EXHIBIT 99.2
SHARE PURCHASE AGREEMENT
BETWEEN:
MARYSTOWN SHIPYARD LIMITED
AND:
NEWFOUNDLAND OCEAN ENTERPRISES LTD.
AND:
XXXXXX XXXXXXX CANADA INC.
AND:
XXXXXX XXXXXXX INTERNATIONAL INC.
AND:
XXXXXX XXXXXXX MARYSTOWN LTD.
WITNESSETH that in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto respectively covenant and agree as
hereinafter set forth.
DATED: January 1, 1998
WHEREAS Newfoundland Ocean Enterprises Ltd. is a Corporation, all issued and
outstanding shares of which are beneficially owned by Government;
AND WHEREAS Newfoundland Ocean Enterprises Ltd. owns all of the issued and
outstanding shares of Marystown Shipyard Limited;
AND WHEREAS Marystown Shipyard Limited and/or Newfoundland Ocean Enterprises
Ltd. own all of the issued and outstanding common shares in the capital stock of
Xxxxxx Xxxxxxx Marystown Ltd. (collectively the "SHARES");
AND WHEREAS Xxxxxx Xxxxxxx Canada Inc. is a wholly owned subsidiary of Xxxxxx
Xxxxxxx International Inc.
AND WHEREAS the Vendors are desirous of selling and Xxxxxx Xxxxxxx Canada Inc.
is desirous of purchasing the Shares for the consideration and upon the terms
herein contained;
NOW THEREFORE THIS AGREEMENT WITNESSETH that for and in consideration of the
sum of $1.00 and other good and valuable consideration now paid by the Purchaser
to the Vendors (the receipt and sufficiency of which is hereby acknowledged) the
parties do hereby agree as follows:
1. DEFINITIONS
a) "BUSINESS" shall mean the business of shipbuilding and metal
fabrication carried on by FGML in the Town of Marystown and at the Cow
Head Facility at Spanish Room, Province of Newfoundland;
b) "CLOSING DATE" shall mean 5 o'clock p.m. on the 1st day of
January, 1998;
c) "CONTRACTS" shall mean all contracts for shipbuilding, repair, or
fabrication subcontracted or assigned by MSL to and assumed by FGML;
d) "FGI" shall mean Xxxxxx Xxxxxxx International Inc., owner of all of
the issued and outstanding shares of the capital stock of the
Purchaser;
e) "FGML" shall mean Xxxxxx Xxxxxxx Marystown Ltd., a body corporate,
duly incorporated and existing under the laws of the Province of
Newfoundland;
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f) "GOVERNMENT" shall mean Her Majesty the Queen in Right of the Province
of Newfoundland;
g) "MARYSTOWN ASSET PURCHASE AGREEMENT" shall mean an Asset Purchase
Agreement pursuant to which MSL and XXXX have transferred, assigned
and conveyed to FGML substantially all of the assets used in the
Business;
h) "MSL" shall mean Marystown Shipyard Limited, a body corporate, duly
incorporated and existing under the laws of the Province of
Newfoundland;
i) "XXXX" shall mean Newfoundland Ocean Enterprises Ltd., a body
corporate, duly incorporated and existing under the laws of the
Province of Newfoundland;
j) "PURCHASER" shall mean Xxxxxx Xxxxxxx Canada Inc., a body corporate,
duly incorporated and existing under the laws of the Province of
Newfoundland;
k) "VENDORS" shall mean MSL and XXXX;
l) "SHARES" shall mean all of the issued and outstanding shares of FGML.
PURCHASE OF SHARES
2. The Purchaser shall purchase and the Vendors shall sell all, and not less
than all, of the Shares on the Closing Date.
PURCHASE CONSIDERATION
3. The purchase consideration paid by the Purchaser to the Vendors upon the
sale of the Shares shall be the sum of $1.00 to each of the Vendors.
4. In further consideration of the transfer of the Shares to the Purchaser,
the Purchaser does hereby represent, warrant, covenant and agree to and for
the benefit of the Vendors and Government that, effective on the Closing
Date:
a) It shall aggressively pursue the operation of the Business as a viable
shipbuilding and fabrication facility.
b) It shall forthwith cause FGML to be incorporated into the business
plans of FGI for the
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establishment of new product lines, with the intention of maintaining
a steady level of employment for the Business.
c) That in respect of Guarantees by Government relative to the Contracts
(excluding any contracts with HAM Marine, Inc.) it will indemnify
Government by way of performance bonds or otherwise as acceptable to
Government, and it shall cause the Government guarantees of contracts
between MSL and HAM Marine, Inc. to be released.
d) It shall cause FGML to maintain a minimum of 1,200,000 man hours
(management and labour, salaried and hourly) per year for the calendar
years 1998, 1999 and 2000 (the "MINIMUM MAN HOURS"). In default
thereof the Purchaser shall cause FGML to pay to the Vendors (or at
their discretion, Government) collectively liquidated damages in the
amount of $10,000,000.00, $5,000,000.00, and $5,000,000.00 (Canadian)
respectively, for any year in which the minimum level of man hours is
not achieved.
e) It shall cause FGML, within three (3) months following the Closing
Date, to upgrade the existing computer system, repair the synchro-lift
and provide other equipment such as an NC burning machine, and it
shall invest from $5,000,000.00 to $15,000,000.00 (Canadian) in
capital improvements, as industry growth requires, to maintain and
expand the status of the Business as a leading fabricator.
f) It shall cause FGML to pay to the Vendors (or at their direction,
Government) collectively 50% of the combined net after tax profit of
MSL and FGML for the twelve (12) months ending March 31, 1998. This
combined net after tax profit (the "NET AFTER TAX PROFIT") shall be
calculated in accordance with Schedule "A" annexed hereto.
g) Without prejudice to the unfettered right of FGML, subject to all
applicable laws, to cease operating the Business, FGCI agrees to cause
FGML, should it decide to cease operations, to provide to Government
at least ninety (90) days notice in writing of the earliest date of
such cessation of operations. During such notice period FGCI will
ensure that a senior executive is reasonably available to consult with
Government relative to the overall impact of such cessation and future
plans for the Business.
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h) It shall cause FGML to carry out its obligations and undertakings
under and comply with the requirements of the Marystown Asset Purchase
Agreement and the agreements entered thereunder.
REPRESENTATIONS AND WARRANTIES
5. The Vendors jointly and severally represent, warrant and covenant to the
Purchaser that, effective the Closing Date:
a) The Shares represent all of the issued and outstanding shares in the
capital stock of FGML;
b) The Shares are now and will at the Closing Date be owned by the
Vendors as beneficial owners thereof free and clear of all liens,
charges and encumbrances whatsoever;
c) No person, firm or corporation now has or at the Closing Date will
have any agreement or right capable of becoming an agreement for the
purchase, subscription or issuance of any of the issued or unissued
shares in the capital stock of FGML other than as provided for in this
Agreement;
d) No dividends or other distributions on any of the Shares have been
declared;
e) No payment to any officer, director or shareholder of FGML has been
made; and
f) FGML does not own directly or indirectly any shares or interest in any
other company or entity.
CONDITIONS PRECEDENT
6. The obligations of the Vendors to transfer the Shares to the Purchaser are
conditional upon performance of or compliance with the following
conditions:
a) FGI shall have executed and delivered to the Vendors and Government a
guarantee of the representations, warranties, agreements and
obligations of each of the Purchaser hereunder and FGML pursuant to
the Marystown Asset Purchase Agreement in substantially the form
annexed hereto as Schedule "B", or in such other form as is agreeable
to Government and FGI.
b) The Vendors shall be satisfied that the requirements of clause 4(c)
hereof have been met; and
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c) All necessary steps and corporate proceedings as approved by the
Vendors' legal counsel, acting reasonably, shall have been taken by
the Purchaser to permit the transactions contemplated by this
Agreement to be duly completed.
7. The obligations of the Purchaser under this Agreement are conditional upon
the performance of or compliance with the following conditions, each of
which is inserted for the sole benefit of the Purchaser and which may be
waived in writing, in whole or in part, by the Purchaser without limiting
the rights of the Purchaser to rely on any of such conditions that are not
so waived by the Purchaser or any subsequent breach thereof concerning
which a prior breach had been so waived.
a) The representations, warranties and covenants of each of the Vendors
contained in this Agreement shall be true and correct at the Closing
Date and the Purchaser shall be furnished with such further evidence
or assurances reasonably requested, including, without restriction, a
statutory declaration of the Vendors in form reasonably satisfactory
to the Purchaser's legal counsel that the representations, warranties
and covenants of the Vendors are true and correct as of the Closing
Date;
b) The title of FGML to its assets and undertaking, the legality of the
incorporation and organization of FGML, the due creation and issuance
as fully paid and non-assessable of the Shares and other corporate
proceedings of FGML, its shareholders and directors, and all other
matters which, in the opinion of the Purchaser acting reasonably, are
material in connection with the transactions contemplated in this
Agreement shall be subject to the favourable opinion of the
Purchaser's legal counsel, and relevant records and information shall
be supplied to the Purchaser for such purpose;
c) All necessary steps and corporate proceedings as approved by the
Purchaser's legal counsel shall have been taken by FGML to permit the
transactions contemplated by this Agreement to be duly completed.
CLOSING
8. The closing shall take place on the Closing Date, or the first business day
thereafter, at such time and place as shall be mutually agreed by the
Vendors and the Purchaser. The parties hereto agree that notwithstanding
that the actual exchange of documentation to accomplish the closing
hereunder shall take place other than on the actual Closing Date, the
effective closing of this transaction is agreed to be 5 o'clock p.m. on the
1st day of January, 1998.
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9. At closing, the Vendors shall deliver to the Purchaser the following
documents:
a) Evidence satisfactory to the Purchaser's legal counsel, acting
reasonably, that the Vendors have taken all corporate steps necessary
or in the reasonable opinion of the Purchaser's legal counsel
desirable to authorize and effect the sale and other transactions
provided for in this Agreement including, without restricting the
generality of the foregoing, an opinion of the Vendors' legal counsel
in a form satisfactory to the Purchaser's legal counsel, acting
reasonably;
b) Such assignments, transfers, assurances, consents and other documents
as the Purchaser's legal counsel may reasonably require for the
purpose of vesting in the Purchaser good title to the Shares free and
clear of all liens, charges, pledges, claims and encumbrances or
restrictions of any kind whatsoever. Such documents shall be in such
form as the Purchaser's legal counsel shall reasonably require and, in
particular, the Vendors will deliver share certificates representing
the Shares duly endorsed for transfer to the Purchaser;
c) Such evidence, if any, as the Purchaser may reasonably require, that
all warranties, representations and covenants for the benefit of the
Purchaser contained in this Agreement are true and correct to the
Closing Date and that all conditions precedent to the closing
contained in this Agreement for the benefit of the Purchaser have been
met, complied with, or waived, as the case may be;
d) The resignations of all directors and officers of FGML effective on
closing. The Vendors shall take such corporate steps as may be
necessary to elect the nominees of the Purchaser as directors and
officers of FGML;
e) The corporate records and books of FGML and the seal of FGML;
f) A certificate or certificates for the Shares in the name of the
Purchaser.
10. At closing, the Purchaser shall deliver to the Vendors the following
documents:
a) Duly executed copies of Schedule "B" hereto or such other form thereof
as finally agreed upon;
b) Satisfactory evidence to the solicitors for the Vendors that the
Performance Bonds referenced in clause 4(c) hereof have been provided;
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c) A duly executed release of any guarantees by Government respecting
performance of any contracts between MSL and HAM Marine, Inc., as
referenced in clause 4(c) hereof;
d) An executed copy of a Notice of Change of Directors and an undertaking
from the solicitors for the Purchaser to file the same at the
Newfoundland Registry of Corporations immediately subsequent to
closing; and
e) Evidence as the Vendors may reasonably require, if any, that all
warranties, representations and covenants for the benefit of the
Vendors contained in this Agreement are true and correct to the
Closing Date and that all conditions precedent to the closing
contained in this Agreement for the benefit of the Vendors have been
met, complied with or waived, as the case may be.
f) Evidence satisfactory to the Vendor's legal counsel acting reasonably,
that the Purchaser and FGI have taken all corporate steps necessary or
in the reasonable opinion of the Vendor's legal counsel desirable to
authorize and effect the purchase and other transactions provided for
in this agreement including, without restricting the generality of the
foregoing, an opinion of legal counsel for the Purchaser and FGI in a
form satisfactory to the Vendor's legal counsel, acting reasonably.
GENERAL/OTHER
11. If any provision of this Agreement is found to be invalid, illegal, or
incapable of being enforced by reason of any rule of law or public policy,
all other provisions of this Agreement shall remain in full force and
effect and no provision of this Agreement shall be deemed to be dependent
upon any other provision unless so expressed herein. In the event that any
provision of this Agreement is found to be invalid, illegal or incapable of
being enforced, it shall be deemed to be amended and modified so that it is
valid, legal and capable of being enforced to the greatest extent possible
to the benefit of the parties hereto.
12. FGI, FGCI, and FGML agree that no change in their corporate structure shall
be permitted with the intention or objective of permitting them, or any of
them, to avoid the undertakings, agreements and obligations undertaken
herein.
13. Within ninety (90) days after March 31, 1998 FGML shall deliver to
Government a statement in writing, signed and verified by FGML and audited
by the auditors for FGML, setting forth the net after tax profit of FGML
calculated in accordance with Schedule "A" hereto.
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14. Within sixty (60) days after each calendar year end for the years 1998,
1999 and 2000, FGML shall report to Government in writing setting forth the
actual man hours for the immediately preceding calendar year. If the number
of man hours so reported is less than the Minimum Man Hours, payment of the
amount set forth in clause 4(d) shall be made with such report.
15. FGML shall keep or cause to be kept at its offices in Marystown,
Newfoundland, full, true and accurate records of its financial statements
and of the number of man hours paid for by FGML for the years 1998, 1999,
and 2000 from which the Net After Tax Profit and actual man hours may be
determined. Government and its representatives shall have access to such
information upon reasonable request and on reasonable notice. All such
information shall remain confidential and shall not be disclosed by
Government to any other party unless otherwise required by law.
16. FGML has joined in this Agreement for the purpose of acknowledging notice
of the existence and contents of this Agreement, and confirming its
obligations as provided herein, and FGML hereby covenants and agrees to do
and carry out each of those obligations and commitments as more
particularly set forth in sub-clauses 4(a), 4(b), 4(d), 4(e), 4(f) and 4(g)
hereof, and to otherwise do all things necessary to carry out and comply
with the provisions of this Agreement.
17. Should any dispute or disagreement arise between the Vendors and Government
of the one part and the Purchaser, FGML and FGI of the other part with
respect to any matter herein dealt with which the parties are unable to
resolve, the same shall be referred to a single arbitrator, if the parties
can agree on one, and if they cannot, then to an arbitration board
consisting of three arbitrators with each party nominating one arbitrator
and the two so nominated, within seven days of their nomination, selecting
a third arbitrator who shall be the chairman whereupon the arbitration
board shall, within a further seven days, proceed to arbitrate the matters
in dispute pursuant to the provisions of the Arbitration Act, R.S.N. 1990,
c. A-14 and the decision of a majority of the arbitrators shall be the
decision of the board.
18. The parties mutually covenant each to the other that they shall from time
to time hereafter upon every reasonable request so to do, make, do, execute
and deliver, cause to be made, done, executed and delivered all such
further acts, deeds, assurances and things as may be necessary in the
reasonable opinion of either of them or their respective legal counsel in
order to effectively implement and carry out the true intent and meaning of
this Agreement.
19. Time shall be of the essence of this Agreement.
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20. All representations, warranties, covenants, obligations and agreements made
herein shall survive completion of the purchase and sale of the Shares.
NOTICES
21. Any notice, demand or request herein provided or permitted to be given by
any party hereto to another may be served by personal service, by telefax
or by prepaid registered mail, delivered, telefaxed or addressed as
follows:
(a) To the Vendors:
Province of Newfoundland
Department of Industry, Trade & Technology
Deputy Minister, Max Ruelokke
Telephone Number: (000) 000-0000
Fax Number: (000) 0000000
With copies to:
O'Reilly, Xxxxxxxxxx
Attention: Xxxxxx X. X'Xxxxxx and/or Xxxxxxx X. Xxxxx
Telephone Number: (000) 000-0000
Fax Number: (000) 000-0000
(b) To the Purchaser at:
XXXXXX XXXXXXX MARYSTOWN LTD.
X/X Xxxxxx Xxxxxxx Xxxxxxxxxxxxx Xxx.
Xxxxx 000
000 X. Xxxxxxx Xx.
Xxxxxxx, XX, 00000
Attention: Xxxxx X. Xxxx III, General Counsel
Fax: (000) 000-0000
Ph.. (000) 000-0000
with copies to:
WHITE, XXXXXXXXXXX & XXXXX
Barristers & Solicitors
P.O. Box 5457
00 Xxxx Xxxxxxx Xxxxx
Xx. Xxxx'x, Xxxxxxxxxxxx
X0X 0X0
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Attention: Xxxxxxx X. Xxxxx and/or Xxxxxxx X. Xxxxxx
Telephone Number: (000) 000-0000
Fax Number: 000-000-0000
22. Service of any such notice, demand or request shall be deemed complete on
the day of actual delivery evidenced in the case of telefax by
acknowledgment of receipt or in the case of mail by the addressee's
registry receipt.
23. Any party may at any time give notice in writing to the others of any
change of address of the party giving such notice and the address therein
specified shall be deemed to be the address of such party for the giving of
notices hereunder.
24. This Agreement and the Schedules referred to herein constitute the entire
agreement between the parties hereto and supersede all prior agreements,
representations, warranties, statements, promises, information,
arrangements and understandings, whether oral or written, express or
implied, with respect to the subject matter hereof. None of the parties
hereto shall be bound or charged with any oral or written agreements,
representations, warranties, statements, promises, information,
arrangements or understandings not specifically set forth in this Agreement
or in the Schedules, documents or instruments to be delivered on or before
the Closing Date pursuant to this Agreement. The parties hereto further
acknowledge and agree that, in entering into this Agreement and in
delivering the Schedules, documents and instruments to be delivered on or
before the Closing Date, they have not in any way relied, and will not in
any way rely, on any oral or written agreements, representations,
warranties, statements, promises, information, arrangements, or
understanding, expressed or implied, not specifically set forth in this
Agreement or such Schedules, documents or instruments.
25. This Agreement is not assignable in whole or in part by any party without
the prior written consent of the other parties.
26. This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
27. This Agreement shall be interpreted in accordance with and governed by the
laws of the Province of Newfoundland, and the parties hereto irrevocably
attorn to the jurisdiction of the St. John's division of the Supreme Court
of Newfoundland.
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EXECUTION
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly and
properly executed as of the day and year first before written.
SIGNED, SEALED AND DELIVERED ) MARYSTOWN SHIPYARD LIMITED
IN THE PRESENCE OF: )
)
) __________________________________
_______________________________ )
WITNESS ) __________________________________
) NEWFOUNDLAND OCEAN ENTERPRISES
) LTD.
)
) __________________________________
)
_______________________________ ) __________________________________
WITNESS
) XXXXXX XXXXXXX CANADA INC.
)
) __________________________________
)
)
_______________________________ ) __________________________________
WITNESS
SIGNED, SEALED AND DELIVERED ) XXXXXX XXXXXXX INTERNATIONAL INC.
IN THE PRESENCE OF: )
) __________________________________
)
) __________________________________
_____________________________ )
WITNESS
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) XXXXXX XXXXXXX MARYSTOWN
) LTD.
)
) __________________________________
)
_______________________________ ) __________________________________
WITNESS
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