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Exhibit 10.19
EXECUTION COPY
CANADA ASSET PURCHASE AGREEMENT
By and Between
DISTRICT PHOTO INC.
as Buyer
and
NASHUA PHOTO LIMITED
as Seller
Dated as of March 10, 1998
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TABLE OF CONTENTS
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ARTICLE I - PURCHASE AND SALE OF ASSETS......................................1
1.1 Purchase and Sale of Assets......................................1
1.2 Retained Assets..................................................4
ARTICLE II - ASSUMPTION OF LIABILITIES.......................................4
2.1 Assumed Liabilities..............................................4
2.2 Retained Liabilities.............................................5
2.3 Prorations.......................................................6
ARTICLE III - CANADIAN PURCHASE PRICE........................................6
3.1 Payment..........................................................6
3.2 Allocation of Canadian Purchase Price............................6
3.3 Preparation of Closing Date Net Current Asset
Disclosure.......................................................6
ARTICLE IV - CLOSING AND CONDITIONS TO CLOSING...............................8
4.1 General..........................................................8
4.2 Documents Delivered by Seller....................................8
4.3 Documents Delivered by Buyer.....................................9
4.4 Conditions to Closing...........................................10
ARTICLE V - REPRESENTATIONS AND WARRANTIES..................................12
5.1 Representations and Warranties of Seller........................12
5.2 Representations and Warranties of Buyer.........................23
ARTICLE VI - COVENANTS OF SELLER............................................25
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6.1 Notice of Claims................................................25
6.2 Maintenance of, and Access to, Records..........................25
6.3 Non-Solicitation................................................25
6.4 Limitations on Assignability....................................26
6.5 Pre-Closing Operations of Seller................................26
6.6 Access to Records and Information...............................27
6.7 No Solicitation of Offers.......................................27
6.8 Notices of Certain Events.......................................27
6.9 Commercially Reasonable Efforts.................................28
6.10 Risk of Loss....................................................28
6.11 Employment of Employees; Benefits...............................29
6.12 Employee Benefits Plans.........................................29
ARTICLE VII - COVENANTS OF BUYER............................................29
7.1 Maintenance of, and Access to, Records..........................29
7.2 Commercially Reasonable Efforts.................................29
ARTICLE VIII - OTHER COVENANTS..............................................30
ARTICLE IX - INDEMNIFICATION................................................30
ARTICLE X - TERMINATION.....................................................30
10.1 Termination Events..............................................30
10.2 Effect of Termination...........................................31
ARTICLE XI - MISCELLANEOUS..................................................31
11.1 Survival of Representations and Warranties......................31
11.2 Amendments......................................................31
11.3 Notices.........................................................31
11.4 [INTENTIONALLY OMITTED].........................................31
11.5 Waiver..........................................................31
11.6 Headings........................................................32
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11.7 Entire Agreement................................................32
11.8 Assignment......................................................32
11.9 Governing Law; Time of the Essence..............................32
11.10 Counterparts....................................................32
11.11 Publicity.......................................................32
11.12 Jurisdiction....................................................32
11.13 Legal Fees......................................................32
11.14 Actions.........................................................32
11.15 Terms...........................................................33
11.16 Construction....................................................33
11.17 Third Parties...................................................33
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SCHEDULES [Not Included in Filing]
Schedule 1.1(a) -- Prepaid Items
Schedule 1.1(b) -- Inventory
Schedule 1.1(c) -- Accounts Receivable
Schedule 1.1(d) -- Tangible Personal Property
Schedule 1.1(g) -- Intellectual Property
Schedule 1.1(h) -- Listed Contracts
Schedule 1.1(i) -- Licenses and Permits
Schedule 1.1(j) -- Leases
Schedule 1.1(k) -- Real Property
Schedule 1.2 -- Retained Assets
Schedule 3.2 -- Allocation of Canadian Purchase Price
Schedule 4.4(a)(v) -- Material Adverse Changes
Schedule 5.1(d) -- Permitted Encumbrances
Schedule 5.1(f) -- Environmental and Safety Compliance
Schedule 5.1(g) -- Material Defects
Schedule 5.1(i) -- Financial Statements
Schedule 5.1(m) -- Litigation
Schedule 5.1(n) -- Customers and Suppliers
Schedule 5.1(s) -- Labor Matters
Schedule 5.1(t) -- Employee Plans
Schedule 5.1(u) -- Taxes
Schedule 5.1(w) -- Required Consents
Schedule 5.1(x) -- Absence of Certain Changes
Schedule 5.2(f) -- Pending Litigation
Schedule 6.11 -- Transferred Employees
EXHIBITS [Not Included in Filing]
Exhibit 2.1 -- Form of Instrument of Assumption of Liabilities
Exhibit 3.3 -- Net Current Asset Disclosure
Exhibit 4.2(d) -- Form of Xxxx of Sale
Exhibit 4.2(k) -- Form of Patent and Trademark Assignment
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of March 10,
1998, is entered into by and between District Photo Inc., a District of Columbia
corporation ("Buyer"), on the one hand, and Nashua Photo Limited, a corporation
organized under the laws of Canada ("Seller"), a wholly-owned subsidiary of
Nashua Photo Inc.
W I T N E S S E T H
WHEREAS, Seller is engaged in Canada in the photofinishing business,
including the marketing and sale of photo-related products (the "Business");
WHEREAS, Seller desires to sell the Acquired Assets (as
defined in Section 1.1) to Buyer;
WHEREAS, this Agreement is entered into between Buyer and Seller pursuant
to that certain Master Asset Purchase Agreement of even date herewith entered
into by and between Nashua Corporation and Buyer (the "Master Agreement");
WHEREAS, Buyer desires to purchase and acquire from Seller, upon the terms
and subject to the conditions hereinafter set forth, the Acquired Assets, in
consideration of the payment of the Canadian Purchase Price (as defined in
Section 3.1) and the assumption by Buyer of the Assumed Liabilities (as defined
in Section 2.1);
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, on the basis
of, and in reliance upon, the representations, warranties, covenants,
obligations and agreements set forth herein, and upon the terms and subject to
the conditions contained herein, hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale of Assets. Subject to the provisions of this
Agreement, at the Closing (as defined in Master Agreement), Seller shall convey,
sell, assign, transfer and deliver to Buyer, and Buyer shall purchase and
acquire from Seller, the Business as a going concern comprising all of the
assets, properties, rights, privileges, claims, contracts and interests of
Seller on the Closing Date (as defined in Master Agreement), of every kind and
description, real, personal or mixed, tangible or intangible, absolute or
contingent,
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wherever situated, whether or not carried or reflected on the books and records
of Seller (other than the Retained Assets (as defined in Section 1.2)), free and
clear of any and all liens, equities, claims, prior assignments, mortgages,
charges, security interests, pledges, restrictions or encumbrances whatsoever
(collectively, "Liens"), other than the Permitted Encumbrances (as defined in
Section 5.1(d)) (such assets, properties, rights, privileges, claims, contracts
and interests collectively referred to as the "Acquired Assets"). Without
limiting the generality of the foregoing, the Acquired Assets shall include the
following:
(a) Prepaid Items. All of Seller's prepaid expenses, advance
payments, deposits and prepaid items, including deposits with lessors, suppliers
or utilities (collectively, "Prepaid Items"), as described on Schedule 1.1(a);
(b) Inventory. All of Seller's inventories, including all
inventories of products, work-in-process, finished goods, raw materials,
supplies, equipment, parts, labels and packaging (including all of Seller's
rights and interests in goods in transit, consigned inventory, inventory sold on
approval and rental inventory) and all returned products, samples and obsolete
and nonsalable inventory (collectively, "Inventory"), as described on Schedule
1.1(b);
(c) Accounts Receivable. All of Seller's accounts receivable, notes
receivable and royalties receivable, any payments received by Seller with
respect thereto after the Closing Date, unpaid interest accrued thereon, and any
security or collateral relating thereto, including all past due, reserved and
written off accounts receivable (collectively, "Accounts Receivable"), as
described on Schedule 1.1(c) (including aging information with respect to the
Accounts Receivable);
(d) Tangible Personal Property. All of Seller's motor vehicles,
machinery, equipment, office furniture, furnishings, tools, fixtures, office
equipment, computer hardware and software, leasehold and other improvements and
other tangible personal property (collectively, "Tangible Personal Property"),
as described on Schedule 1.1(d);
(e) Books, Records and Written Materials. All of Seller's business
records, including all financial books and records, sales order files, purchase
order files, engineering order files, warranty and repair files, supplier lists,
customer lists, dealer, representative and distributor lists, studies, surveys,
analyses, strategies, plans, forms, designs, diagrams, drawings, specifications,
technical data, production and quality control records, formulations, and any
other information which has been reduced to writing (collectively, "Books and
Records") (but excluding those books and records described in Section 1.2(a));
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(f) Catalogs and Advertising Materials. All of Seller's promotional
and advertising materials, including all catalogs, brochures, videos, plans,
manuals and handbooks;
(g) Intellectual Property Rights. All of Seller's trademarks,
service marks, trade names, logos, copyrights or patents (and any applications
for any of the foregoing and rights therein), together with all claims for
damages against Persons by reason of past infringement and the right to xxx for
and collect such damages, licenses, shop rights, know-how, developments,
research data, designs, specifications, drawings, blueprints, technology, ideas,
compositions, manufacturing and production principles and techniques, test
procedures, processes, formulas, know-how, file reports, certifications,
customer and supplier lists, pricing and cost information, confidential
information, inventions (whether or not patentable), discoveries, business
methods, confidential or proprietary business information and trade secrets and
all other intellectual and intangible property rights owned by Seller or to, or
in, which Seller has any right or interest whatsoever (where there are multiple
copies of such material in Seller's possession or control, all copies of such
material) (collectively, the "Intellectual Property"), as described on Schedule
1.1(g) (as used herein, "Person" means a corporation, limited liability company,
association, partnership, organization, trust, joint venture or other legal
entity, an individual or a Governmental Authority);
(h) Contracts. All of Seller's licenses, contracts, agreements,
commitments and undertakings, whether oral or written, (including unfilled
customer orders) relating to the Acquired Assets or Business to which Seller is
a party or by which any of the Acquired Assets are bound (collectively,
"Contracts"), of which, only those Contracts that are reflected in Seller's
Financial Statements that constitute obligations involving more than $10,000
annually or that are not cancelable within thirty (30) days without incurring
liability for such cancellation, are described on Schedule 1.1(h) ("Listed
Contracts");
(i) Licenses and Permits. All licenses, permits, approvals,
franchises, consents and other authorizations held by Seller or related to or
used in connection with the Business or the Acquired Assets (collectively,
"Licenses and Permits") issued to Seller by any foreign, federal, provincial,
state or local governmental entity or municipality or subdivision thereof or any
authority, department, commission, board, bureau, agency, court or
instrumentality (collectively, "Governmental Authorities"), to the extent
transferable to Buyer, which Licenses and Permits are described on Schedule
1.1(i);
(j) Leases. All of Seller's leases as described on Schedule 1.1(j)
(the "Leases");
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(k) Real Property. All of Seller's real property located in
Saskatoon, Saskatchewan and described on Schedule 1.1(k) (the "Real Property");
and
(l) Other Assets. Excluding the Retained Assets described in Section
1.2, all of the other assets, properties, rights, privileges, claims, contracts
and interests of every kind and description, real, personal or mixed, tangible
or intangible, absolute or contingent, wherever situated, whether or not carried
or reflected on the books and records of Seller, of Seller including such
assets, properties, rights, privileges, claims, contracts and interests as are
reflected on the Closing Date Net Current Asset Disclosure (as defined in
Section 3.3(b)) or which are owned by Seller on the Closing Date, including
those customer orders received (whether before, on or after Closing) relating to
the Business, which customer orders have not been opened for processing.
1.2 Retained Assets. Notwithstanding anything in this Agreement to the
contrary, Seller shall retain, and the Acquired Assets shall not include, any of
the assets described on Schedule 1.2, assets disposed of since the date hereof
in the ordinary course of business, such other assets as have been or are
disposed of pursuant to this Agreement, and the following assets of Seller
(collectively, the "Retained Assets"):
(a) Corporate Records. Seller's corporate books and records,
including stock certificates, treasury stock, stock transfer records, corporate
seals and minute books, and Seller's tax returns and tax supporting information,
records constituting privileged and confidential attorney-client communications
or work product related to the transactions contemplated hereby;
(b) Seller Rights under this Agreement. All rights of Seller under
this Agreement; and
(c) Prepaid Taxes and Tax Refunds. Prepaid foreign, federal,
provincial or local taxes and any rights of Seller to any tax refunds or carry
backs.
ARTICLE II
ASSUMPTION OF LIABILITIES
2.1 Assumed Liabilities. On the terms and subject to the conditions set
forth in the Assignment and Assumption Agreement attached hereto as Exhibit 2.1,
at the Closing, Buyer shall assume the following liabilities and obligations of
Seller (collectively, the "Assumed Liabilities"):
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(a) Accounts Payable. All of Seller's trade and other accounts
payable reflected on the Closing Date Net Current Asset Disclosure;
(b) Accrued Liabilities. All of Seller's accrued liabilities
reflected on the Closing Date Net Current Asset Disclosure.
(c) Contracts. All liabilities and obligations of Seller arising
under the Contracts which accrue after the Closing; provided, however, that
Buyer shall not assume or be responsible for any such liabilities or obligations
which arise from defaults thereunder or breaches thereof by Seller prior to or
on the Closing Date (whether a claim for any such default or breach is made
before or after the Closing).
(d) Leases. All contractual liabilities and obligations of Seller
under the Leases for time periods after the Closing Date; provided, however,
that Buyer shall not assume or be responsible for any such liabilities or
obligations which arise from defaults thereunder or breaches thereof by Seller
prior to or on the Closing Date or for any Environmental Matters (as defined in
Section 2.2) related in any way to the Leases prior to or on the Closing Date
(whether a claim for any such default or breach is made before or after the
Closing);
(e) Taxes. All real and personal property taxes, sales, goods and
services and use taxes attributable to the sale of inventory, payroll taxes and
employee withholding tax obligations and other taxes, relating to Buyer's
operation of the Business after the Closing.
2.2 Retained Liabilities. Except for the Assumed Liabilities, Seller shall
retain all, and Buyer shall have no responsibility for any, of Seller's
liabilities and obligations, whether or not relating to the Business or Acquired
Assets, whether fixed, contingent or otherwise, and whether known or unknown
(collectively, the "Retained Liabilities"). Without limiting the foregoing,
Buyer shall not assume or be liable for and Seller shall indemnify Buyer against
and hold Buyer harmless from any of the following liabilities for (i)
environmental matters ("Environmental Matters") arising under Environmental Laws
(as defined in Section 5.1(f)) in connection with violations, disposal, events,
occurrences or releases that occurred or are attributable to the period on or
prior to the Closing Date; (ii) liabilities incurred by Seller in connection
with this Agreement, the transactions provided for herein and any other
agreements contemplated hereby, including, without limitation, attorneys' and
accountants' fees, and expenses pertaining to the performance by Seller of its
obligations hereunder; (iii) liabilities that relate to the Retained Assets;
(iv) except for Assumed Liabilities, liabilities arising out of the operation of
the Business on or before the Closing; (v) payments, if any, to be made as a
result of the purchase and sale of the Business of Seller to certain management
personnel of Seller under certain retention and other similar agreements solely
in respect to those obligations resulting from
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the transactions contemplated by this Agreement; (vi) all federal, provincial
and local franchise and income taxes of Seller, whether relating to periods
before or after the transactions contemplated in this Agreement or incurred by
Seller in connection with this Agreement and the transactions provided for
herein, including any liability for such taxes arising out of the inclusion of
Seller in any group filing consolidated, combined or unitary tax returns or
arising out of any transferee liability; (vii) liabilities with respect to
workers' compensation or other employee related claims, including, without
limitation, with respect to discrimination, wrongful termination and employee
benefits of any kind arising from any facts or circumstances occurring prior to
or on the Closing Date; (viii) the employment contracts of Xxxxxxx Xxxxxxx,
Xxxxxxx Xxxxxxx and Xxxxxxx Jeans including, but not limited to, any and all of
the employer's responsibilities under such contracts; and (ix) any other
liabilities of Seller not specifically assumed by Buyer hereunder.
2.3 Prorations. Except as otherwise provided in Section 2.1, general
utility charges, personal property taxes and assessments, and similar proratable
items which are attributable to the Acquired Assets, shall be apportioned
between Buyer and Seller as follows: any item which relates to the period prior
to or on the Closing Date shall, to the extent not accrued on the Closing Date
Net Current Asset Disclosure, be apportioned to and paid by Seller, and any such
item which relates to the period on or after the Closing Date, whether or not
accrued on the Closing Date Net Current Asset Disclosure, shall be apportioned
to and paid by Buyer; provided, however, that any special assessments or similar
charges in effect or payable prior to the Closing Date shall be paid by Seller
prior to the Closing.
ARTICLE III
CANADIAN PURCHASE PRICE
3.1 Payment. In full consideration for the conveyance, sale, transfer and
assignment of the Acquired Assets, but subject to adjustment as provided in
Section 3.3 and satisfaction of all of the conditions contained herein, Buyer
shall deliver or cause to be delivered to Nashua Corporation for the account of
Seller a cash purchase price of Two Million Dollars ($2,000,000) (the "Canadian
Purchase Price"), payable at the Closing by wire transfer of immediately
available funds to an account or accounts designated in writing by Seller.
3.2 Allocation of Canadian Purchase Price. Within sixty days after the
Closing, Buyer and Seller agree to allocate the Canadian Purchase Price among
the Acquired Assets. Schedule 3.2 shall set forth the amount of the Canadian
Purchase Price allocable to the various Acquired Assets.
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3.3 Preparation of Closing Date Net Current Asset Disclosure.
(a) Seller has delivered to Buyer an unaudited summary of the
Accounts Receivable, Inventories and other current assets of the Business as of
February 6, 1998 less accounts payable and accrued expenses and other Assumed
Liabilities as of February 6, 1998 (the "Net Current Asset Disclosure") which
are reflected on the books and records of Seller and are prepared consistently
with U.S. generally accepted accounting principles. A copy of the Net Current
Asset Disclosure is attached hereto as Exhibit 3.3. The total net amount as set
forth on the Net Current Asset Disclosure is referred to herein as the "February
6th Assets."
(b) (i) Within thirty (30) business days following the Closing,
Seller shall prepare and deliver to Buyer an unaudited summary of those assets
and liabilities specified in Section 3.3(a) as of the Closing (the "Closing Date
Net Current Asset Disclosure"). The Closing Date Net Current Asset Disclosure
shall accurately reflect all Inventories, Accounts Receivable, other current
assets, accounts payable and accrued expenses and other Assumed Liabilities
which are reflected on the books and records of Seller and shall in all respects
be prepared consistently with and utilizing the same accounting policies and
valuation procedures as set forth in the Net Current Asset Disclosure. The total
net amount as set forth on the Closing Date Net Current Asset Disclosure is
referred to herein as the "Closing Date Assets." In the event that the Closing
Date Assets have either increased or decreased by any amount from the February
6th Assets, the amount of the increase or decrease (the "Canadian Purchase Price
Adjustment") shall be paid by Buyer to Seller (if the Closing Date Assets exceed
the February 6th Assets) or by Seller to Buyer (if the February 6th Assets
exceed the Closing Date Assets).
(ii) The Canadian Purchase Price Adjustment shall be made by
wire transfer not later than the close of business on the fifth business day
immediately following the date on which the Canadian Purchase Price Adjustment
is finally determined, and shall include simple interest on such amount at the
rate of 3% plus the prime rate of interest publicly quoted by the Chase
Manhattan Bank in New York as of and commencing on the Closing and continuing
until the date of full payment hereunder. The Closing Date Net Current Asset
Disclosure delivered by Seller and the calculation of the Canadian Purchase
Price Adjustment shall be final and binding on the parties hereto, unless within
forty-five (45) business days following Seller's delivery of the Closing Date
Net Current Asset Disclosure to Buyer, Seller receives from Buyer a report
setting forth in detail Buyer's objections to such calculation and any
adjustments required. Buyer and Seller shall use reasonable efforts to resolve
any dispute, and such resolution shall be in writing and shall be final and
binding on the parties hereto. Until the earlier to occur of (i) the mutual
agreement of Seller and Buyer as to the appropriate amount of the Canadian
Purchase Price Adjustment, or (ii) the final determination of the Canadian
Purchase Price
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Adjustment by the Accounting Firm as set forth below, Buyer and Seller shall
allow each other reasonable access to each other's books, records and employees
pertaining to the Business and cooperate with each other during normal business
hours for purposes of computing and/or verifying the information set forth in
the Closing Date Net Current Asset Disclosure.
(c) If Seller and Buyer have not reached a final resolution with
respect to any Canadian Purchase Price Adjustment within thirty (30) business
days following Seller's receipt of Buyer's objections, such dispute shall be
resolved by the New York City office of Ernst & Young LLP (the "Accounting
Firm").
(d) The Accounting Firm shall be instructed to render its decision
resolving all matters presented to it within sixty (60) calendar days of receipt
by it of Seller's Closing Date Net Current Asset Disclosure or Buyer's
objections, whichever is the later.
(e) Each party shall bear its own expenses. The determination of the
Canadian Purchase Price Adjustment by Accounting Firm shall be final and binding
upon the parties.
ARTICLE IV
CLOSING AND CONDITIONS TO CLOSING
4.1 General. Subject to the conditions set forth in Sections 4.2, 4.3 and
4.4, the Closing as defined in the Master Agreement shall take place at the
offices of Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 at
10:00 AM (Eastern Time) on the Closing Date as defined in the Master Agreement.
Failure to close on such date shall not relieve either party hereto of its
obligations under this Agreement. All transactions at the Closing shall be
deemed to take place simultaneously at 12:01 a.m. Eastern Time on the Closing
Date, and no transaction shall be deemed to have been completed and no document
or certificate shall be deemed to have been delivered until all transactions are
completed and all documents are delivered.
4.2 Documents Delivered by Seller. At the Closing, Seller shall deliver to
Buyer the following, duly executed by the appropriate parties, subject to
satisfaction of the conditions precedent to the obligations of Seller stated
herein:
(a) Secretary's Certificate. A certificate executed by the Secretary
of Seller confirming the existence, incorporation and good standing under the
laws of Canada and Saskatchewan of Seller on the Closing Date, attaching copies
of the certificate of
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incorporation and by-laws of Seller, and resolutions authorizing and approving
the execution, delivery and performance of this Agreement and all other
documents and the taking of all action required thereunder or in connection
therewith on behalf of Seller, together with an incumbency certificate for
Seller;
(b) Opinion of Seller's Counsel. An opinion, dated as of the Closing
Date, from Xxxx and Xxxx LLP in a form reasonable and customary for similar
transactions;
(c) Assignment and Assumption of Contracts and Liabilities. An
Instrument of Assumption of Liabilities in the form of Exhibit 2.1;
(d) Xxxx of Sale. A xxxx of sale and assignment conveying, selling,
transferring and assigning the Acquired Assets to Buyer, free and clear of any
and all Liens, in the form of Exhibit 4.2(d);
(e) Required Consents. All of the Required Consents (as defined in
Section 5.1(w)) which are identified on Schedule 5.1(w) as being necessary for
consummating the sale of the Acquired Assets and the transactions relating
thereto;
(f) Assignment and Assumption of Leases. An Assignment and
Assumption of each of the Leases in form and substance substantially similar to
the attached Exhibit 4.2(f);
(g) Other Documents. Such other deeds, bills of sale, endorsements,
assignments, affidavits, and other instruments of sale, assignment, conveyance
and transfer, in form and substance reasonably satisfactory to Buyer and its
counsel, as are required to effectively vest in Buyer all of Seller's right,
title and interest in and to all of the Acquired Assets, free and clear of any
and all Liens;
(h) Lien Releases. Such releases and termination statements as are
necessary for the termination and release of any and all Liens (other than the
Permitted Encumbrances (as defined in Section 5.1(d)) on the Acquired Assets;
(i) Releases of Seller Employees from Confidentiality Agreements.
Such releases from Seller as are necessary to permit employees of Seller who
have signed confidentiality or secrecy agreements with Seller to disclose
information to Buyer;
(j) Officer's Certificate. A certificate dated the Closing Date and
executed by an executive officer of Seller to the effect that each of the
conditions specified in Section 4.4(a) is satisfied;
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(k) Patent and Trademarks. Patent and trademark assignments in form
and substance substantially similar to the attached Exhibit 4.2(k); and
(l) Real Property. A registrable transfer of title, in favor of
Buyer, and the duplicate certificate of title for, the Real Property, together
with a real property report (otherwise referred to as a surveyor's certificate)
showing that the improvements on the Real Property do not encroach on any other
property and there are no encroachments on the Real Property.
4.3 Documents Delivered by Buyer. At the Closing, Buyer shall deliver to
Seller the following, duly executed by the appropriate parties, subject to
satisfaction of the conditions precedent to the obligations of Buyer stated
herein:
(a) Secretary's Certificate. A certificate executed by the Secretary
of Buyer, confirming the existence, incorporation and good standing of Buyer on
the Closing Date, attaching copies of the articles of incorporation and by-laws
of Buyer, and resolutions authorizing and approving the execution, delivery and
performance of this Agreement and all other documents and the taking of all
action required thereunder or in connection therewith on behalf of Buyer,
together with an incumbency certificate for Buyer;
(b) Assignment and Assumption of Contracts and Liabilities. An
Assignment and Assumption Agreement in the form of Exhibit 2.1;
(c) Assignment and Assumption of Leases. An Assignment and
Assumption of each of the Leases in form and substance substantially similar to
the attached Exhibit 4.2(f);
(d) Officer's Certificate. A certificate dated the Closing Date and
executed by an executive officer of Buyer to the effect that each of the
conditions specified in Section 4.4(b) is satisfied;
(e) Payment of Canadian Purchase Price. Payment of the Canadian
Purchase Price in the manner and the amount set forth in Article III;
(f) Opinion of Buyer's Counsel. An opinion, dated as of the Closing
Date, from Xxxxxx, Xxxxxx & Xxxxxxxxx in a form reasonable and customary for
similar transactions; and
(g) GST Registration. Evidence that Buyer is registered for the
purposes of Part IX of the Excise Tax Act (Canada) (the "GST Legislation").
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4.4 Conditions to Closing.
(a) Conditions to Obligations of Buyer. Subject to Section 9.3 of
the Master Agreement, the obligation of Buyer to close the transactions
contemplated by this Agreement shall be subject to the satisfaction of each of
the following conditions precedent, each of which may be waived, in whole or in
part, in the sole discretion of Buyer, by a written instrument signed by Buyer.
(i) Fulfillment of Seller's Covenants. Each of Nashua
Corporation, Seller and the Asset Sellers shall have fulfilled or complied with
each covenant, obligation and agreement required to be fulfilled or complied
with by it prior to the Closing Date under this Agreement, the Master Agreement
and the Asset Purchase Agreements.
(ii) Accuracy of Seller's Representations. The representations
and warranties of Seller contained in this Agreement shall be true and correct
on the date when made and shall be repeated at and as of the Closing Date and
shall be true and correct as so made again (unless a representation is made as
of a specific date, and in such event it shall be true and correct as of such
date); provided, however, that in the event Seller has provided Buyer with
written notice prior to the Closing Date of an event or development arising
after the date hereof and prior to the Closing Date that causes any
representation or warranty of Seller in this Agreement not to be true and
correct on the Closing Date (a "Seller's Notice"), then Buyer shall, in its sole
discretion, either (i) elect not to close the transactions contemplated by this
Agreement by reason of the failure of the condition to Closing specified in this
Section 4.4(a)(ii) to be satisfied, or (ii) elect to close the transactions
contemplated by this Agreement, notwithstanding the failure of the condition to
Closing specified in this Section 4.4(a)(ii) to be satisfied, in which event
Buyer shall be deemed to have waived the condition to Closing specified in this
Section 4.4(a)(ii) with respect to the matters specified in Seller's Notice and
shall not seek or be entitled to indemnification under Article IX with respect
to only the matters specified in Seller's Notice.
(iii) Authorizations and Consents. Seller shall have obtained
and made all governmental or other authorizations, approvals, consents, permits,
waivers and filings which are necessary under all applicable laws and
regulations for the consummation by Seller of the transactions contemplated by
this Agreement.
(iv) No Litigation. No injunction shall be outstanding which
would prevent consummation of the transactions contemplated by this Agreement.
No provision of any applicable domestic law or regulation, and no judgment,
injunction, order or decree of a governmental authority that has the effect of
making the Closing illegal or otherwise restrains or prohibits the Closing from
occurring shall be in effect (each party
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agreeing to use commercially reasonable efforts, including appeals to higher
courts, to have any such judgment, injunction, order or decree lifted).
(v) No Material Adverse Changes. Since December 31, 1997,
there shall have been no material adverse changes in Seller's business
operations, affairs, prospects, properties, assets existing and potential
liabilities, obligations, profits or condition (financial or otherwise) of the
Business ("Material Adverse Change") or an adverse change in Seller which would
have a material adverse effect on Seller's ability to perform its obligations
under this Agreement except as set forth on Schedule 4.4(a)(v).
(b) Conditions to Obligations of Seller. The obligation of Seller to
close the transactions contemplated by this Agreement shall be subject to the
satisfaction of each of the following conditions precedent, each of which may be
waived, in whole or in part, in the sole discretion of Seller, by a written
instrument signed by Seller.
(i) Fulfillment of Buyer's Covenants. Buyer shall have
fulfilled or complied with each covenant, obligation and agreement required to
be fulfilled or complied with by it prior to the Closing Date under this
Agreement.
(ii) Accuracy of Buyer's Representations. The representations
and warranties of Buyer contained in this Agreement shall be true and correct on
the date when made and shall be repeated at and as of the Closing Date and shall
be true and correct as so made again (unless a representation is made as of a
specific date, and in such event it shall be true and correct as of such date);
provided, however, that in the event Buyer has provided Seller with written
notice prior to the Closing Date of an event or development arising after the
date hereof and prior to the Closing Date that causes any representation or
warranty of Buyer in this Agreement not to be true and correct on the Closing
Date (a "Buyer's Notice"), then Seller shall, in its sole discretion, either (i)
elect not to close the transactions contemplated by this Agreement by reason of
the failure of the condition to Closing specified in this Section 4.4(b)(ii) to
be satisfied, or (ii) elect to close the transactions contemplated by this
Agreement, notwithstanding the failure of the condition to Closing specified in
this Section 4.4(b)(ii) to be satisfied, in which event Seller shall be deemed
to have waived the condition to Closing specified in this Section 4.4(b)(ii)
with respect to the matters specified in Buyer's Notice and shall not seek or be
entitled to indemnification under Article IX with respect to only the matters
specified in Buyer's Notice.
(iii) Authorizations and Consents. Buyer shall have obtained
and made all governmental or other authorizations, approvals, consents, permits,
waivers and filings which are necessary under all applicable laws and
regulations for the consummation by Buyer of the transactions contemplated by
this Agreement.
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(iv) No Litigation. No injunction shall be outstanding which
would prevent consummation of the transactions contemplated by this Agreement.
No provision of any applicable domestic law or regulation, and no judgment,
injunction, order or decree of a governmental authority that has the effect of
making the Closing illegal or otherwise restrains or prohibits the Closing is in
effect (each party agreeing to use commercially reasonable efforts, including
appeals to higher courts, to have any such judgment, injunction, order or decree
lifted).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of Seller. Except as set forth on an
appropriate Disclosure Schedule, Seller represents and warrants to Buyer that
the statements contained in this Section 5.1 are on the date hereof true and
correct and on the Closing Date will be, repeated true and correct as so made
again:
(a) Organization and Standing; Power and Authority.
(i) Seller is a corporation duly organized, validly existing
and in good standing under the laws of Canada, and has full corporate power and
authority to operate the Business, to own or lease the Acquired Assets, to carry
on the Business as now being conducted, and to make and perform this Agreement,
and the transactions and other agreements and instruments contemplated by this
Agreement. Seller is qualified to do business and is in good standing in each
jurisdiction in which the failure to so qualify would have a material adverse
effect upon the Business or the Acquired Assets.
(ii) This Agreement has been, and all other agreements and
instruments to be executed and delivered by Seller in connection herewith have
been, or as of the Closing Date will have been, duly executed and delivered by
Seller. This Agreement constitutes, and the other agreements and instruments all
executed or to be executed by Seller in connection with the transactions
contemplated hereby constitute, or when executed and delivered by Seller will
constitute, the valid and binding obligations of Seller, enforceable in
accordance with their respective terms, except to the extent that enforceability
may be limited by bankruptcy, receivership, moratorium, conservatorship,
reorganization or other laws of general application affecting the rights of
creditors generally or by general principles of equity ("Debtor Relief Laws").
(iii) The execution, delivery and performance of this
Agreement and all other agreements and instruments to be executed and delivered
by Seller have been approved by all necessary corporate action by Seller.
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(b) Articles of Incorporation and By-Laws. The copies of the
Articles of Incorporation and By-Laws of Seller, certified by its Secretary and
delivered by Seller to Buyer, are true, correct and complete as of the date of
this Agreement and have not been amended or modified in any respect.
(c) Conflicts; Defaults.
(i) Neither the execution and delivery of this Agreement and
the other agreements and instruments executed in connection herewith by Seller,
nor the performance by Seller of the transactions contemplated hereby or
thereby, will (A) violate, conflict with, or constitute a default under, any of
the terms of Seller's Articles of Incorporation or By-Laws, or any provisions
thereof, or, subject to obtaining the Required Consents (as defined in Section
5.1(w)), result in the acceleration of any obligation under, any contract, sales
commitment, license, purchase order, security agreement, mortgage, note, deed,
lien, lease, agreement, instrument, order, judgment or decree relating to the
Business or the Acquired Assets, or by which Seller or the Acquired Assets are
bound, including the Contracts, (B) result in the creation or imposition of any
Liens in favor of any third person or entity upon any of the Acquired Assets,
(C) violate any law, statute, judgment, decree, order, rule or regulation of any
Governmental Authority, or (D) constitute an event which, after notice or lapse
of time or both, would result in such violation, conflict, default,
acceleration, or creation or imposition of Liens.
(ii) Seller is not, as of the date of this Agreement, in
violation of or in default under its Articles of Incorporation or By-Laws, or
any provision of any contract, sales commitment, license, purchase order,
security agreement, mortgage, note, deed, lien, lease, agreement, instrument,
order, judgment or decree relating to the Business or the Acquired Assets, or by
which Seller or the Acquired Assets is bound, including the Contracts, or in the
payment of any of Seller's monetary obligations or debts, and there exists no
condition or event which, after notice or lapse of time or both, would result in
any such violation or default.
(d) Acquired Assets; Title; Required Consents.
(i) The Acquired Assets and the Retained Assets are the only
properties and assets owned by Seller. The Acquired Assets being conveyed to
Buyer under this Agreement constitute all of the assets used in or necessary to
conduct the Business in substantially the same manner as currently conducted by
Seller. The Acquired Assets set forth in the Net Current Asset Disclosure are
not stated in amounts in excess of their respective realizable values.
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(ii) Seller has good and indefeasible right, title and
interest in and to all of the Acquired Assets, and Seller has the right to use
and, subject to obtaining the Required Consents, to transfer to Buyer all of the
Acquired Assets. All of the Acquired Assets are free and clear of all Liens and
claims of any kind or nature whatsoever, except for the Liens set forth on
Schedule 5.1(d) (the "Permitted Encumbrances"). Except as disclosed on Schedule
5.1(d), all of the Acquired Assets are in the sole possession and under the sole
control of Seller. The delivery to Buyer of the instruments of transfer of
ownership contemplated by this Agreement will vest good and indefeasible title
to the Acquired Assets in Buyer, free and clear of all Liens and claims of any
kind or nature whatsoever, except the Permitted Encumbrances.
(iii) Each leasehold interest in any personal property
("Leased Personal Property") or any real property ("Leased Real Property"),
which leasehold interest is part of the Acquired Assets, is in full force and
effect and enforceable against Seller and the other parties thereto, in
accordance with its terms, and there does not exist any material violation,
breach or default by Seller or to Seller's knowledge by any other party thereto,
thereof or thereunder.
(iv) The Tangible Personal Property and the Leased Personal
Property are in reasonably good operating condition and repair, reasonable wear
and tear excepted, and adequate for the intended purposes thereof and no
material maintenance, replacement or repair has been deferred or neglected. The
Leased Personal Property is in a condition suitable for return to the lessor of
such equipment, as required under the applicable lease therefor.
(v) The conveyance, sale, transfer and assignment of the
Acquired Assets does not require any consents or approvals of any entity,
individual or Governmental Authority other than the Required Consents (as
defined in Section 5.1(w));
(e) Real Property. Seller is the registered owner of an estate in
fee simple of and in the Real Property subject to:
(i) the Permitted Encumbrances registered against title to the
Real Property, which Permitted Encumbrances will not interfere with the use of
the Real Property in the Business as presently conducted by Seller;
(ii) the exceptions and reservations contained in the original
grant of the Real Property from the Crown;
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(iii) any exceptions, qualifications, reservations, liens,
estates or interests contained in, or implied by, The Land Titles Act
(Saskatchewan) with respect to Real Property; and
(iv) all applicable building and zoning by-law restrictions
and regulations set forth by any relevant governmental or municipal authority
having jurisdiction.
(f) Environmental and Safety Compliance. Except as disclosed on
Schedule 5.1(f):
(i) Neither (A) the operation of the Business by Seller or
agents under the direction and control of Seller, (B) the ownership, use or
operation of the Acquired Assets by Seller or agents under the direction and
control of Seller, nor (C) the manufacture or sale by Seller or agents under the
direction and control of Seller of the processes, results or products of Seller,
has violated or violates any foreign, federal, provincial or local statute, law,
common law, rule, regulation, ordinance or order relating to air, water or noise
pollution, employee health and safety, or the production, storage, labeling,
transportation or disposition of waste or hazardous or toxic substances,
(collectively, the "Environmental Laws"). Notwithstanding the foregoing,
Seller's operation of the Business complies only in all material respects with
any federal, provincial or local occupational, safety or health related laws or
regulations. Seller has not received notice of any violation of any of the
Environmental Laws, which has not been or is not being corrected, provided that
Seller makes no representation hereunder with respect to Buyer's operation of
the Business or the Acquired Assets after the Closing.
(ii) Seller has timely obtained all licenses and permits and
timely filed all reports required to be filed under the Environmental Laws.
(iii) Seller has not, and no other person has, stored any
chemical substances, including any hazardous substances, pollutants or
contaminants, or petroleum (including crude oil or any fraction thereof), all of
which are collectively referred to as "Chemical Substances", on, beneath or
about any of the properties to be transferred to Buyer in connection with
Seller's operations of the Business, except for inventories of such Chemical
Substances to be used, and wastes generated therefrom, in the ordinary course of
the business of Seller (which inventories and wastes, if any, were stored and
disposed of in compliance with the Environmental Laws, including storage so that
there was no release of any Chemical Substance to the environment which
violated, or created any liability or obligation under, the Environmental Laws).
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(iv) Seller has not, and no other person has, buried, dumped
or otherwise disposed of, or permitted the intentional or accidental release of,
any Chemical Substances, on, beneath or about the properties to be transferred
to Buyer in connection with Seller's operation of the Business.
(v) Seller has not received any notice from any Governmental
Authority or private or public entity advising Seller that it is potentially
responsible for response costs with respect to a release or threatened release
of hazardous substances, pollutants or contaminants in respect to the properties
to be transferred to Buyer.
(vi) Seller has not, and no other person has installed, used,
owned or operated any underground storage tank on or beneath the properties to
be transferred to Buyer in connection with Seller's operation of the Business.
(vii) There are no polychlorinated biphenyls,
asbestos-containing materials or radioactive substances on, beneath or about the
properties to be transferred to Buyer in connection with Seller's operation of
the Business.
(viii) To Seller's knowledge, no environmental approvals,
clearances or consents are required under applicable law from any entity or
authority in order for the parties to consummate the transactions contemplated
by this Agreement (other than such as correspond to Licenses and Permits) or for
Buyer to transact the Business after the Closing Date.
(ix) Seller has disclosed, prior to the date of this
Agreement, its waste practices, its use of Chemical Substances and all
potentially material environmental matters and has disclosed all material
reports, assessments, remedial action plans or other similar documents relating
to the environmental condition of Seller's properties to be transferred to Buyer
and operations.
(g) Leases. Schedule 1.1(j) contains a description of all real and
personal property leased by Seller in the conduct of the Business and all Leases
thereto.
(i) True, complete and accurate copies of all Leases, together
with all amendments thereto, have previously been provided to Buyer. With
respect to any Lease to which Seller is a party, Seller warrants that: (a) each
such Lease has been duly authorized and executed by Seller, has not been
modified, altered, terminated or revoked and is in full force and effect; and
(b) Seller, as the present tenant under the Leases, is not in default under or
in breach of any of such Leases. Seller knows of no existing fact or condition
which could give rise to any such breach or default, or any claim against
Seller, under the Leases. To the best of Seller's knowledge, the present lessors
under the Leases
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are not in default thereunder, or in breach thereof, and Seller knows of no
existing fact or condition which could give rise to any such breach or default,
or any claim against such lessors under such leases.
(ii) Taxes. To Seller's knowledge, there are no taxes or local
improvement levies payable by Seller other than ordinary property taxes pending,
business and occupation tax payable against the Real Property.
(iii) Utilities. All water, sewer, gas, electric, telephone,
drainage and other utility equipment required by law or necessary for the
current operation of the Real Property are installed and connected to the Real
Property and such utilities are available in sufficient quantities and such
connections are adequate to service the Real Property as it is currently used
and operated.
(iv) Conditions Except as set forth on Schedule 5.1(g), to
Seller's knowledge, there are no material defects in the physical condition of
any improvements constituting a part of the Real Property.
(v) Compliance with Law; Government Approvals. Seller has
received no notice from any governmental authority of any violation of any law,
ordinance, regulation, license, permit or authorization issued with respect to
any of the Real Property that has not been corrected heretofore and no such
violation exists which could have a material adverse effect.
(h) Contracts. Each of the Listed Contracts as set forth on Schedule
1.1(h) is in full force and effect, and is a legal, binding and enforceable
obligation of Seller and, to Seller's knowledge, of the other parties thereto or
against the parties thereto, subject to the Debtor Relief Laws. Neither Seller
nor, to Seller's knowledge, any other party to any Contract is currently in
breach or has improperly terminated any such Contract, or is in default under
any Contract by which it is bound, and there exists no condition or event which,
after notice or lapse of time or both, would constitute any such breach,
termination or default. Except where third party consent to disclose has not
been obtained, Seller has delivered to Buyer true, correct and complete copies
of such Contracts, an accurate and complete description of such oral Contracts,
if any, and all modifications and amendments thereto.
(i) Financial Statements of Seller.
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(i) In respect to the Business, Seller has delivered to Buyer
its unaudited financial statements including: (i) Balance Sheets, (ii)
Statements of Income and (iii) Statements of Cash Flow for the fiscal years
ended 1995, 1996 and 1997 (collectively, the "Financial Statements", copies of
which are attached hereto as Schedule 5.1(i)). The Financial Statements have
been prepared in accordance with U.S. generally accepted accounting principles
consistently followed throughout the periods covered by such statements, and, at
the statement dates and for the periods of the income statements, present
fairly, in all material respects, the assets, liabilities, financial position
and results of operations of the Business.
(ii) The Net Current Asset Disclosure has been prepared in
accordance with U.S. generally accepted accounting principles.
(j) Liabilities. Seller has no liabilities or obligations (in excess
of $50,000 individually or $100,000 in the aggregate) of any nature whatsoever,
whether absolute, accrued, contingent or otherwise, except for those (i)
reflected or reserved on the Net Current Asset Disclosure or Closing Date Net
Current Asset Disclosure (ii) incurred or accrued since February 6, 1998 in
transactions involving the purchase or sale of goods and services in the
ordinary course of business, and consistent with the representations,
warranties, covenants, obligations and agreements contained herein, or (iii)
under the Contracts (exclusive of any liabilities or obligations which arise
from defaults thereunder or breaches thereof prior to the Closing). There exists
no event or circumstance which, after notice or lapse of time or both, might
create any other obligations or liabilities of Seller with respect to the
Business.
(k) Accounts Receivable. All Accounts Receivable reflected on the
Net Current Asset Disclosure have arisen in the ordinary course of the Business
and are collectible in accordance with their terms net of any respective
reserves shown on the Seller's books and records as of the date hereof. All
Accounts Receivable represent valid obligations arising from sales actually made
or services actually performed in the ordinary course of business. There is no
contest, claim or right of set-off, other than rebates and returns or exchanges
in kind arisen in the ordinary course of business, under any contract with any
obligor of an Account Receivable relating to the contract or validity of such
Account Receivable.
(l) Inventories. All of Seller's Inventory reflected on the Net
Current Asset Disclosure or Closing Date Net Current Asset Disclosure are usable
or salable in the ordinary and normal course of business, of which the value is
carried at the lower of cost or market and reflects write-offs, write-downs or
reserves for damaged, excess or obsolete items in accordance with the historical
inventory policy and practices of Seller.
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(m) Pending Litigation. Except as set forth on Schedule 5.1(m),
there is no litigation, claim, action, suit, proceeding, governmental
investigation or inquiry pending or, to Seller's knowledge, threatened, against
or in any manner involving Seller, relating to the Business, the Acquired
Assets, the Assumed Liabilities or the transactions contemplated hereby. Seller
is not subject to any judgment, decree, injunction, award or order outstanding
relating to the Business or the Acquired Assets or the transactions contemplated
hereby.
(n) Customers and Suppliers. Except for employees of Seller, no
parties or individuals other than those listed on Schedule 5.1(n) have had
access to its customer lists, and Seller has maintained reasonably adequate
measures to maintain the confidentiality of its customer lists. Since September
30, 1997, no substantial supplier has: (i) stopped, or indicated an intention to
stop, trading with or supplying Seller, (ii) reduced, or indicated an intention
to reduce, substantially its trading with or provision of goods or services to
Seller, or (iii) changed, or indicated an intention to change, materially the
terms and conditions on which it is prepared to trade with or supply Seller. No
substantial supplier has informed Seller that, as a result of the transactions
contemplated by this Agreement, that it intends to (i) not trade with or supply
Buyer, (ii) reduce substantially its trading with or provision of goods or
services to Buyer, or (iii) change the terms and conditions on which it is
prepared to trade with or supply Buyer, as compared to Seller. Seller has no
knowledge of any facts, conditions or events which might give rise to a claim by
Seller against any of its suppliers or any claim by a supplier against Seller.
Seller has not entered into any agreement or commitment with suppliers, except
in the ordinary course, consistent with past practice. Except as set forth on
Schedule 5.1(n), none of Seller's suppliers of materials to the Business is the
sole source of such supply.
(o) Regulatory Compliance. The Business has been conducted, and the
Acquired Assets have been owned, used, operated and maintained, in full
compliance with all applicable laws, regulations and other requirements of
Governmental Authorities. Seller is not now in violation of any applicable laws,
regulations or orders of any Governmental Authority, and no material
expenditures are or will be required in order for the conduct of the Business or
the ownership, use, operation or maintenance of the Acquired Assets to comply
with any applicable laws, regulations or orders of any Governmental Authorities.
(p) Brokers, Finders and Agents. Except for BT Alex. Xxxxx
Incorporated, whose fees and expenses shall be the sole responsibility of Seller
or its Affiliates, Seller is not directly or indirectly obligated to anyone
acting as a broker, finder or in any other similar capacity in connection with
this Agreement or the transactions contemplated hereby.
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(q) Intellectual Property. Except as set forth on Schedule 1.1(g),
Seller owns or has the exclusive right to use, free and clear of any payment,
restriction or encumbrance, all Intellectual Property owned by Seller or used in
the conduct of the Business as presently conducted. There is no claim or demand
of any person pertaining to, or any proceedings which are pending or, to the
best of Seller's knowledge, threatened, which relate to any Intellectual
Property owned by Seller or used in the conduct of the Business as presently
conducted. No Intellectual Property owned by Seller or used in the conduct of
the Business as presently conducted is subject to any outstanding order, ruling,
decree, judgment or stipulation by or with any Governmental Authority or
infringes, violates or constitutes a misappropriation of the rights of others,
or is being infringed, violated or misappropriated by others or used by others
(whether or not such use constitutes infringement). The Business does not
involve employment of any person in a manner which violates any non-competition
or non-disclosure agreement which such person entered into in connection with
any former employment. All statements of fact contained in any application for
patents in any country, for trademark registration in any country or copyright
registration in any country, that were filed by or on behalf of Seller are true,
accurate, and complete in every material respect, and are in material compliance
with applicable patent laws, and all pending patent applications, issued
patents, pending trademark registration applications and copyright registration
applications, and issued trademark and copyright registrations have been duly
and properly filed.
(r) Licenses and Permits. Set forth on Schedule 1.1(i) is a true and
complete list of all Licenses and Permits. The Licenses and Permits include all
licenses, permits and other authorizations from all Governmental Authorities (i)
currently used by Seller in connection with the Business, or (ii) required to
permit Seller to operate the Business in the manner in which it presently is
conducted.
(s) Labor Matters. Except as set forth on Schedule 5.1(s), with
respect to employees of and service providers to Seller:
(i) Seller is and has been in compliance in all material
respects with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, including
without limitation any such laws respecting employment discrimination, workers'
compensation, family and medical leave, the Saskatchewan Human Rights Code and
occupational safety and health requirements, and has not and is not engaged in
any unfair labor practice; and no sex, age, disability, gender, race or
religious discrimination claim has been made against Seller;
(ii) there is not now, nor within the past three years has
there been any unfair labor practice complaint against Seller pending or
threatened before the Saskatchewan Labor Relations Board or any other comparable
authority; there is not now,
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nor within the past three years has there been any labor strike, lock-out,
slowdown or work stoppage actually pending or threatened against or directly
affecting the Business; no labor representation organization effort exists nor
has there been any such activity within the past three years; and no grievance
or any arbitration proceeding arising out of or under collective bargaining
agreements is pending and no claims therefor exist or have been threatened;
(iii) except those employees subject to the Collective
Agreement (as defined in Section 6.12(a)), all employees of Seller are employed
on an at-will basis and may be terminated without cause and without penalty or
liability to Seller; and
(iv) All individuals who are or were performing services and
are or were classified as "independent contractors" for tax purposes qualify or
qualified for such classification, and Seller has fully and accurately reported
their compensation on the applicable tax form.
(t) Employee Plans.
(i) Disclosure. Schedule 5.1(t) contains a list of all
pension, bonus, profit sharing, retirement, employee share option, deferred
compensation, welfare, insurance, disability, salary continuation and other
similar plans, programs and agreements, currently maintained by Seller for the
benefit of employees of Seller employed in the conduct of the Business
("Employee Benefit Plans"). The pension plans included in the Employee Benefit
Plans are registered under and are in material compliance with all applicable
federal and provincial legislation, and all reports, returns and filings
required to be made thereunder have been made except where the failure to do so
would not have a material adverse effect. Such pension plans have been
administered in material compliance with their terms and the provisions of
applicable law. Each such pension plan has been funded in accordance with the
requirements of such plans and based on actuarial assumptions which are
appropriate to the employees of the Business. Based on such assumptions, to the
knowledge of Seller, there is no unfunded liability under any such pension plan.
No funds have been withdrawn by Seller from any such pension plan or other
Employee Benefit Plan. No Employee Benefit Plan is the subject of any law suit,
arbitration or other proceeding concerning any benefit claim, breach of
fiduciary duty or other matter, whether brought by or against a participant, a
beneficiary, a trustee, a plan administrator, Seller or any officer, employee or
director thereof.
(ii) Claims and Litigation. Except as set forth on Schedule
5.1(t), there are no pending or, to Seller's knowledge, threatened claims, suits
or other proceedings by present or former employees of Seller employed by Seller
in the conduct of the Business, plan participants, beneficiaries or spouses of
any of the above with respect
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to or involving any of Seller's Employee Benefit Plans, or any rights or
benefits thereunder, other than claims by participants or beneficiaries of such
Plans for ordinary and usual benefits to which such beneficiaries of
participants are entitled under the terms of such Plans.
(u) Taxes. Seller has timely filed or received an appropriate time
extension for the filing of all federal, provincial, local and foreign income,
personal property, withholding, excise, unemployment, sales, goods and services
and franchise tax returns and reports relating to Seller and the Business due as
of the date hereof, and has fully paid and discharged all taxes due as indicated
on such returns. Except as set forth in Schedule 5.1(u), no deficiencies for any
taxes, assessment or other governmental charges have been asserted in writing or
assessed against Seller which remain unpaid. Seller is not under audit with
respect to any sales or income taxes related to the Business.
(v) [INTENTIONALLY OMITTED]
(w) Required Consents. Except as described on Schedule 5.1(w), no
consent, approval, order or authorization of or from, or registration,
notification, declaration or filing with any individual, entity or Governmental
Authority (collectively, "Required Consents") is required in connection with the
execution, delivery or performance of this Agreement by Seller or the
consummation by Seller of the transactions contemplated herein.
(x) Absence of Certain Changes. Since December 31, 1997, except as
set forth on Schedule 5.1(x) and Schedule 4.4(a)(v), there has not been:
(i) any Material Adverse Change;
(ii) any acquisition or disposition of any asset or property,
or any agreement to do the same other than in the ordinary and regular course of
business;
(iii) created, incurred or permitted to exist any Lien on any
of the Acquired Assets, except for Permitted Encumbrances;
(iv) any damage, destruction or loss, whether or not covered
by insurance, materially and adversely affecting, either in any case or in the
aggregate, the financial condition, results of operations or properties of the
Business;
(v) any increase in salary, bonuses or other compensation of
any officers, employees, agents or independent contracts employed by Seller,
except in the ordinary course of business, consistent with past practice, or any
increase in executive
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compensation nor has Seller entered into any employment, severance or other
agreements, in a manner that increases liabilities;
(vi) any individual capital expenditures in excess of $50,000
related to the Business;
(vii) any non-cash dividend or non-cash distribution out of
the Business;
(viii) any change in accounting methods or practices, credit
practices or collection policies used by Seller that would affect the Financial
Statements; or
(ix) any other event or condition experienced by Seller of any
character which has materially adversely affected or could so materially
adversely affect the assets, liabilities, financial position, results or
operations, net worth or prospects of Seller.
(y) Books and Records. The Books and Records are complete and
correct in all material respects. Seller has made available to Buyer for
examination the original or true and correct copies of all the Books and
Records.
(z) Affiliate Transactions. No director, officer or employee of any
Affiliate of Seller, or member of the family of any such person, or any
corporation, partnership, trust or other entity in which any such person, or any
member of the family of any such person, has a substantial interest or is an
officer, director, trustee, partner or holder of more than 5% of the outstanding
capital stock thereof, is a party to any transaction with Seller.
(aa) Accuracy of Representations. None of the representations,
warranties or statements of Seller contained in this Agreement, in the Schedules
and Exhibits hereto or in any other agreement or instrument executed or
delivered by or on behalf of Seller at the Closing in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the representations, warranties or statements made, in the
context in which made, not false or misleading.
(bb) Goods and Services Exemption. Seller is registered for purposes
of the GST Legislation, and the Acquired Assets comprise all or substantially
all of the property used in the Business.
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(cc) Zoning and Building Restrictions. The improvements on the Real
Property comply with all applicable building and zoning restrictions and
regulations. The Real Property is zoned in a manner which permits its present
use. There are no outstanding work orders by any governmental authority
respecting the Real Property or the improvements located thereon.
5.2 Representations and Warranties of Buyer. Buyer represents and warrants
to Seller that the statements contained in this Section 5.2 are on the date
hereof true and correct and on the Closing Date will be repeated true and
correct as so made again:
(a) Organization and Standing; Power and Authority.
(i) Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the District of Columbia, and has full
corporate power and authority to make and perform this Agreement, and to perform
the transactions contemplated by this Agreement.
(ii) This Agreement has been, and all other agreements and
instruments to be executed and delivered by Buyer in connection herewith have
been, or as of the Closing Date will have been, duly executed and delivered by
Buyer. This Agreement constitutes, and the other agreements and instruments all
executed or to be executed by Buyer in connection with the transactions
contemplated hereby constitute, or when executed and delivered by Buyer will
constitute, the valid and binding obligations of Buyer, enforceable in
accordance with their respective terms, except to the extent that enforceability
may be limited by Debtor Relief Laws.
(iii) The execution, delivery and performance of this
Agreement and all other agreements and instruments to be executed and delivered
by Buyer have been approved by all necessary corporate action by Buyer.
(b) Articles of Incorporation and By-Laws. The copies of the
Articles of Incorporation and By-Laws of Buyer, certified by its Secretary and
delivered by Buyer to Seller, are true, correct and complete as of the date of
this Agreement and have not been amended or modified in any respect.
(c) Conflicts; Defaults.
(i) Neither the execution and delivery of this Agreement and
the other agreements and instruments executed in connection herewith by Buyer,
nor the performance by Buyer of the transactions contemplated hereby or thereby,
will (A) violate, conflict with, or constitute a default under, any of the terms
of Buyer's Articles of Incorporation or By-Laws, or any provisions of, or result
in the acceleration of any
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obligation under, any contract, sales commitment, license, purchase order,
security agreement, mortgage, note, deed, lien, lease, agreement, instrument,
order, judgment or decree to which Buyer is party or subject, (B) result in the
creation or imposition of any Liens in favor of any third person or entity upon
any of the assets of Buyer, (C) violate any law, statute, judgment, decree,
order, rule or regulation of any Governmental Authority, or (D) constitute an
event which, after notice or lapse of time or both, would result in such
violation, conflict, default, acceleration, or creation or imposition of Liens.
(ii) Buyer is not, as of the date of this Agreement, in
violation of or in default under its Articles of Incorporation or By-Laws, or
any provision of any contract, sales commitment, license, purchase order,
security agreement, mortgage, note, deed, lien, lease, agreement, instrument,
order, judgment or decree relating to its business, or by which Buyer is bound
or in the payment of any of Buyer's monetary obligations or debts.
(d) Brokers, Finders and Agents. Buyer is not directly or indirectly
obligated to anyone as a broker, finder or in any other similar capacity in
connection with this Agreement or the transactions contemplated hereby.
(e) Required Consents. To the knowledge of Buyer, all Required
Consents, which must be obtained or satisfied by Buyer for the consummation of
the transactions contemplated by this Agreement have been obtained and
satisfied.
(f) Pending Litigation. Except as set forth on Schedule 5.2(f), no
action, suit, or proceeding is pending or, to Buyer's knowledge, threatened
against it before any court or quasi-judicial or administrative agency of any
federal, provincial, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or charge
which would (i) prevent consummation of any of the transactions contemplated by
this Agreement, (ii) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, or (iii) affect adversely the
right of Buyer to own the Acquired Assets and to operate the Business and no
written notice of the initiation of any such action, suit or proceeding has been
received.
(g) Accuracy of Representations. None of the representations,
warranties or statements of Buyer contained in this Agreement or in any other
agreement or instrument executed or delivered by or on behalf of Buyer at the
Closing in connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the representations,
warranties or statements made, in the context in which made, not false or
misleading.
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ARTICLE VI
COVENANTS OF SELLER
6.1 Notice of Claims. Seller covenants and agrees with Buyer that for the
first twelve (12) months after the Closing Date, it shall give Buyer ten (10)
days' prior written notice of its intent to assert any claim against any former
supplier of Seller which, at the time of the assertion, is a supplier of Buyer.
6.2 Maintenance of, and Access to, Records. After the Closing Date, Seller
shall provide Buyer with reasonable access (with an opportunity to make copies
at Buyer's expense), during normal business hours, and upon reasonable advance
notice, to all books records relating to the Business which are retained by it
in accordance with this Agreement. Seller shall preserve and maintain the books
and records relating to the Business retained by Seller for at least seven (7)
years after the Closing Date or longer if required by any governmental agency.
6.3 Non-Solicitation. During the period commencing on the Closing Date and
through and until the date five (5) years after the Closing Date, Seller and its
Affiliates shall not, for any reason whatsoever, directly or indirectly, call
upon or solicit any Covered Employee for the purpose or with the intent of
enticing such employee away from or out of the employ of Buyer. As used herein,
"Covered Employee" means an employee of Seller on the Closing Date who accepts
employment with Buyer on or promptly after the Closing Date.
6.4 Limitations on Assignability. To the extent that any of the contract
rights of Seller to be sold, transferred or assigned hereunder are not
assignable without the consent of a third party, neither this Agreement, nor any
of the instruments or documents executed and delivered in connection herewith or
contemplated hereby, shall constitute an assignment or assumption thereof, or
attempted assignment or attempted assumption thereof, if such assignment or
attempted assignment, or assumption or attempted assumption, would constitute a
breach thereof. If Seller has not obtained a consent or approval necessary for
the assignment of any contract right to be assigned hereunder, then Seller shall
use commercially reasonable efforts where required by Buyer to obtain such
consents and approvals after the Closing, or, at Buyer's request, shall
cooperate in any reasonable and mutually acceptable arrangement to provide to
Buyer the benefits thereof subject to the performance by Buyer of Seller's
obligations arising or to be performed after the Closing thereunder. Nothing
contained in this Section 6.4 shall require Buyer to enter into, or to accept as
a substitute for performance by Seller hereunder, any arrangement that would
impose any additional cost, expense or liability on Buyer, or that would deprive
Buyer of any benefits contemplated by this Agreement. In respect to any Contract
that is not a Listed Contract nor is required to be a Listed Contract under
Schedule 1.1(h), and
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provided Seller provides a list of such Contracts prior to Closing, Buyer shall
have the option to assume or reject any such Contracts. In the event Buyer
elects to assume such a Contract, Buyer shall assume its liabilities and
obligations pursuant to Section 2.1(c). In the event Buyer elects to reject such
a Contract, Seller shall retain all rights, obligations and liabilities
associated therewith. In respect to any Contract that is not a Listed Contract
nor is required to be a Listed Contract under Schedule 1.1(h) of which Seller
does not provide notice prior to Closing, Buyer shall assume any such Contracts,
provided that if Buyer incurs any net loss by reason of any such assumption
Seller shall reimburse Buyer for Buyer's losses with respect to all such
Contracts in excess of $25,000 in the aggregate.
6.5 Pre-Closing Operations of Seller. Except as contemplated by this
Agreement or as otherwise approved in writing by Buyer, from the date hereof
until the Closing Date, Seller will conduct the Business in the ordinary course
consistent with past practice (including, but not limited to, payment of all
accounts payable as they come due consistent with past practice). Buyer shall
have no access to Seller's employees or facilities except pursuant to Section
6.6. Subject to the foregoing exceptions, from the date hereof until the Closing
Date:
(a) Mergers and Sales. Seller will not merge, consolidate, or enter
into a share exchange with any other corporation or other business entity,
acquire any material stock or any material amount of assets of any other
corporation or business entity, sell, lease, license, mortgage, pledge, or
otherwise dispose of any material assets;
(b) New Commitments; Non-Disclosure. Seller will not make any
commitment or enter into any contract or agreement that is not in the ordinary
course of business consistent with past practice, and neither Seller, nor any
officer, employee, agent or representative of Seller shall sell or disclose
Seller's customer lists to any third party except in the ordinary course of
business consistent with past practice and to third parties as disclosed in
Schedule 5.1(n); and
(c) Compensation Increase. Seller will not increase in any manner
the compensation or fringe benefits of any of its directors or officers, pay any
pension or retirement allowance to any directors or officers, or become a party
to, amend, or commit itself to any pension, retirement, profit-sharing, welfare
benefit plan, or employment agreement with or for the benefit of any director or
officer or amend any Seller Plan or Seller Benefit Arrangement, other than
general increases in the compensation of, and the payment of bonuses to,
officers in the ordinary course of business consistent with past practice.
6.6 Access to Records and Information. From the date hereof until the
Closing Date, Seller will, upon reasonable advance notice, give Buyer's
authorized representatives reasonable access during regular business hours to
the offices, properties, books, and
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records of Seller, and will furnish to its authorized representatives such
financial and operating data and other information as such persons may
reasonably request, for the purpose of evaluating changes in the financial
condition, results of operations, or business of Seller after the date of this
Agreement except any information in respect to prices or other competitive
practices of Seller and will instruct Seller's employees having custody of such
data, counsel, and financial advisors to cooperate with Buyer in its evaluation.
Buyer shall communicate with respect to obtaining such data only with such
employees of Seller as Seller has designated to Buyer in advance.
6.7 No Solicitation of Offers. Except as permitted in the Master
Agreement, Seller shall use its best efforts to ensure that it does not take,
directly or indirectly, any of the following actions with any party other than
Buyer or its designees: (i) solicit, initiate, or participate in any
negotiations, inquiries or discussions with respect to any Acquisition Proposal
(as defined in the Master Agreement); (ii) disclose, in connection with an
Acquisition Proposal, any information with respect to, or otherwise cooperate in
any way with, or assist or participate in, any effort or attempt by any other
person to do or seek any of the foregoing; (iii) enter into or execute any
agreement relating to an Acquisition Proposal; or (iv) make or authorize any
public statement, recommendation or solicitation in support of any Acquisition
Proposal other than with respect to the transactions contemplated by this
Agreement.
6.8 Notices of Certain Events. In addition to any notices required under
the Master Agreement, Seller shall promptly notify Buyer of the following:
(a) Notice of Third Party that Consent is Required. Any notice or
other communication from any person alleging that the consent of any third party
is or may be required in connection with the transactions contemplated by this
Agreement;
(b) Notice from Governmental Authority. Any notice or other
communication from any Governmental Authority in connection with the
transactions contemplated by this Agreement;
(c) Legal Proceedings. Any actions, suits, claims, investigations,
or proceedings commenced or threatened against, relating to, or involving or
otherwise affecting Seller that, if pending on the date of this Agreement, would
have been required to have been disclosed pursuant hereto or that relate to the
consummation of the transactions contemplated by this Agreement; and
(d) Agreement Default. Any notice of, or other communication
relating to, a default, or an event with notice or lapse of time or both would
become a default,
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under any material agreement that is received by Seller subsequent to the date
of this Agreement.
6.9 Commercially Reasonable Efforts. Subject to the terms and conditions
of this Agreement, Seller will use its commercially reasonable efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary or advisable under applicable laws or regulations to consummate the
transactions contemplated by this Agreement, and will use commercially
reasonable efforts to obtain such approvals and take such actions as are
necessary, including without limitation using its best efforts to obtain all
consents of any Person, whether private or governmental, so that the
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated hereby.
6.10 Risk of Loss. Seller will bear the risk of loss or damage to the
Acquired Assets resulting from fire, theft, or other casualty at all times prior
to and on the Closing. If any such loss or damage is so substantial as to
prevent normal operation of any material portion of Seller's Business or the
replacement or restoration of the lost or damaged material Asset within thirty
(30) days after the occurrence of the event resulting in such loss or damage,
Seller will immediately notify Buyer and Buyer, at any time within ten (10) days
after receipt of such notice, may elect by written notice to Seller either (a)
to waive such defect and proceed toward consummation of the acquisition of the
Acquired Assets in accordance with the terms hereof, or (b) terminate this
Agreement. If Buyer elects to consummate the transactions contemplated by this
Agreement, there will be no separate adjustment in the Canadian Purchase Price
related to such loss or damage but all insurance proceeds payable as a result of
the occurrence of the event resulting in such loss or damage will be delivered
by Seller to Buyer, or the rights to such proceeds will be assigned by Seller to
Buyer and Seller will pay to Buyer (or Buyer may withhold from the Canadian
Purchase Price) an amount equal to any deductible amount charged to Seller
against the proceeds due for such loss.
6.11 Employment of Employees; Benefits. At or prior to the Closing, Buyer
shall offer employment as of the Closing Date to all employees of Seller
employed by Seller in the conduct of the Business to whom it would be legal for
Buyer to offer employment at Seller's facility located in Saskatoon,
Saskatchewan (the "Transferred Employees"). The Transferred Employees shall be
listed on Schedule 6.11 to be provided at Closing. Schedule 6.11 shall also set
forth each Transferred Employee's salary level, years of uninterrupted
employment and years of service for benefit plan purposes. Buyer shall offer
employment to each Transferred Employee at the same or substantially equivalent
cash compensation as that provided by Seller to Transferred Employee immediately
prior to the Closing Date.
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6.12 Employee Benefits Plans.
(a) For purposes hereof, "Collective Agreement" means the collective
bargaining agreement respecting the unionized employees of the Business. Buyer
agrees that, as of the Closing Date, it shall become the successor employer
under the terms of the Collective Agreement and Buyer agrees that it shall
advise the Transferred Employees who are subject to the Collective Agreement
that they will be employed by Buyer as of and from the Closing Date, subject to
the terms of the Collective Agreement. Buyer and Seller shall jointly give
notice to the Transferred Employees in respect of the purchase and sale of the
Acquired Assets pursuant to this Agreement and the consequential change of
employer from Seller to Buyer.
(b) If Buyer terminates the employment of any employee of the
Business after Closing, Buyer shall be responsible for all obligations incurred
after Closing and in connection with such termination.
ARTICLE VII
COVENANTS OF BUYER
7.1 Maintenance of, and Access to, Records. Buyer shall provide Seller
with reasonable access (with an opportunity to make copies at Seller's expense)
during normal business hours, and upon reasonable advance notice, to all books
and records turned over to Buyer in accordance with this Agreement. Buyer shall
preserve and maintain such books and records for at least seven (7) years after
the Closing Date or longer if required by guidelines of any governmental
authority.
7.2 Commercially Reasonable Efforts. Subject to the terms and conditions
of this Agreement, Buyer will use its commercially reasonable efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement, and will use commercially
reasonable efforts to obtain such approvals and take such actions as are
necessary, including without limitation using its best efforts to obtain all
consents of any Person, whether private or governmental, so that the
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated hereby.
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ARTICLE VIII
OTHER COVENANTS
Seller and Buyer will jointly execute in prescribed form, and Buyer will
file within the required time, an election under subsection 167(1) of the Excise
Tax Act (Canada) that no tax be payable pursuant to the GST Legislation with
respect to the purchase and sale of the Acquired Assets hereunder.
ARTICLE IX
INDEMNIFICATION
The indemnification provisions of the Master Agreement shall apply to
Buyer and Seller, and in addition, in the event the sale of the Acquired Assets
pursuant to the terms of this Agreement is not eligible for the joint election
or Revenue Canada, Customs & Excise, does not accept such an election by Seller
and Buyer, Buyer shall indemnify and save harmless Seller from any goods and
services tax, penalties, interest or other amounts which may be payable by or
assessed against Seller under the Excise Tax Act (Canada).
ARTICLE X
TERMINATION
10.1 Termination Events. Subject to the other provisions of this Article
X, this Agreement may, by written notice given at or prior to the Closing in the
manner hereinafter provided, be terminated and abandoned:
(a) By Buyer or Seller upon termination of the Master Agreement;
(b) By mutual written consent of Seller and Buyer;
(c) By Buyer pursuant to Section 4.4(a);
(d) By Seller pursuant to Section 4.4(b);
(e) As otherwise provided in Article 12 of the Master Agreement; or
(f) By Buyer pursuant to Section 6.10.
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10.2 Effect of Termination. In the event this Agreement is terminated
pursuant to Section 10.1, all further obligations of the parties hereunder shall
terminate, except as provided in Section 12.2 of the Master Agreement. No
termination of this Agreement shall act to terminate or otherwise impair the
obligations set forth in Section 13.4 of the Master Agreement (Expenses).
ARTICLE XI
MISCELLANEOUS
11.1 Survival of Representations and Warranties. All covenants and
obligations to be performed after the Closing Date contained in this Agreement
or in any other certificate or document delivered pursuant to this Agreement
shall survive the Closing and expire in accordance with their respective terms.
All representations and warranties contained in this Agreement or in any other
certificate or document delivered pursuant to this Agreement shall survive the
Closing for a period of eighteen (18) months; provided, however, that any
representations and warranties contained herein related to tax, benefits and
environmental matters, and the indemnification obligation under Article IX of
this Agreement shall survive the Closing for a period of six (6) months beyond
the applicable federal or provincial statute of limitations (including
extensions thereto). The waiver of any condition, based upon the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification,
reimbursement, or other remedy based upon such representations, warranties,
covenants or obligations.
11.2 Amendments. This Agreement may be amended only by a written agreement
signed by Seller and Buyer.
11.3 Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered or sent in accordance with Section 13.3 of the Master
Agreement.
11.4 [INTENTIONALLY OMITTED]
11.5 Waiver. Waiver of any term or condition of this Agreement by any
party shall only be effective if in writing and shall not be construed as a
waiver of any subsequent breach or failure of the same term or condition, or a
waiver of any other term or condition of this Agreement.
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11.6 Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
11.7 Entire Agreement. This Agreement, including the Exhibits and
Schedules hereto, constitutes the entire agreement, and supersedes all other
prior agreements (except as identified in the Master Agreement) and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter thereof.
11.8 Assignment. This Agreement shall not be assigned by either Buyer or
Seller or by operation of law or otherwise, except with the written consent of
the other party; provided, however, that Buyer shall be permitted to assign this
Agreement as set forth in Section 13.8 of the Master Agreement. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns.
11.9 Governing Law; Time of the Essence. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware
(excluding the conflict of laws provisions thereof). Time is of the essence in
the performance of this Agreement.
11.10 Counterparts. This Agreement may be executed in two or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which shall
constitute one and the same agreement.
11.11 Publicity. No press releases or public disclosure, written or oral,
of the transactions contemplated by this Agreement shall be made by Buyer or
Seller except in accordance with Section 13.11 of the Master Agreement.
11.12 Jurisdiction. In the event that any dispute should arise between
Buyer and Seller with respect to any matter covered by this Agreement (other
than disputes described in Section 3.3(c)), the parties hereto consent to the
sole and exclusive jurisdiction of the state and federal courts of the United
States and the State of Delaware located in Dover, Delaware in connection with
the adjudication of any such dispute.
11.13 Legal Fees. In the event of any litigation between Seller and Buyer
arising out of this Agreement, the party prevailing in such litigation shall be
entitled to have its reasonable attorneys' fees and expenses reimbursed by the
other party.
11.14 Actions. The parties will execute and deliver to the other, from
time to time at or after the Closing, for no additional consideration and at no
additional cost to the requesting party, such further assignments, certificates,
instruments, records, or other
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documents, assurances or things as may be reasonably necessary to give full
effect to this Agreement and to allow each party fully to enjoy and exercise the
rights accorded and acquired by it under this Agreement.
11.15 Terms. All capitalized terms used herein shall have the meanings
specified in this Agreement, or, if not so specified, the meanings specified in
the Master Agreement. The word "include" and derivatives of that word are used
in this Agreement in an illustrative sense rather than limiting sense. The term
"Buyer's knowledge" or "Seller's knowledge" or words of similar import or
limitation means the actual knowledge or conscious awareness, without
independent investigation, of any executive officer of Buyer or Seller, as the
case may be.
11.16 Construction. The language used in this Agreement shall be deemed to
be the language chosen by the parties hereto to express their mutual intent, and
no rule of strict construction shall be applied against either party. Any
reference to any federal, state, local or foreign statute or law shall be deemed
also to refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise.
11.17 Third Parties. Nothing expressed or implied herein is intended, or
shall be construed, to confer upon or give any person or entity, including any
employee of Seller, other than Seller and Buyer any rights or remedies under or
by reason of this Agreement.
[Signature Page Following]
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IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the date first above written.
BUYER
DISTRICT PHOTO INC.
By:________________________________
Name:
Title:
SELLER
NASHUA PHOTO LIMITED
By:________________________________
Name:
Title:
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