser during such period;
(b) the representations and warranties set out in Section 3.1(gg) shall
survive and continue in full force and effect for a period of five
years following the Closing Date unless a bona fide notice of a
claim shall have been made in writing before such date, in which
case the representation and warranty to which such notice applies
shall survive in respect of that claim until the final determination
or settlement of the claim and, notwithstanding such closing nor any
investigation made by or on behalf of the Purchaser, shall continue
in full force and effect for the benefit of the Purchaser during
such period;
(c) the representations and warranties set out in Sections 3.1(a),
3.1(b) and 3.1(d), the first sentence of Sections 3.1(f) and 3.1(g),
and Section 3.1(k)(i) (and the corresponding representations and
warranties set out in the certificates delivered on behalf of the
Vendor pursuant to Section 6.1(a)) shall survive and continue in
full force and effect without limitation of time; and
(d) a claim for any breach of any of the representations and warranties
contained in this Agreement or in any agreement, instrument,
certificate or other document executed or delivered pursuant hereto
involving fraud or fraudulent misrepresentation may be made at any
time following the Closing Date, subject only to applicable
limitation periods imposed by law.
-24-
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
4.1 Representations and Warranties.
The Purchaser represents and warrants to the Vendor as follows and
acknowledges and confirms that the Vendor is relying on such representations and
warranties in connection with the sale by the Vendor of the Purchased Shares:
(a) Existence and Capacity. The Purchaser is an unlimited liability
company validly existing under the laws of the Province of Nova
Scotia and it has the corporate power to enter into this Agreement
and perform its obligations hereunder;
(b) Financial Ability. The Purchaser will, on the Closing Date, have the
financial means to satisfy its obligation under Section 2.2 to pay
the Purchase Price to the Vendor, and the performance of such
obligation is not subject to any requirement for the Purchaser or
its Affiliates to provide any notice, obtain any consent or approval
or meet any financial or other test;
(c) 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 Vendor 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;
(d) No Violation. The execution and delivery of this Agreement by the
Purchaser and C&D Parent and the consummation by the Purchaser of
the transaction of purchase and sale of the Purchased Shares
provided for herein do not result in the violation by the Purchaser
or C&D Parent of, or constitute a default under or conflict with:
(i) 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 or C&D Parent; (ii) any judgment,
decree, order or award of any court, governmental body or arbitrator
having jurisdiction over the Purchaser or C&D Parent; or (iii) any,
law, statute, ordinance, regulation or rule applicable to the
Purchaser or C&D Parent, except where such violation, default or
conflict would not prevent or prohibit consummation by the Purchaser
or C&D Parent of the transactions provided for herein; and
(e) Consents and Approvals. There is no requirement for the Purchaser or
C&D Parent to make any filing with, give any notice to or obtain any
licence, permit, certificate, registration, authorization, consent
or approval of, any governmental or regulatory authority as a
condition to the lawful consummation by the Purchaser of the
transaction of purchase and sale of the Purchased Shares
contemplated by this Agreement.
-25-
4.2 Survival of Representations and Warranties of the Purchaser.
The representations and warranties of 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 for a period of one year after the Closing Date
unless a bona fide notice of a claim shall have been made in writing before the
expiry of that period, in which case the representation and warranty to which
such notice applies shall survive in respect of that claim until the final
determination or settlement of the claim, and, notwithstanding such closing nor
any investigation made by or on behalf of the Vendor, shall continue in full
force and effect for the benefit of the Vendor during such period, except that:
(a) the representations and warranties set out in Sections 4.1(a) and
4.1(c) (and the corresponding representations and warranties set out
in the certificates delivered on behalf of the Purchaser pursuant to
Section 6.2(b) shall survive and continue in full force and effect
without limitation of time; and
(b) a claim for any breach of any of the representations and warranties
contained in this Agreement or in any agreement, instrument,
certificate or other document executed or delivered pursuant hereto
involving fraud or fraudulent misrepresentation may be made at any
time following the Closing Date, subject only to applicable
limitation periods imposed by law.
ARTICLE 5
COVENANTS
5.1 Access to the Company.
From the date hereof until the Time of Closing, the Vendor shall
make available to the Purchaser and its authorized representatives all title
documents, Contracts, financial statements, minute books, share certificate
books, share registers, plans, reports, licences, orders, permits, books of
account, accounting records, constating documents and all other documents,
information and data of the Company and the Vendor with respect to its portion
of the Business. The Vendor shall cause the Company to afford the Purchaser and
its authorized representatives reasonable access during normal business hours to
the Business and the senior management of the Company and the property, assets,
records and documents of the Company and the Vendor with respect to its portion
of the Business, which access will not include any right to conduct any invasive
investigation or to disrupt the Business and shall be conducted in accordance
with any reasonable requirements of the Vendor and the Company.
5.2 Delivery of Books and Records.
At the Time of Closing the Vendor shall deliver to the Purchaser all
of the books and records of the Company. Following the Time of Closing, the
Vendor shall permit the Purchaser to have access (including without limitation
by electronic means) to the books and records of the Vendor relating to the
Business. Each of the Purchaser and the Vendor agrees that it will preserve the
books and records so delivered to it (or retained by it, as the case may be) for
a period of six years from the Closing Date, or for such longer period as is
required by any
-26-
applicable Law, and will permit the other or its authorized representatives
reasonable access thereto in connection with the affairs of the other relating
to its matters. If, at any time during the three-month period prior to the
expiration of the applicable period referred to in the preceding sentence, the
Purchaser or Vendor, as the case may be, (in either case, the "notifying party")
provides written notice to the other that the notifying party wishes to make a
copy of or repossess all or part of the books and records, or the notifying
party, at any time and from time to time, provides written notice to the other
that the notifying party wishes to make a copy of all or part of such books and
records, the other party will provide the notifying party with an opportunity to
make such copies of such books and records within a reasonable period of time or
repossess such books and records within 30 days following the expiration of the
applicable period referred to in the preceding sentence, as the case may be.
5.3 Conduct Prior to Closing.
Without in any way limiting any other obligations of the Vendor
hereunder, during the period from the date hereof to the Time of Closing:
(a) Conduct Business in the Ordinary Course. The Vendor shall use
reasonable commercial efforts to conduct the portion of the Business
conducted by it in the ordinary and normal course of business
consistent with past practice (other than changes to the conduct of
the business arising out of the implementation of the PIP), and to
prevent the Company, without the prior written consent of the
Purchaser, from entering into any transaction or refrain from doing
any action which, if effected before the date of this Agreement,
would constitute a breach of any representation, warranty, covenant
or other obligation of the Vendor contained herein. Without limiting
the generality of the foregoing, and except in connection with the
implementation of the PIP, the Vendor shall not make any material
changes to the terms of employment of any of the Employees or grant
salary increases other than in the ordinary course, consistent with
past practices in the Business, or to terminate any of the
Employees' employment other than for just cause, in each case unless
requested by the Purchaser in writing to do so;
(b) Continue Insurance. The Vendor shall use reasonable commercial
efforts to maintain in full force and effect all policies of
insurance or renewals thereof related to its conduct of the Business
now in effect, shall take out, at the expense of the Purchaser, such
additional insurance as may be reasonably requested by the Purchaser
and shall give all notices and present all claims under all policies
of insurance in a due and timely fashion;
(c) Regulatory Consents. The Vendor shall use reasonable commercial
efforts to obtain, at or prior to the Time of Closing, from all
appropriate federal, provincial, state, municipal or other
governmental or regulatory bodies, the licences, permits, consents,
approvals, certificates, registrations and authorizations described
in Schedule 3.1(s);
(d) Contractual Consents. The Vendor shall use reasonable commercial
efforts to give or obtain the notices, consents and approvals
described in Schedule 5.3(d);
-27-
(e) Preserve Goodwill. The Vendor shall use reasonable commercial
efforts (i) to preserve intact the portion of the Business it
conducts and its property, assets, operations and affairs relating
to such portion of the Business and to cause the portion of the
Business conducted by it to be carried on as currently conducted,
and (ii) to preserve for the Purchaser the goodwill of suppliers,
customers and others having business relations with the portion of
the Business that the Vendor conducts; and
(f) Corporate Action. The Vendor shall use reasonable commercial efforts
to take and cause the Company to take all necessary corporate
action, steps and proceedings to complete the transfer of the
Purchased Shares to the Purchaser and to cause all necessary
meetings of directors and shareholders of the Vendor and the Company
to be held for such purpose.
5.4 Delivery of Documents.
Upon Closing, the Vendor shall deliver to the Purchaser all
necessary transfers, assignments and other documentation reasonably required to
transfer the Purchased Shares to the Purchaser with a good and marketable title,
free and clear of all Encumbrances.
5.5 Employee Plans.
Subject to the completion of the purchase and sale of the Purchased
Shares pursuant to this Agreement, effective as of the Effective Time, the
Employees shall cease participation in the Employee Plans. The Purchaser agrees
that it will, or will cause the Company to, establish plans for the Employees in
respect of their employment by the Company from and after the Effective Time.
5.6 Use of Name.
The Purchaser agrees that it shall as soon as practicable after the
Time of Closing and in any event no later than March 22, 2005, cause the Company
to cease any use of the name "Celestica" or any logos, trade-marks or
derivatives thereof (other than the letters "CPS" which the Purchaser and its
Affiliates shall be entitled to use without limitation by Celestica Parent or
any of its Subsidiaries) in the style or manner in which it represents itself or
conducts its business, including without limitation in the labelling or
packaging of products and goods sold by the Company, and on its letterhead,
invoices and other stationery; provided that the Purchaser shall, or shall cause
the Company to, notify the Company's component vendors within 45 days of the
Closing Date to cease branding product components with the "Celestica" name, or
any logos, trade-marks or derivatives thereof (other than the letters "CPS"
which the Purchaser and its Affiliates shall be entitled to use without
limitation by Celestica Parent or any of its Subsidiaries).
5.7 Tax Matters.
(a) The Vendor shall cause to be prepared and filed on a timely basis, all
Tax Returns for the Company for any taxation period which ends on or before the
Effective Time and for which Tax Returns have not been filed. The Purchaser
shall be given a reasonable period of time
-28-
to review and comment on such Tax Return prior to the due date for the filing
thereof. The Purchaser shall cause to be prepared and filed on a timely basis,
all Tax Returns of the Company for periods beginning at or before and ending
after the Effective Time. The Vendor and the Purchaser shall cooperate fully
with each other and make available to each other in a timely fashion such data
and other information as may reasonably be required for the preparation of any
Tax Return of the Company for a period ending on, prior to or including the
Closing Date and shall preserve such data and other information until the
expiration of any applicable limitation period under any applicable Law with
respect to Taxes.
(b) The Purchaser shall notify the Vendor in writing within 60 days of
receipt by the Company (or any successor thereto) of notice of any proceedings,
investigations, audits or Claims relating to a Tax Return prepared by the Vendor
pursuant to Section 5.7(a) for any taxation year of the Company ending on or
before the Effective Time ("Pre-Closing Tax Claims"). The Vendor shall, at its
own expense, have the sole right, with counsel of its choice, to represent the
interests of the Company in the name of the Company (or any successor thereto)
in any negotiation or proceeding regarding a Pre-Closing Tax Claim, including
settlement or other disposition thereof. The Vendor will not consent to any such
settlement or disposition without first consulting in good faith with the
Purchaser. The Purchaser agrees that it will co-operate with, and will cause the
Company to co-operate with, and will cause its and the Company's auditors,
accountants and counsel to provide reasonable co-operation to, the Vendor and
its counsel in the defence or compromise of any such Pre-Closing Tax Claim.
(c) The Vendor shall not, and until the Time of Closing, the Company shall
not, make any election (other than those set out on Schedule 3.1(mm)) in respect
of Taxes that could reasonably be expected to affect the Purchaser's or the
Company's liability for Taxes for any period commencing after the Effective Time
without the consent of the Purchaser.
(d) The Vendor and the Purchaser agree to allocate $1.00 of the Purchase
Price to the agreement described in Section 6.1(h)(i) and further agree to elect
jointly under paragraph 56.4(3)(c) of the Tax Act in respect of such allocation.
5.8 Product Warranty Claims.
After the Closing Date the Vendor shall continue to be responsible
for all Claims made by customers of the Business under the product warranties
provided by the Vendor in respect of products sold by the Vendor in the conduct
of the Business prior to the Effective Time (but not in respect of any products
sold or delivered by the Company after the Effective Time), in each case
accordance with such product warranties.
5.9 Shanghai Employees.
Between the date hereof and the Closing Date, the Vendor shall
assist Datel Electronic Technology (Shanghai) Co., Ltd. in its efforts to employ
the employees of the Business in Shanghai, provided that it shall not be
required to incur any cost or expense in using such efforts.
-29-
5.10 Leave Employees.
The Purchaser shall cause the Company to offer employment to Leave
Employees who present themselves for work with the Company within six months of
the Closing Date (the "Leave Expiry Date"), or for Leave Employees on statutory
leave, within such later period as is prescribed by law, on the same terms and
conditions of employment as are applicable to the Employees who are employed by
the Company (or its successors) at the time of the Leave Employees' respective
return to work, which employment, if accepted, shall be effective upon their
respective return to work (any such Leave Employee who accepts such offer of
employment being herein referred to as a "Transferred Employee"). Until the
earliest to occur of (i) the date on which a Leave Employee becomes a
Transferred Employee and (ii) the Leave Expiry Date, a Leave Employee shall
remain employed by the Vendor and shall continue to receive benefits under the
Vendor's Plans.
5.11 Insurance.
The Vendor shall, from time to time, upon receipt of the written
direction of the Purchaser, make claims under the Vendor's policies of insurance
with respect to product liability claims asserted against the Company in respect
of the manufacture of Power Products by the Vendor prior to the Closing Date,
and, without duplication of any payments made by or on behalf of the Vendor (or
any successors) arising out of a claim for indemnity under Section 8.1(e), upon
receipt by the Vendor of proceeds paid by the insurer under such policies of
insurance, shall pay such proceeds to the Company. Any direction delivered by
the Purchaser pursuant to this Section 5.11 shall set out in reasonable detail
the nature of the claim asserted against the Company.
5.12 Survival of Covenants.
All of the covenants of any of the parties contained in this
Agreement (with the exception of those that, by their terms, are to be fulfilled
on or before Closing) shall survive the Closing indefinitely.
ARTICLE 6
CONDITIONS OF CLOSING
6.1 Conditions of Closing in Favour of the Purchaser.
The sale and purchase of the Purchased Shares 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 Time of Closing:
(a) Representations and Warranties. The representations and warranties
of the Vendor contained in Article 3 of this Agreement shall be true
and correct in all material respects at the Time of Closing, with
the same force and effect as if such representations and warranties
were made at and as of such time, except to the extent that such
representations and warranties are made as of a specified date, in
which case such representations and warranties shall have been true
and correct in all material respects as of the specified date, and a
certificate of a senior officer of
-30-
the Vendor dated the Closing Date to that effect shall have been
delivered to the Purchaser;
(b) Covenants. All of the terms, covenants and conditions of this
Agreement to be complied with or performed by the Vendor or the
Company at or before the Time of Closing shall have been complied
with or performed in all material respects and a certificate of a
senior officer of each of the Vendor and the Company dated the
Closing Date to that effect shall have been delivered to the
Purchaser;
(c) Regulatory Consents. There shall have been obtained, from all
appropriate federal, provincial, municipal or other governmental or
administrative bodies, such licences, permits, consents, approvals,
certificates, registrations and authorizations as are required to be
obtained by the Vendor to permit the change of ownership of the
Purchased Shares contemplated hereby including, without limitation,
those described in Schedule 3.1(s);
(d) Contractual Consents. The Vendor shall have given the notices, and
obtained the consents and approvals required under the Lease dated
March 12, 1985, between Xxxx/Intereal Portland and OECO Corporation
as amended by the First Amended and Restated Sublease dated April 1,
1996, between OECO Corporation and VXI Electronics, Inc. and by the
first amendment to the First Amended and Restated Sublease dated
April 30, 1999, between OECO Corporation and VXI Electronics, Inc.
and by the second amendment to the First Amended and Restated
Sublease dated June 1, 1999, between OECO and VXI Electronics, Inc.,
in each case in form and substance satisfactory to the Purchaser,
acting reasonably;
(e) Opinion of Counsel to the Vendor. The Purchaser shall have received
an opinion dated the Closing Date from counsel for the Vendor in
such form and as to such matters as the Purchaser or its counsel may
reasonably request, provided that, insofar as the opinions expressed
in such opinion are based on matters of fact, such opinions may be
based upon certificates of the Vendor, public officials and officers
of the Vendor or the Company and, as to matters involving the laws
of jurisdictions in which such counsel is not qualified to practice,
on opinions of recognized local counsel in such jurisdictions;
(f) 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 contemplated
hereby;
(g) Resignation of Directors and Officers. Such directors and officers
of the Company as the Purchaser may designate by notice in writing
given to the Vendor at least three Business Days prior to the
Closing Date shall have resigned in favour of nominees of the
Purchaser effective as of the Time of Closing;
(h) Non-Competition and Non-Solicitation Agreements.
(i) The Vendor and those Affiliates named therein shall have
executed and delivered in favour of the Purchaser and the
Company a non-competition
-31-
and non-solicitation agreement in the form attached as
Schedule 6.1(h) hereto; and
(ii) each of Xxxxx Xxxxxxx and Xxxxxx Xxxxxxxxxxxx shall have
executed and delivered a non-competition and non-solicitation
agreement substantially in the form attached as Schedule
6.1(h)(ii) hereto;
(i) U.S., Asian and Shanghai Purchase Agreements. The transactions
contemplated by the U.S. Purchase Agreement, the Asian Purchase
Agreement and the Shanghai Purchase Agreement shall have been
completed concurrently with the closing of the transactions
contemplated hereby;
(j) Agreement for Manufacture. Celestica Hong Kong Limited shall have
entered into an agreement for manufacture with Dynamo Power System
(USA) LLC in the form attached as Schedule 6.1(j) hereto (the
"Agreement for Manufacture");
(k) Transition Services Agreement. Celestica Corporation shall have
entered into a transition services agreement with the Company and
Dynamo Power System (USA) LLC in the form attached as Schedule
6.1(k) hereto;
(l) Employee Services Agreements. The Vendor and Celestica Parent shall
have entered into an Employee Services Agreement with the Company
and C&D Parent, and Celestica Corporation and Celestica Parent shall
have entered into an Employee Services Agreement with Dynamo Power
System (USA) LLC and C&D Parent, in the forms attached as Schedules
6.1(l)(i) and 6.1(l)(ii), respectively;
(m) Toronto Lease. The Company, 1204362 Ontario Inc. and Celestica
Parent shall have entered into the Toronto Lease in the form
attached as Schedule 6.1(m) hereto;
(n) Shanghai Occupancy Agreement. Omni Electronics (Shanghai) Co. Ltd.
shall have entered into an occupancy agreement with Datel Electronic
Technology (Shanghai) Co., Ltd. in the form attached as Schedule
6.1(n) hereto;
(o) Drop-Downs. The Drop-Downs shall have occurred on the Closing Date;
and
(p) Material Adverse Change. Between the date hereof and the Effective
Time, no event or condition shall have occurred which shall have
materially and adversely affected the ability of Celestica Hong Kong
Limited to continue to produce products for Dynamo Power System
(USA) LLC and its Affiliates under the Agreement for Manufacture
immediately following the Closing in substantially the same manner
and for substantially the same volumes as such products had been
produced in the operation of the Business in the twelve-month period
ending on the Closing Date, and, should such event or condition have
occurred, neither Celestica Hong Kong Limited nor any of its
Affiliates shall have presented to Dynamo Power System (USA) LLC or
any of its Affiliates a plan, satisfactory to Dynamo Power System
(USA) LLC or its relevant Affiliates, acting reasonably,
-32-
within five Business Days of the occurrence of such event or
condition which would be reasonably expected to address the problem
created by such event or condition within 30 days of its approval by
Dynamo Power System (USA) LLC or such Affiliate, in which event the
Closing Date shall be deferred to the first Business Day following
the date on which such plan is fully implemented, provided, that if
such plan is not fully implemented within such 30-day period, the
condition of Closing described in this Section 6.1(p) shall not have
been performed or fulfilled, and the Purchaser shall have the rights
described in the paragraph below.
If any of the conditions contained in this Section 6.1 shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
the Purchaser, acting reasonably, the Purchaser may, by notice to the Vendor,
terminate this Agreement and the obligations of the Vendor and the Purchaser
under this Agreement other than the obligations contained in Section 9.1 shall
be terminated. If the Purchaser or any of its representatives or agents is
aware, on or prior to the Closing, that a representation or warranty of the
Vendor is incorrect or inaccurate or a covenant or obligation of the Vendor to
be performed on or prior to the Time of Closing is breached or not performed and
the Purchaser proceeds with the Closing, the Purchaser shall be deemed to have
waived its rights in connection with such representation, warranty, covenant or
obligation to the extent of such incorrectness, inaccuracy, breach or
non-performance.
6.2 Conditions of Closing in Favour of the Vendor.
The purchase and sale of the Purchased Shares is subject to the
following terms and conditions for the exclusive benefit of the Vendor, to be
fulfilled or performed at or prior to the Time of Closing:
(a) Payment of Purchase Price. The Purchaser shall have paid the
Purchase Price to the Vendor in accordance with the provisions of
Section 2.2;
(b) Representations and Warranties. The representations and warranties
of the Purchaser contained in Article 4 of this Agreement shall be
true and correct in all material respects at the Time of Closing,
with the same force and effect as if such representations and
warranties were made at and as of such time, except to the extent
that such representations and warranties are made as of a specified
date, in which case such representations and warranties shall have
been true and correct in all material respects as of the specified
date, and a certificate of a senior officer of the Purchaser dated
the Closing Date to that effect shall have been delivered to the
Vendor;
(c) Covenants. All of the terms, covenants and conditions of this
Agreement to be complied with or performed by the Purchaser at or
before the Time of Closing shall have been complied with or
performed in all material respects and a certificate of a senior
officer of the Purchaser dated the Closing Date to that effect shall
have been delivered to the Vendor;
-33-
(d) Regulatory Consents. There shall have been obtained, from all
appropriate federal, provincial, municipal or other governmental or
administrative bodies, such licences, permits, consents, approvals,
certificates, registrations and authorizations as are required by
law to be obtained by the Purchaser to permit the change of
ownership of the Purchased Shares contemplated hereby including
those described in Schedule 3.1(s), in each case in form and
substance satisfactory to the Vendor, acting reasonably;
(e) 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 contemplated
hereby;
(f) Agreement for Manufacture. Dynamo Power System (USA) LLC shall have
entered into an Agreement for Manufacture with Celestica Hong Kong
Limited;
(g) U.S., Asian and Shanghai Purchase Agreements. The transactions
contemplated by the U.S. Purchase Agreement, the Asian Purchase
Agreement and the Shanghai Purchase Agreement shall have been
completed concurrently with the closing of the transactions
contemplated hereby;
(h) Non-Competition and Non-Solicitation Agreement. The Purchaser, C&D
Parent, Dynamo Power System (USA) LLC and the Company shall have
entered into a non-competition and non-solicitation agreement with
the Vendor, Celestica Parent and Celestica Corporation in the form
attached as Schedule 6.1(h)(i);
(i) Shanghai Occupancy Agreement. Datel Electronic Technology (Shanghai)
Co., Ltd. shall have entered into an occupancy agreement with Omni
Electronics (Shanghai) Co. Ltd., in the form attached as Schedule
6.1(n) hereto; and
(j) Suzhou Payments. Concurrently with the closing of the transactions
contemplated hereby, Dynamo Acquisition Corp. shall have paid all
amounts due and payable by it on the Closing Date pursuant to the
Suzhou Purchase Agreement.
If any of the conditions contained in this Section 6.2 shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
the Vendor, acting reasonably, the Vendor may, by notice to the Purchaser,
terminate this Agreement and the obligations of the Vendor and the Purchaser
under this Agreement other than the obligations contained in Article 9 shall be
terminated. If the Vendor or any of its representatives or agents are aware, on
or prior to the Closing, that a representation or warranty of the Purchaser is
incorrect or inaccurate or a covenant or obligation of the Purchaser to be
performed on or prior to the Time of Closing is breached or not performed and
the Vendor proceed with the Closing, the Vendor shall be deemed to have waived
its rights in connection with such representation, warranty, covenant or
obligation to the extent of such incorrectness, inaccuracy, breach or
non-performance.
-34-
ARTICLE 7
CLOSING ARRANGEMENTS
7.1 Place of Closing.
The Closing shall take place at the Time of Closing at the offices
of Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP, Suite 4400, 0 Xxxxx Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxx X0X 0X0.
7.2 Transfer.
At the Time of Closing, upon fulfilment of all the conditions set
out in Article 6 which have not been waived in writing by the Purchaser or the
Vendor, as appropriate, the Vendor shall deliver to the Purchaser certificates
respecting all the Purchased Shares duly endorsed in blank for transfer and will
cause transfers of such shares to be duly and regularly recorded in the name of
the Purchaser, or its nominee(s), subject to all other terms and conditions
hereof being complied with, and the Purchase Price shall be paid and satisfied
in the manner provided in Section 2.2.
7.3 Further Assurances.
Each party to this Agreement covenants and agrees that, from time to
time subsequent to the Closing Date, it 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 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 or 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.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by the Vendor.
Subject to the limitations contained in Section 8.9, and without
duplication of any indemnities granted under Section 8.2 or by Celestica
Corporation under the U.S. Purchase Agreement, by Celestica Electronics
(Shanghai) Co. Ltd. under the Shanghai Purchase Agreement, by Celestica Suzhou
Technology Ltd. under the Suzhou Purchase Agreement, or by the Vendor, Celestica
Corporation or Celestica (Thailand) Limited under the Asian Purchase Agreement,
the Vendor agrees to indemnify and save harmless the Purchaser from and against
all Losses suffered or incurred by the Purchaser or any of its Affiliates
(including, without limitation, the Company (as long as it remains an Affiliate
of the Purchaser) from and after the Closing) as a result of:
(a) any breach by the Vendor of any representation or warranty of the
Vendor contained in Article 3 of this Agreement or in any agreement,
certificate or other document delivered by the Vendor pursuant
hereto (provided that the Vendor shall not be required to indemnify
or save harmless the Purchaser in respect of
-35-
any breach of any such representation or warranty unless the
Purchaser shall have provided notice to the Vendor in accordance
with Section 8.4 on or prior to the expiration of the applicable
time period related to such representation and warranty as set out
in Section 3.2);
(b) any breach or non-performance by the Vendor of any covenant to be
performed by it which is contained in this Agreement or in any
agreement, certificate or other document delivered by the Vendor
pursuant hereto;
(c) any non-compliance with Environmental Laws as a result of the
conduct of the Business at the Company's current locations (as at
the Closing Date) by the Vendor or the Company prior to the Closing
Date (provided that the Vendor shall not be required to indemnify or
save harmless the Purchaser under this Section 8.1(c) unless the
Purchaser shall have provided notice to the Vendor in accordance
with Section 8.4 on or prior to the fifth anniversary of the Closing
Date);
(d) the Company or the Vendor having caused or permitted the Release of
any Hazardous Substances on or before the date of Closing on or
offsite from any of the Company's current locations as at the date
of Closing (provided that the Vendor shall not be required to
indemnify or save harmless the Purchaser under this Section 8.1(d)
unless the Purchaser shall have provided notice to the Vendor in
accordance with Section 8.4 on or prior to the fifth anniversary of
the Closing Date);
(e) claims relating to the design, manufacture or sale of products by
the Vendor or its Affiliates in conducting the Business prior to the
Effective Time;
(f) any Excluded Liabilities (provided that the Vendor shall not be
required to indemnify or save harmless the Purchaser under this
Section 8.1(f) unless the Purchaser shall have provided notice to
the Vendor in accordance with Section 8.4 on or prior to March 31,
2006);
(g) any non-compliance by the Vendor or the Company with the provisions
of any bulk sales laws applicable to the Canadian Drop-Down; and
(h) claims by any or all of Xxxx Xxxxx or Xxxxx Xxxxxxxx or Xxxxxxx
XxXxxx relating to entitlement to retiree medical benefits under any
plan maintained by the Vendor or any of its Affiliates.
8.2 Tax Indemnification by the Vendor.
(a) Without duplication of any indemnities granted by the Vendor under
Section 8.1, otherwise granted under this Section 8.2 or granted by Celestica
Corporation under the U.S. Purchase Agreement, by Celestica Electronics
(Shanghai) Co. Ltd. under the Shanghai Purchase Agreement, by Celestica Suzhou
Technology Ltd. under the Suzhou Purchase Agreement or by the Vendor, Celestica
Corporation or Celestica (Thailand) Limited under the Asian Purchase Agreement,
the Vendor agrees to indemnify and save harmless the Purchaser from and against
-36-
all Losses suffered or incurred by the Purchaser or any of its Affiliates
(including, without limitation, the Company (as long as it remains an Affiliate
of the Purchaser) from and after the Closing) that are attributable to:
(i) any Taxes of the Company (including, for greater certainty,
any GST, sales, withholding or similar Taxes which the Company
is required to pay or remit on behalf of another Person)
arising or accruing in respect of any period (or partial
period) ending on or before the time at which the Canadian
Drop-Down occurs;
(ii) any withholding or similar Taxes imposed on the Purchaser, the
Company or any of their respective Affiliates, that are
attributable to the Purchaser's acquisition of the Purchased
Shares;
(iii) any personal property, sales or other similar Tax liability
other than an Assumed Liability of any member of the Celestica
Group which may be imposed on the Purchaser or the Company or
any of their respective Affiliates, as a transferee or
successor, by contract, or otherwise (including any personal
property, sales or other similar Tax liability in respect of
which any member of the Celestica Group became liable at any
time up to and including the Time of Closing as transferee or
successor, by contract or otherwise);
(iv) any Taxes attributable to the non-compliance by the Vendor or
the Company with the provisions of any bulk sales laws
applicable to the Canadian Drop-Down;
(v) any breach of any representation set out in Section 3.1(mm) or
any covenant of the Vendor or the Company with respect to
Taxes set forth in Section 5.7 or Section 9.6;
(vi) any Taxes of the Company that are Excluded Liabilities; and
(vii) any Taxes of the Company (including, for greater certainty any
GST, withholding or similar Taxes which the Company is
required to pay or remit on behalf of another Person) arising
or accruing in respect of any period or partial period ending
on or before the Time of Closing from the conduct of the
Business other than in the ordinary course.
(b) The Vendor shall be relieved of its obligation under Section 8.2(a) in
respect of any Taxes that were the subject of a Pre-Closing Tax Claim where
written notice of such Pre-Closing Tax Claim was not given by the Purchaser
within the 60-day period stipulated in Section 5.7(b).
8.3 Indemnification by the Purchaser.
The Purchaser agrees to indemnify and save harmless the Vendor from
and against all Losses suffered or incurred by the Vendor or any of its
Affiliates as a result of:
-37-
(a) any breach by the Purchaser of any representation or warranty of the
Purchaser contained in Article 4 of this Agreement or of any
agreement, certificate or other document delivered by the Purchaser
pursuant hereto (provided that the Purchaser shall not be required
to indemnify or save harmless the Vendor in respect of any breach of
any such representation or warranty unless the Purchaser shall have
provided notice to the Vendor in accordance with Section 8.4 within
the applicable survival period in respect of such representation and
warranty, as set forth in Section 4.2);
(b) any breach or non-performance by the Purchaser of any covenant to be
performed by it which is contained in this Agreement or in any
agreement, certificate or other document delivered by the Purchaser
pursuant hereto;
(c) the operation of the Business after the Effective Time, including,
without limitation: (i) all claims relating to the design,
manufacture or sale of products by the Company or its Affiliates
after the Effective Time; and (ii) all environmental liabilities
which are attributable to the period after the Effective Time;
(d) any claim by a Leave Employee for severance or termination or other
related payments with respect to a Leave Employee who does not
accept the Purchaser's offer of employment when made in accordance
with Section 5.10 hereof on the grounds that the terms and
conditions of the employment offered were not equivalent to the
terms and conditions of employment for such Leave Employee on the
day immediately preceding the Closing Date;
(e) the use by the Company of the name "Celestica" or any logo,
trade-xxxx or derivative thereof after the Effective Time; and
(f) claims by any of the Employees relating to entitlement to retiree
medical benefits with respect to the period during which such
Employee is employed by the Company or any of its Affiliates from
and after the Closing Date.
8.4 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
-38-
Indemnifying Party resulting from the Indemnified Party's failure to give such
notice on a timely basis.
8.5 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, failing which the matter shall be referred to
binding arbitration in such manner as the parties may agree or shall be
determined by a court of competent jurisdiction.
8.6 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 or
unless the named parties to any action or proceeding include both the
Indemnifying Party and the Indemnified Party and the representation of both the
Indemnifying Party and the Indemnified Party by the same counsel would be
inappropriate due to the actual or potential differing interests between them
(such as the availability of different defences). 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.
8.7 Settlement of Third Party Claims.
If the Indemnifying Party fails to assume control of the defence of
any Third Party Claim, the Indemnified Party shall have the exclusive right to
contest, settle or pay the amount claimed. 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.
-39-
8.8 Co-operation.
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).
8.9 Monetary Limit on Indemnification.
(a) No Claim shall be made by any Indemnified Party in respect of Losses
suffered or incurred by it pursuant to:
(i) Section 8.1(a) (other than arising from a breach or inaccuracy
of any of the representations and warranties contained in
Sections 3.1(d), 3.1(k)(i), 3.1(gg) or 3.1(mm));
(ii) Section 8.1(b) (other than in respect of a failure by the
Vendor to comply with any of its covenants contained in
Section 5.8, or to sell the Purchased Shares to the Purchaser
as provided herein except where permitted to do so in this
Agreement);
(iii) Section 8.1(f);
(iv) Section 8.3(a); or
(v) Section 8.3(b) (other than in respect of a failure by the
Purchaser to purchase the Purchased Shares from the Vendor as
provided herein except where permitted to do so in this
Agreement),
until the aggregate of all Losses suffered or incurred by such Indemnified Party
in respect of all matters which could be the subject of Claims under the
foregoing Sections and by it and the indemnified parties that are its Affiliates
under the comparable indemnification provisions of the Other Purchase
Agreements, exceeds $500,000, in which case the Indemnifying Party's liability
to indemnify the Indemnified Party shall commence from the first dollar of
Losses in excess of $250,000 (except for a Claim made by an Indemnified Party in
respect of Losses suffered or incurred by it pursuant to Section 8.1(f), in
which case the Indemnifying Party's liability to indemnify the Indemnified Party
shall commence from the first dollar of Losses).
(b) An Indemnifying Party shall have no liability to indemnify an
Indemnified Party for any Losses pursuant to:
(i) Section 8.1(a) (other than arising from a breach or
inaccuracy of any of the representations and warranties
contained in Sections 3.1(d), 3.1(k)(i) or 3.1(mm));
(ii) Section 8.1(b) (other than in respect of a failure by the
Vendor to comply with any of its covenants contained in
Section 5.8, or to sell the Purchased
-40-
Shares to the Purchaser as provided herein except where
permitted to do so in this Agreement);
(iii) Section 8.1(c);
(iv) Section 8.1(d);
(v) Section 8.1(e);
(vi) Section 8.1(f);
(vii) Section 8.3(a); or
(viii) Section 8.3(b) (other than in respect of a failure by the
Purchaser to purchase the Purchased Shares from the Vendor as
provided herein except where permitted to do so in this
Agreement),
after the aggregate of all successful Claims for Losses made by such Indemnified
Party under the foregoing Sections and by it and the indemnified parties that
are its Affiliates under the comparable indemnification provisions of the Other
Purchase Agreements exceeds $10,000,000.
8.10 Exclusivity.
The provisions of this Article 8 shall apply to any Claim for breach
of any covenant, representation, warranty or other provision of this Agreement
or any agreement, certificate or other document delivered pursuant hereto (other
than a claim for specific performance or injunctive relief) with the intent that
all such Claims shall be subject to the limitations and other provisions
contained in this Article 8.
ARTICLE 9
GENERAL
9.1 Confidentiality of Information.
In the event that the transactions contemplated herein are not
consummated for any reason, the Purchaser covenants and agrees that, except as
otherwise authorized by the Vendor, neither the Purchaser nor its
representatives, agents or employees will disclose to third parties, directly or
indirectly, any confidential information or confidential data relating to the
Company or the Business discovered by the Purchaser or its representatives as a
result of the Vendor or the Company making available to the Purchaser and its
representatives the information requested by them in connection with the
transactions contemplated herein.
9.2 Notices.
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly given upon
receipt if (i) delivered in person, (ii) transmitted by facsimile or similar
means of recorded electronic communication with
-41-
receipt confirmed, or (iii) sent by registered mail or courier, charges prepaid,
addressed as follows:
(a) if to the Vendor: Celestica International Inc.
c/o Celestica Inc.
0000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX X0X 0X0
Attention: Senior Vice-President and
Chief Legal Officer
Facsimile No.: 000-000-0000
with a copy to: Senior Vice-President, Corporate Development
Facsimile No.: 000-000-0000
(b) if to the Purchaser: C&D Technologies, Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Vice-President, General Counsel
Facsimile No.: 000-000-0000
with a copy to: Attention: Vice-President, Corporate Development
Facsimile No.: 000-000-0000
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 9.2.
9.3 Commissions, etc.
The Vendor agrees to indemnify and save harmless the Purchaser from
and against all Losses suffered or incurred by the Purchaser in respect of any
commission or other remuneration payable to any broker, agent or other
intermediary who is acknowledged by the Vendor to act or have acted for or on
behalf of the Vendor or any of its Affiliates in connection with the
transactions contemplated hereby, and the Purchaser agrees to indemnify and save
harmless the Vendor from and against all Losses suffered or incurred by the
Vendor in respect of any commission or other remuneration payable to any broker,
agent or other intermediary who is acknowledged by the Purchaser to act or have
acted for the Purchaser or any of its Affiliates in connection with the
transactions contemplated hereby.
9.4 Consultation and Public Announcements.
The Purchaser shall consult with the Vendor, and the Vendor shall
consult with the Purchaser, before issuing any press release or making any other
public announcement with respect to this Agreement or the transactions
contemplated hereby and, except as required by any applicable law or regulatory
requirement, neither the Vendor nor the Purchaser shall issue any such press
release or make any such public announcement without the prior written consent
of the Purchaser or the Vendor, as the case may be.
-42-
9.5 Disclosure.
Prior to any public announcement of the transaction contemplated
hereby pursuant to Section 9.4, no party shall disclose this Agreement or any
aspect of such transaction except to its board of directors and, in the case of
the Vendor, to the board of directors of its parent corporation, Celestica Inc.,
or any committee thereof, and on a "need to know" basis (i) to its senior
management, (ii) to its legal, accounting, financial or other professional
advisors who are assisting it in connection with the transaction, and (iii) as
may otherwise be required by any applicable law or any regulatory authority
having jurisdiction or any stock exchange on which the shares of such party or
of an Affiliate of such party are listed.
9.6 Celestica Parent Guarantee.
(a) Celestica Parent hereby irrevocably and unconditionally guarantees to
the Purchaser, jointly and severally with the Vendor, the performance by the
Vendor of its obligations under this Agreement, including, without limitation,
the indemnification obligations of the Vendor contained in Article 8. The
Purchaser shall not be required to give any notice to, or make any demand on,
the Vendor or to proceed against the Vendor's assets prior to requiring the
performance by Celestica Parent of the obligations guaranteed under this Section
9.6. Celestica Parent agrees that its obligations under this Section 9.6 will
not be discharged except by complete performance of all obligations of the
Vendor set forth in this Agreement.
(b) Celestica Parent hereby agrees, in furtherance of the foregoing and
not in limitation of any other right which the Purchaser may have against
Celestica Parent by virtue hereof, that upon the failure of the Vendor to pay or
perform any of its obligations when and as the same shall become due hereunder,
Celestica Parent will, upon demand, pay, perform or cause to be paid or
performed all obligations then due as aforesaid.
9.7 C&D Parent Guarantee.
(a) C&D Parent hereby irrevocably and unconditionally guarantees to the
Vendor, jointly and severally with the Purchaser, the performance by the
Purchaser of its obligations under this Agreement, including, without
limitation, the indemnification obligations of the Purchaser contained in
Article 8. The Vendor shall not be required to give any notice to, or make any
demand on, the Purchaser or to proceed against the Purchaser's assets prior to
requiring the performance by C&D Parent of the obligations guaranteed under this
Section 9.7. C&D Parent agrees that its obligations under this Section 9.7 will
not be discharged except by complete performance of all obligations of the
Purchaser set forth in this Agreement.
(b) C&D Parent hereby agrees, in furtherance of the foregoing and not in
limitation of any other right which the Vendor may have against C&D Parent by
virtue hereof, that upon the failure of the Purchaser to pay or perform any of
its obligations when and as the same shall become due hereunder, C&D Parent
will, upon demand, pay, perform or cause to be paid or performed all obligations
then due as aforesaid.
9.8 Counterparts.
This Agreement may be executed by facsimile transmission and in any
number of counterparts, each of which shall constitute an original and all of
which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF this Agreement has been executed by the parties.
CELESTICA INTERNATIONAL INC.
by: /s/ Xxxxx Xxxx
-------------------------------
Name: Xxxxx Xxxx
Title: Authorized Signatory
CELESTICA INC.
by: /s/ Xxxxx Xxxx
-------------------------------
Name: Xxxxx Xxxx
Title: Senior Vice-President
Corporate Development
C&D POWER SYSTEMS (CANADA) ULC
by: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Director
C&D TECHNOLOGIES, INC.
by: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Vice President and CFO
