EXHIBIT 2.1
SUN GRO HORTICULTURE, INC.
as Vendor
and
SUN GRO HORTICULTURE INCOME FUND
as Purchaser
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ACQUISITION AGREEMENT
March 18, 2002
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TABLE OF CONTENTS
Page
ARTICLE 1 INTERPRETATION.......................................................2
Section 1.1 Defined Terms..........................................2
Section 1.2 Gender and Number......................................7
Section 1.3 Headings, etc..........................................7
Section 1.4 Currency...............................................7
Section 1.5 Certain Phrases, etc...................................7
Section 1.6 Accounting Terms.......................................8
Section 1.7 Incorporation of Schedules.............................8
ARTICLE 2 SHARE PURCHASE.......................................................8
Section 2.1 Share Purchase.........................................8
ARTICLE 3 PURCHASE PRICE.......................................................8
Section 3.1 Purchase Price.........................................8
Section 3.2 Payment of the Closing Purchase Price.................10
Section 3.3 Distribution of Special Receivables and Seba Beach
Insurance Claims......................................10
ARTICLE 4 REPRESENTATIONS AND WARRANTIES......................................10
Section 4.1 Representations and Warranties of the Vendor..........10
Section 4.1.1 Corporate Existence and Power.........................11
Section 4.1.2 Authority to Execute and Perform Under Agreement......11
Section 4.1.3 Governmental Authorization; Consents..................11
Section 4.1.4 Non-Contravention.....................................11
Section 4.1.5 Capitalization........................................12
Section 4.1.6 Financial Statements..................................12
Section 4.1.7 Other Liabilities.....................................13
Section 4.1.8 Absence of Certain Changes............................13
Section 4.1.9 Assets................................................14
Section 4.1.10 Properties............................................15
Section 4.1.11 Litigation............................................17
Section 4.1.12 Material Contracts....................................17
Section 4.1.13 Compliance with Laws; No Defaults.....................18
Section 4.1.14 Proprietary Rights....................................19
Section 4.1.15 Environmental Matters.................................19
Section 4.1.16 Tax Matters...........................................20
Section 4.1.17 Transfer Pricing......................................22
Section 4.1.18 Employee Benefit Plans................................23
Section 4.1.19 Accounts Receivable...................................24
Section 4.1.20 Inventory.............................................24
Section 4.1.21 Product Warranty......................................24
Section 4.1.22 Import/Export Laws....................................24
Section 4.1.23 Corporate Records.....................................24
Section 4.1.24 Disclosure............................................25
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Section 4.1.25 Prospectus Disclosure.................................25
Section 4.1.26 No Other Representations or Warranties................25
Section 4.2 Representations and Warranties of Xxxxx...............25
Section 4.3 Representations and Warranties of the Purchaser.......26
ARTICLE 5 PRE-CLOSING COVENANTS OF THE PARTIES................................27
Section 5.1 Conduct of Business Prior to Closing..................27
Section 5.2 Filings and Authorizations............................28
Section 5.3 Notice of Untrue Representation or Warranty...........28
Section 5.4 Section 116 Requirements..............................28
Section 5.5 Reorganization........................................30
ARTICLE 6 CONDITIONS OF CLOSING...............................................30
Section 6.1 Conditions for the Benefit of the Purchaser...........30
Section 6.2 Conditions for the Benefit of the Vendor..............32
ARTICLE 7 CLOSING.............................................................33
Section 7.1 Date, Time and Place of Closing.......................33
Section 7.2 Closing Procedures....................................33
ARTICLE 8 TERMINATION.........................................................34
Section 8.1 Termination by Purchaser..............................34
Section 8.2 Termination by Vendor.................................34
Section 8.3 Other Termination Rights..............................34
Section 8.4 Effect of Termination.................................34
ARTICLE 9 INDEMNIFICATION.....................................................35
Section 9.1 Indemnification in Favour of the Purchaser............35
Section 9.2 Specific Indemnifications in Favour of The Purchaser..35
Section 9.3 Indemnification in Favour of the Vendor...............35
Section 9.4 Time Limitations......................................36
Section 9.5 Indemnification Proceedings - Third Party Claims......37
Section 9.6 Other Limitations.....................................38
Section 9.7 Amalco Entitled to Indemnities........................39
Section 9.8 Tax Indemnity.........................................40
ARTICLE 10 POST-CLOSING COVENANTS.............................................42
Section 10.1 Access to Books and Records...........................42
Section 10.2 Insurance Proceeds and Distributed Claims.............42
Section 10.3 Service Agreement.....................................42
Section 10.4 Reimbursement of Insurance Costs......................43
Section 10.5 Xxxxx Guarantee.......................................43
Section 10.6 Transfer Pricing......................................43
ARTICLE 11 SETTLE DISPUTES....................................................44
Section 11.1 Best Efforts to Settle Disputes.......................44
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ARTICLE 12 MISCELLANEOUS......................................................45
Section 12.1 Notices...............................................45
Section 12.2 Time of the Essence...................................46
Section 12.3 Brokers...............................................46
Section 12.4 Announcements.........................................46
Section 12.5 Consequential Damages.................................46
Section 12.6 Third Party Beneficiaries.............................46
Section 12.7 Amendments............................................47
Section 12.8 Waiver................................................47
Section 12.9 Non-Merger............................................47
Section 12.10 Entire Agreement......................................47
Section 12.11 Successors and Assigns................................47
Section 12.12 Severability..........................................48
Section 12.13 Governing Law.........................................48
Section 12.14 Further Assurances....................................48
Section 12.15 Execution by the Purchaser............................48
Section 12.16 Counterparts..........................................49
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ACQUISITION AGREEMENT
Acquisition Agreement made as of March 18, 2002 between Xxxxx
Horticulture, Inc. ("XXXXX HORTICULTURE") and Xxxxx Nurseries, Inc. ("XXXXX
Nurseries") (collectively, "XXXXX"), Sun Gro Horticulture Canada Ltd. (the
"COMPANY"), Sun Gro Horticulture, Inc. (the "VENDOR") and Sun Gro Horticulture
Income Fund (the "PURCHASER").
RECITALS
A. The Vendor owns all of the issued and outstanding shares (the "SHARES") of
the Company, a corporation organized under the federal laws of Canada, and the
Company owns directly or indirectly all the issued and outstanding equity
interests in Sunshine Peat Xxxx Ltd., a Manitoba corporation, Sunshine Peat Xxxx
Ltd., a New Brunswick corporation, Sun Gro Horticulture CM Ltd., a Canadian
corporation, Sun Gro Holdings Inc., a Delaware corporation, Sun Gro Horticulture
Processing Inc., a Delaware corporation and Sun Gro Horticulture Distribution
Inc., a Delaware corporation.
B. The Vendor desires to sell the Amalco Shares (as defined below) to the
Purchaser, and the Purchaser desires to purchase the Amalco Shares from the
Vendor all pursuant to the terms and conditions set forth herein.
C. Prior to completion of the sale of the Amalco Shares to the Purchaser, Xxxxx
and the Vendor have agreed to complete or cause to be completed the following
transactions (the "REORGANIZATION"):
(i) the Vendor transferring all of its right, title and interest
in all of its assets (other than the Shares and certain other
excluded assets) and certain of its liabilities to the
Company;
(ii) the Vendor transferring the Shares to a newly incorporated
Nova Scotia unlimited liability corporation ("SUN GRO NOVA
SCOTIA"), all of the shares of which will be owned by the
Vendor;
(iii) Sun Gro Nova Scotia and the Company, which will continue under
the laws of Nova Scotia prior to Closing, amalgamating to form
an amalgamated limited liability company organized under the
laws of Nova Scotia ("AMALCO"), all of the issued and
outstanding shares (the "AMALCO SHARES") of which will be owed
by the Vendor;
(iv) Amalco transferring all of its right, title and interest in
certain of its assets and certain of its liabilities to Sun
Gro Holdings Inc. and Sun Gro Holdings Inc. transferring all
of its right, title and interest in certain of the assets and
liabilities acquired from Amalco to Sun Gro Horticulture
Processing Inc. and all of its right, title and interest in
the remaining assets and liabilities acquired from Amalco to
Sun Gro Horticulture Distribution Inc. and Amalco, Sun Gro
Horticulture Processing Inc., Sun Gro Horticulture
Distribution Inc. and Sun Gro Horticulture CM Ltd. entering
into certain operational agreements including a distribution
agreement between Amalco and Sun Gro Horticulture Distribution
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Inc., a contract manufacturing agreement between Amalco and
Sun Gro Horticulture Processing Inc., a management agreement
between Sun Gro Horticulture Distribution Inc. and Sun Gro
Horticulture CM Ltd. and a management agreement between Sun
Gro Horticulture CM Ltd. and Amalco.
ARTICLE 1
INTERPRETATION
SECTION 1.1 DEFINED TERMS.
(1) As used in this Agreement, the following terms have the following
meanings:
"AFFILIATE" means with respect to any Person, any other Person directly
or indirectly controlling, controlled by or under common control with
such first Person, and a Person is deemed to control another Person if
the first Person possesses, directly or indirectly, the power to direct
or cause the direction of the management and policies of the other
Person whether through the ownership of voting securities, by contract,
or otherwise; and the terms controlling and controlled shall have
similar meanings.
"AGREEMENT" means this acquisition agreement and all schedules and
exhibits hereto as it or they may be amended from time to time; and the
expressions "Article" and "Section" followed by a number mean and refer
to the specified Article or Section of this Agreement.
"ASSETS" means the tangible and intangible property and assets of the
Vendor, the Company or any of their subsidiaries used in connection
with the Business.
"ASSET PURCHASE NOTE" means the secured promissory note in the amount
of $111,578,000 owed by the Company (and to be assumed by Amalco) to
the Vendor in respect of part of the purchase price of the assets of
the Vendor transferred to the Company under the Reorganization.
"AUTHORIZATION" means, with respect to any Person, or in connection
with the Business, any consents, decrees, exemptions, certifications,
orders, permits, approvals, waivers, licences or similar authorizations
of any Governmental Body having jurisdiction over the Person in
connection with, or which are required to carry on, the Business.
"BALANCE SHEET DATE" has the meaning ascribed to it in Section 4.1.7.
"BEST EFFORTS" means the efforts that a prudent Person who desires to
complete the transaction would use in similar circumstances to ensure
that a closing occurs as expeditiously as possible without the
necessity of incurring or assuming any material obligations or paying
any material amounts to an unrelated third party, except as otherwise
agreed by the parties to the transaction.
"BOOKS AND RECORDS" means all books of account, tax records, personnel
records, sales and purchase records, customer and supplier lists, lists
of potential customers, referral sources, research and development
reports and records, production reports and records, equipment logs,
operating guides and manuals, business reports, plans and projections
and all other documents files, correspondence and other information
(whether in written, printed, electronic or computer printout form)
relating to the Business.
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"BUSINESS" means the peat harvesting and the growing media production
and distribution business carried on before the Closing Date by the
Vendor and the Company through a number of subsidiaries, as described
in the Prospectus.
"BUSINESS DAY" means any day of the year, other than a Saturday or
Sunday or any day on which banks are required or authorized to close in
Vancouver, British Columbia.
"CCRA" means the Canada Customs and Revenue Agency and any provincial
tax authority that may be relevant in the circumstances in which the
term CCRA is used.
"CLOSING" means the completion of the transaction of purchase and sale
of the Amalco Shares contemplated in this Agreement.
"CLOSING DATE" means March 27, 2002 or such earlier or later date as
the parties may mutually agree in writing.
"CONSENTS" means all approvals, orders or consents of or filings with
any Governmental Body or any third party required to be obtained or
made by the Vendor or any of the Purchased Companies in connection with
the execution, delivery and performance of this Agreement or any other
documents and agreements to be delivered under this Agreement or the
performance of the Vendor's obligations under this Agreement or any
Transaction Documents or other documents and agreements to be delivered
under this Agreement.
"CONTRACT" means any written agreement, indenture, mortgage, contract,
lease, deed of trust, licence, option, instrument, collective
agreement, accepted purchase order or other commitment entered into or
having a binding effect on any of the Purchased Companies or by which
any of the Purchased Companies or their Assets or the Business is
bound.
"DECLARATION OF TRUST" means the declaration of trust made the 12th day
of February, 2002, under the laws of the Province of British Columbia
pursuant to which the Purchaser was established, as amended from time
to time.
"DISTRIBUTED CLAIMS" has the meaning ascribed to in it Section 4.7.
"GAAP" means at any time, accounting principles generally accepted in
Canada as set out in the Handbook of the Canadian Institute of
Chartered Accountants, at the relevant time applied for each period on
a basis consistent with past periods.
"GOVERNMENTAL BODY" means (i) any multinational, federal, provincial,
state, municipal, local or other government or public department,
central bank, court, commission, board, bureau, agency or
instrumentality, domestic or foreign (ii) any subdivision or authority
of any of the foregoing, or (iii) any quasi-governmental or private
body exercising any regulatory, expropriation or taxing authority under
or for the account of any of the above.
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"INDEBTEDNESS" means the following items with respect to the Purchased
Companies: (i) all indebtedness for borrowed money, including accrued
interest expense thereon; (ii) all notes payable representing
extensions of credit, whether or not representing obligations for
borrowed money; (iii) any guarantee securing indebtedness for borrowed
money; and (iv) any fees or penalties or any other costs related to the
early payoff or termination of any of the foregoing; and (v) marked to
market obligations under derivatives.
"INTER-COMPANY DEBT" means the inter-company debt that will be owed by
Amalco to Xxxxx as of the Closing Date, which amount shall be equal to
$223,495,775 (being the net proceeds of the Offering plus the initial
amount drawn on the Credit Facility described in Section 6.1(i)) less:
(i) the amount of the Asset Purchase Note; (ii) the amount of the Share
Purchase Note; (iii) the amount of the Closing Purchase Price; and (iv)
the Canadian dollar equivalent of the Term Debt on the Closing Date.
"INTERIM PERIOD" means the period between the close of business on the
date hereof and the earlier of the (i) termination of this Agreement,
or (ii) Time of Closing.
"LAWS" means any and all applicable laws in effect on the Closing Date
including all statutes, codes, ordinances, decrees, rules, regulations,
municipal by-laws, judicial or arbitral or administrative or
ministerial or departmental or regulatory judgments, orders, decisions,
ruling or awards, and general principles of common and civil law and
equity, legally binding on or affecting the Person referred to in the
context in which the word is used.
"LIEN" means any mortgage, charge, pledge, hypothecation, security
interest, assignment, lien (statutory or otherwise), title retention
agreement or arrangement, restrictive covenant or other encumbrance of
any nature or any other arrangement or condition which, in substance,
secures payment or performance of an obligation.
"MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE" means any effect
or change that is, or as far as can be reasonably determined is
reasonably likely to be, materially adverse to the results of
operations, financial condition, assets, properties, prospects or
business of the Business; provided, however, that in respect of the
Company, none of the following shall be deemed by itself or themselves,
either alone or in combination, to constitute a Material Adverse
Effect: (x) failure by the Company (on a consolidated basis) to meet
internal earnings or revenue projections (provided, that the foregoing
shall not prevent the Purchaser from asserting that any underlying
cause of such failure independently constitutes a Material Adverse
Effect or Material Adverse Change); or (y) conditions affecting the
horticulture and growing media industry as a whole or the North
American economy as a whole and that are not specifically related to,
and does not have a materially disproportionate effect (relative to
other industry participants) on, the Company.
"MATERIAL FACT" means, where used in relation to securities issued or
proposed to be issued, a fact that significantly affects, or could
reasonably be expected to significantly affect, the market price or
value of those securities.
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"MISREPRESENTATION" means (i) an untrue statement of material fact, or
(ii) an omission to state a material fact that is required to be stated
or that is necessary to make a statement not misleading in light of the
circumstances in which it was made.
"NET WORKING CAPITAL" means (i) the sum of cash, cash equivalents,
marketable securities, net trade receivables, other receivables (other
than the Special Receivables), inventory, including raw materials,
scratch peat, packaging, depot costs in inventory, supplies and
finished goods (including fixed product cost variance in inventory),
prepaid expenses, refundable income taxes and deposits, minus (ii) the
sum of any bank overdraft amounts, net accounts payable (including net
of import tax credits which are receivable or payable), accrued
liabilities, accrued expenses (other than accrued interest), accrued
Taxes (including for greater certainty, transfer taxes associated with
the transfer of assets from the Vendor to the Company under the
Reorganization), accrued employee compensation, but excluding any
accrued employee bonuses and severance payments related to the sale of
the Purchased Companies (which sale related bonuses and severance
payments shall be accrued and paid by Xxxxx or the Vendor rather than
Amalco), all calculated in accordance with GAAP. The following shall be
disregarded in calculating Net Working Capital: (i) Indebtedness
(including, for greater certainty the Inter-Company Debt, (ii) deferred
income taxes, (iii) any assets or liabilities relating to insurance,
including without limitation, with respect to the Seba Beach facility
(the "SEBA BEACH FACILITY") and (iv) the Special Receivables.
"NET WORKING CAPITAL ADJUSTMENT" means the amount by which the Net
Working Capital of Amalco (on a consolidated basis) as at the end of
the day prior to the Closing Date exceeds (in which case, the Net
Working Capital Adjustment shall be a positive number and such amount
shall be paid by or on behalf of the Purchaser to the Vendor pursuant
to Section 3.1(2)) or, is less than (in which case, the Net Working
Capital Adjustment shall be a negative number and such amount shall be
paid by the Vendor to the Purchaser pursuant to Section 3.1(2))
U.S.$43,870,441.
"NOTICE" means any written directive, order, claim, litigation,
investigation, proceeding, letter or other written communication, from
any Person.
"OFFERING" means the offering of trust units of the Purchaser to the
public pursuant to the Prospectus which offering is to be completed on
the Closing Date.
"ORDINARY COURSE" means, with respect to an action taken by a Person in
connection with the Business, that such action is consistent with the
past practices of the Person in connection with the Business and is
taken in the ordinary course of the normal day-to-day operations of the
Person in connection with the Business.
"PARTIES" means Xxxxx Horticulture, Xxxxx Nurseries, the Vendor, the
Company, the Purchaser and any other Person who may become a party to
this Agreement.
"PERMITTED ENCUMBRANCES" means Liens that, individually or in
combination, would not have a Material Adverse Effect on the value to
the Company of, or the ability of the Company to use, the Assets, or
Liens for taxes not yet due and payable.
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"PERSON" means a natural person, partnership, limited liability
partnership, corporation, joint stock company, trust, unincorporated
association, joint venture or other entity or Governmental Body, and
pronouns have a similarly extended meaning.
"PROSPECTUS" means the final prospectus of the Purchaser dated March
18, 2002 relating to the Offering.
"PURCHASED COMPANIES" means collectively Amalco and all subsidiaries of
Amalco at the Time of Closing (as set forth in Schedule 4.1.5).
"SHARE PURCHASE NOTE" means the promissory note in the amount of
$52,546,000 owed by Sun Gro Nova Scotia (and to be assumed by Amalco)
to the Vendor in respect of the purchase price of the Shares under the
Reorganization.
"SPECIAL RECEIVABLES" means the receivables from the Vendor's insurance
carrier arising from allegedly defective product sold to certain
customers, which amount is included in the line item "Other
Receivables" on the Company's consolidated balance sheet and was an
aggregate amount of US$1,167,559 as of March 3, 2002.
"SUBSIDIARY" has the meaning ascribed thereto in the CANADA BUSINESS
CORPORATIONS ACT.
"TAXES" includes all taxes, duties, fees, premiums, assessments,
imposts, levies and other charges of any kind whatsoever imposed by any
Governmental Body, together with all instalments, interest, penalties,
fines, additions to tax or other additional amounts imposed in respect
thereof, imposed by any federal, provincial, territorial, state, local
or foreign Governmental Body, including those levied on, or measured
by, or referred to as income, gross receipts, profits, capital,
transfer, land transfer, sales, goods and services, ad valorem, use,
value-added, excise, stamp, withholding, business, franchising,
property (both real and personal), payroll, employee withholding,
employment, occupation, health, social service, environmental,
education and social security taxes, all surtaxes, all customs duties
and import and export taxes, all license, franchise and registration
fees and taxes all unemployment or employment insurance, workers'
compensation, health insurance, Canada, Quebec and other government
pension plan premiums, U.S. Pension Benefit Guaranty Corporation
premiums, and other obligations of the same or of a similar nature to
any of the foregoing and whether disputed or not.
"TAX ACT" means the INCOME TAX ACT (Canada), as amended, and a
reference to any provisions of the Tax Act includes a reference to any
analogous provisions of provincial income tax legislation that may be
relevant in the circumstances in which the reference occurs.
"TERM DEBT" means the US$12 million term debt owing by the Company to a
syndicate of lenders, which amount is part of the Xxxxx Senior Credit
Facility.
"TIME OF CLOSING" means the Time of Closing on the Closing Date
provided for in Section 7.1.
"TRANSFER PRICING STUDY" means:
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(a) the transfer pricing study performed by
PricewaterhouseCoopers LLP ("PWC") and covering
letter dated February 22, 2002;
(b) a memorandum from Xxxxx Xxxxxx and Xxxx Xxxxxx to
Xxxx Xxxxxxx dated March 18, 2002 regarding proposed
changes in functions, risks and asset ownership;
(c) a memorandum from Xxxxx Xxxxxx and Xxxx Xxxxxxxx to
Xxxx Xxxxxxx dated February 22, 2002 regarding the
"Sun Gro Restructure";
(d) a memorandum from Xxxxx Xxxxxx to Xxxx Xxxxxxx dated
March 7, 2002 regarding "Sun Gro Group Operational
Guidelines"; and
(e) all agreements as of the Closing Date between the
Purchaser and its direct and indirect subsidiaries or
any of them.
(2) Definitions contained in this section are not exhaustive of the defined
terms or expressions used in this Agreement and other terms or
expressions may be defined throughout this Agreement.
SECTION 1.2 GENDER AND NUMBER.
Any reference in this Agreement to gender includes all genders and
words importing the singular number only shall include the plural and vice
versa.
SECTION 1.3 HEADINGS, ETC.
The provision of a Table of Contents, the division of this Agreement
into Articles and Sections and the insertion of headings are for convenient
reference only and are not to affect its interpretation.
SECTION 1.4 CURRENCY.
All references in this Agreement to dollars, unless otherwise
specifically indicated, are expressed in Canadian currency.
SECTION 1.5 CERTAIN PHRASES, ETC.
In this Agreement (i) (y) the words "INCLUDING" and "INCLUDES" mean
"INCLUDING (OR INCLUDES) WITHOUT LIMITATION", unless the context otherwise
expressly provides, such as, including only and (z) the phrase "THE AGGREGATE
OF", "THE TOTAL OF", "THE SUM OF", or a phrase of similar meaning means "THE
AGGREGATE (OR TOTAL OR SUM), WITHOUT DUPLICATION, OF", and (ii) in the
computation of periods of time from a specified date to a later specified date,
unless otherwise expressly stated, the word "FROM" means "FROM AND INCLUDING"
and the words "TO" and "UNTIL" each mean "TO (OR UNTIL) BUT EXCLUDING".
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SECTION 1.6 ACCOUNTING TERMS.
All accounting terms not specifically defined in this Agreement shall
be interpreted in accordance with GAAP.
SECTION 1.7 INCORPORATION OF SCHEDULES.
The following Exhibit is attached to this Agreement and forms an
integral part of this Agreement:
Exhibit A Disclosure Schedules
ARTICLE 2
SHARE PURCHASE
SECTION 2.1 SHARE PURCHASE.
Subject to the terms and conditions of this Agreement, the Vendor
agrees to sell, assign and transfer to the Purchaser, and the Purchaser agrees
to purchase from the Vendor, the Amalco Shares free and clear of any Liens.
ARTICLE 3
PURCHASE PRICE
SECTION 3.1 PURCHASE PRICE.
(1) CLOSING PURCHASE PRICE. At the Closing, the Purchaser shall pay $1 (the
"Closing Purchase Price") pursuant to Section 3.2.
(2) POST CLOSING ADJUSTMENT.
(a) Following the Closing Date, the Purchaser shall prepare or
cause to be prepared an actual balance sheet of Amalco in
accordance with GAAP as of the end of the day prior to the
Closing (the "ACTUAL CLOSING BALANCE SHEET") and a related
calculation of the Net Working Capital Adjustment based on the
Actual Closing Balance Sheet. Within thirty (30) days
following the Closing Date, the Purchaser shall deliver the
Actual Closing Balance Sheet to the Vendor, together with a
computation of the Net Working Capital Adjustment.
(b) The Vendor shall have thirty (30) days following the delivery
of the Actual Closing Balance Sheet during which to review the
Actual Closing Balance Sheet and the computation of the Net
Working Capital Adjustment at the Vendor's expense. The
Purchaser shall provide such access to the financial books and
records of the Purchased Companies to the Vendor and the
Vendor's accountants during normal business hours in
connection with the determinations to be made pursuant to this
Section 3.1 as the Vendor may reasonably request. If the
Vendor has not delivered to the Purchaser a proposed
modification to the Actual Closing Balance Sheet pursuant to
Subsection 3.1(2)(c) within 30 days after delivery to the
Vendor of the Actual Closing Balance Sheet, then the Net
Working Capital Adjustment, based on the Actual Closing
Balance Sheet, shall be determined to be final and binding and
shall be paid in accordance with subsection 3.1(2)(d).
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(c) If the Vendor delivers to the Purchaser a proposed
modification to the Actual Closing Balance Sheet or the Net
Working Capital Adjustment, in writing setting forth (i) the
amount of the proposed modification, (ii) the item or items to
which such proposed modification relates, and (iii) the facts
and circumstances supporting the reasonableness and propriety
of such modifications, then the Vendor and the Purchaser shall
use their Best Efforts for fifteen (15) days after any such
proposed modifications to settle each dispute related to the
Actual Closing Balance Sheet and to agree upon the Net Working
Capital Adjustment. Upon the expiration of such 15-day period,
any party may submit in writing for resolution to any major
international accounting firm (other than PWC) mutually agreed
by the parties (the "INDEPENDENT ACCOUNTANTS") any dispute
with respect to such matters which has not been resolved. The
Vendor and the Purchaser shall use their Best Efforts to cause
the Independent Accountants to render a decision within
fifteen (15) days following submission for resolution of any
such dispute. The costs of the Independent Accountants shall
be divided equally between the Purchaser and the Vendor. The
decision of the Independent Accountants with respect to the
Actual Closing Balance Sheet or the computation of the Net
Working Capital Adjustment shall be final and binding on each
of the parties hereto.
If the final and binding Net Working Capital Adjustment is a positive
number, then the Purchaser shall, within five (5) business days
following the date the Net Working Capital Adjustment is deemed to be
final and binding pursuant to subsection 3.1(2)(b) or agreed upon or
determined pursuant to subsection 3.1(2)(c), pay or cause to be paid by
wire transfer of immediately available funds to such account as will
have been designated by the Vendor in writing an amount equal to (w)
the Net Working Capital Adjustment plus (x) 7.00% interest per annum on
such amount from the Closing Date through the date of payment thereof
(less any applicable withholding tax). If the Net Working Capital
Adjustment is a negative number, then the Vendor shall, within five (5)
business days following the date the Net Working Capital Adjustment is
deemed to be final and binding pursuant to subsection 3.1(2)(b) or
agreed upon or determined pursuant to subsection 3.1(2)(c) pay by wire
transfer of immediately available funds to such account designated by
the Purchaser in writing, an amount equal to (y) the Net Working
Capital Adjustment plus (z) 7.00% interest per annum on such amount
from the Closing Date through the date of payment thereof (less any
applicable withholding tax).
(3) INDEBTEDNESS AT CLOSING. On or before the Closing, the Vendor shall pay
or assume all Indebtedness of the Purchased Companies, except: (i) the
loan from the Atlantic Canada Opportunities Agency the principal amount
of which was US$191,000 as of March 3, 2002; (ii) the Asset Purchase
Note; (iii) the Share Purchase Note; (iv) the Inter-Company Debt; and
(v) the Term Debt.
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(4) REPAYMENT OF AMALCO LOANS. The Purchaser agrees to cause Amalco to
repay, on the Closing Date, the Asset Purchase Note, the Share Purchase
Note, the Term Debt and the Inter-Company Debt, and the Vendor and
Xxxxx hereby acknowledge that upon payment of the Inter-Company Debt,
Asset Purchase Note and Share Purchase Note there are no debts or other
amounts owed by the Company to the Vendor or Xxxxx.
SECTION 3.2 PAYMENT OF THE CLOSING PURCHASE PRICE.
The Closing Purchase Price shall be paid by the Purchaser and satisfied
at the time of Closing on the Closing Date by certified cheque or bank draft
payable as directed by the Vendor, in writing, at least two business days prior
to the Closing Date.
SECTION 3.3 DISTRIBUTION OF SPECIAL RECEIVABLES AND SEBA BEACH INSURANCE
CLAIMS.
Following the Closing, Amalco or the Purchaser shall pay or cause to be
paid to the Vendor an amount equal to each amount received by Amalco in respect
of the following (the "DISTRIBUTED CLAIMS"):
(a) all insurance proceeds realized by the Purchased Companies
following the Closing Date related to the Seba Beach Facility,
other than insurance proceeds received by the Purchased
Companies for insurable claims which occur after the Closing
Date; and
(b) all other payments on, or rights related to or arising out of
such insurance claims,
and in respect of which, it is acknowledged that the Vendor's recourse is
limited to the proceeds of any Distributed Claims and no interest is being
charged by the Vendor and such payments by Amalco shall be limited to the
repayment of any direct or indirect advances made by the Vendor to the Company
in respect of the Distributed Claims.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE VENDOR.
To the extent the following representations and warranties are limited
to "Vendor's Knowledge", the "Knowledge of the Company", or similar phrases,
"Knowledge" shall mean the current actual knowledge of any one or more of Xxxxx
Xxxxxx, Xxxx Xxxxx, Xxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxx Xxxxxxx and Xxxxx
Xxxxxxx. Each of the Vendor and Xxxxx jointly and severally hereby represents
and warrants to the Purchaser, as of the date hereof, except as set forth in the
disclosure Schedule A attached (which disclosure schedule shall specifically
reference the Section in this Agreement to which such disclosure schedule
relates) and acknowledges and confirms that the Purchaser is relying upon these
representations and warranties in connection with the purchase by the Purchaser
of the Business:
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SECTION 4.1.1 CORPORATE EXISTENCE AND POWER.
The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of Canada, and has all corporate powers required to
carry on its business as now and as proposed to be conducted. The Company is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the character of the property owned or leased by it
or the nature of its activities make such qualification necessary. Each of the
Company's subsidiaries is a corporation duly incorporated and validly existing
under the laws of the jurisdiction of its incorporation, and has all corporate
powers required to carry on its business as now and as proposed to be conducted.
As of the Closing Date the Company will be amalgamated and in good standing
under the laws of Nova Scotia and will have all corporate power required to
carry on its business as then proposed to be conducted.
SECTION 4.1.2 AUTHORITY TO EXECUTE AND PERFORM UNDER AGREEMENT.
The Vendor and each of the Company and the Purchased Companies has all
requisite corporate power and corporate authority to enter into and perform its
obligations under this Agreement and all ancillary documents and instruments
executed in connection herewith (including, without limitation, the agreements
and instruments relating to the Reorganization) (collectively, the "TRANSACTION
DOCUMENTS") to which it is a party, and the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate action
on the part of the Vendor and each of the Company and the Purchased Companies.
This Agreement has been, and each of the other Transaction Documents to which
the Vendor and each of the Company and the Purchased Companies is a party will
be, as of the Closing, duly executed and delivered by the Vendor and each of the
Company and the Purchased Companies, as applicable, and constitutes, or will
constitute, the legal, valid and binding obligations of the Vendor or the
Company or the Purchased Companies, as the case may be, enforceable against each
of them in accordance with the terms thereof, except that (a) such enforcement
may be subject to applicable bankruptcy, insolvency or other similar laws, now
or hereafter in effect, affecting creditors' rights generally and (b) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefore may be brought.
SECTION 4.1.3 GOVERNMENTAL AUTHORIZATION; CONSENTS.
Except as set forth on SCHEDULE 4.1.3 hereto, no consent, approval,
waiver or other action by any Person under any material license, material
franchise, material permit or other similar material authorization held by the
Vendor, the Company or the Purchased Companies or under any material Contract,
is required or necessary for the execution, delivery and performance by the
Vendor or the Company or the Purchased Companies of this Agreement or any other
Transaction Document or the consummation of the transactions contemplated hereby
or thereby.
SECTION 4.1.4 NON-CONTRAVENTION.
Except as set forth on SCHEDULE 4.1.4 hereto, none of the execution,
delivery or performance by the Vendor or the Company or the Purchased Companies
of this Agreement or any other Transaction Document does or will (i) contravene
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or conflict with or constitute a violation of any provision of any Law binding
upon or applicable to the Vendor, the Company or the Purchased Companies; (ii)
constitute a default under or give rise to any right of termination,
cancellation or acceleration of any material right or material obligation of the
Vendor, the Company or any of the Purchased Companies or to a loss of any
material benefit to which the Company or any of the Purchased Companies is
entitled under any provision of any material Contract or any material license,
material franchise, material permit or other similar material authorization held
by the Vendor, the Company or any of the Purchased Companies including those
listed in SCHEDULE 4.1.11 or (iii) result in the creation or imposition of any
Lien on any material asset of the Company or any of the Purchased Companies.
SECTION 4.1.5 CAPITALIZATION.
(a) All outstanding shares of the Purchased Companies have been,
or will have been at the Closing, duly authorized and validly
issued and are, or will be at Closing, fully paid and
non-assessable and none of them was issued in violation of any
pre-emptive right. The Vendor will have, immediately prior to
the Closing, good and marketable title to the Amalco Shares
free and clear of any Liens. Immediately prior to the Closing,
Amalco will have good and marketable title to all of the
issued and outstanding shares of Sun Gro Holdings Inc. and Sun
Gro Horticulture CM Ltd. free and clear of any Liens.
Immediately prior to the Closing, Sun Gro Holdings Inc. will
have good and marketable title to all of the issued and
outstanding shares of Sun Gro Horticulture Processing Inc. and
Sun Gro Horticulture Distribution Inc. free and clear of any
Liens.
(b) Except as set forth on SCHEDULE 4.1.5 hereto, there are no
outstanding (i) shares of capital stock or other voting
securities of the Company or any of the Purchased Companies,
(ii) securities of the Company or any of the Purchased
Companies convertible into or exchangeable for shares of
capital stock or voting securities of such Person or (iii)
options or other rights to acquire from the Company or any of
the Purchased Companies any capital stock, voting securities
or securities convertible into or exchangeable for capital
stock or voting securities of such Person (the items in
clauses (i), (ii) and (iii) are referred to herein
collectively as the "OTHER SECURITIES"). There are no
outstanding obligations of the Company or any of the Purchased
Companies to issue or deliver or to repurchase, redeem or
otherwise acquire any Other Securities.
(c) Except as set forth on SCHEDULE 4.1.5 hereto, none of the
Company or any of the Purchased Companies owns, directly or
indirectly, any shares of capital stock of any corporation, or
any equity investment in any other Person, and none of the
Company or any of the Purchased Companies has any obligation
to acquire any such shares or to make any such investment.
SECTION 4.1.6 FINANCIAL STATEMENTS.
The financial statements included in the Prospectus: (i) are accurate,
correct and complete in accordance with the books of account and records of the
Company and each of the Purchased Companies, (ii) have been prepared in
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accordance with GAAP on a consistent basis throughout the indicated periods, and
(iii) present fairly, in all material respects, the financial condition, assets
and liabilities and results of operation of the Company and of the Purchased
Companies at the dates and for the relevant periods indicated.
SECTION 4.1.7 OTHER LIABILITIES.
The Company and the Purchased Companies have no liabilities or
obligations, whether accrued, absolute, contingent or otherwise (including,
without limitation, unasserted claims) except (a) to the extent set forth or
provided for in the financial statements included in the Prospectus or the notes
thereto, (b) as set forth and identified as such in any Schedule attached hereto
or as described in this Agreement or (c) liabilities of the same nature as those
set forth in the Financial Statements and the notes thereto incurred since
September 30, 2001 (the "BALANCE SHEET DATE") in the ordinary course of the
Company's business, substantially consistent with past practices, which would
not, either individually or in the aggregate, cause a Material Adverse Change.
SECTION 4.1.8 ABSENCE OF CERTAIN CHANGES.
Except as set forth on SCHEDULE 4.1.8 hereto, since the Balance Sheet
Date each of the Company and the Purchased Companies has conducted its business
in the ordinary course substantially consistent with past practices. Since the
Balance Sheet Date, there has not been any Material Adverse Change and without
limiting the generality of the foregoing, except as set forth on SCHEDULE 4.1.8
hereto or as contemplated by the Reorganization, since the Balance Sheet Date,
there has not been:
(a) any issuance by the Company or the Purchased Companies of
shares of capital stock or other securities of or other
ownership interest in the Company or the Purchased Companies,
(ii) any repurchase, redemption or other acquisition, or any
amendment of any term, by the Company or its subsidiaries of
any outstanding shares of capital stock or other securities
of, or other ownership interests in the Company or a Purchased
Company or (iii) any declaration or payment of any dividend on
the Shares, except with respect to the assignment to the
Vendor of the Distributed Claims;
(b) (i) any creation or assumption by the Vendor, the Company or
any of its subsidiaries of any Lien on any material asset of
the Company or any Purchased Company, other than in the
ordinary course of business substantially consistent with past
practices, or (ii) any making by the Company or any Purchased
Company of any loan, advance or capital contribution to or
investment in any Person in excess of US$250,000;
(c) any personal property damage, destruction or casualty loss or
personal injury loss (whether or not covered by insurance)
affecting the business or assets of the Company or any
Purchased Company in an individual amount in excess of
US$250,000;
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(d) except in the ordinary course of business substantially
consistent with past practices, any increase in compensation,
bonus or other benefits payable to directors, consultants,
officers or employees of the Company or any Purchased Company;
(e) any activity or proceeding by a labour union or representative
thereof to organize any employees of the Company or any
subsidiary, which employees were not subject to a collective
bargaining agreement, or any lockouts, strikes, slowdowns,
work stoppages or threats thereof by or with respect to any
employees of the Company or any Purchased Company;
(f) other than in the ordinary course of business substantially
consistent with past practices, any sale, lease, transfer or
disposal by the Company or any Purchased Company of any assets
or rights with a fair market value in excess of US$250,000 in
the aggregate, except with respect to the assignment to the
Vendor of the Distributed Claims;
(g) any payment, discharge or satisfaction by the Company or any
Purchased Company of any liability, obligation or Lien other
than payment, discharge or satisfaction of (i) Indebtedness as
it matures and becomes due and payable in the ordinary course
of business substantially consistent with past practice, or
(ii) liabilities, obligations or Liens in the ordinary course
of business substantially consistent with past practice,
including, without limitation, relating to the re-construction
of the Seba Beach Facility;
(h) any change in any of the accounting or tax principles,
practices or methods used by the Company or any Purchased
Company, except as required by changes in applicable Laws or
any change in reserve amounts or policies;
(i) any capital expenditures made or authorized by the Company or
any Purchased Company in excess of US$250,000, except (i) in
the ordinary course of business substantially consistent with
past practice and (ii) in connection with the re-construction
of the Seba Beach Facility;
(j) any change in the Company's or any Purchased Company's working
capital practices generally, including accelerating any
collections of cash or accounts receivable or deferring any
payments, or any failure to make timely accruals, including
with respect to accounts payable and liabilities incurred in
the ordinary course of business substantially consistent with
past practice; or
(k) any commitment or agreement to do any of the foregoing.
SECTION 4.1.9 ASSETS.
The Company and each Purchased Company has good, marketable and
exclusive title to all of its Assets, free and clear of all Liens except
Permitted Encumbrances. Each of the Assets is owned by one or more of the
Company or the Purchased Companies, and the Assets include all assets that are
necessary for use in and operation of the Business conducted or proposed to be
conducted by the Company and the Purchased Companies.
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SECTION 4.1.10 Properties.
(a) All of the real property and facilities owned by the Company
or any of the Purchased Companies in fee or freehold are
listed on SCHEDULE 4.1.10(a) (each, an "OWNED FACILITY," and
collectively, the "OWNED FACILITIES"). With respect to each
Owned Facility, as applicable:
(i) except as set forth on SCHEDULE 4.1.10(a)(i), there
is no action, suit, arbitration, unsatisfied order or
judgment pending, or to the Knowledge of the Company
threatened, against the Vendor, the Company or any
subsidiary, which, if adversely determined, would,
individually or with all others, have a Material
Adverse Effect;
(ii) neither the Company nor any subsidiary has received
any written notice of any condemnation or eminent
domain proceedings (or proceedings or actions of a
similar nature) relating thereto;
(iii) except as set forth on SCHEDULE 4.1.10(a)(iii),
neither the Company nor any subsidiary has received
any written notice of an uncured violation of any
federal, provincial, state or local law applicable to
any Owned Facility or the operation thereof which
would, individually or with all others, have a
Material Adverse Effect;
(iv) to the Knowledge of the Company, each Owned Facility
and its current use does not violate any local zoning
or land use ordinance, law or regulation or any
private covenants, conditions and restrictions
encumbering such Owned Facility;
(v) to the Knowledge of the Company, there is not now
pending or threatened any proceeding for the
rezoning, condemnation or other taking of any Owned
Facility which would, individually or with all
others, have a Material Adverse Effect; and
(vi) except for planned capital expenditures as described
in the Prospectus, to the Knowledge of the Company,
there is no defect or condition requiring capital
repair with respect to the improvements on an Owned
Facility which would, individually or with all
others, have a Material Adverse Effect and which
would cost in excess of US$250,000 to cure.
(vii) the Company, or one of the Purchased Companies, has
good and marketable fee simple title to all Owned
Property, free and clear of all Liens, other than (a)
easements, covenants, rights-of-way and other
encumbrances or restrictions of record; (b) zoning
restrictions, and (c) Liens for current Taxes not yet
due, provided that any such Lien in clauses (a), (b)
and (c) does not have a Material Adverse Effect or
prohibit or interfere with the operations of the
Business.
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(b) Set forth in SCHEDULE 4.1.10(b) is a list of all material bogs
and other real property which are used or occupied by the
Company or a Purchased Company under an existing lease, permit
or other use agreement (each such lease, permit or agreement
is hereinafter referred to as a "LEASE"). Each Lease,
including any Lease referenced on Schedule 4.1.10(c), remains
in full force and effect, and has not been materially modified
except as set forth in Schedule 4.1.10(b) or in Schedule
4.1.10(c), as applicable; there is no material default by the
Company or any subsidiary (as the case may be) under any Lease
or, to the knowledge of the Company, by the respective
landlord/property owner under any Lease; and all rental
payments which are material individually or in the aggregate,
security deposits and other payments under the Leases are
accurately reflected in the Financial Statements as of the
Balance Sheet Date, in accordance with GAAP.
(c) The real property set forth on SCHEDULE 4.1.10(c) sets forth
of all material land which is used or occupied by the Company
or a subsidiary under a Lease, but which facilities and other
improvements thereon are owned by the Company or a subsidiary
in freehold (such facilities and other improvements, the
"OCCUPIED FACILITIES") and the Company or a Purchased Company,
as applicable, has the right to quiet enjoyment of all
Occupied Property for the full term of any applicable lease,
including all applicable renewal periods. The representations
and warranties set forth in clauses (i) through (vi) of
Section 4.1.10(a) are made with respect to the Occupied
Facilities, except that the term "Occupied Facility" is
substituted for the term "Owned Facility" in each such clause.
(d) Except as set forth on SCHEDULE 4.1.10(d) hereto, there is no
lease to any third party with respect to any Owned Facility
and no sublease or license or other right of occupation or
interest with respect to any Lease which gives any third party
any ongoing right to occupy or use any of the Owned Facilities
or any of the properties leased by the Company or any
subsidiary pursuant to the Leases.
(e) SCHEDULE 4.1.10(e) sets forth (i) the machinery, equipment,
furniture, and other personal property of the Company and any
subsidiary used in its business and leased from third parties
(the "Leased Personal Property") which require lease payments
in excess of US$250,000 in any calendar year after the Closing
Date, (ii) the name of the lessor and lessee of such
applicable Leased Personal Property and (iii) the applicable
lease or agreement by which such property is leased.
(f) Except as set forth on SCHEDULE 4.1.10(f), none of the
machinery, equipment, furniture and other personal property of
the Company or any subsidiary used in their business, other
than the Leased Personal Property, is subject to any Liens
which will not be terminated, vacated or discharged at
Closing, except for Liens for taxes not yet due or Liens which
are being contested in good faith (and for which adequate
accruals or reserves have been established on the Financial
Statements as of the Balance Sheet Date), or Liens which do
not, either individually or in the aggregate, materially
detract from the value of such property or assets as now used,
or materially interfere with any present or intended use of
such property or assets.
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SECTION 4.1.11 Litigation.
There is no action, cause of action, or investigation of which the
Company or any subsidiary has received notice (written or oral), pending against
or, to the Knowledge of the Company, threatened against the Company or any
subsidiary, or any of their properties before any court or arbitrator or any
Governmental Body which, individually or in the aggregate, could have a Material
Adverse Effect or which in any manner challenges or seeks to prevent, enjoin,
alter or materially delay the transactions contemplated by this Agreement.
SECTION 4.1.12 Material Contracts.
(a) SCHEDULE 4.1.12 hereto sets forth all of the following
agreements or contracts to which the Company or any Purchased
Company is a party:
(i) all partnership, joint venture and other similar
contract arrangements or agreements;
(ii) all material license agreements (other than
shrink-wrap licenses) and franchise agreements;
(iii) all material agency, dealer, distributor and sales
representative agreements;
(iv) all contracts and other documents that substantially
limit the freedom of the Company or any Purchased
Company to conduct or to compete in any line of
business or with any Person or in any area or which
would so limit the freedom of the Company or any
subsidiary after the Closing Date;
(v) all contracts and agreements with any present or
former stockholder, director, or employee or any
Affiliate of any of the foregoing;
(vi) all agreements relating to the making of any loan or
advance by the Company or any Purchased Company,
other than the making of loans or advances to
employees;
(vii) all agreements providing for the indemnification by
the Company or any Purchased Company of any Person,
other than the Leases;
(viii) all agreements for the sale of assets with a fair
market value in excess of US$250,000, other than the
sale of inventory in the ordinary course of business;
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(ix) all material supply agreements between the Company or
any Purchased Company, on the one hand, and such
Person's suppliers, on the other hand;
(x) all tax sharing or tax allocation agreements;
(xi) all agreements pursuant to which the Company or any
Purchased Company has incurred any Indebtedness; and
(xii) all commitments to enter into any of the foregoing.
(b) Each agreement and contract disclosed on SCHEDULE 4.1.12 is a
valid and binding obligation of the Company or a Purchased
Company, as the case may be, is in full force and effect and
is enforceable in accordance with its terms, except that (i)
such enforcement may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereafter in effect,
affecting creditors' rights generally and (ii) the remedy of
specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding
therefor may be brought. Neither the Company nor any Purchased
Company, as the case may be, nor, to the Knowledge of the
Company, any other party thereto is in default in any material
respect under the terms of any such agreement or contract.
SECTION 4.1.13 Compliance with Laws; No Defaults.
(a) Except as set forth on SCHEDULE 4.1.13, the Company and the
Purchased Companies are in compliance in all material respects
with all applicable provisions of any Law. Neither the Company
nor any Purchased Company is presently subject to any material
consent, injunction, order, judgment or decree which resulted
from a violation of applicable Laws.
(b) Each of the Company and the Purchased Companies holds, or will
hold at the Time of Closing, all permits, leases, by-laws,
licences, waivers, exemptions, consents, certificates,
registrations, authorizations, approvals, rights, rights of
way and entitlements and the like which are required from any
Governmental Body or any other Person required or necessary to
conduct its Business and activities as currently conducted or
as the Prospectus discloses they will be conducted, the
failure of which to hold or obtain, individually or in the
aggregate, would have a Material Adverse Effect, and all such
permits, leases, by-laws, licences, waivers, exemptions,
consents, certificates, registrations, authorizations,
approvals, rights, rights of way and entitlements and the like
are in full force and effect and in good standing in all
material respects or will be in full force and effect and in
good standing in all material respects at the Time of Closing.
(c) Except as set forth on SCHEDULES 4.1.3, 4.1.4 and 4.1.13
hereto, neither the Company nor any Purchased Company is in
default under, and no condition exists that with notice or
lapse of time or both would constitute a default under (i) any
material contract which the Company or any Purchased Company
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is a party or by which the Company or any Purchased Company or
any of their assets or properties are bound, or (ii) any
judgment, order or injunction of any court, arbitrator or
Governmental Body.
SECTION 4.1.14 Proprietary Rights.
(a) Attached hereto as SCHEDULE 4.1.14 is a true, correct and
complete list of all registered patents, patent applications,
registered trademarks, trademark applications, trade secrets,
registered service marks, registered trade names, registered
copyrights, inventions or other material rights with respect
thereto (collectively, "PROPRIETARY RIGHTS"), and all material
licenses or other material agreements, excluding shrink wrap
licenses, with respect to Proprietary Rights to which the
Company or any subsidiary is a party, in each case that have
been or are now used in the business of the Company or any
subsidiary, and the same are sufficient in all material
respects to conduct such Person's business as it has been and
is now conducted. To the Knowledge of the Company, the
operations of the Company and the subsidiaries do not conflict
with or infringe in any manner any proprietary rights owned,
possessed or used by any third party. There are no claims,
disputes, actions, proceedings, suits or appeals pending
against the Company or any subsidiary with respect to any
Proprietary Rights and, to the Knowledge of the Company, none
have been threatened against the Company or any subsidiary.
Except as otherwise set forth in SCHEDULE 4.1.14, neither the
Company nor any subsidiary is a party to, or bound by, any
contract or any other obligation whatsoever that limits or
impairs its ability to sell, transfer, assign or convey the
Proprietary Rights in connection with the transactions
contemplated hereby.
(b) To the Company's Knowledge, no third party is infringing upon
any of the Proprietary Rights owned by the Company or any
subsidiary.
(c) Except with respect to the license or similar agreements
indicated in SCHEDULE 4.1.14, there are no settlements,
consents, judgments, orders or other agreements which restrict
the Company's or any subsidiary's rights to use any of the
Proprietary Rights listed on SCHEDULE 4.1.14.
SECTION 4.1.15 Environmental Matters.
(a) Except as set forth in SCHEDULE 4.1.15(a) hereto, each of the
Company and the Purchased Companies is in compliance in all
material respects with all applicable federal, state, local
and Canadian laws and regulations relating to pollution or the
environment, including, without limitation, those relating to
releases or threatened releases of Hazardous Materials (as
defined in Section 4.1.15(c) hereof) or otherwise relating to
the manufacture, processing, distribution, use, treatment,
storage, transport or handling of Hazardous Materials
(collectively, the "ENVIRONMENTAL LAWS"). Neither the Company
nor any Purchased Company has received any written
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communication from a Governmental Body, alleging that the
Company or any Purchased Company is not in such compliance.
Each of the Company and the Purchased Companies has and Amalco
will have all material permits and other material governmental
authorizations required under applicable Environmental Laws to
conduct its business as presently conducted and as proposed to
be conducted as contemplated in the Prospectus.
(b) There is no claim, action, cause of action, or investigation
of which the Company or any Purchased Company has received
notice (written or oral), alleging potential liability arising
out of, based on or resulting from (i) the presence or release
of any Hazardous Materials at any location, whether or not
owned or operated by the Company or any Purchased Company, or
(ii) circumstances forming the basis of any violation of any
Environmental Law (in any such case, an "ENVIRONMENTAL CLAIM")
pending or, to the Knowledge of the Company, threatened
against the Company or any subsidiary or against any Person
whose liability for any Environmental Claim either the Company
or any subsidiary has or may have assumed either contractually
or by operation of law, except Environmental Claims that,
individually and in the aggregate, would not have a Material
Adverse Effect.
(c) Except as set forth in SCHEDULE 4.1.15(c) hereto, there have
been no releases by the Company or any Subsidiary or, to the
Knowledge of Company, any other Person, in violation in any
material respect of the Environmental Laws relating to the
environment or any flammable, ignitable, corrosive, reactive,
radioactive or explosive substance or material, petroleum or
its byproducts or breakdown products, hazardous waste, toxic
substance or related material or any other substance or
material defined or designated as a hazardous or toxic
substance, material or waste by any legal requirement
(collectively, "HAZARDOUS MATERIALS") at any Owned Facility or
property subject to a Lease, except such releases that,
individually and in the aggregate, would not have a Material
Adverse Effect.
SECTION 4.1.16 Tax Matters.
Except as set forth in the Financial Statements:
(i) all returns, statements, reports and forms and other
documents of any kind (including estimated tax
returns and reports), to the extent required to be
filed by or on behalf of the Company or any
Subsidiary in connection with any Tax or under any
law or administrative policy that relates to Tax on
or prior to the date hereof (collectively, the
"RETURNS"), have been filed when due in accordance
with all applicable laws and are correct and complete
in all material respects;
(ii) the Company and the Subsidiaries have timely paid,
withheld or made provision for all Taxes shown as due
and payable on the Returns that have been filed and
any assessments or reassessments in respect thereof,
and has timely paid any Taxes otherwise payable on or
prior to the date hereof;
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(iii) the Company and the Subsidiaries have made or will on
or before the Closing Date establish an adequate
reserve which will be deducted in computing Net
Working Capital for all Taxes payable by the Company
or any Subsidiary for any periods commencing prior to
the date hereof for which no Return has yet been
filed;
(iv) the charges, accruals and reserves for Taxes with
respect to the Company and the Subsidiaries for any
period commencing prior to the date hereof specified
on the books of the Company or any Subsidiary, as the
case may be, are no less then such Taxes;
(v) the Company and the Subsidiaries have not granted,
been granted or become entitled to any extension or
waiver of the limitation period applicable to any
Returns;
(vi) immediately prior to the Closing, the Vendor shall
cause any and all Tax sharing agreements between the
Vendor and/or Xxxxx, on the one hand, and the Company
and/or any Subsidiary, on the other hand, to be
terminated and of no further force or effect;
(vii) there are no reassessments of the Taxes of the
Company or any Subsidiary that have been issued and
are outstanding and there are no outstanding issues
which have been raised and communicated to the
Company or any Subsidiary by any Governmental Body
for any taxation year in respect of which a Return of
the Company or any Subsidiary has been audited. No
Governmental Body has challenged, disputed or
questioned the Company or any Subsidiary in respect
of Taxes or of any Returns, filings or other reports
filed under any statute relating to Tax. Neither the
Company nor any Subsidiary is negotiating any draft
assessment or reassessment with any Governmental
Body. Xxxxx is not aware of any contingent
liabilities for Taxes or any grounds for an
assessment or reassessment of the Company or any
Subsidiary, aggressive treatment of income expenses,
credits or other claims for deduction under any
return or notice other than as disclosed in the
Financial Statements. Neither the Company, any
Subsidiary, or Xxxxx has received any indication from
any Governmental Body that an assessment or
reassessments of the Company or any Subsidiary is
proposed in respect of any Taxes regardless of its
merits. Neither the Company nor any Subsidiary has
executed or filed with any Governmental Body any
agreement or waiver extending the period for
assessment, reassessment or collection of any Taxes.
In respect of the Company, the periods during which
an assessment or reassessment of Tax may be issued by
all Canadian federal and provincial Governmental
Bodies for the purposes of income taxes in respect of
all taxation years up to and including the taxation
year ended December 31, 1996 have expired; and in
respect of sales taxes the periods during which an
assessment or reassessment of Tax may be issued by
all Canadian federal and provincial Government Bodies
have expired for all periods ending March, 1995;
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(viii) the Company and each Subsidiary has withheld from
each payment made to any of its present or former
employees, officers and directors, and to all persons
who are non-residents of Canada for the purposes of
the Tax Act and the U.S. Tax Code all amounts
required by law to be withheld, and furthermore, has
remitted such withheld amounts within the prescribed
periods to the appropriate Governmental Body. The
Company and each Subsidiary has remitted all Canada
Pension Plan contributions, provincial pension plan
contributions, employment insurance premiums,
employer health taxes and other Taxes payable by it
in respect of its employees and has remitted such
amounts to the proper Governmental Body within the
time required under the applicable legislation. The
Company and each Subsidiary has charged, collected
and remitted on a timely basis all Taxes as required
under applicable legislation on any sale, supply or
delivery whatsoever, made by the Company or
Subsidiary;
(ix) neither the Company nor any Subsidiary will at any
time be deemed to have a capital gain pursuant to
subsection 80.03(2) of the Tax Act as a result of any
transaction or event taking place in any taxation
year ending on or before the Closing;
(x) there are no circumstances existing which could
result in the application of section 78 or 160 of the
Tax Act to the Company or any Subsidiary;
(xi) the Company and each Subsidiary has maintained and
continues to maintain all books and records required
to be maintained under the Tax Act and the U.S. Tax
Code in the manner and place required by such
legislation.
For purposes of this Section 4.1.16 and Section 4.1.17 a reference to a
"Subsidiary" means a body corporate that is directly or indirectly controlled by
the Company or Amalco, as the context requires, and "U.S. Tax Code" means the
United States Internal Revenue Code of 1986, as amended.
SECTION 4.1.17 TRANSFER PRICING
(a) The Transfer Pricing Study does not contain any
misrepresentation and does not omit to state any material
fact.
(b) All of the transactions and steps contemplated in the Transfer
Pricing Study to be completed on or prior to the Closing have
been, or will have been, at or prior to the Time of Closing,
completed as and when contemplated in the Transfer Pricing
Study.
(c) To the best of the Vendor's Knowledge, the Business as
currently carried on by the Vendor and its subsidiaries can,
after the Closing Date, be conducted substantially in
accordance with the terms contemplated in the Transfer Pricing
Study without any Material Adverse Effect on such Business
resulting from the Business being conducted on such terms.
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(d) To the extent possible for a prospective analysis, the Vendor
has prepared contemporaneous documentation described in
subsection 247(4) of the TAX ACT and in U.S. Treasury
Regulation Section 1.6662-6 (d)(2)(iii).
SECTION 4.1.18 Employee Benefit Plans.
(a) SCHEDULE 4.1.18(a) hereto lists, as of the date of this
Agreement, all stock option plans, employment, consulting and
severance agreements, pension, profit sharing and retirement
plans and all bonus and other employee benefit or fringe
benefit plans, including, without limitation, "employee
benefit plans" as such term is defined under Section 3(3) of
ERISA, maintained or with respect to which contributions are
made by the Company or any subsidiary or with respect to which
the Company or any subsidiary has any liability (collectively,
the "COMPANY PLANS").
(b) (i) Each Company Plan of the Company and its subsidiaries
which is intended to be qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code") has
received a favourable determination letter from the Internal
Revenue Service that it is so qualified, and nothing has
occurred since the date of such letter than could reasonably
be expected to affect the qualified status of such Company
Plan; (ii) each Company Plan has been operated in all material
respects in accordance with its terms and the requirements of
applicable law; and (iii) the Company and the subsidiaries
have not incurred any direct or indirect liability under,
arising out of or by operation of Title IV of ERISA in
connection with the termination of, or withdrawal from, any of
its Company Plans or other retirement plan or arrangement
(including, without limitation, any "employee pension benefit
plan" as defined in Section 3(2) of ERISA that the Company, or
any other entity that together with the Company is treated as
a single employer under Section 414 of the Code, maintains or
ever has maintained or to which any of them contributes, ever
has contributed, or ever has been required to contribute),
and, to the Knowledge of the Company, no fact or event exists
that could reasonably be expected to give rise to any such
liability. The aggregate accumulated benefit obligations of
each Company Plan of the Company and its subsidiaries, as of
the Closing Date, do not exceed the fair market value of the
assets of such plan.
(c) All Company Plans that are subject to the laws of Canada are
in compliance in all material respects with such applicable
laws, including relevant tax laws relating thereto, and the
requirements of any trust deed or equivalent instrument under
which they are established. Except as set forth on SCHEDULE
4.1.18(C), each Company Plan has been duly registered under
the Tax Act and applicable provincial pension legislation.
(d) Except as set forth in SCHEDULE 4.1.18(d) hereto, no retired
or former employee of the Company or any subsidiary is
receiving benefits under any Company Plan.
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(e) Except as set forth in SCHEDULE 4.1.18(e) hereto, neither the
Company nor any subsidiary is subject to a collective
bargaining agreement.
SECTION 4.1.19 Accounts Receivable.
All accounts receivable of the Company and the subsidiaries reflected
on the Financial Statements arose from valid transactions in the ordinary course
of business and are not the subject of any defense, setoff or counterclaim. All
accounts receivable of the Company and the subsidiaries are collectible, net of
reserves reflected in the financial statements included in the Prospectus.
SECTION 4.1.20 Inventory.
All inventories of raw materials, work-in-process and finished goods
set forth or reflected in the Financial Statements or acquired by the Company or
any subsidiary since the Balance Sheet Date are of merchantable quality, and are
recorded on the books at an amount not higher than cost. All defective, obsolete
or overstocked finished goods held by the Company or any subsidiary have been
adequately reserved for in the financial statements included in the Prospectus
in accordance with GAAP.
SECTION 4.1.21 Product Warranty.
Except as set forth on SCHEDULE 4.1.21, since January 1, 1999 neither
the Company nor any of the subsidiaries has suffered any material product
liability or material product warranty claims or material product recalls.
Except as set forth on SCHEDULE 4.1.21, since January 1, 1999, neither the
Company nor any subsidiary has received any written notice of a claim against
the Company or any subsidiary, whether or not fully covered by insurance, for
product liability or liability on account of any express or implied warranty,
except for warranty obligations and returns in the ordinary course substantially
consistent with past practice for which appropriate reserves have been reflected
on the financial statements included in the Prospectus. The reserves reflected
in the financial statements included in the Prospectus for product liability and
product warranty claims and for product recalls have been established in good
faith and in accordance with GAAP.
SECTION 4.1.22 Import/Export Laws.
Each of the Company and the subsidiaries has complied in all material
respects with all laws, rules and regulations relating to the import and export
of its products to and from Canada and the United States of America and each
other country where a customer or supplier of the Company or subsidiary is
located. Each of the Company and the subsidiaries possesses, and is in
compliance with, all permits, licenses and authorizations necessary to import
and export its products to and from Canada and the United States of America and
each other country where a customer or supplier of the Company or any subsidiary
is located.
SECTION 4.1.23 Corporate Records.
The copies or originals of the minute books and records of the Company
and the Subsidiaries previously delivered to Purchaser are true, complete and
correct in all material respects. Each of the Company and the subsidiaries has,
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in accordance with good business practices, maintained substantially complete
and accurate books and records, including financial records which fairly present
its financial condition and substantially correct records of all its material
corporate proceedings.
SECTION 4.1.24 Disclosure.
No representation or warranty of the Vendor in this Agreement or any of
the Transaction Documents, and no information contained in any Schedule or other
writing delivered pursuant to this Agreement or the Transaction Documents or at
the Closing, contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact required to make the statements
herein or therein not misleading.
SECTION 4.1.25 Prospectus Disclosure.
The description of, and all other information with respect to, the
Business contained in the Prospectus constitutes full, true and plain disclosure
of all material facts relating to the Business, and the Prospectus does not
contain any Misrepresentation.
SECTION 4.1.26 No Other Representations or Warranties.
EXCEPT FOR THE REPRESENTATION AND WARRANTIES CONTAINED IN THIS ARTICLE
4, THE VENDOR MAKES NO OTHER EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY AND
THE VENDOR HEREBY DISCLAIMS ANY SUCH OTHER REPRESENTATION OR WARRANTY WITH
RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 4.2 REPRESENTATIONS AND WARRANTIES OF XXXXX.
Each of Xxxxx Horticulture and Xxxxx Nurseries jointly and severally
represents and warrants to the Purchaser and acknowledges and confirms that the
Purchaser is relying upon these representations and warranties in connection
with the purchase by the Purchaser of the Business:
(a) INCORPORATION AND QUALIFICATION. It is validly subsisting and
in good standing under the laws of its jurisdiction and
incorporation and has the corporate power to enter and perform
its obligations under this Agreement.
(b) VALIDITY OF AGREEMENT. The execution, delivery and performance
by it of this Agreement has been duly authorized by all
necessary corporate action on its part. This Agreement has
been duly executed and delivered by it and constitutes a
legal, valid and binding agreement of each of Xxxxx
Horticulture and Xxxxx Nurseries enforceable in accordance
with its terms, except that:
(i) such enforcement may be subject to applicable
bankruptcy, insolvency or other similar laws, now or
hereafter in effect, affecting creditors' rights
generally; and
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(ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(c) None of the execution, delivery or performance by Xxxxx of
this Agreement or any other Transaction Document does or will:
(i) contravene or conflict with or constitute a violation
of any provision of any Law binding upon or
applicable to Xxxxx;
(ii) constitute a material default under or give rise to
any right of termination, cancellation or
acceleration of any material right or material
obligation of Xxxxx, or to a loss of any material
benefit to which Xxxxx is entitled under any
provision of any material contracts or any material
license, material franchise, material permit or
similar material authorization held by Xxxxx; or
(iii) results in the creation or imposition of any Lien on
any material asset of the Company or any of the
Purchased Companies.
(d) There is no requirement on the part of Xxxxx to make any
filing with, give any notice to, or obtain any Authorization
of, any Governmental Body as a condition to the lawful
completing of the transactions contemplated by this Agreement,
or any other Transaction Document except where the failure to
give such notice would not result in a Material Adverse
Effect.
SECTION 4.3 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Vendor and acknowledges
and confirms that the Vendor is relying upon these representations and
warranties in connection with the sale to the Purchaser of the Business:
(a) SUBSISTENCE AND QUALIFICATION. The Purchaser is validly
subsisting and in good standing under the laws under which it
is established. The Purchaser has the authority to enter into
and perform its obligations under this Agreement.
(b) VALIDITY OF AGREEMENT. The Execution, delivery and performance
by the Purchaser of this Agreement:
(i) has been duly authorized by all necessary action on
the part of the Purchaser;
(ii) does not (or would not with the giving of notice, the
lapse of time or the happening of any other event or
condition) result in a breach or a violation of, or
conflict with or result in a default under, or allow
any other Person to exercise any rights under, any of
the terms or provisions of its constating documents
or resolutions of the trustees (or any committee
thereof) or unitholders of the Purchaser or any
judgment, decree, order or award of any court,
governmental body or arbitrator having jurisdiction
over the Purchaser; and
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(iii) will not result in the violation of any Law.
This Agreement has been duly executed and delivered by the
Purchaser and constitutes a legal, valid and binding agreement
of the Purchaser enforceable in accordance with its terms,
except that:
(a) such enforcement may be subject to
applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect,
affecting creditors' rights generally; and
(b) the remedy of specific performance and
injunctive and other forms of equitable
relief may be subject to equitable defenses
and to the discretion of the court before
which any proceeding therefor may be
brought.
(c) REQUIRED AUTHORIZATION. There is no requirement on the part of
the Purchaser to make any filing with, give any notice to, or
obtain any Authorization of, any Governmental Body as a
condition to the lawful completion of the transaction
contemplated by this Agreement, except where the failure to
give such notice would not result in a Material Adverse
Effect.
ARTICLE 5
PRE-CLOSING COVENANTS OF THE PARTIES
SECTION 5.1 CONDUCT OF BUSINESS PRIOR TO CLOSING.
Except as expressly contemplated by this Agreement, during the Interim
Period, each of the Vendor and Xxxxx will cause the Business to be carried on in
the Ordinary Course, and without limiting the generality of the foregoing, shall
cause the Company:
(a) not to make or agree to make any material change in the
compensation of any director, officer or employee of the
Company or of any of its subsidiaries and not to pay or agree
to pay or set aside any bonus, profit sharing, retirement,
insurance, death, severance or fringe benefit or other
extraordinary or indirect compensation to, for or on behalf of
any such director, officer or employee;
(b) not to sell, assign, transfer, mortgage, pledge or otherwise
encumber any of the Assets, except for sales of inventories in
the Ordinary Course of business;
(c) not to enter into any contract, agreement, commitment or
transaction outside the Ordinary Course;
(d) not to issue any shares or other securities of the Company;
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(e) not to declare or cause to be paid any dividend make any other
form of distribution or payment on the Shares or any other
securities of the Company;
(f) not to default in the performance of any term or condition of
any material Consent or material Contract;
(g) to maintain relations with the suppliers, customers and
landlords of the Company and its subsidiaries in accordance
with past custom and practices and in the Ordinary Course; and
(h) to pay when due all Taxes and other obligations which become
due and payable by the Company or its subsidiaries.
SECTION 5.2 FILINGS AND AUTHORIZATIONS.
Each of the Parties, as promptly as practicable after the execution of
this Agreement, will make, or cause to be made, all such filings and submissions
under all Laws applicable to it, as may be required for it to consummate the
purchase and sale of the Business in accordance with the terms of this
Agreement. During the Interim Period, each of the Parties will (a) reasonably
cooperate with the other Party with respect to all filings that such Party
elects to make or is required by Law to make in connection with the Closing; and
(b) reasonably cooperate with the other Party in obtaining the Consents,
provided that this Agreement will not require the Vendor to dispose to a third
party or make any change in any of its businesses or to incur any other similar
burden to obtain a Governmental Authorization. The Parties will coordinate and
cooperate with one another in exchanging such information and supplying such
assistance as may be reasonably requested by each in connection with the
foregoing including, without limitation, providing each other with all notices
and information supplied to or filed with any Governmental Body (except for
notices and information which the Vendor or the Purchaser, in each case acting
reasonably, considers confidential, which may be filed on a confidential basis),
and all notices and correspondence received from any Governmental Body.
SECTION 5.3 NOTICE OF UNTRUE REPRESENTATION OR WARRANTY.
The Vendor and/or Xxxxx, as the case may be, shall promptly notify the
Purchaser and the Purchaser shall promptly notify the Vendor, upon obtaining
knowledge that any representation or warranty made by it contained in this
Agreement becoming untrue or incorrect in any material respect during the
Interim Period. Any such notification shall set out particulars of the untrue or
incorrect representation or warranty and details of any actions being taken by
the Vendor, Xxxxx or the Purchaser, as the case may be, to rectify that state of
affairs.
SECTION 5.4 SECTION 116 REQUIREMENTS
(1) The Vendor covenants and agrees with the Purchaser as follows:
(a) the Vendor shall take all reasonable steps to obtain and
deliver to the Purchaser on or before Closing a certificate
(the "SECTION 116 CERTIFICATE") issued by the Minister of
National Revenue under subsection 116(2) of the Tax Act in
respect of the Vendor's shareholdings in Amalco;
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(b) if a Section 116 Certificate is so delivered and is
satisfactory to the Purchaser, the Purchaser shall be entitled
to withhold from the Closing Purchase Price 25% of the amount,
if any, by which the Closing Purchase Price exceeds the
aggregate of the certificate limit, as defined in subsection
116(2) of the Tax Act and fixed by the Minister of National
Revenue in the Section 116 Certificate;
(c) if a Section 116 Certificate is not so delivered and
satisfactory, the Purchaser shall be entitled to withhold from
the Closing Purchase Price an amount equal to 25% of the
Closing Purchase Price;
(d) where the Purchaser has withheld any amount under the
provisions of paragraph (b) or (c) above and the Vendor
delivers to the Purchaser, after the Closing and within twenty
five (25) days after the end of the month in which the Closing
occurs, a Section 116 Certificate issued by the Minister of
National Revenue under subsection 116(2) or 116(4), as the
case may be of the Tax Act, and such certificate is
satisfactory to the Purchaser, the Purchaser shall:
(i) pay forthwith to the Receiver General 25% of the
amount, if any, by which the Closing Purchase Price
exceeds the certificate limit fixed in the Section
116 Certificate referred in the preamble of this
paragraph (d), and the amount so paid shall be
credited to the Purchaser as payment on account of
the Closing Purchase Price; and
(ii) pay forthwith to the Vendor any amount that the
Purchaser has withheld and is not required to pay to
the Receiver General in accordance with (i) above,
net of any applicable withholding tax, and the amount
so paid shall be credited to the Purchaser as payment
on account of the Closing Purchase Price; and
(e) where the Purchaser has withheld any amount under the
provisions of paragraphs (b) or (c) above and no Section 116
Certificate that is satisfactory to the Purchaser has been
delivered to the Purchaser by the Vendor, such amount shall be
paid by the Purchaser to the Receiver General on the 30th day
after the end of the month in which the Closing occurs on
account of the Purchaser's liability pursuant to subsection
116(5) of the Tax Act, and the amount so paid shall be
credited to the Purchaser as payment on account of the Closing
Purchase Price.
(2) The Vendor covenants and agrees with the Purchaser as follows:
(a) in the event that the Purchaser is obligated to make a payment
or have a payment made on its behalf as a result of the Net
Working Capital Adjustment, the Vendor covenants and agrees
with the Purchaser as follows:
(i) the Vendor shall take all reasonable steps to obtain
and deliver to the Purchaser on or before the payment
relating to the Net Working Capital Adjustment a
Section 116 Certificate issued by the Minister of
National Revenue under subsection 116(4) of the TAX
ACT in respect of the Vendor's shareholdings in
Amalco;
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(ii) if a Section 116 Certificate is so delivered and is
satisfactory to the Purchaser, the Purchaser shall be
entitled to withhold from the Net Working Capital
Adjustment 25% of the amount, if any, by which the
Net Working Capital Adjustment exceeds the proceeds
of disposition fixed by the Minister of National
Revenue in the Section 116 Certificate;
(iii) if a Section 116 Certificate is not so delivered and
satisfactory, the Purchaser shall be entitled to
withhold from the Net Working Capital Adjustment an
amount equal to 25% of the Net Working Capital
Adjustment;
(iv) the Purchaser shall be entitled to take all such
further actions with respect to withholdings and
payments as are contemplated in Section 5.4(1)(d) and
(e) such Sections to apply mutatis mutandis with
respect to such withheld amount of the Net Working
Capital Adjustment.
SECTION 5.5 REORGANIZATION
The Vendor covenants to use its Best Efforts to complete the
Reorganization on or before the Closing Date. Xxxxx agrees to cause the Vendor
to complete the Reorganization on or before the Closing Date.
ARTICLE 6
CONDITIONS OF CLOSING
SECTION 6.1 CONDITIONS FOR THE BENEFIT OF THE PURCHASER.
The purchase and sale of the Amalco Shares is subject to the following
conditions being fulfilled or performed at or prior to the Closing, which
conditions are for the exclusive benefit of the Purchaser and may be waived, in
whole or in part, by the Purchaser in its sole discretion:
(a) TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Vendor and Xxxxx contained in this
Agreement shall have been true and correct as of the date of
this Agreement and shall be true and correct as of the Time of
Closing on the Closing Date (including as set out in the
disclosure schedule in Schedule A hereto, which the parties
acknowledge set out additional items arising as a result of
the Reorganization) with the same force and effect as if such
representations and warranties had been made on and as of such
time and as if references to the Company include Amalco, and
the Vendor and Xxxxx shall each have executed and delivered a
certificate of two senior officers to that effect. The receipt
of such certificates at the Closing shall not constitute a
waiver by the Purchaser of any of the representations and
warranties of the Vendor or Xxxxx, as the case may be, which
are contained in this Agreement. Upon the delivery of such
certificates, the representations and warranties of the Vendor
and Xxxxx in Article 4 shall be deemed to have been made on
and as of the Time of Closing on the Closing Date with the
same force and effect as if made on and as of such time and as
if references to the Company include Amalco.
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(b) PERFORMANCE OF COVENANTS. Each of the Vendor and Xxxxx shall
have fulfilled or complied with all conditions and covenants
contained in this Agreement to be fulfilled or complied with
by it at or prior to the Closing, and each of the Vendor and
Xxxxx shall have executed and delivered a certificate of two
senior officers to that effect. The receipt of such
certificates and the Closing shall not constitute a waiver of
the covenants of the Vendor or Xxxxx, as the case may be,
which are contained in this Agreement.
(c) REORGANIZATION. The Reorganization shall have been completed
in the manner specified in recital C, pursuant to agreements
satisfactory to the Purchaser, acting reasonably.
(d) OFFERING. The Offering by the Purchaser shall have been
completed.
(e) DELIVERIES. Each of Xxxxx and the Vendor shall deliver or
cause to be delivered to the Purchaser the following in form
and substance satisfactory to the Purchaser, acting
reasonably:
(i) original or certified copies of (A) the charter
documents and the by-laws of Xxxxx, the Vendor and
each of the Purchased Companies, (B) resolutions of
the sole shareholder of the Vendor approving the
entering into and completion of the transactions
contemplated by this Agreement, (C) resolutions of
the board of directors of each of Xxxxx Horticulture
and Xxxxx Nurseries approving the entering into and
completion of the transactions contemplated by the
Agreement, (D) share registers of each of the
Purchased Companies and (E) a list of the officers
and directors of each of Xxxxx and the Vendor
authorized to sign agreements together with their
specimen signatures;
(ii) a certificate of status, compliance, good standing or
like certificate with respect to each of Xxxxx
Horticulture, Xxxxx Nurseries, the Vendor and the
Purchased Companies issued by appropriate government
officials of their respective jurisdictions of
incorporation;
(iii) the certificates referred to in Section 6.1 (a) and
Section 6.1(b); and
(iv) evidence that all necessary insurance coverages and
policies applicable to the Business are in place,
including, without limitation, property (including
business interruption), automobile liability,
workers' compensation, general liability, crime and
fiduciary, directors and officers, umbrella and
employment practises liability insurance.
(f) PROCEEDINGS. All corporate proceedings to be taken in
connection with the transactions contemplated by this
Agreement, including without limitation the Reorganization,
shall be satisfactory in form and substance to the Purchaser,
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acting reasonably, and the Purchaser shall have received
copies of all instruments and other evidence as it may
reasonably request in order to establish the consummation of
such transactions and the taking of all necessary corporate
proceedings in connection therewith;
(g) NO LEGAL ACTION. No action or proceeding shall be pending by
any Person (other than the Purchaser) in any jurisdiction, to
enjoin, restrict or prohibit any of the transactions
contemplated by this Agreement;
(h) CONSENTS. All Consents listed in Schedule 4.1.3 shall have
been obtained in form and substance satisfactory to the
Purchaser, acting reasonably;
(i) CREDIT FACILITY. The Sun Gro credit facility in the amount of
approximately $30 million referred to in the Prospectus shall
have been established and the description of the material
terms of the Credit Facility contained in the Prospectus shall
be complete and accurate; (j) CLOSING. The Closing shall not
occur later than March 29, 2002; and
(k) ASSET SCHEDULES. The Vendor shall deliver, or cause to be
delivered, to the Purchaser, schedules ("ASSET SCHEDULES"),
certified by two officers of the Vendor, confirming (i) that
for the purposes of the Tax Act, the Company owns depreciable
property of the prescribed classes and having undepreciable
capital costs set out in the Asset Schedules and (ii) that,
for the purposes of the U.S. Tax Code and the Tax Act, Sun Gro
Horticulture Processing Inc. and Sun Gro Horticulture
Distribution Inc. will own depreciable property as set out in
the Asset Schedules that is depreciable at the rates set out
in the Asset Schedules, in both cases consistent with the
financial models provided to BMO Xxxxxxx Xxxxx pursuant to the
Offering.
SECTION 6.2 CONDITIONS FOR THE BENEFIT OF THE VENDOR.
The purchase and sale of the Shares is subject to the following
conditions to be fulfilled or performed at or prior to the Closing, which
conditions are for the exclusive benefit of the Vendor and may be waived, in
whole or in part, by the Vendor in its sole discretion:
(a) TRUTH OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Purchaser contained in this Agreement
shall have been true and correct as of the date of this
Agreement and shall be true and correct as of the Time of
Closing on the Closing Date with the same force and effect as
if such representations and warranties had been made on and of
such time, and the Purchaser shall have executed and delivered
a certificate of a senior officer to that effect. The receipt
of such certificate at the Closing shall not constitute a
waiver by the Vendor of any of the representations and
warranties of the Purchaser which are contained in this
Agreement. Upon the delivery of such certificate, the
representations and warranties of the Purchaser shall be
deemed to have been made on and as of the Time of Closing on
the Closing Date with the same force and effect as if made on
and as of such time.
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(b) PERFORMANCE OF COVENANTS. The Purchaser shall have fulfilled
or complied with all conditions and covenants contained in
this Agreement to be fulfilled or complied with by it at or
prior to Closing and the Purchaser shall have executed and
delivered a certificate of a senior officer to that effect.
The receipt of such certificate and the Closing shall not
constitute a waiver by any of the Vendor of the covenants of
the Purchaser which are contained in this Agreement;
(c) CLOSING. The Closing shall not occur at a date later than
March 29, 2002;
(d) DELIVERIES. The Purchaser shall deliver or cause to be
delivered to the Vendor the following in form and substance
satisfactory to the Vendor acting reasonably:
(i) Original or certified copies of (A) all resolutions
of the trustees of the Purchaser approving the
entering into and completion of the transactions
contemplated by this Agreement, and (B) a list of the
officers and trustees of the Purchaser authorized to
sign agreements together with their specimen
signatures; and
(ii) The certificate referred to in Section 6.2(a).
(e) PROCEEDINGS. All trust proceedings to be taken in connection
with the transactions contemplated in this Agreement shall be
reasonably satisfactory in form and substance to the Vendor,
acting reasonably, and the Vendor shall have received copies
of all the instruments and other evidence as it may reasonably
request in order to establish the consummation of such
transactions and the taking of all corporate proceedings in
connection therewith; and
(f) NO LEGAL ACTION. No action or proceeding shall be pending by
any Person (other than the Vendor) in any jurisdiction, to
enjoin, restrict or prohibit any of the transactions
contemplated by this Agreement.
ARTICLE 7
CLOSING
SECTION 7.1 DATE, TIME AND PLACE OF CLOSING.
The completion of the transaction of purchase and sale contemplated by
this Agreement shall take place at the offices of Xxxxxx Xxxxxx Gervais LLP,
1200 Waterfront Centre, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X
0X0, at 5:30 a.m. (Vancouver time) on the Closing Date or at such other place,
on such other date and at such other time as may be agreed upon in writing
between the Vendor and the Purchaser.
SECTION 7.2 CLOSING PROCEDURES.
Subject to satisfaction or waiver by the relevant Party of the
conditions set forth in Section 6.1 and 6.2, at the Closing the Vendor shall
deliver a certificate or certificate representing the Amalco Shares, duly
endorsed in blank for transfer in and upon such delivery the Purchaser shall pay
or satisfy the Closing Purchase Price in accordance with Section 3.2.
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ARTICLE 8
TERMINATION
SECTION 8.1 TERMINATION BY PURCHASER.
If any of the conditions set forth in Section 6.1 have not been
fulfilled or waived at the Time of Closing or any obligation or covenant of the
Vendor or Xxxxx to be performed at or prior to the Time of Closing has not been
observed or performed by the Time of Closing, the Purchaser may terminate this
Agreement by giving notice in writing to the Vendor. Upon giving the requisite
notice, the Purchaser shall be released from all obligations hereunder, save and
except for its obligations under Section 12.3 and Section 12.4, which shall
survive. Each of the Vendor and Xxxxx shall be released from its obligations
only if the condition or conditions for the non-performance of which the
Purchaser has terminated this Agreement are not reasonably capable of being
performed or caused to be performed by the Vendor or Xxxxx. If the Purchaser
waives compliance with any of the conditions, obligations or covenants contained
in this Agreement, the waiver will be without prejudice to any of its rights of
termination in the event of non-fulfillment, non-observance or non-performance
of any other condition, obligation or covenant in whole or in part.
SECTION 8.2 TERMINATION BY VENDOR.
If any of the conditions set forth in Section 6.2 have not been
fulfilled or waived at the Time of Closing or any obligation or covenant of the
Purchaser to be performed at or prior to the Time of Closing has not been
observed or performed by the Time of Closing, the Vendor and Xxxxx may terminate
this Agreement by giving notice in writing to the Purchaser. Upon giving the
requisite notice, each of the Vendor and Xxxxx shall be released from all
obligations hereunder, save and except for their respective obligations under
Section 12.3 and Section 12.4, which shall survive. The Purchaser shall be
released from its obligations only if the condition or conditions for the
non-performance of which the Vendor and Xxxxx have terminated this Agreement are
not reasonably capable of being performed or caused to be performed by the
Purchaser. If the Vendor and Xxxxx waive compliance with any of the conditions,
obligations or covenants contained in this Agreement, the waiver will be without
prejudice to any of their rights of termination in the event of non-fulfilment,
non-observance or non-performance of any other condition, obligation or covenant
in whole or in part.
SECTION 8.3 OTHER TERMINATION RIGHTS.
This Agreement may, by notice in writing given at or before Closing, be
terminated by mutual consent of the Vendor and the Purchaser, and, in such
event, each Party shall be released from all obligations under this Agreement,
save and except for its obligations under Section 12.3 and Section 12.4, which
shall survive.
SECTION 8.4 EFFECT OF TERMINATION.
Each Party's right of termination under this Article 8 is in addition
to any other rights it may have under this Agreement or otherwise, and the
exercise of a right of termination will not be an election of remedies. Nothing
in Article 8 shall limit or affect any other rights or causes of action which
the Purchaser, Xxxxx or the Vendor may have with respect to the representations,
warranties, covenants and indemnities in its favour contained in this Agreement.
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ARTICLE 9
INDEMNIFICATION
SECTION 9.1 INDEMNIFICATION IN FAVOUR OF THE PURCHASER.
If the Closing occurs, each of the Vendor and Xxxxx shall, jointly and
severally, indemnify and save the Purchaser, the Purchased Companies and their
shareholders, directors, trustees, officers, employees, agents, representatives,
successors and assigns (the "PURCHASER INDEMNIFIED PARTIES") harmless of and
from any loss, liability, claim, damage or expense (whether or not involving a
third-party claim) including reasonable legal fees and expenses (collectively,
"DAMAGES") suffered by, imposed upon or asserted against a Purchaser Indemnified
Party as a result of, in respect of, connected with, or arising out of, under,
or pursuant to:
(a) any failure of the Vendor or Xxxxx to perform or fulfil any
condition or covenant to be fulfilled or complied with by the
Vendor or Xxxxx under this Agreement; and
(b) subject to Sections 9.4 and 9.8, any breach of any
representation or warranty given by the Vendor or Xxxxx in
this Agreement, provided that the Vendor and Xxxxx shall not
be required to indemnify or save harmless the Purchaser
Indemnified Parties unless the Purchaser shall have provided
notice to the Vendor in accordance with Section 9.5 on or
prior to the expiration of the survival time period related to
such representation and warranty as set out in Section 9.4.
If the Closing occurs, the remedies provided in this Section 9.1 and 9.8 are
exclusive of any other remedies that may be available to the Purchaser
Indemnified Parties under any legal theory in respect of Damages and the Company
hereby waive any and all such other remedies.
SECTION 9.2 SPECIFIC INDEMNIFICATIONS IN FAVOUR OF THE PURCHASER
If the Closing occurs, Xxxxx shall indemnify and save the Purchaser Indemnified
Parties harmless of and from any Damages suffered by, imposed upon or asserted
against the Purchaser Indemnified Parties or any of them as a result of, in
respect of, connected with, or arising out of, under, or pursuant to the
performance by the Purchased Companies of their obligations pursuant to Section
10.3 hereof, provided that Xxxxx will not be liable to the Purchaser Indemnified
Parties for any Damages in connection with Section 10.3 to the extent that any
Damages have resulted from the bad faith, negligence or wilful misconduct of the
Company.
SECTION 9.3 INDEMNIFICATION IN FAVOUR OF THE VENDOR.
If the Closing occurs, the Purchaser shall indemnify and save Xxxxx,
the Vendor and their shareholders, directors, officers, employees, agents,
representatives, successors and assigns (the "VENDOR INDEMNIFIED PARTIES")
harmless of and from any Damages suffered by, imposed or asserted against the
Vendor Indemnified Parties as a result of, in respect of, connected with, or
arising out of, under or pursuant to:
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(a) any failure of the Purchaser to perform or fulfil any
condition or covenant to be fulfilled or complied with by the
Purchaser under this Agreement; and
(b) subject to Section 9.4, any breach of any representation or
warranty given by the Purchaser contained in this Agreement,
provided that the Purchaser shall not be required to indemnify
or save harmless the Vendor Indemnified Parties unless the
Vendor shall have provided notice to the Purchaser in
accordance with Section 9.5 on or prior to the expiration of
the survival time period related to such representation and
warranty as set out in Section 9.4.
SECTION 9.4 TIME LIMITATIONS.
(1) The representations and warranties of the Vendor and Xxxxx contained in
this Agreement shall survive the Closing and, notwithstanding the
Closing and any investigation made by or on behalf of the Purchaser,
shall continue for a period of twenty-four (24) months after the
Closing Date except that:
(a) the representations and warranties set out in Section 4.1.25
shall survive and continue in full force and effect for the
benefit of the Purchaser for a period equal to the period for
which the purchaser is liable for misrepresentations under the
Prospectus pursuant to the SECURITIES ACT (B.C.);
(b) the representations and warranties set out in Section 4.1.16
shall survive and continue in full force and effect until 30
days after the expiration of the period, if any, during which
an assessment, reassessment or other form of recognized
document assessing liability for Tax, interest or penalties
under applicable Tax legislation in respect of any taxation
year to which such representations and warranties extend could
be issued under such Tax legislation to the Purchased
Companies but for any consent, waiver, agreement or other
document, made or filed by the Purchased Companies after the
Closing; and
(c) the representations and warranties set out in Section 4.1.17
shall survive and continue in full force and effect with
respect to any claims arising in connection with a taxable
year that commences on the Closing Date or within three (3)
years after the Closing Date until thirty (30) days after
expiration of any period during which an assessment,
reassessment or other form of recognized document assessing
liability for Tax in respect of any such taxation year could
be issued but for any consent, waiver, agreements or other
document made or filed by the Purchased Company after the
Closing;
and any claim in respect thereof (except a claim based on fraud) shall be made
in writing during such applicable time period and shall be subject to Section
9.5.
(2) The representations and warranties of the Purchaser contained in this
Agreement shall survive the Closing and, notwithstanding such Closing
and any investigation made by or on behalf of the Vendor, shall
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continue in full force and effect for the benefit of the Vendor for a
period of twenty-four (24) months from the Closing Date and any claim
in respect thereof (except a claim based on fraud) shall be made in
writing within such time period and shall be subject to Section 9.5.
SECTION 9.5 INDEMNIFICATION PROCEEDINGS - THIRD PARTY CLAIMS.
(1) Promptly after receipt by an indemnified party (an "INDEMNIFIED PARTY")
under Section 9.1, 9.2 or Section 9.3 of a notice of commencement of
any proceeding against it by a third party, the Indemnified Party will,
if a claim is to be made against an indemnifying party (an
"INDEMNIFYING PARTY") under such Section, give notice to the
Indemnifying Party of the commencement of such claim. The failure to
notify the Indemnifying Party will not relieve the Indemnifying Party
of any liability that it may have to any Indemnified Party, except to
the extent that the Indemnifying Party demonstrates that the defence of
such action is prejudiced by the Indemnified Party's failure to give
such notice.
(2) If any proceeding referred to in Section 9.5(1) (a "PROCEEDING") is
brought against an Indemnified Party and it gives notice to the
Indemnifying Party of the commencement of the Proceeding, the
Indemnifying Party will be entitled to participate in the Proceeding as
hereinafter provided. To the extent that the Indemnifying Party wishes
to assume the defence of the Proceeding with counsel satisfactory to
the Indemnified Party, it may do so provided it (i) reimburses the
Indemnified Party for all of its out-of-pocket expenses (including
solicitor's fees and disbursements) arising prior to or in connection
with such assumption; and (ii) permits the Indemnified Party to
participate in such defence through counsel chosen by the Indemnified
Party provided that the fees and expenses of such counsel shall be
borne by the Indemnified Party unless there are separate defences
available to the Indemnified Party or conflicts of interest in which
case those fees and expenses will be paid by the Indemnifying Party.
After notice from the Indemnifying Party to the Indemnified Party of
its election to assume the defence of the Proceeding as against the
Indemnified Party, the Indemnifying Party will not, as long as it
diligently conducts such defence and except as expressly provided
herein, be liable to the Indemnified Party under this Section 9.5 for
any fees of other counsel or any other expenses with respect to the
defence of the Proceeding, in each case subsequently incurred by the
Indemnified Party in connection with the defence of the Proceeding,
other than reasonable costs of investigation approved in advance by the
Indemnifying Party. If the Indemnifying Party assumes the defence of a
Proceeding as against the Indemnified Party (i) no compromise or
settlement of such claims may be made by the Indemnifying Party without
the Indemnified Party's consent unless (A) there is no admission of any
violation of Laws or any violation of the rights of any Person and no
adverse effect on any other claims that may be made against the
Indemnified Party, and (B) the sole relief provided is monetary damages
that are paid in full by the Indemnifying Party, and (ii) the
Indemnified Party will have no liability with respect to any compromise
or settlement of such claims effected without its consent. If notice is
given to an Indemnifying Party of the commencement of any Proceeding
and the Indemnifying Party does not, within ten (10) days after receipt
of such notice, give notice to the Indemnified Party of its election to
assume the defence of the Proceeding, the Indemnifying Party will be
bound by any determination made in the Proceeding or any compromise or
settlement effected by the Indemnified Party acting in good faith.
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(3) Notwithstanding the foregoing, if an Indemnified Party determines in
good faith that there is a reasonable probability that a Proceeding may
adversely affect it or its Affiliates other than as a result of
monetary damages for which it would be entitled to indemnification
under this Agreement, the Indemnified Party may, by notice to the
Indemnifying Party, assume the exclusive right to defend, compromise,
or settle the Proceeding. In such case, the Indemnifying Party will not
be bound by any compromise or settlement effected without its consent
(which may not be unreasonably withheld).
(4) Where the defence of a Proceeding is being undertaken and controlled by
the Indemnifying Party, the Indemnified Party will use its Best Efforts
to make available to the Indemnifying Party those employees whose
assistance, testimony or presence is necessary to assist the
Indemnifying Party in evaluating and defending any such claims.
However, the Indemnifying Party shall be responsible for the expense
associated with any employees made available by the Indemnified Party
to the Indemnifying Party pursuant to this Section 9.5(4), which
expense shall be equal to the out of pocket expenses of such employees
and an amount to be mutually agreed upon per person per hour or per day
for each day or portion thereof that the employees are assisting the
Indemnifying Party and which expenses shall not exceed the actual cost
to the Indemnified Party associated with the employees.
(5) With respect to any Proceeding at the request of the Indemnifying
Party, the Indemnified Party shall make available to The Indemnifying
Party or its representatives on a timely basis all documents, records
and other materials in the possession of the Indemnified Party, at the
expense of the Indemnifying Party, reasonably required by the
Indemnifying Party for its use in defending any such claim and shall
otherwise cooperate on a timely basis with the Indemnifying Party in
the defence of such claim.
(6) With respect to any Proceeding in respect of income, corporate, sales,
excise, or other tax liability enforceable by Lien against the property
of the Indemnified Party, the Indemnifying Party's right to so defend
the Proceeding shall only apply after payment of any such
re-assessment.
SECTION 9.6 OTHER LIMITATIONS.
(1) Notwithstanding anything contained in this Agreement, the Purchaser
shall not be entitled to make any claim against the Vendor or Xxxxx, as
the case may be:
(a) in respect of any of the representations or warranties in
respect of any claim that arises or is increased as a result
of any increase in rates of taxation after the Closing or the
passing of any enactment or other governmental regulation
(whether relating to taxation or otherwise) or any judgment
delivered after the date hereof with retrospective effect
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unless a proposal to introduce such increase in rates,
enactment or regulation was publicly announced on or before
the Closing; provided, however, that in the case of any such
increase, the claim shall apply to the extent thereof prior to
such increase;
(b) to the extent the claim would not have arisen but for a change
in accounting policies or practices introduced by the
Purchaser after the Closing; and
(c) to the extent that the claim has been reduced by the amount of
any recovery by the Purchaser under any insurance policy.
(2) If any breach of the representations and warranties arises by reason of
a liability of the Purchaser which is contingent when the claim in
respect thereof is notified to the Vendor or Xxxxx then the Vendor or
Xxxxx, as the case may be, will not be obliged to make any payment to
the Purchaser until such time as the contingent liability ceases to be
contingent and becomes an actual liability.
(3) Subject to limitations found in Section 9.8, but notwithstanding any
other provision herein to the contrary, the maximum aggregate liability
of the Vendor and Xxxxx with respect to any claims for indemnity
(including, for greater certainty, any amounts claimed pursuant to
Sections 9.1, 9.2 and
9.8) other than amounts claimed pursuant to section 10.4 under this
Agreement shall be the net proceeds of the Offering; provided, that the
Vendor and Xxxxx will only be liable to the Purchaser in respect of
total claims in the aggregate exceeding U.S.$1,000,000 and then only to
the extent of such excess over U.S.$1,000,000.
(4) Notwithstanding any provision herein to the contrary, the maximum
aggregate liability of the Purchaser with respect to any claims for
indemnity (including, for greater certainty, any amounts claimed
pursuant to Section 9.3) shall be the net proceeds of the Offering;
provided, that the Purchaser will only be liable to the Vendor in
respect of total claims in the aggregate exceeding U.S.$1,000,000 and
then only to the extent of such excess over U.S.$1,000,000.
(5) All claims for indemnification pursuant to this Section 9 shall be
expressed and all payments made with respect to such claims shall be
paid in U.S. dollars. If any currency conversion shall be required for
the purposes of expressing the value of the claim or making any payment
pursuant to this Section 9, the reference date for calculating the
applicable exchange rate shall be the date on which the claim arose or
occurred.
SECTION 9.7 Amalco Entitled to Indemnities.
Xxxxx and the Vendor agree with the Purchaser and the Company that
effective on the Closing, Amalco shall be entitled to and be deemed to have the
full and direct benefit of each of the representations and warranties of Xxxxx
and the Vendor given to the Purchaser in Article 4 and the covenants contained
herein as if such representations and warranties and covenants were given to
Amalco on Closing and as if the references to the Company included Amalco. Xxxxx
and the Vendor furthermore agree with the Purchaser and the Company that
effective on the Closing, Amalco shall be entitled to and be deemed to have the
full and direct benefit of the indemnification obligations of the Vendor and
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Xxxxx contained in this Article 9. The Company agrees with the Vendor and Xxxxx
that all of the terms and conditions of the indemnity obligations of the Vendor
and Xxxxx', including notice, that are applicable to the Purchaser shall be
equally applicable to Amalco. The Purchaser and Amalco may in their sole
discretion determine which of them seeks or obtains recovery or remedy from the
Vendor or Xxxxx, as the case may be, in respect of a particular fact,
circumstance or event giving rise to such recovery or remedy. Notwithstanding
any other provision in this Agreement, neither the Purchaser nor Amalco shall be
entitled to recovery against the Vendor or Xxxxx under the provisions of this
Article 9 if the other has recovered against the Vendor or Xxxxx under this
Agreement in respect of any claim arsing from the same facts or circumstances,
the intention being that the Vendor or Xxxxx, as the case may be, shall only be
required to make payment, restitution or indemnification once to either the
Purchaser or Amalco as the case may be, as a result of any breach of any
representation or warranty, or covenant in relation to a particular fact,
circumstance or event, regardless of whether one or both of the Purchaser and
Amalco have made a claim in respect thereof.
SECTION 9.8 TAX INDEMNITY.
In addition to and without limiting the generality of the above (but
without duplication), Xxxxx shall indemnify the Purchaser Indemnified Parties in
respect of and save them harmless from:
(a) except to the extent indemnified pursuant to paragraphs (b) or
(c), any Taxes, costs, expenses and liabilities including
reasonable legal or accounting or economists' fees which may
be suffered or incurred by any Purchaser Indemnified Party
relating to any period ended on or before the Closing Date or
to the portion of any taxation year or period ending after the
Closing Date that ends on the Closing Date, except to the
extent that such Taxes were specifically accrued as a
liability on the financial statements in the Prospectus or
will be included as part of the Net Working Capital
calculation;
(b) any Taxes, costs, expenses and liabilities including
reasonable legal or accounting or economists' fees which may
be suffered or incurred by any Purchaser Indemnified Party
relating to any period ended on or before the Closing Date or
to the portion of any taxation year or period ending after the
Closing Date that ends on the Closing Date, that arise,
directly or indirectly, in any manner whatsoever, as a
consequence of or in connection with any assessment or
reassessment of, or proposal to assess or reassess, the
Company (a "Transfer Pricing Assessment") under sections 247
or 245 (but only to the extent it relates to transfer pricing
matters) of the Tax Act (the "Transfer Pricing Rules"), and
any such Transfer Pricing Assessment that may occur further to
a competent authority procedure under Articles IX or XXVI of
the CANADA-UNITED STATES INCOME TAX CONVENTION (the
"Convention"), but only to the extent such Taxes and other
amounts exceed any amount that is refunded to the Vendor as a
result of or in connection with that Transfer Pricing
Assessment in accordance with the INTERNAL REVENUE CODE
(United States of America) or Articles IX or XXVI of the
Convention and paid by the Vendor to the Company as required
by Section 10.6; and
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(c) any Taxes, costs, expenses and liabilities including
reasonable legal or accounting or economists' fees which may
be suffered or incurred by any Purchaser Indemnified Party
relating to any taxation year that commences on the Closing
Date or within three (3) years after the Closing Date as a
result of, in respect of, connected with, or arising out of,
under or pursuant to a breach of a representation and warranty
contained in Section 4.1.17.
The indemnity provided in this Section 9.8 shall survive (in the case of
paragraph (a)) until 30 days after the expiry of any period during which any
Purchaser Indemnified Party may be assessed or reassessed by any of the CCRA or
the Internal Revenue Service (United States of America) (the "IRS") in
connection with any issue to which the applicable indemnity relates, and (in the
case of paragraph (b)) in respect of any particular taxation year of the Company
until two years after receipt by the Company of written notice from the CCRA of
its intention to commence an audit relating to that year to which the indemnity
in paragraph (b) may apply and in the case of paragraph (c) until 30 days after
the expiry of any period during which any Purchaser Indemnified Party may be
assessed or reassessed by any of the CCRA or the IRS in connection with any
issue to which the applicable indemnity relates in respect of any taxation year
that commences on the Closing Date or within three years after the Closing Date.
The obligation of Xxxxx under the indemnity in paragraph (b) shall not exceed US
$3 million in respect of the aggregate amount of all claims under that paragraph
and the indemnity in paragraph (c) shall not exceed U.S.$5million in respect of
the aggregate amount of all claims under that paragraph.
In the event that any Purchaser Indemnified Party is assessed or reassessed for
Taxes in respect of which an indemnity under this Section 9.8 may be payable by
Xxxxx (a "Reassessment"), the Purchaser Indemnified Party shall notify Xxxxx in
writing of the Reassessment within 30 days of receipt thereof by the Purchaser
Indemnified Party. Notwithstanding the foregoing, any failure by the Purchaser
Indemnified Party to so notify Xxxxx within 30 days shall not affect Xxxxx'
obligation to indemnify the Purchaser Indemnified Party under this Section 9.8
except to the extent that such failure shall have materially prejudiced the
defence against the Reassessment. Xxxxx shall:
(a) have the right, at its option and expense, to participate in
and be present at the defence against the Reassessment, which
shall mean the right to be apprised of and be afforded the
opportunity to comment upon any submissions but not to control
the defence, negotiation or settlement thereof, which control
shall at all times rest entirely with the Purchaser
Indemnified Party, and
(b) co-operate fully with the Purchaser Indemnified Party in
connection with the defence, negotiation or settlement of the
Reassessment (including any appeal or competent authority
procedure under Article IX or XXVI of the CANADA-UNITED STATES
INCOME TAX CONVENTION), which co-operation shall include the
provision to the Purchaser Indemnified Party of complete and
timely access to all relevant books and records of any
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relevant Person Affiliated with Xxxxx including any and all
prior communications with the CCRA or the IRS on transfer
pricing or related matters (the "Issues"), to all personnel
currently employed by or under contract to any relevant Person
Affiliated with Xxxxx having any knowledge whatsoever of the
Issues and to all personnel previously employed by or under
contract to any relevant Person Affiliated with Xxxxx having
such knowledge to the extent Xxxxx or a relevant Person
Affiliated with Xxxxx can access such previously employed
personnel using reasonable best efforts.
ARTICLE 10
POST-CLOSING COVENANTS
SECTION 10.1 ACCESS TO BOOKS AND RECORDS.
For a period of six (6) years from the Closing Date or for such longer
period as may be required by Law, the Purchaser and the Company shall retain all
original accounting Books and Records relating to the Business for the period
prior to the Closing Date. So long as such Books and Records are retained by the
Purchaser and/or the Company pursuant to this Agreement, the Vendor shall have
the right to inspect and make copies (at its own expense) of them upon
reasonable request during normal business hours and upon reasonable notice and
without undue interference to the business operations of the Purchaser and the
Company. The Purchaser and the Company shall have the right to have their
representatives present during any such inspection.
SECTION 10.2 INSURANCE PROCEEDS AND DISTRIBUTED CLAIMS.
After the Closing, Purchaser agrees to, and agrees to cause the
Purchased Companies to:
(a) at the direction of the Vendor, use Best Efforts to collect
the insurance proceeds and claims related to, and any other
amounts available to the Purchased Companies with respect to,
the Distributed Claims and the Special Receivables;
(b) cooperate with the Vendor with respect to executing, or
causing the Purchased Companies to execute, any documents
reasonably required to effectuate the assignment of the
Distributed Claims; and
(c) provide the Vendor with access to the books and records of the
Purchased Companies pertaining to the Distributed Claims and
the Special Receivables. In the event that the Purchaser,
Amalco or any of its subsidiaries receives any amounts related
to the Distributed Claims, the Purchaser agrees to, and agrees
to cause the Purchased Companies to, promptly deliver such
amounts to the Vendor.
SECTION 10.3 SERVICE AGREEMENT.
During the twelve (12) months following the Closing Date, the Purchaser
agrees to cause the Purchased Companies, at no cost to the Vendor or Xxxxx, to:
(a) provide services to Xxxxx and/or the Vendor, in a manner
consistent with the services provided by the Company to Xxxxx
and/or the Vendor on and prior to the Closing Date, in
connection with the hosting and maintenance of Xxxxx' website
at xxx.xxxxx.xxxxxxxxxxxx.xxx and the NeoFlora horticulture
database used in Xxxxx' business; and
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(b) make such changes and additions to such website and database
reasonably requested by Xxxxx and/or the Vendor.
SECTION 10.4 Reimbursement of Insurance Costs
During the period from the Closing Date to December 31, 2002 (the
"Coverage Period"), the Purchaser agrees to cause Amalco to use its Best Efforts
to maintain insurance coverage commensurate (both in terms of types of coverage
and coverage limits) with the insurance coverage provided to the Company by
Xxxxx prior to the Closing Date at a cost not to exceed the Company's budgeted
amount of U.S.$1,200,000 for such period. In the event that the insurance
coverage (as described above) obtained by the Company costs in excess of its
budgeted amount for the Coverage Period, Xxxxx agrees to pay to the Company,
subject to a maximum payment by Xxxxx of U.S.$500,000, the lesser of:
(a) U.S.$20,480,000 less U.S.$300,000 minus the actual EBITDA for
the Coverage Period, minus the total amount of the tax refund
received by the Company in respect of the 2001 fiscal year;
and
(b) the difference between U.S.$16,913,000 and the actual
distributable cash of the Purchaser for the Coverage Period.
Such payment, if any, shall be provided by Xxxxx within 30 days of receiving
documentary evidence of the results of such formula.
SECTION 10.5 Xxxxx Guarantee
Xxxxx, an affiliate of the Vendor, shall be responsible for and to the
Purchaser Indemnified Parties for any failure by the Vendor to discharge its
responsibilities and/or satisfy its obligations to the Purchaser Indemnified
Parties under this Agreement, including, without limitation, any indemnification
claims pursuant to Section 9.
SECTION 10.6 TRANSFER PRICING.
In the event that the CCRA assesses, reassesses or proposes to assess or
reassess the Company (which for the purposes of this Section 10.6 includes any
successor thereto or assignee thereof) under sections 247 or 245 (but only to
the extent it relates to transfer pricing matters) of the Tax Act (an
"ASSESSMENT") in respect of any taxation year which commenced prior to the
acquisition of the Company by the Purchaser then Xxxxx and the Vendor shall
cooperate, at the expense of Xxxxx, co-operate with the Company in seeking a
resolution of the issues raised in the Assessment with the competent authorities
of Canada and the United States of America in accordance with and to the
greatest extent permitted by Article IX of the CANADA -UNITED STATES INCOME TAX
CONVENTION.
At the Closing, Xxxxx and the Vendor shall assign, free and clear of any Liens
to the Purchaser or a person designated by the Purchaser all amounts (up to the
maximum amount of the Assessment) to which Xxxxx or any member of the affiliated
group of which Xxxxx or any successor to Xxxxx was or is the common parent (the
"Xxxxx Affiliated Group") may be entitled under the Internal Revenue Code of
1986, as amended (the "U.S. Tax Code") and applicable rules and regulations of
-43-
the U.S. Treasury Department (the "IRS Regulations") as a result of the
Assessment. The Vendor shall, and Xxxxx shall cause the Vendor or any successor
to the Vendor to, exercise its Best Efforts after the Closing to obtain the
maximum Tax refund to which the Xxxxx Affiliated Group may be entitled under the
U.S. Tax Code and the IRS Regulations as a result of the Assessment. In
furtherance of the foregoing, Xxxxx shall not take any action or omit to take
any action where such action or omission would have the effect of eliminating or
lowering the amount of the Tax refund to which the Xxxxx Affiliated Group may be
entitled under the U.S. Tax Code and the IRS Regulations as a result of the
Assessment. In the event that after the Closing any member of the Xxxxx
Affiliated Group shall obtain any Tax refund as a result of the Assessment in
respect of any taxation year which commenced prior to the Closing, then Xxxxx
shall, or shall cause the member of the Xxxxx Affiliated Group that receives
such refund to, immediately pay (up to the maximum amount of the Assessment) to
the Purchaser or a person designated by the Purchaser the full amount of such
refund.
In connection with the determination of any Tax refund as a result of the
Assessment, Xxxxx shall notify the Purchaser in writing promptly of the receipt
of any refund, or the discovery of a right to claim a refund, and shall permit
the Company and the Purchaser to review and comment on, and to consider in good
faith any such comments, any materials to be submitted to any U.S. or Canadian
governmental authorities in connection therewith prior to submission. Further,
Xxxxx shall furnish to the Purchaser all information, records and assistance
necessary to verify the amount of the refund.
Subject to and in accordance with the provisions set forth above, Xxxxx shall
prepare or cause to be prepared and file, or cause to be filed, and cause each
member of the Xxxxx Affiliated Group to prepare and file, all Tax Returns
required to be filed in respect of any taxation year which commenced prior to
the Acquisition.
The covenant contained in this Section 10.6 shall survive until the expiry of
any period during which an Assessment could be issued under applicable law, the
receipt by the Xxxxx Affiliated Group of the maximum amount of any Tax refund to
which the Xxxxx Affiliated Group may be entitled under the U.S. Tax Code and the
IRS Regulations as a result of the Assessment or the payment of such Tax refund
to the Purchaser, whichever occurs latest.
ARTICLE 11
SETTLE DISPUTES
SECTION 11.1 BEST EFFORTS TO SETTLE DISPUTES.
In the event any dispute, claim, question or difference (a "DISPUTE")
arises out of or with respect to this Agreement or its performance, enforcement,
breach, termination or validity, the Parties shall use their Best Efforts to
settle the Dispute. To this end, they shall consult and negotiate with each
other, in good faith and understanding of their mutual interests, to reach a
just and equitable solution satisfactory to all Parties.
-44-
ARTICLE 12
MISCELLANEOUS
SECTION 12.1 NOTICES.
Any notice, direction or other communication given under this Agreement
shall be in writing and given by delivering it or sending it by facsimile or
other similar form of recorded communication addressed:
(a) to the Purchaser or Amalco at:
Sun Gro Horticulture, Inc.
52130 X.X. 00
X.X. Xxx 000
Xxxx Xxxxx, Xxxxxxx
Attention: Xxxxx Xxxxxx
Facsimile: (000) 0000-0000
With a copy to Xxxxxx Xxxxxx Gervais LLP at:
0000 Xxxxxxxxxx Xxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Attention: Nigel P.H. Cave
Facsimile: (000) 000-0000
(b) to the Vendor and Xxxxx at:
Xxxxx Horticulture, Inc.
00000 Xxxxxxx Xxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
With a copy to Paul, Hastings, Xxxxxxxx & Xxxxxx LLP at:
000 Xxxx Xxxxxx Xxxxx,
00xx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile:
-45-
Any such communication shall be deemed to have been validly and effectively
given (i) if personally delivered, on the date of such delivery if such date is
a Business Day and such delivery was made prior to 4:00 p.m. (local time) and
otherwise on the next Business Day, or (ii) if transmitted by facsimile or
similar means of recorded communication, on the Business Day following the date
of transmission. Any Party may change its address for service from time to time
by notice given in accordance with the foregoing and any subsequent notice shall
be sent to such Party at its changed address.
SECTION 12.2 TIME OF THE ESSENCE.
Time shall be of the essence of this Agreement.
SECTION 12.3 BROKERS.
The Vendor and Xxxxx shall indemnify and save harmless the Purchaser
from and against any and all claims, losses and costs whatsoever for any
commission or other remuneration payable or alleged to be payable to any broker,
agent or other intermediary who purports to act or have acted for the Vendor or
Xxxxx, including BMO Xxxxxxx Xxxxx Inc. The Purchaser shall indemnify and save
harmless the Vendor from and against any and all claims, losses and costs
whatsoever for any commission or other remuneration payable or alleged to be
payable to any broker, agent or other intermediary who purports to act or have
acted for the Purchaser. These indemnities shall not be subject to any of the
limitations set out in Article 9 of this Agreement.
SECTION 12.4 ANNOUNCEMENTS.
At all times prior to Closing, any press release or public statement or
announcement (a "PUBLIC STATEMENT") with respect to the transaction contemplated
in this Agreement shall be made only with the prior approval of Xxxxx and the
Purchaser unless such Public Statement is required by Law or by any stock
exchange, in which case the Party required to make the Public Statement shall
use its Best Efforts to obtain the approval of the other Party as to the form,
nature and extent of the disclosure, prior to the making of any such Public
Statements.
SECTION 12.5 CONSEQUENTIAL DAMAGES.
In no event shall the Purchaser be liable to the Vendor or shall the
Vendor or Xxxxx be liable to the Purchaser for any consequential damages
whatsoever save and except for claims of a third party for Damages where such
Damages include consequential damages.
SECTION 12.6 THIRD PARTY BENEFICIARIES.
None of the Vendor, Xxxxx and the Purchaser intend that this Agreement
shall benefit or create any right or cause of action in, or on behalf of, any
Person, other than the Parties to this Agreement and the Purchased Companies and
no Person, other than the Parties to this Agreement and the Purchased Companies,
shall be entitled to rely on the provisions of this Agreement in any action,
suit, proceeding, hearing or other forum.
-46-
SECTION 12.7 AMENDMENTS.
This Agreement may only be amended or otherwise modified by written
agreement executed by the Vendor, Xxxxx, the Company and the Purchaser.
SECTION 12.8 WAIVER.
(1) No waiver of any of the provisions of this Agreement shall be deemed to
constitute a waiver of any other provision (whether or not similar),
nor shall such waiver be binding unless executed in writing by the
Party to be bound by the waiver.
(2) No failure on the part of a Party to exercise, and no delay in
exercising any right under this Agreement shall operate as a waiver of
such right, nor shall any single or partial exercise of any such right
preclude any other or further exercise of such right or the exercise of
any other right.
SECTION 12.9 NON-MERGER.
Except as otherwise expressly provided in this Agreement, the
covenants, representations and warranties shall not merge on and shall survive
the Closing and, notwithstanding such Closing and any investigation made by or
on behalf of any Party, shall continue in full force and effect. Closing shall
not prejudice any right of one Party against any other Party in respect of
anything done or omitted under this Agreement or in respect of any right to
damages or other remedies.
SECTION 12.10 ENTIRE AGREEMENT.
This Agreement together with the other agreements tabled on the Closing
Date constitute the entire agreement between the Parties with respect to the
transactions contemplated in this Agreement and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
Parties. There are no representations, warranties, covenants, conditions or
other agreements, express or implied, collateral, statutory or otherwise,
between the Parties in connection with the subject matter of this Agreement,
except as specifically set forth herein and the Vendor, Xxxxx and the Purchaser
have not relied and are not relying on any other information, discussion or
understanding in entering into and completing the transactions contemplated by
this Agreement.
SECTION 12.11 SUCCESSORS AND ASSIGNS.
This Agreement shall become effective when executed by the Parties and
after that time shall be binding upon and enure to the benefit of the Parties
and their respective successors and permitted assigns. Except as expressly
contemplated herein, neither this Agreement nor any of the rights or obligations
under this Agreement shall be assignable or transferable by any Party without
the prior written consent of the other Parties, provided that the Purchaser may
assign the benefits of this Agreement to one or more financial institutions
providing loans to it or an Affiliate and no such assignment to such financial
institutions will give rise to any liability on the part of such financial
institutions.
-47-
SECTION 12.12 SEVERABILITY.
If any provision of this Agreement shall be determined by an arbitrator
or any court of competent jurisdiction to be illegal, invalid or unenforceable,
that provision will be severed from this Agreement and the remaining provisions
shall remain in full force and effect.
SECTION 12.13 GOVERNING LAW.
(1) This Agreement shall be governed by and interpreted and enforced in
accordance with the laws of the Province of British Columbia and the
federal laws of Canada applicable therein.
(2) Each of the Parties irrevocably attorn and submit to the non-exclusive
jurisdiction of the Supreme Court of British Columbia.
SECTION 12.14 FURTHER ASSURANCES.
From time to time subsequent to the Closing Date, each Party shall at
the request of any other Party execute and deliver such additional conveyances,
transfers, specific assignment and other assurances as may be reasonably
required effectually to carry out the intent of this Agreement and to transfer
the Shares to the Purchaser.
SECTION 12.15 EXECUTION BY THE PURCHASER
The parties hereto acknowledge that the Company is entering into this
agreement solely on behalf of the Purchaser and the obligations of the Purchaser
hereunder shall not be personally binding upon any of the trustees of the
Purchaser, the Company, any registered or beneficial holder of trust units of
the Purchaser or any beneficiary under a plan of which a holder of such trust
units acts as a trustee or carrier, and that resort shall not be had to, nor
shall recourse be sought from, any of the foregoing or the private property of
any of the foregoing in respect of any indebtedness, obligation or liability of
the Purchaser arising hereunder or arising in connection herewith or from the
matters to which this Agreement relates, and recourse shall be limited to, and
satisfied only out of, the Fund Assets as defined in the Declaration of Trust
made the 12th day of February, 2002, as amended or restated from time to time.
-48-
SECTION 12.16 COUNTERPARTS.
This Agreement may be executed in any number of counterparts (including
counterparts by facsimile) and all such counterparts taken together shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF the parties have executed this Agreement.
XXXXX NURSERIES, INC.
By:
----------------------------------------
Authorized Signatory
By:
----------------------------------------
Authorized Signatory
SUN GRO HORTICULTURE, INC.
By:
----------------------------------------
Authorized Signatory
By:
----------------------------------------
Authorized Signatory
XXXXX HORTICULTURE, INC.
By:
----------------------------------------
Authorized Signatory
By:
----------------------------------------
Authorized Signatory
SUN GRO HORTICULTURE INCOME FUND
BY ITS ATTORNEY, SUN GRO HORTICULTURE CANADA LTD.
By:
----------------------------------------
Authorized Signatory
By:
----------------------------------------
Authorized Signatory
-49-
SUN GRO HORTICULTURE CANADA LTD.
By:
----------------------------------------
Authorized Signatory
By:
----------------------------------------
Authorized Signatory
-50-
SCHEDULE 4.1.3
GOVERNMENTAL AUTHORIZATION; CONSENTS
1. Written consent of Hood Packaging Corporation required for the
assignment of the Bag Supply Contract effective January 1, 2001 between
Hood Packaging Corporation and Sun Gro Horticulture, Inc.
2. Written consent of Color Spot Nurseries Inc. required for the
assignments and transfer by operation of law of the Purchase Agreement
dated September 28, 2001 between Color Spot Nurseries, Inc. and Sun Gro
Horticulture, Inc.
3. Waiver of Section 17 of the Supply Contract dated December 10, 1999
between Xxxxxx Plant Farms, Inc. and Sun Gro Horticulture, Inc.
required for the assignments and transfer by operation of the Supply
Contract.
4. Consent required for the assignment of the Trademark License Agreement
dated January 1, 2001 between Odin Enterprises II LLC and Sun Gro
Horticulture, Inc.
5. Waiver of Section 13 of Master Software License Agreement No. 2000-4171
dated December 30, 1999 between Infinium Software, Inc. and Sun Gro
Horticulture, Inc. required for the assignment and transfer by
operation of law of that Master Software License Agreement.
6. Written consent required for Assignment of Repayable Contribution
Agreement dated July 24, 0000 xxxxx Xxxxxxxx Xxxxxx Opportunities
Agency, Sun Gro Horticulture, Inc. and Sun Gro Horticulture Canada Ltd.
7. Revised permit required for Illinois Environmental Protection Agency
Lifetime Operating Permit ILR 001447.
8. Consent required for transfer of Arkansas Minor Source Air Permit
#1109-AR-3.
9. Consent required for transfer of Water Discharge Permit TRX 05 (Texas).
10. Notice of assignment of Manufacturer's Representative Agreement to
Tierra Associates LLC regarding assignment of Manufacturer's
Representative Agreement between Tierra Associates LLC and Sun Gro
Horticulture, Inc. dated November 1, 1999.
-1-
SCHEDULE 4.1.4
NON-CONTRAVENTION
1. Assignment and transfer by operation of law of Master License Software
Agreement No. 2000-4141 is prohibited by the terms of the agreement;
therefore, a waiver of the prohibition is required. See Schedule 4.1.3
- paragraph 5.
2. Assignment and transfer by operation of law of the Supply Agreement
with Xxxxxx Farms, Inc. is expressly prohibited by the terms of the
agreement; therefore, a waiver of the prohibition is required. See
Schedule 4.1.3 - paragraph 3.
3. Illinois Storm Water Permit ILR 001447 requires 30 days advance notice
of assignment. Less than 30 days notice was provided.
4. Arkansas Minor Source Air Permit #1109-AR-3 requires 30 days advance
notice of assignment. Less than 30 days notice was provided and as a
result we do not expect to have this consent in time for closing.
-2-
SCHEDULE 4.1.5
CAPITALIZATION
4.1.5 (b)(i) VOTING SECURITIES OF THE COMPANY AND ITS SUBSIDIARIES
(A) PRIOR TO REORGANIZATION
Prior to the Reorganization, the Company is a corporation
under the Canada Business Corporations Act ("CBCA") has an
unlimited number of common shares authorized, 200 of which are
issued and outstanding and held by Vendor. 66 of the issued
and outstanding shares have liens against them in favour of
Deutsche Bank Canada which liens shall be released at Closing.
Sunshine Peat Xxxx Ltd., a New Brunswick company, has 100
common shares authorized. Four common shares are issued and
outstanding and held by the Company.
Sunshine Peat Xxxx Ltd., a Manitoba company, has 20,000 common
shares authorized. Six common shares are issued and
outstanding and held by the Company.
(B) AT CLOSING
At Closing the Company will be a Nova Scotia company having
100,000,000 common shares (without nominal or par value)
authorized, of which one common share will be issued and
outstanding and held by the Fund.
Sunshine Peat Xxxx Ltd., a New Brunswick company, will have
100 common shares authorized, 4 of which will be issued and
outstanding and held by the Company.
Sunshine Peat Xxxx Ltd., a Manitoba company, will have 20,000
common shares authorized, 6 of which will be issued and
outstanding and held by the Company.
Sun Gro Horticulture CM Ltd., a CBCA corporation, will have an
unlimited number of common shares authorized, of which 100
will be issued and outstanding and held by the Company.
Sun Gro Holdings Inc., a Delaware corporation, will have 5,000
common shares authorized ($0.0001 par value per share), of
which 1,000 shares will be issued and outstanding and held by
the Company.
Sun Gro Horticulture Processing Inc. and Sun Gro Horticulture
Distribution Inc., each a Delaware corporation, will each have
5,000 common shares authorized ($0.0001 par value per share),
of which 1,000 shares will be issued and outstanding and held
by Sun Gro Holdings Inc..
-3-
4.1.5 (b)(ii) CONVERTIBLE OR EXCHANGEABLE SECURITIES
None.
4.1.5 (b)(iii) OPTIONS OR OTHER RIGHTS TO ACQUIRE SECURITIES
None.
4.1.5 (c) SHARE OR OTHER EQUITY INVESTMENTS IN OTHER ENTITIES
(A) PRIOR TO REORGANIZATION
None.
(B) AT CLOSING
At Closing the Company will own 995,000 shares of Neo
Informatics Inc. Neo Informatics, Inc. is currently dormant.
-4-
SCHEDULE 4.1.8
ABSENCE OF CERTAIN CHANGES
4.1.8(a) ISSUANCE OF SHARES OR OTHER SECURITIES
(A) PRIOR TO REORGANIZATION
None.
(B) AT CLOSING
None.
4.1.8(b) CREATION OF LIENS ON MATERIAL ASSETS AND ADVANCES IN EXCESS
OF US$250,000
(A) PRIOR TO REORGANIZATION
None.
(B) AT CLOSING
None.
4.1.8(c) PERSONAL PROPERTY OR PERSONAL INJURY LOSS, ETC.
(A) PRIOR TO REORGANIZATION
None.
(B) AT CLOSING
None.
4.1.8(d) INCREASE IN COMPENSATION
(A) PRIOR TO REORGANIZATION
None.
(B) AT CLOSING
None.
-5-
4.1.8(e) LABOUR UNION ACTIVITIES, ETC.
(A) PRIOR TO REORGANIZATION
None.
(B) AT CLOSING
None.
4.1.8(f) SALES, LEASE OR TRANSFER OF MATERIAL ASSETS OR RIGHTS
(A) PRIOR TO REORGANIZATION
None.
(B) AT CLOSING
None.
4.1.8(g) DISCHARGE OF INDEBTEDNESS OR OTHER LIABILITIES
(A) PRIOR TO REORGANIZATION
None.
(B) AT CLOSING
None.
4.1.8(h) CHANGES IN ACCOUNTING PRACTICES
None.
4.1.8(i) CAPITAL EXPENDITURES IN EXCESS OF US$250,000 EXCEPT ORDINARY
COURSE AND SEBA BEACH EXPENDITURES
(A) PRIOR TO REORGANIZATION
None.
(B) AT CLOSING
None.
4.1.8(j) CHANGES IN WORKING CAPITAL PRACTICES
-6-
None.
4.1.8(k) AGREEMENTS OR COMMITMENTS TO MAKE CERTAIN CHANGES
(A) PRIOR TO REORGANIZATION
None.
(B) AT CLOSING
None.
-7-
SCHEDULE 4.1.10(a)
FREEHOLD PROPERTIES
4.1.10(a) OWNED FACILITIES
(A) PRIOR TO REORGANIZATION
1. Lameque Plant, New Brunswick - 0000 Xxxxx 000,
Xxxxxxx, New Brunswick,
2. Maisonnette Plant, New Brunswick - 000 xxxxxx xx xx
Tourbe, Maisonnette, New Brunswick
3. Niagara Depot, Ontario - 000 Xxxx Xxxx,
Xxxxxxx-xx-xxx-Xxxx, Xxxxxxx, Xxxxxx
4. Montreal Depot, Quebec - 000 Xxxxxx Xxxxxxx,
Xx.-Xxxxxxx, Xxxxxx
5. Vilna Plant, Alberta - 6 miles north of Xxxxxxx 00 xx
Xxxxxxx 36, Alberta
6. 160 acres in Ontario - Former Xxxxxx Bog, Parts of
Lots 1 and 0, Xxxxxxxxxx 0, Xxxxxxxx xx Xxxxxx,
Xxxxxxxx of Cochrane
7. Plant site, Iroquois Falls, Ontario - Xxxxxxx 00,
Xxxxxxxx to Airport, Iroquois Falls, Ontario
8. Wandering River Bog, 160 acres -1/2mile Xxxx xx
Xxxxxxx 00, Xxxxxxxxx Xxxxx, Xxxxxxx
(B) AT CLOSING
In addition to the Owned Facilities listed above, the Company
will also have the following Owned Facilities is at Closing.
1. Quincy Plant - 0000 Xxxxxxx Xxxx, Xxxxxx, XX
2. Xxxxxxx Plant - 0000 X.X. 000, Xxxxxxx, XX
3. Hubbard Parcel One - 00000 Xxxxxxx 00X, Xxxxxxx, XX
4. Hubbard Parcel Two - 00000 Xxxxxxx 00X, Xxxxxxx, XX
5. Fillmore Plant - 0000 X. Xxxxxxxxxx Xxx, Xxxxxxxx, XX
6. Harbor Industrial District - 0000 Xxxxxx Xxxxxxx
Xxxx, Xxxx Xxxxx, XX
-8-
7. Seneca Industrial Park - 444 Shipyard Road, Seneca,
IL
8. Xxxxxxxxx City Plant (NC) - 000 Xxx Xxx Xx.,
Xxxxxxxxx Xxxx, XX
9. XxXxxxxxx Plant (SC), Highway 000 Xxxx Xxx Xxx Xxxxx,
XxXxxxxxx, XX
4.1.10(a)(i) CLAIMS AGAINST OWNED FACILITIES
(A) PRIOR TO REORGANIZATION
None.
(B) AT CLOSING
None.
4.1.10(a)(iii) NOTICES OF UNCURED VIOLATIONS REGARDING OWNED FACILITIES
(A) PRIOR TO REORGANIZATION
None.
(B) AT CLOSING
None.
-9-
SCHEDULE 4.1.10(b)
LEASED PROPERTIES
(A) PRIOR TO REORGANIZATION
ALBERTA
-------
1. Memorandum of Lease Agreement dated February 1, 1994 between
Sun Gro Horticulture Canada Ltd. ("Sun Gro Canada") Xxxx
Xxxxxx in respect of Meridian 5 Range 6 Township 51, Section
29, Quarter North West, Excepting Thereout All Mines And
Minerals And The Right To Work The Same.
2. Memorandum of Lease Agreement dated February 1, 1994 among Sun
Gro Canada and Xxxxxx Xxxx Xxxxxxx as to an undivided 1/2
interest, Xxxx Xxxxxxxxxx as to an 1/4 undivided interest and
Xxxx Xxxxxxxx as to an 1/4 undivided interest in respect
Meridian 5 Range 6 Township 51, Section 29, Quarter North
East, Excepting Thereout All Mines And Minerals And The Right
to Work the Same.
3. Assumption of Lease and Right of Way Agreement dated November,
1993 among Xxxxx Xxxxx Xxxxxxxx and Xxxxxxxx Xxxxxx and Sun
Gro Horticulture Canada Ltd. Right of Way Agreement dated
January 31, 1992 between Xxxxxxx Xxxxxxxx and Fisons
Horticulture Inc. and Memorandum of Lease Agreement dated
August 8, 1985 between Langley Peat North, a Division of
Fisons Western Corporation and Sun Gro Canada in respect of
THE EAST HALF OF SECTION NINE (9) TOWNSHIP FIFTY ONE (51)
RANGE SIX (6) WEST OF THE FIFTH MERIDIAN CONTAINING 130
HECTARES (322) ACRES MORE OR LESS EXCEPTING THEREOUT: 0.417
HECTARES (1.03 ACRES) OUT OF THE SOUTH EAST QUARTER, FOR ROAD
AS SHOWN ON ROAD PLAN 802 2070 EXCEPTING THEREOUT ALL MINES
AND MINERALS AND THE RIGHT TO WORK THE SAME. (All of the
foregoing is subject to an Assignment and Amendment Agreement
among Xxxxx Xxxxxxxx and Xxxxxxxx Xxxxxxxx and Red Oak
Industries dated December 1999).
4. Amendment of Lease Agreement dated March 17, 1993 between
Fisons Western Corporation and Xxxxxxx Xxx Xxxxx and
Memorandum of Lease Agreement dated April 22, 1986 among
Fisons Western Corporation and Xxxxxx Xxxxxx Xxxxx and Xxxxxxx
Xxx Xxxxx in respect of THE NORTH WEST QUARTER OF SECTION FOUR
(4) TOWNSHIP FIFTY ONE (51) RANGE SIX (6) WEST OF THE FIFTH
MERIDIAN CONTAINING ONE HUNDRED AND SIXTY ONE (161) ACRES,
MORE OR LESS. RESERVING UNTO HER MAJESTY ALL MINES AND
MINERALS.
5. Notice of Change of Lessor dated October 15, 1999 indicating
assignment of the lease to 563128 Alberta Ltd., Lease
Amendment Agreement dated June 6th 1990 among Fisons
-10-
Horticulture Inc. and Xxxxxx X. Xxxxxxxxx and Xxxxx X.
Xxxxxxxxx and Memorandum of Lease Agreement dated March 18,
1986 among Fisons Western Corporation and Xxxxxx X. Xxxxxxxxx
and Xxxxx X. Xxxxxxxxx in respect of THE NORTH EAST QUARTER OF
SECTION FOUR (4) TOWNSHIP FIFTY ONE (51) RANGE SIX (6) WEST OF
THE FIFTH MERIDIAN, CONTAINING 65.2 HECTARES 9161 ACRES) MORE
OR LESS.
(ACRES) MORE
EXCEPTING THEREOUT: HECTARES OR LESS
------------------- -------- -------
A) PLAN 0000000 - XXXX 0.417 1.03
B) PLAN 9020922 - DESCRIPTIVE 3.93 9.71
EXCEPTING THEREOUT ALL MINES AND MINERALS AND THE RIGHT TO
WORK THE SAME AND WITHOUT RESTRICTING THE GENERALITY OF
THE FOREGOING, ALL RIGHTS OF THE LESSEE HEREUNDER SHALL
APPLY IN PARTICULAR TO THOSE PORTIONS OF THE LANDS AS
OUTLINED IN RED BELOW: (approx. 55acres.).
6. Amendment of Lease Agreement dated March 30, 1994 among Sun
Gro Canada and Xxxxxxx Xxxxx and Xxxxxxxx Xxxx Xxxxx,
Amendment of Lease Agreement dated January 25, 1993 among Sun
Gro Canada and Xxxxxxx Xxxxx and Xxxxxxxx Xxxx Xxxxx and
Memorandum of Lease Agreement dated August 19, 1985 among
Langley Peat North, a Division of Fisons Western Corporation,
and Xxxxxxx Xxxxx and Xxxxxxxx Xxxx Xxxxx in respect of
FIRSTLY: THE SOUTH EAST QUARTER OF SECTION SIXTEEN (16)
TOWNSHIP FIFTY ONE (51) RANGE SIX (6) WEST OF THE FIFTH
MERIDIAN CONTAINING ONE HUNDRED AND SIXTY ONE (161) ACRES,
MORE OR LESS. EXCEPTING THEREOUT: TWO AND ONE HUNDREDTHS
(2.01) ACRES, MORE OR LESS, FOR ROAD AS SHOWN ON ROAD PLAN
1122 M.C. EXCEPTING THEREOUT ALL MINES AND MINERALS, AND THE
RIGHT TO WORK THE SAME, AS SET FORTH IN NOTIFICATION 16688.
SECONDLY: NORTH WEST QUARTER OF SECTION NINE(9) TOWNSHIP FIFTY
ONE (51) RANGE SIX (6) WEST OF THE FIFTH MERIDIAN BOUGHT FROM
ALBERTA GOVERNMENT UNDER FARM DEVELOPMENT SALE NO. FDS 001036.
7. Assignment of Lease dated June 28, 1999 among Xxxxxx Xxxxxxx
Xxxxxxxx and Xxxx Xxxxxxxx and Xxxxxx Xxxxxx and Xxxxxx Xxxxxx
and Memorandum of Lease Agreement dated February 10, 1993
among Fisons Horticulture Inc. and Xxxxxx Xxxxxxx Xxxxxxxx and
Xxxx Xxxxxxxx in respect of Meridian 5 Range 6 Township 51
Section 00 Xxxxxxx Xxxxx Xxxx Containing 65.2 Hectares (161
Acres) More or Less Excepting Thereout: 2.01 Acres More or
Less As Shown on Road plan 1122MC Excepting Thereout All Mines
And Minerals.
8. Memorandum of Lease Amendment Agreement dated February 21,
1996 between Sun Gro Canada and Xxxx Xxxxxx and Memorandum of
Lease Agreement dated February 10, 1993 between Fisons
Horticulture Inc. and Xxxx Xxxxxx in respect of THE SOUTH EAST
-11-
QUARTER OF SECTION 13 TOWNSHIP 51 RANGE 7 WEST OF THE FIFTH
MERIDIAN Containing 64.7 Hectares (160 Acres) More or Less
Excepting Thereout All Mines and Minerals And The Right to
Work The Same.
9. Memorandum of Lease Agreement dated February 23, 1999 between
Sun Gro Canada and Xxxx X. Xxxxxxxx in respect of Meridian 4
Range 16, Township 72, Section 30, Quarter South East,
Excepting Thereout All Mines And Minerals and Right to Work
the Same.
10. Agreement between Xxxxxxx Xxxxxxx Xxxxxxxx and Xxxxxxxxx
Xxxxxxx Xxxxxxxx and Fisons Horticulture Inc. in respect of
THE NORTH WEST QUARTER OF SECTION EIGHTEEN (18) TOWNSHIP
FIFTY-ONE (51) RANGE SIX (6) WEST OF THE FIFTH MERIDIAN
CONTAINING ONE HUNDRED AND SIXTY-ONE (161) ACRES MORE OR LESS
EXCEPTING THEREOUT ALL MINES AND MINERALS AND THE RIGHT TO
WORK THE SAME AND THE SOUTH EAST QUARTER OF SECTION NINETEEN
(19) TOWNSHIP FIFTY-ONE (51) RANGE SIX (6) WEST OF THE FIFTH
MEREDIAN CONTAINING ONE HUNDRED AND SIXTY-ONE (161) ACRES MORE
OR LESS EXCEPTING THEREOUT ALL MINES AND MINERALS AND THE
RIGHT TO WORK THE SAME.
11. Seba Beach, Alberta - Surface Materials Lease 780114 - Twp
51-6-W5, NW 1/4 LS 7, 10, 15 Section 31, S 1/2 32; Xxx
00-0-X0, XX 0/0 , XX 0/0 , XX 10, 15 Section 5, SE 1/4 , LS 3,
4, 6, 9, 10, 16 Section 7 W 1/2 , LS 1, 2, 7, 10, 15 Section
6, SW 1/4, LS 2,7 W 1/2 , LS 1, 2, 7, 10, 15 Section 6, SW
1/4, LS 2, 7 Xxxxxxx 0, XX0
00. Xxxx Xxxxx Xxxxx, Xxxxxxx - Miscellaneous Lease 860120 - XXX
00-0-X0, XX Xxxxxxx 0
00. Xxxxxxxxx, Xxxxxxx - Surface Materials Lease 830058 - Xxx
00-0-X0, Xxx 00-0-X0
00. Xxxxxxxx, Xxxxxxx - Surface Materials Lease 840089 - Xxx
00-0-X0, X0/0 & XX0, XX0, XX00, S1/2 18 Twp 51-7-W5, SE24
15. Wandering River, Alberta - Surface Materials Lease 940055 -
See Attachment A for description. Acres reduced from 3408 to
2173 in yr 2000
16. Lobstick, Alberta - Surface Materials Lease 950013 -
5-08-054-17
17. Lobstick, Alberta - Licence of Occupation 960215 - Drainage
ditch. LSD 10 & 11 of Sec. 17
18. Wandering River, Alberta - Surface Materials Lease 960005 -
See Attachment A
19. Vilna, Alberta - Surface Materials Lease 870050 0-00-000, XX
00, XX 23, W1/2 26, E1/2 27, SW 34, Sec. 35
-12-
20. Vilna, Alberta - Licence of Occupation 951528 - Outlet ditch,
XX 00-00-00-X0
00. Xxxxxxx, Xxxxxxx - Surface Materials Lease 870096 - Under
restoration - agricultural use
22. Mallaig, Alberta - Miscellaneous Lease 910117 Land Use Permit
- Storage Site (IRQ1260), NE 32, SW33
23. Mallaig, Alberta - Licence of Occupation 000000 - Xxxxxx Xxxx.
XX 00, XX 00, XX 00
00. Xxxxxxx, Xxxxxxx - Licence of Occupation 910453 - Airstrip and
access. SW 33
25. Corrigall Lake, Alberta - Surface Materials Lease 940011 -
4-18-072, Sec 22-01
26. Corrigall Lake, Alberta - Licence of Occupation 000000 -
Xxxxxx Xxxx
27. Corrigall Lake, Alberta - Miscellaneous Lease 950051 - Land
Use Permit. 4-17-072-19-SW
28. Edmonton Office, 00000 - 000xx Xxxxxx, Xxxxxxxx, Xxxxxxx, X0X
0X0
NEW BRUNSWICK
-------------
1. Lameque, New Brunswick - Peat Lease No. 10 - Peat Lease
2. Rosaireville Lake, New Brunswick - Peat Lease Option No. 4 -
Option to Lease
3. Rosaireville Lake, New Brunswick - Peat Lease Option No. 5 -
Option to Lease
4. Rosaireville Lake, New Brunswick - Peat Lease Option No. 6 -
Option to Lease
5. Shippigan, New Brunswick - Miscellaneous Lease - Restoration
site
6. Maisonnette, New Brunswick - Peat Lease No. 12 - Peat Lease
MANITOBA
--------
1. Lease Agreement dated January 1, 2000 between Canpar Holdings
Ltd. and Sun Gro Horticulture Canada Ltd. in respect of
Township 11, Range 9, E1M, S/2 & NW/4 Section 26, as described
in Certificate of Title No. 1014653
2. Elma, Manitoba - Quarry Lease 0000 - XX Xxxx Xxxxx 00-00-00X
0. Xxxx, Xxxxxxxx - Quarry Lease 0000 - 00-00-00X
0. Xxxx, Xxxxxxxx - Quarry Lease 0115 - W1/4& SE1/4(NW)
36-09-11E; W1/4& SE1/4(SE) 36-09-11E; X0/0& XX0/0(XX)
00-00-00X
-00-
0. Xxxx, Xxxxxxxx - Quarry Lease 0116 - E1/2(NE) 26-09-11E;
E1/2(SE) 26-09-11E
6. Elma, Manitoba - Quarry Lease 0000 - 00-00-00X
0. Xxxx, Xxxxxxxx - Quarry Lease 0000 - 00-00-00X
0. Xxxxxxxxx, Xxxxxxxx - Quarry Lease 0125 - LS 9, 10 09-13-10E
9. Evergreen, Manitoba - Quarry Lease 0252 - LS 8, 9, 16
08-13-10E
10. Evergreen, Manitoba - Quarry Lease 1529 - LS 8 of 23-11-9 EPM
11. Xxxxxx, Manitoba - Quarry Lease 0060 - LS 15(NE), 29-12-10E;
LS 00, 00(XX), 00-00-00X; XX00, 00(XX), 30-12-10E; LS11(NW),
31-12-10E; LS1, 2, 7, 8(SE), 31-12-10E; XX0, 0(XX), 31-12-10E
12. Xxxxxx Xxxx Xxxx, Xxxxxxxx - Xxxxxx Xxxxx 0000 - X0/0XX 13
28-11-09E
13. Xxxxxx Xxxx West, Manitoba - Quarry Lease 0646 - LS 14, 15, 16
& N1/2LS 9, 10, 11 29-11-09E
14. Xxxxxx Xxxx South, Manitoba - Quarry Lease 1448 - W1/2LS 12 &
00 00-00-00 EPM. LS 6, 7, 9, 10, 11, 15, 16 & E1/2LS 5 of
17-13-10 EPM
15. Xxxxxx Xxxx South, Manitoba - Quarry Lease 1040 - LS 1, 7
23-11-09E
16. Xxxxxx Xxxx South, Manitoba - Quarry Lease 1041 - E1/2LS 12
23-11-09E
17. Xxxxxx Xxxx South, Manitoba - Quarry Lease 1042 - LS 11/12 &
W1/2LS 10 24-11-09E
18. Xxxxxx Xxxx South, Manitoba - Quarry Lease 1043 - LS 9, 10
26-11-09E
19. Haypoint, Manitoba - Quarry Lease 0475 - E1/218-25-05E; NW1/4&
LS 10, 15, 16, 17-25-05E
20. Haypoint, Manitoba - Quarry Lease 0476 - LS 1, 2, 8 19-25-05E;
SW1/4& LS 2, 7, 8 20-25-05E
21. Haypoint, Manitoba - Quarry Lease 0477 - NW1/4& LS 10, 15
20-25-05E
22. Xxxxxxxx, Manitoba - Quarry Lease 0484 - LS 1, 2 32-11-09E
23. Xxxxxxxx, Manitoba - Quarry Lease 0485 - LS 10, 11, 14, 15
23-11-09E
24. Xxxxxxxx, Manitoba - Quarry Lease 0590 - E1/2of E1/2LS 13
23-11-09E
25. Xxxxxxxx, Manitoba - Quarry Lease 0591 - LS 8, 9, 16 23-11-09E
-14-
26. Xxxxxxxx, Manitoba - Quarry Lease 0592 - LS 5, 6, & N1/2LS 7
24-11-09E
27. Xxxxxxxx, Manitoba - Quarry Lease 0593 - LS 4 23-11-09E
28. Xxxx Spur, Manitoba - Quarry Lease 0066 - LS 9, 10 (NE),
10-12-10E; LS 11 (NW) 10-12-10E; LS 0, 0, 0, 0 (XX) 00-00-00X;
XX 0, 0 (XX) 10-12-10E; LS 11, 12 (NW) 11-12-10E; LS 3, 4, 0,
0 (XX) 00-00-00X
00. Xxxx Xxxx, Xxxxxxxx - Quarry Lease 0067 - LS 11, 12, 13, 14
(NW) 02-12-10E; LS 15, 16 (NE) 02-12-10E; LS 9, 10, 15, 16
(NE) 03-12-10E; LS 11, 14 (NW) 03-12-10E; LS 0, 0 (XX)
00-00-00X
00. Xxxx Xxxx, Xxxxxxxx - Quarry Lease 0068 - LS 0, 0, 0, 0 (XX)
02-12-10E; LS 1, 2, 7, 8 (SE) 03-12-10E; LS 0 (XX) 00-00-00X
00. Xxxx Xxxx, Xxxxxxxx - Quarry Lease 0665 - SE1/4&
NW1/404-12-10E; LS 0, 0, 00, 00 00-00-00X
00. Xxxx Xxxx, Xxxxxxxx - Quarry Lease 1472 - X0/0& X0/0xx
XX0/00-00-00 XXX
00. Xxxx Xxxx, Xxxxxxxx - Quarry Lease 1528 - LS 13 of 24 & LS 4
of 25-11-9 EPM. Various govt. roads
33. Xxxx Spur, Manitoba - Quarry Lease 1107 - See description on
Attachment B
34. Hecla Island, Manitoba - Quarry Lease 1108 - See description
on Attachment B
35. Grindstone, Manitoba - Quarry Lease 1109 - See description on
Attachment B
36. Moose Lake, Manitoba - Quarry Lease 1110 - See description on
Attachment B 37. Dave's Lake, Manitoba - Quarry Lease 1137 -
See description on Attachment B
38. Xxxxxx Point, Manitoba - Quarry Lease1138 - See description on
Attachment B
39. Birch Lake, Manitoba - Quarry Lease 1139 - See description on
Attachment B
40. Sugar Creek, Manitoba - Quarry Lease1140 - See description on
Attachment B
41. Sugar Creek, Manitoba - Quarry Lease 1141 - See description on
Attachment B
42. Sugar Creek, Manitoba - Quarry Lease 1142 - See description on
Attachment B
43. Sugar Creek, Manitoba - Quarry Lease 1143 - See description on
Attachment B
44. Sugar Creek, Manitoba - Quarry Lease 1144 - See description on
Attachment B
45. Sugar Creek, Manitoba - Quarry Lease 1145 - See description on
Attachment X
-00-
00. Xxxxx Xxxxx, Xxxxxxxx - Quarry Lease 1146 - See description on
Attachment B
47. Sugar Creek, Manitoba - Quarry Lease 1147 - See description on
Attachment B
48. Sugar Creek, Manitoba - Quarry Lease 1148 - See description on
Attachment B
49. Sugar Creek, Manitoba - Quarry Lease 1149 - See description on
Attachment B
50. Sugar Creek, Manitoba - Quarry Lease 1150 - See description on
Attachment B
51. Sugar Creek, Manitoba - Quarry Lease 1151 - See description on
Attachment B
52. Sugar Creek, Manitoba - Quarry Lease 1152 - See description on
Attachment B
53. Sugar Creek, Manitoba - Quarry Lease 1154 - See description on
Attachment B
54. Sugar Creek, Manitoba - Quarry Lease 1155 - See description on
Attachment B
55. Sugar Creek, Manitoba - Quarry Lease 1156 - See description on
Attachment B
56. Sugar Creek, Manitoba - Quarry Lease 1157 - See description on
Attachment B
57. Sugar Creek, Manitoba - Quarry Lease 1158 - See description on
Attachment B
58. Sugar Creek, Manitoba - Quarry Lease 1196 - See description on
Attachment B
59. Sugar Creek, Manitoba - Quarry Lease 1197 - See description on
Attachment B
60. Sugar Creek, Manitoba - Quarry Lease 1198 - See description on
Attachment B
61. Sugar Creek, Manitoba - Quarry Lease 1199 - See description on
Attachment B
62. Whiteshell, Manitoba - Quarry Lease 1360 - N1/2& N1/2of S1/2LS
10, 11, N1/2& E1/2of S1/2LS 13 and LS 14 & 15 of 00-000-00 EPM
63. Caribou Cluster, Manitoba - Quarry Lease 1362 - LS 1, N1/2of
E1/2LS 2 of 20-5-16-EPM
64. Caribou Cluster, Manitoba - Quarry Lease 1363 - W1/2LS 11, LS
12 & 13 and W1/2LS 14 of 21-5-16 EPM
65. Caribou Cluster, Manitoba - Quarry Lease 1365 - S1/2LS 2, 3
and 4 of 21-5-16 EPM
66. Caribou Cluster, Manitoba - Quarry Lease 1366 - N1/2& N1/2of
S1/2LS 9 and LS 16 of 20-5-16 EPM
67. Caribou Cluster, Manitoba (Elma Plant) - Quarry Surface Lease
1 - N1/2of E1/2, S1/2LS 7 of 00-0-00
-00-
00. Xxxxxxx Xxxxxxx, Xxxxxxxx (North Xxxxxx Plant) - Lease - 32 -
N1/2of LS 12, 12-13-10 EPM; SW1/4of LS 13, 2-12-10 EPM;
NE1/4of LS 8, 4-13-10 EPM a--40 acres, not included in bog
total
QUEBEC
------
1. Montreal - Xxxx Xxxxxx Xxxxxx, 0000 Xxxxxxxxxx Xxxxxxxxx,
Xxxxx, Xxxxxx, X0X 267
BRITISH COLUMBIA
----------------
1. Surrey Depot - Multi-tenant lease among Rycol Development
Partnership, Sun Gro Horticulture Canada Ltd. and Sun Gro
Horticulture Inc. dated August 1, 1995 in respect of a portion
of Parcel "G" (Explanatory Plan 9963) of Parcel "E" (Plan with
fee deposited 00000X), Xxxxxxxx Lot 387A, Group 2 EXCEPT
FIRSTLY: Parcel "F" (Reference Plan 12278); SECONDLY: Parcel
"OWE" (Bylaw Plan 49583), N.W.D. and Parcel "F" (Reference
Plan 12278) of Parcel "E" (Plan with fee deposited 21160E,
District Plan 387A, Group 2, N.W.D.)
ONTARIO
-------
1. Land Use Permit Xx. XXX0000, Xxxx 00, X 0000, X 54215,
Southwest of Bingle Lake, Area 253.00
(B) AT CLOSING
In addition to the Leased Properties listed above, the Company will
have the following Leased Properties at Closing:
1. 841 Pro Xxx Xxxxx, Xxxxxxxxx Xxxx, Xxxxx Xxxxxxxx
0. 000 Xxxxxxxxxxxxx, Xxxxx X, Xxxxxxxxx, Xxxxxxxxx
3. 00000 XX 0xx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx
4. Xxxxx 0000, Xxxxx 00, Xxxxxxx Xxxxx Xxxxxxxx, 0000 0xx Xxxxxx,
Xxxxxxx, Xxxxxxxxxx (these premises have been sublet to a
third party)
-17-
SCHEDULE 4.1.10(c)
OCCUPIED FACILITIES
1. Xxxx Xxxxx, Xxxxxxx, 00000 X.X. 00, X.X. Xxx 000, Xxxx Xxxxx, Xxxxxxx,
X0X 0X0
All that portion of the following land required for a miscellaneous
lease as shown outlined in black, upon the final plot dated September
28, 1987 on file no. MLL86120 in the Department of Forestry, Lands and
Wildlife at Edmonton, containing 9.032 ha (22.32 ac) more or less.
2. Xxxx Xxxxx, X.X. Xxx 000, Xxxx, Xxxxxxxx, XXX 0X0
Section 00-0-00 XXX, 000 XX Xxxx xx Xxxxxxxx, Xxxxxxxx, Xxxxxx, 12 KM
South of the Xxxxxx, Xxxx, Manitoba
3. Xxxxxx, Xxxxxxxx, X.X. Xxx, Xxxx, Xxxxxxxx, X0X 0X0
SW Portion of 32-12-10 EDM, approximately 000 XX Xxxxxxxxx xx Xxxxxxxx,
Xxxxxxxx
-18-
SCHEDULE 4.1.10(d)
SUBLEASES
(A) PRIOR TO REORGANIZATION
None
(B) AT CLOSING
1. Sub-Sublease dated for reference purposes as of March 19, 2001
by and between Company and Xxxxxxx Engineers in connection with
Sublease Agreement made and entered into as of December 15,
1999 by and between APCO Associates, Inc. and Company, as
sublessee, under that certain Office Building Lease made as of
November 20, 1998, as amended, by and between Seattle Landmark
Joint Venture and APCO Associates, Inc. for Suite 1600 in the
Seattle Tower Building located at 0000 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx.
2. Sublease Agreement dated October 12, 2001 between Sun Gro
Horticulture, Inc. and Cordant, Inc. subletting 980 rentable
square feet on the 1st floor of the West Building located in
the building known as The Crossroads Office Park, 15831 N.E.
0xx Xxxxxx, Xxxxxxxx, XX 00000 in connection with Lease
Agreement dated November 21, 1997, as amended by Amendment
Number One dated August 23, 1999 between Parkwood Limited
Partnership and Sun Gro Horticulture, Inc.
-19-
SCHEDULE 4.1.10(e)
LEASED PERSONAL PROPERTY
None.
-20-
SCHEDULE 4.1.10(f)
LIENS ON LEASED PERSONAL PROPERTY
(A) PRIOR TO REORGANIZATION
------------------------ ------------------------------------ ----------------------- ---------------------
EXPIRY DATE (except
where otherwise
JURISDICTION SECURED PARTY indicated) FILING NO.
------------------------ ------------------------------------ ----------------------- ---------------------
ONTARIO MTC LEASING INC. 2/14/2001 200102141623
(FILING DATE) 13981862
------------------------ ------------------------------------ ----------------------- ---------------------
ONTARIO BML LEASING LIMITED 6/22/1998 199806221820
(FILING DATE) 15319756
------------------------ ------------------------------------ ----------------------- ---------------------
Quebec The R-M Trust Company 11/28/95 95-0140895-0001
(FILING DATE)
------------------------ ------------------------------------ ----------------------- ---------------------
Quebec Associates Leasing 11/23/03 00-035874760-0001
(Canada) Ltd.
------------------------ ------------------------------------ ----------------------- ---------------------
BRITISH COLUMBIA CIT Financial Ltd. 30/11/04 8587920
------------------------ ------------------------------------ ----------------------- ---------------------
BRITISH COLUMBIA CIT Financial Ltd. 25/02/04 8121742
------------------------ ------------------------------------ ----------------------- ---------------------
BRITISH COLUMBIA BML Leasing Limited 22/06/03 7722039
------------------------ ------------------------------------ ----------------------- ---------------------
NEW BRUNSWICK Ford Credit Canada Leasing Company 9/27/04 7548362
------------------------ ------------------------------------ ----------------------- ---------------------
NEW BRUNSWICK Associates Capital Limited 3/16/06 6855753
------------------------ ------------------------------------ ----------------------- ---------------------
NEW BRUNSWICK Associates Leasing (Canada) Ltd. 12/9/04 5433248
------------------------ ------------------------------------ ----------------------- ---------------------
NEW BRUNSWICK Newcourt Financial Ltd. 8/18/04 5058901
------------------------ ------------------------------------ ----------------------- ---------------------
New Brunswick BML Leasing Limited 7/23/03 3776738
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxxxx Tractor Ltd. 14/01/03 200200967100
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxxxx Tractor Ltd. 14/01/03 200200966405
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Citicorp Vendor Finance Ltd. 6/6/04 200121323205
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Limited 7/11/05 200123967703
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Caterpillar Financial Services Ltd. 6/29/02 990629107410
------------------------ ------------------------------------ ----------------------- ---------------------
-21-
------------------------ ------------------------------------ ----------------------- ---------------------
EXPIRY DATE (except
where otherwise
JURISDICTION SECURED PARTY indicated) FILING NO.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Caterpillar Financial Services Ltd. 6/21/02 990621111965
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Caterpillar Financial Services Ltd. 6/18/02 990618105423
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba GE Capital Vehicle and Equipment 07/11/06 200132734207
Leasing Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Copelco Capital Ltd. 7/28/03 000728108819
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Associates Leasing (Canada) Ltd. 1/7/03 000107110275
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Ltd. 8/10/02 990810102454
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Ltd. 5/10/02 990510108167
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Ltd. 5/10/02 990510108221
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Ltd. 5/10/02 990510108230
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Ltd. 5/10/02 990510108248
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Ltd. 5/10/02 990510108256
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Ltd. 5/10/02 990510108264
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Ltd. 5/10/02 990510108540
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Credit Inc. 10/17/05 200131139100
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Limited 7/11/05 200123969005
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Limited 7/11/05 200123968602
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Limited 7/11/05 200123968106
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Limited 7/11/05 200123961306
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Limited 7/11/05 200123960806
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Xxxx Deere Limited 7/11/05 200123960300
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Associates Capital Limited 4/27/07 200118065408
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/12/03 000512110134
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/12/03 000512110142
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/4/03 000504110320
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
-22-
------------------------ ------------------------------------ ----------------------- ---------------------
EXPIRY DATE (except
where otherwise
JURISDICTION SECURED PARTY indicated) FILING NO.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/4/03 000504110338
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/4/03 000504110346
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/4/03 000504110397
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/14/02 990514105294
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/14/02 990514105308
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba GE Capital Canada Leasing Services 3/3/03 000303108882
Inc. (Sun Gro Horticulture, Inc.
additional debtor)
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 10/17/04 200131090209
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 7/12/04 200124046202
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 000000000000
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118451600
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118451405
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118451308
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118451200
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118451103
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118450905
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118450808
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
-23-
------------------------ ------------------------------------ ----------------------- ---------------------
EXPIRY DATE (except
where otherwise
JURISDICTION SECURED PARTY indicated) FILING NO.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118450700
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118450603
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118450409
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118449605
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118449508
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 000000000000
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118449303
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118449206
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118449109
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118449001
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118448900
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118448803
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118448706
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118448609
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Case Credit Ltd.
Manitoba Red River Equipment Inc. 5/2/03 200118448501
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118448404
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118448307
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
-24-
------------------------ ------------------------------------ ----------------------- ---------------------
EXPIRY DATE (except
where otherwise
JURISDICTION SECURED PARTY indicated) FILING NO.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118448200
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 000000000000
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118447505
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118447300
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118447203
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118446908
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118446800
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 000000000000
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118446606
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118446509
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118446401
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118446304
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118446207
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118446100
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118446002
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118445901
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118444603
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
-25-
------------------------ ------------------------------------ ----------------------- ---------------------
EXPIRY DATE (except
where otherwise
JURISDICTION SECURED PARTY indicated) FILING NO.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118443208
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118443100
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118443003
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118442902
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118442805
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118442600
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200118442503
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 5/2/03 200117934607
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 11/10/03 000000000000
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Manitoba Case Credit Ltd. 10/11/03 20003086401
Red River Equipment Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 20/04/03 00042031427
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 03/06/02 99060328855
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 21/05/02 99052126036
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 21/05/02 99052126754
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 14/05/02 99051430934
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 11/05/02 99051114884
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 11/05/02 99051116442
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
-26-
------------------------ ------------------------------------ ----------------------- ---------------------
EXPIRY DATE (except
where otherwise
JURISDICTION SECURED PARTY indicated) FILING NO.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 11/05/02 99051118356
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 19/04/02 99041923071
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 19/04/02 99041923691
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 19/04/02 99041924111
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 13/04/02 99041302698
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 13/04/02 99041302961
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 13/04/02 99041303365
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 13/04/02 99041312606
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 30/03/02 99033013774
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 30/03/02 99033008147
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 30/03/02 99033008592
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Case Credit Ltd. 30/03/02 99033014251
First Equipment Centre Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Xxxxxxx Xxxxxxx International Inc. 5/5/04 98050506314
------------------------ ------------------------------------ ----------------------- ---------------------
Xxxxxxx Xxxxxxx International Inc. 5/5/04 98050506793
------------------------ ------------------------------------ ----------------------- ---------------------
Xxxxxxx Xxxxxxx International Inc. 5/5/04 98050507064
------------------------ ------------------------------------ ----------------------- ---------------------
Xxxxxxx Xxxxxxx International Inc. 5/5/04 98050507437
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta BML Leasing Limited 6/22/03 98062218163
------------------------ ------------------------------------ ----------------------- ---------------------
Xxxxxxx Xxxxxxx International Inc. 3/12/05 99031213426
------------------------ ------------------------------------ ----------------------- ---------------------
Xxxxxxx Xxxxxxx International Inc. 3/16/05 99031616875
------------------------ ------------------------------------ ----------------------- ---------------------
Xxxxxxx Xxxxxxx International Inc. 4/30/05 99043024431
------------------------ ------------------------------------ ----------------------- ---------------------
Xxxxxxx Xxxxxxx International Inc. 4/30/05 99043025263
------------------------ ------------------------------------ ----------------------- ---------------------
-27-
------------------------ ------------------------------------ ----------------------- ---------------------
EXPIRY DATE (except
where otherwise
JURISDICTION SECURED PARTY indicated) FILING NO.
------------------------ ------------------------------------ ----------------------- ---------------------
Xxxxxxx Xxxxxxx International Inc. 5/7/05 99050726076
------------------------ ------------------------------------ ----------------------- ---------------------
Xxxxxxx Xxxxxxx International Inc. 1/15/07 01011523774
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta AT&T Capital Canada, Inc. 7/10/03 97071026088
------------------------ ------------------------------------ ----------------------- ---------------------
Xxxxxxx Xxxx Commercial Credit, Canada, 8/26/02 97082627148
Inc.
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Ikon Office Solutions Inc. 3/28/03 98032801304
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Newcourt Financial Ltd. 8/6/03 98080601432
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Newcourt Financial Ltd. 2/15/05 99021506425
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Newcourt Financial Ltd. 4/22/04 99042213167
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Copelco Capital Ltd. 5/3/02 99050310780
(Filing Date)
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta John Deere Limited 1/19/05 01011917885
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta Ikon Office Solutions, Inc. 12/16/04 99121619110
------------------------ ------------------------------------ ----------------------- ---------------------
Xxxxxxx Xxxxxxx International Inc. 2/19/05 99021903564
------------------------ ------------------------------------ ----------------------- ---------------------
Xxxxxxx Xxxxxxxx Tire (St. Xxxx) 3/27/02 01122725722
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta AIG Credit Corporation of Canada 1/07/04 02010703987
------------------------ ------------------------------------ ----------------------- ---------------------
Alberta IKON Office Solutions, Inc. 11/22/04 01112232184
------------------------ ------------------------------------ ----------------------- ---------------------
(B) AT CLOSING
In addition to those personal property liens listed above, the Company
will have the following liens against its personal property at Closing:
---------------------------- ----------------------------------- -------------------- ---------------------
JURISDICTION SECURED PARTY FILING DATE FILING NO.
---------------------------- ----------------------------------- -------------------- ---------------------
ARKANSAS TOYOTA MOTOR CREDIT CORPORATION 3/23/2000 1235224
---------------------------- ----------------------------------- -------------------- ---------------------
ARKANSAS TOYOTA MOTOR CREDIT CORPORATION 8/16/2000 01259645
---------------------------- ----------------------------------- -------------------- ---------------------
ARKANSAS XXXX DEERE CONSTRUCTION EQUIPMENT 11/14/2000 01273758
CO., INC.
---------------------------- ----------------------------------- -------------------- ---------------------
ARKANSAS DEERE CREDIT, INC. 12/1/2000 1275988
---------------------------- ----------------------------------- -------------------- ---------------------
-28-
---------------------------- ----------------------------------- -------------------- ---------------------
JURISDICTION SECURED PARTY FILING DATE FILING NO.
---------------------------- ----------------------------------- -------------------- ---------------------
ARKANSAS DEERE CREDIT, INC. 12/1/2000 1275989
---------------------------- ----------------------------------- -------------------- ---------------------
ARKANSAS XXXX DEERE CONSTRUCTION EQUIPMENT 7/23/2001 01325200
CO., INC.
---------------------------- ----------------------------------- -------------------- ---------------------
ILLINOIS ASSOCIATES LEASING INC. 04/25/2001 004375894
---------------------------- ----------------------------------- -------------------- ---------------------
ILLINOIS CATEPILLAR FINANCIAL SERVICES 2/26/2002 004833473
CORPORATION
---------------------------- ----------------------------------- -------------------- ---------------------
MICHIGAN CATERPILLAR FINANCIAL SERVICES 12/15/1997 D315847
CORPORATION
---------------------------- ----------------------------------- -------------------- ---------------------
MICHIGAN SANWA BUSINESS CREDIT CORPORATION 1/2/1998 D322326
---------------------------- ----------------------------------- -------------------- ---------------------
MICHIGAN CATERPILLAR FINANCIAL SERVICES 1/2/1998 D322599
CORPORATION
---------------------------- ----------------------------------- -------------------- ---------------------
MICHIGAN CITICORP DEL LEASE, INC. 4/19/1999 D504426
---------------------------- ----------------------------------- -------------------- ---------------------
OREGON TRANSAMERICA VENDOR FINANCIAL 10/19/1999 0000486934
SRVCS CORP
---------------------------- ----------------------------------- -------------------- ---------------------
OREGON CB TOYOTA LIFT; TOYOTA FINANCIAL 3/28/2000 0000506501
SERVICES
---------------------------- ----------------------------------- -------------------- ---------------------
OREGON CB TOYOTA LIFT; TOYOTA FINANCIAL 3/28/2000 0000506502
SERVICES
---------------------------- ----------------------------------- -------------------- ---------------------
OREGON CB TOYOTA LIFT; TOYOTA FINANCIAL 5/8/2000 0000511472
SERVICES
---------------------------- ----------------------------------- -------------------- ---------------------
OREGON TOYOTA MOTOR CREDIT CORP; 6/21/2000 0000516991
FRONTIER EQUIPMENT CO
---------------------------- ----------------------------------- -------------------- ---------------------
SOUTH CAROLINA CATERPILLAR FINANCIAL SERVICES 10/17/2001 011017-154355A
CORPORATION
---------------------------- ----------------------------------- -------------------- ---------------------
TEXAS XXXXX LEASING COMPANY 12/01/1997 9700243688
---------------------------- ----------------------------------- -------------------- ---------------------
TEXAS NISSAN MOTOR ACCEPTANCE CORP 08/05/1998 9800159154
---------------------------- ----------------------------------- -------------------- ---------------------
TEXAS CASE CREDIT CORPORATION 1/20/2000 0000415098
---------------------------- ----------------------------------- -------------------- ---------------------
TEXAS KOMATSU FINANCIAL LIMITED 08/24/2000 572073
PARTNERSHIP
---------------------------- ----------------------------------- -------------------- ---------------------
TEXAS CASE CREDIT CORPORATION 1/20/2000 415098
---------------------------- ----------------------------------- -------------------- ---------------------
UTAH TOYOTA MOTOR CREDIT CORP. 5/3/1999 99641195
---------------------------- ----------------------------------- -------------------- ---------------------
UTAH THE MANIFEST GROUP 2/26/2001 01-707527
---------------------------- ----------------------------------- -------------------- ---------------------
UTAH THE MANIFEST GROUP 4/2/2001 01-710909
---------------------------- ----------------------------------- -------------------- ---------------------
COLUMBIA BANK; THE ARCHIVE GROUP,
WASHINGTON INC. 11/19/1997 973230222
---------------------------- ----------------------------------- -------------------- ---------------------
-29-
---------------------------- ----------------------------------- -------------------- ---------------------
JURISDICTION SECURED PARTY FILING DATE FILING NO.
---------------------------- ----------------------------------- -------------------- ---------------------
WASHINGTON IBM CREDIT CORP 6/24/1998 981750302
---------------------------- ----------------------------------- -------------------- ---------------------
WASHINGTON IBM CREDIT CORP 2/24/2000 20000550385
---------------------------- ----------------------------------- -------------------- ---------------------
WASHINGTON CITICORP DEL LEASE, INC. 4/19/1999 991090342
---------------------------- ----------------------------------- -------------------- ---------------------
WASHINGTON EL CAMINO RESOURCES, LTD. 3/6/2000 20000660327
---------------------------- ----------------------------------- -------------------- ---------------------
WASHINGTON THE MANIFEST GROUP; PINNACLE 11/17/2000 20003220420
CAPITAL LLC
---------------------------- ----------------------------------- -------------------- ---------------------
WASHINGTON THE MANIFEST GROUP 3/7/2001 20010660256
---------------------------- ----------------------------------- -------------------- ---------------------
WASHINGTON TRANSAMERICA VENDOR FINANCIAL 3/19/2001 0000486934
SRVCS CORP
---------------------------- ----------------------------------- -------------------- ---------------------
WASHINGTON [NOT VERIFIED] 12/27/2001 200201502918
---------------------------- ----------------------------------- -------------------- ---------------------
PACIFIC SOIL CO.
----------------
---------------------------- ----------------------------------- -------------------- ---------------------
JURISDICTION SECURED PARTY FILING DATE FILING NO.
---------------------------- ----------------------------------- -------------------- ---------------------
OREGON CB EQUIPMENT CO; TOYOTA MOTOR 3/11/98 0000413323
CREDIT CORPORATION
---------------------------- ----------------------------------- -------------------- ---------------------
OREGON CB EQUIPMENT COMPANY; TOYOTA 4/1/98 0000416728
MOTOR CREDIT CORPORATION
---------------------------- ----------------------------------- -------------------- ---------------------
STRONG-LITE PRODUCTS
--------------------
---------------------------- ----------------------------------- -------------------- ---------------------
JURISDICTION SECURED PARTY FILING DATE FILING NO.
---------------------------- ----------------------------------- -------------------- ---------------------
ARKANSAS SANWA BUSINESS CREDIT CORPORATION 2/10/98 1114604
---------------------------- ----------------------------------- -------------------- ---------------------
-30-
SCHEDULE 4.1.12
MATERIAL CONTRACTS
(A) PRIOR TO REORGANIZATION
1. License and Lease Agreement For Use of Equipment between
Houweling Nurseries Ltd. and Sun Gro Horticulture Canada
Ltd. dated September 7, 2001.
2. Repayable Contribution Agreement among Atlantic Canada
Opportunities Agency, Sun Gro Horticulture, Inc. and Sun Gro
Horticulture Canada Ltd. dated July 29, 1998.
3. License Agreement between Sun Gro Horticulture Canada Ltd.
and Le Xxxxxx Xxxxxx Ltee/Xxxxxx Group Ltd. dated August 12,
2001.
4. See Schedule 4.1.10(b).
5. Term loan in the amount of US$12 Million granted pursuant to
the Amended and Restated Credit Agreement among Xxxxx
Nurseries, Inc., Sun Gro Horticulture Canada Ltd., Bankers
Trust Company and others dated June 26, 1998, as amended.
6. Equipment Lease and Product Supply Agreement between Xxxxxx
Greenhouses Ltd. and Sun Gro Horticulture Canada Ltd. dated
February 22, 2002.
(B) AT CLOSING
In addition to the Material Contracts listed above, the Company will
have the following Material Contacts at Closing:
1. Bag Supply Contract between Hood Packaging Corporation and
Sun Gro Horticulture, Inc. effective January 1, 2001.
2. Purchase Agreement between Color Spot Nurseries, Inc. and
Sun Gro Horticulture, Inc. dated September 28, 2001.
3. Supply Contract between Xxxxxx Plant Farms, Inc. and Sun Gro
Horticulture Inc. dated December 10, 1999.
4. Trademark License Agreement between Odin Enterprises II LLC
and Sun Gro Horticulture, Inc. dated January 1, 2001.
5. Bag Supply Contract between Balcan Plastics and Sun Gro
Horticulture Inc. dated February 19, 2001.
6. Manufacturer's Representative Agreement dated November 1,
1999 between Sun Gro Horticulture, Inc. and Tierra
Associates LLC.
-31-
7. Distributor Agreement dated May 2, 1994 between Xxxx Xxx
Xxxxxxxx Limited and Sun Gro Horticulture, Inc.
8. Distributor Agreement dated May 2, 1994 between Sun Gro
between BWI Companies, Inc. and Sun Gro Horticulture, Inc.
9. Supply Agreement with Xxxxx Nurseries, Inc. (currently there
is no formal written agreement; however, a written agreement
is expected to be executed on or before Closing).
10. Private Label Agreement with Xxxxxxx Industries, Inc. (this
is a verbal agreement, there is no formal written agreement
in place).
11. Distributor Agreement between X. Xxxxxxx & Son Inc. and Sun
Gro Horticulture, Inc. (this is a verbal agreement, there is
no formal written agreement in place).
12. Distributor Agreement between Xxxxxxxxx Products, Inc. and
Sun Gro Horticulture, Inc. (this is a verbal agreement,
there is no formal written agreement in place).
-32-
SCHEDULE 4.1.13
COMPLIANCE WITH LAWS; NO DEFAULTS
See Schedule 4.1.4.
-33-
SCHEDULE 4.1.14
PROPRIETARY RIGHTS
4.1.14(a) LIST OF PROPRIETARY RIGHTS
(A) PRIOR TO REORGANIZATION
PATENTS:
--------
NONE.
LICENSES:
---------
LICENSE AGREEMENT DATED AUGUST 14, 2001 BETWEEN SUBSIDIARY AND
THE XXXXXX GROUP LTD. FOR USE OF CANADIAN PATENT NO. 2,111,733
AND U.S. PATENT NOS. (I) 5,477,658, (II) 5,699,915 AND (III)
5,515,666.
TRADEMARKS:
-----------
SEE ATTACHED SCHEDULE "A"
(B) AT CLOSING
IN ADDITION TO THE PROPRIETARY RIGHTS LISTED ABOVE, THE
COMPANY WILL HAVE THE FOLLOWING PROPRIETARY RIGHTS AT CLOSING:
PATENTS:
--------
PATENT NO. 6,074,988 FOR SOILLESS GROWTH MEDIUM, INCLUDING
SOLUBLE SILICON
LICENSES:
---------
TRADEMARK LICENSE AGREEMENT DATED JANUARY 1, 2001 BETWEEN
COMPANY AND ODIN ENTERPRISES II LLC FOR USE OF "BLACK GOLD"
AND "BLACK GOLD AND DESIGN".
-34-
TRADEMARKS:
-----------
SEE ATTACHED SCHEDULE "B"
4.1.14(a) SETTLEMENTS, JUDGMENTS, ORDERS, ETC. WITH RESPECT TO
PROPRIETARY RIGHTS
(A) PRIOR TO REORGANIZATION
NONE.
(B) AT CLOSING
NONE.
-35-
SCHEDULE "A"
COUNTRY: CANADA
XXXX REG. OWNER APP. # APP. DT REG. # REG. DT STATUS
---- ---------- ------ ------- ------ ------- ------
BIG SHOT Sun Gro Horticulture Canada Ltd. 716,637 11/10/1992 TMA 429,950 0/0/00 Xxxxxxxxxx
XXXXXXX Xxx Xxx Xxxxxxxxxxxx Xxxxxx Ltd. 252,538 8/22/1959 TMA 117,346 3/25/1960 Registered
HI-PRESS Sun Gro Horticulture Canada Ltd. 223,548 2/22/1954 UCA 049,192 2/22/1954 Registered
PARKLAND Sun Gro Horticulture Canada Ltd. 602,555 3/9/1988 TMA 428,717 6/17/1994 Registered
PEAT XXXX XXXX & MOIST
Device Sun Gro Horticulture Canada Ltd. 0492404 9/15/1982 TMA 280,243 6/10/1983 Registered
POSTHARVEST Sun Gro Horticulture Canada Ltd. 0608666 6/6/1988 TMA379,077 2/1/1991 Registered
Sun & Deer Design Sun Gro Horticulture Canada Ltd. 308,505 10/23/1967 TMA 158,799 10/18/1968 Registered
SUNSHINE Sun Gro Horticulture Canada Ltd. 485,183 3/31/1982 TMA 282,358 8/12/1983 Registered
SUNSHINE Sun Gro Horticulture Canada Ltd. 284,916 10/3/1964 TMA 140,180 5/7/1965 Registered
SUNSHINE Sun Gro Horticulture Canada Ltd. 492,403 9/15/1982 TMA 336,281 1/22/1988 Registered
SUNSHINE & Deer and
Sun Design Sun Gro Horticulture Canada Ltd. 308,506 10/23/1967 TMA 158,802 10/18/1968 Registered
SUNSHINE & Rays Design Sun Gro Horticulture Canada Ltd. 492,353 9/15/1982 TMA 331,816 9/11/1987 Registered
SUNSHINE BRAND Sun Gro Horticulture Canada Ltd. 247,439 9/18/1958 TMA 115,843 11/6/1959 Registered
COUNTRY: UNITED KINGDOM
XXXX REG. OWNER APP. # APP. DT REG. # REG. DT STATUS
---- ---------- ------ ------- ------ ------- ------
SUNSHINE Fisons Horticulture Inc. (Canada) 1,190,687 2/18/1983 1,190,687 2/18/1983 Registered
-36-
SCHEDULE "B"
COUNTRY: AUSTRALIA
XXXX REG. OWNER APP. # APP. DT REG. # REG. DT STATUS
---- ---------- ------ ------- ------ ------- ------
SUNSHINE Sun Gro Horticulture Inc. B304277 2/3/1977 B304277 2/3/1977 Registered
COUNTRY: CANADA
XXXX REG. OWNER APP. # APP. DT REG. # REG. DT STATUS
---- ---------- ------ ------- ------ ------- ------
POTTING MIX PLUS Sun Gro Horticulture Inc. 492,401 9/15/1982 TMA 280,458 6/17/1983 Registered
POTTING MIX PLUS and
Design Sun Gro Horticulture Inc. 492,400 9/15/1982 TMA 280,241 6/10/1983 Registered
SUN GRO Sun Gro Horticulture Inc. 745,332 1/14/1994 TMA 469,245 1/21/1997 Registered
COUNTRY: GUATEMALA
XXXX REG. OWNER APP. # APP. DT REG. # REG. DT STATUS
---- ---------- ------ ------- ------ ------- ------
FISONS SUNSHINE Sun Gro Horticulture Inc. 2534-3 4/27/1993 78031 Registered
SUNSHINE Sun Gro Horticulture Inc. 5/06/1998 099932 1/10/2000 Registered
TECHNIGRO Sun Gro Horticulture Inc. 5/06/1998 Pending
Application
FISONS TECHNIGRO Sun Gro Horticulture Inc. 93-2534 4/27/1993 78808 Registered
COUNTRY: JAPAN
XXXX REG. OWNER APP. # APP. DT REG. # REG. DT STATUS
---- ---------- ------ ------- ------ ------- ------
FAIRWAY Sun Gro Horticulture Inc. 35050/86 20126 1/26/1988 Registered
COUNTRY: MEXICO
XXXX REG. OWNER APP. # APP. DT REG. # REG. DT STATUS
---- ---------- ------ ------- ------ ------- ------
OCLI Sun Gro Horticulture Inc. 483500 5/3/2001 Pending
Application
XXX XXXXXXXXX Sun Gro Horticulture Inc. 147,859 8/19/1992 447821 12/1/1993 Pending
Application
-37-
XXX XXXXXXXXX Sun Gro Horticulture Inc. 147,858 8/19/1992 447,821 12/1/1993 Registered
SUN GRO Sun Gro Horticulture Inc. 194,377 3/23/1994 500,765 8/11/1995 Registered
SUN GRO Sun Gro Horticulture Inc. 194,378 3/23/1994 469,172 8/10/1994 Registered
SUNSHINE Sun Gro Horticulture Inc. 140421 5/25/1992 447815 1/1/1993 Pending
Application
SUNSHINE Sun Gro Horticulture Inc. 140419 5/25/1992 447,815 Registered
TECHNIGRO Sun Gro Horticulture Inc. 140,420 5/25/1992 447,817 12/1/1993 Registered
TECHNIGRO Sun Gro Horticulture Inc. 140,422 5/25/1992 447,816 12/1/1993 Registered
COUNTRY: SOUTH KOREA
XXXX REG. OWNER APP. # APP. DT REG. # REG. DT STATUS
---- ---------- ------ ------- ------ ------- ------
SUN GRO Sun Gro Horticulture Inc. 1994-12340 3/28/1994 317545 7/19/1995 Registered
COUNTRY: TAIWAN
XXXX REG. OWNER APP. # APP. DT REG. # REG. DT STATUS
---- ---------- ------ ------- ------ ------- ------
SUN GRO Sun Gro Horticulture Inc. 83,024,458 3/26/1994 00,669,122 2/1/1995 Registered
COUNTRY: UNITED STATES
XXXX REG. OWNER APP. # APP. DT REG. #
---- ---------- ------ ------- ------
BIG SHOT Sun Gro Horticulture Inc. 74/587,181 10/18/1994 1,970,937 4/30/1996 Registered
FAIRWAY Sun Gro Horticulture Inc. 72/090,603 2/8/1960 706,178 10/25/1960 Registered
FAIRWAY PEAT XXXX
SPHAGNUM and Design Sun Gro Horticulture Inc. 75/853,195 11/22/1999 2,471,143 7/24/2001 Registered
GROWER'S GOLD Sun Gro Horticulture Inc. 75/301,297 6/2/1997 2,299,193 12/14/1999 Registered
LAKELAND Sun Gro Horticulture Inc. 75/283,241 4/29/1997 2,161,859 6/2/1998 Registered
NATURE'S Sun Gro Horticulture Inc. 75/282,401 4/28/1997 2,299,184 12/14/1999 Registered
PARKLAND Sun Gro Horticulture Inc. 73/809,188 6/26/1989 1,587,037 3/13/1990 Registered
POTTING MIX PLUS and
Design Sun Gro Horticulture Inc. 73/387,903 9/23/1982 1,274,690 4/24/1984 Registered
STRONG-LITE Sun Gro Horticulture Inc. 73/247,493 1/24/1980 1,185,761 1/12/1982 Registered
STRONG-GRO Sun Gro Horticulture Inc. 73/470,945 3/20/1984 1,322,817 3/5/1985 Registered
SUN GRO Sun Gro Horticulture Inc. 74/442,047 9/28/1993 2,079,508 7/15/1997 Registered
SUNSHINE Sun Gro Horticulture Inc. 74/052,625 4/25/1990 1,663,086 11/5/1991 Registered
SUNSHINE & Rays Design Sun Gro Horticulture Inc. 74/052,624 4/25/1990 1,657,077 9/17/1991 Registered
SUNSHINE GARDEN CLUB Sun Gro Horticulture Inc. 75/666,224 3/23/1999 2,329,242 3/14/2000 Registered
TECHNIGRO Sun Gro Horticulture Inc. 74/130,740 1/16/1991 1,776,947 6/15/1993 Registered
WESTERN Sun Gro Horticulture Inc. 72/214,299 3/16/1965 803,669 2/15/1966 Registered
-38-
STATE REGISTRATIONS: XXXXXXXXXX
XXXX REG. OWNER APP. # APP. DT REG. # REG. DT STATUS
---- ---------- ------ ------- ------ ------- ------
BLACK GOLD Sun Gro Horticulture Inc. 20,093 6/12/2000 Registered
-39-
SCHEDULE 4.1.15
ENVIRONMENTAL
4.1.15(a) ENVIRONMENTAL MATTERS
(A) PRIOR TO REORGANIZATION
In August 2001, the Alberta Department of Human Resources and
Employment notified the Company of an anonymous complaint
regarding perlite dust at its Seba Beach (Alberta) plant. The
dust is created when popped perlite is screened as it is
loaded into wagons and trailers. The Company has taken
temporary and long-term measures to mitigate the dust problem,
including rescheduling the loading of wagons and trailers
during times when construction workers are not in the affected
area, and constructing a building around the screening
equipment which will be serviced by a cyclone and a bag house.
The remedial measures were outlined in an August 21, 2001
letter to Xxxxx Xxxxxx of the Alberta Department of Human
Resources and Employment.
In May 1993, Pilko Associates completed a Phase I
Environmental Assessment of facilities located in Seba Beach,
Alberta, Xxxx and Xxxxx, Manitoba, Terrell, Texas, Quincy,
Michigan, Lameque, New Brunswick and Maisonnette, New
Brunswick. The Phase I Assessment did not reveal any fines or
enforcement actions with respect to any of the properties
included in the assessment. Nonetheless, Pilko Associates
recommended certain remedial actions.
(B) AT CLOSING
In addition to the environmental matters listed above, the
following could be considered environmental matters of the
Company at Closing.
In August 2000, the Vendor was cited by the U.S. Department of
Labor Occupational Safety and Health Administration ("OSHA")
for the following violations at its Seneca, Illinois facility:
(i) exposing certain employees to dust from furnaces and
bagging and sealing operations in violation of 29 CFR
1910.13(a)(2); (ii) failing to ensure that bark/peat handler
had been fit tested prior to use of respirator, in violation
of 29 CFR 1910.134(f)(2); and (iii) exposing its raw ore
material handler to airborne concentrations of particulates in
excess of 15 milligrams per cubic meter, in violation of 29
CFR 1910.1000(a)(2). The Vendor entered into an Informal
Settlement Agreement with OSHA, pursuant to which it agreed to
take abatement measures with respect to the foregoing
violations. The abatement measures are outlined in an August
31, 2000 letter to OSHA. These abatement measures have been
implemented.
-40-
The North Carolina Department of Environment, Health and
Natural Resources Division of Solid Waste Management has
determined that, in order to comply with the North Carolina
Solid Waste Compost Rules (15A NCAC 13B.1401), a state
composting permit is required at the Pro-Gro facility located
in Elizabeth City, North Carolina. Under the terms of an Asset
Purchase Agreement dated as of Xxxxxx 00, 0000, Xxxxx Xxxxxx
(former owner of the Pro-Gro facility) became obligated to
obtain a composting permit for the operation of the Pro-Gro
facility. On August 31, 2001 the Vendor entered into a revised
agreement with Xx. Xxxxxx, pursuant to which Xx. Xxxxxx
reaffirmed his obligation to obtain the permit, to make any
improvements or repairs to the property necessary in
connection with the issuance of the permit, to bear all costs
of such repairs, and to pay all fees associated with obtaining
the permit. If Xx. Xxxxxx fails to obtain the permit prior to
January 1, 2002, the Vendor shall be entitled to obtain the
permit and recover the costs therefor from Xx. Xxxxxx.
4.1.15(c) RELEASES TO THE ENVIRONMENT IN VIOLATION OF ENVIRONMENTAL LAWS
None.
-41-
SCHEDULE 4.1.18(a)
EMPLOYEE BENEFIT PLANS
(A) PRIOR TO REORGANIZATION
Registered Pension Plan (the Company)
(B) AT CLOSING
In addition to the Plan listed above, the Company will have
the following Employee Benefit Plans at Closing:
Stock Option Plans - None
Employment Agreements -
EMPLOYMENT LETTER DATED JUNE 2, 1997 AND ACCEPTED
JUNE 5, 1997 BETWEEN XXXXX XXXXXX AND COMPANY (AS
MODIFIED BY XX. XXXXXX'X RETENTION AGREEMENT
DESCRIBED BELOW)
Consulting Agreements - None
Pension, Profit Sharing and Retirement Plans -
401(K) PLAN
U.S. EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN (COMPANY)
- TERMINATED IN 1997
Bonus Plans -
2001 SALES INCENTIVE PLAN
2001 VARIABLE COMPENSATION PLAN
GAIN SHARING PLANS: EACH SITE HAS A GAIN SHARING
PLAN, WHICH MUST BE SELF-FUNDED BY COST SAVINGS
REALIZED BY THE VENDOR FOR THE PARTICULAR SITE. EACH
SITE CHOOSES THE GOALS THAT WILL BE THE BASIS OF THE
BONUS CALCULATION, BUT THE TYPICAL PAYOUT PER QUARTER
IS 5% OF AN EMPLOYEES WAGES.
-42-
SEE EMPLOYEE HANDBOOKS FOR (i) SALARIED EMPLOYEES IN
CANADA, (ii) HOURLY EMPLOYEES IN CANADA, (iii)
SALARIED EMPLOYEES IN THE UNITED STATES AND (iv)
HOURLY EMPLOYEES IN THE UNITED STATES.
-43-
SCHEDULE 4.1.18(c)
REGISTRATION OF PLANS
None.
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SCHEDULE 4.1.18(d)
RETIRED OR FORMER EMPLOYEES
(A) PRIOR TO REORGANIZATION
None.
(B) AT CLOSING
XX XXXXXXXX IS RECEIVING BENEFITS UNDER COMPANY'S U.S.
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN IN THE AMOUNT OF $2,607
PER MONTH, PAYABLE UNTIL DEATH.
XXXX XXXXXXXX IS RECEIVING MEDICAL, DENTAL AND LIFE INSURANCE
PREMIUMS IN THE AMOUNT OF $1,142 PER MONTH UNTIL JUNE 1, 2003.
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SCHEDULE 4.1.18(e)
COLLECTIVE BARGAINING AGREEMENTS
1. Collective Agreement between Sun Gro Horticulture Canada Ltd. and
United Brotherhood of Carpenters and Joiners of America, Local 2716
effective 2001-2003.
2. Memorandum of Agreement dated July 25, 2001 between Sun Gro
Horticulture Canada Ltd. and Teamsters Local Union No. 879, Affiliated
with the INTERNATIONAL BROTHERHOOD OF TEAMSTERS, ratifying the
Collective Agreement dated June 1, 1998.
3. Union Agreement between Sun Gro Horticulture Canada Ltd. and United
Food and Commercial Workers Union, Local No. 832 dated June 1, 1999.
4. Agreement between Sun Gro Horticulture Canada Ltd. and United
Brotherhood of Carpenters and Joiners of America Local 2717 dated
September 1, 1998. (In the process of renegotiation).
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SCHEDULE 4.1.21
PRODUCT WARRANTY CLAIMS
(A) PRIOR TO REORGANIZATION
-------------------------------------------------------------------------------------------------------------------------
NAME OF CLAIMANT AMOUNT OF CLAIM STATUS OF CLAIM
-------------------------------------------------------------------------------------------------------------------------
JVK $700,000 Paid two growers, trying to obtain settlement with
insurers--see special receivable section.
-------------------------------------------------------------------------------------------------------------------------
Springfield Mushroom $125,000 Settled by insurance company.
-------------------------------------------------------------------------------------------------------------------------
Xxxxx No $ amount Notice received from growers attorney. Submitted
to insurer.
-------------------------------------------------------------------------------------------------------------------------
(B) AT CLOSING
In addition to the product warranty claims listed above, the Company will be
subject to the following product warranty claims at Closing:
-------------------------------------------------------------------------------------------------------------------------
NAME OF CLAIMANT AMOUNT OF CLAIM STATUS OF CLAIM
-------------------------------------------------------------------------------------------------------------------------
Xxxxxxxxx $300,000 - $400,000 Claim filed in circuit court of Xxxxxxx County,
Missouri at Kansas City, File #00CVZZ5301
-------------------------------------------------------------------------------------------------------------------------
Country Place $300,000 - $400,000 Defense of court action has been tendered to
insurers.
-------------------------------------------------------------------------------------------------------------------------
Multiple claims. All settled directly with
North Dakota Germination Mix less than $100,000 growers.
-------------------------------------------------------------------------------------------------------------------------
Xxxxx'x Nursery $50,000 Claims settled
-------------------------------------------------------------------------------------------------------------------------
Xxxxxx Plant Farms zero Claim dropped by grower. No payment.
-------------------------------------------------------------------------------------------------------------------------
Ball Seed/Xxxxxxxxx'x $70,000 Credit issued
-------------------------------------------------------------------------------------------------------------------------
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