EXHIBIT 4.11
SHARE PURCHASE AGREEMENT
This Agreement dated December 11, 2001 is made
A M O N G
XXX X. XXXX,
in the Province of Ontario ("DION")
IN THE FIRST PART
- and -
XXX XXXX, XXXXXX XXXX AND
XXXXX XXXX trustees of
the. DION FAMILY TRUST,
("DION TRUST")
IN THE SECOND PART
- and -
1503549 ONTARIO LIMITED, a
corporation incorporated in the
Province of Ontario ("DION NEWCO")
IN THE THIRD PART
- and -
XXXXXX XXXX,
in the Province of Ontario ("DICK")
IN THE FOURTH PART
- and -
XXXXXX XXXX, XXXXX XXXX AND
XXXXX XXXXXX, trustees of the
DICK FAMILY TRUST,
("DICK TRUST")
IN THE FIFTH PART
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- and -
1503550 ONTARIO LIMITED,
a corporation incorporated in the
Province of Ontario ("DICK NEWCO")
IN THE SIXTH PART
- and -
XXXXXX XXXX,
in the Province of Ontario ("XXXX")
IN THE SEVENTH PART
- and -
CAPITAL ENVIRONMENTAL RESOURCE INC.,
a corporation amalgamated in the Province of Ontario
(the "PURCHASER")
IN THE EIGHTH PART
RECITALS
A Dion is the registered and beneficial owner of 55% of the issued and
outstanding common shares and 100% of the issued and outstanding Series A
preference shares of 1364927 and the Dion Family Trust is the registered and
beneficial owner of 45% of the issued and outstanding common shares of 1364927;
B Dick is the registered and beneficial owner of 25% of the issued and
outstanding common shares and 100% of the issued and outstanding Series A
preference shares of 1364928 and the Dick Family Trust is the registered and
beneficial owner of 75% of the issued and outstanding common shares of 1364928;
C 1364927 is the registered and beneficial owner of 35 issued and
outstanding common shares in the capital of Waste Services Inc. ("WSI");
D 1364928 is the registered and beneficial owner of 35 issued and
outstanding common shares in the capital of WSI;
E the Purchaser is willing to purchase from, and the members of the Dion
Group are willing to sell, in the aggregate, 100 common shares and 150,000
Series A preference shares in the capital of 1364927, on the terms and
conditions contained in this Agreement;
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F the Purchaser is willing to purchase from, and the members of the Dick
Group are willing to sell, in the aggregate, 100 common shares and 150,000
Series A preference shares in the capital of 1364928, on the terms and
conditions contained in this Agreement;
G at the closing of the transactions contemplated herein Xxxx will be the
registered owner of 5% of the then issued and outstanding common shares in the
capital of WSI and the Purchaser is willing to purchase and Xxxx is willing to
sell such common shares, on the terms and conditions contained in this
Agreement;
H at the closing of the transactions contemplated herein TD Canada Trust
(as hereinafter defined) will be the registered owner of 30% of the then issued
and outstanding common shares in the capital of WSI and the Purchaser is willing
to purchase from TD Canada Trust and Dion and Dick are willing to ensure that TD
Canada Trust sells such common shares to the Purchaser, on the terms and
conditions contained in this Agreement;
I Dion is willing to guarantee the obligations of the Dion Group and Xxxx
and certain of the obligations of the Dick Group under this Agreement;
J Dick is willing to guarantee the obligations of the Dick Group and Xxxx
and certain of the obligations of the Dion Group under this Agreement.
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS. In this Agreement, the following terms shall have the meanings
set out below unless the context requires otherwise:
(1) "1364927" means 1364927 Ontario Limited.
(2) "1364928" means 1364928 Ontario Limited.
(3) "ACCOUNTANT" has the meaning given in Section 2.10(4).
(4) "AFFILIATE" means, with respect to any Person, any other Person who
directly or indirectly controls, is controlled by, or is under direct or
indirect common control with, such Person, and includes any Person in like
relation to an Affiliate. A Person shall be deemed to control a Person if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the term
"controlled" shall have a similar meaning.
(5) "AGREEMENT" means this Agreement, including the Exhibits and the
Schedules to this Agreement, as it or they may be amended or supplemented from
time to time, and the
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expressions "HEREOF", "HEREIN", "HERETO", "HEREUNDER", "HEREBY" and similar
expressions refer to this Agreement and not to any particular Section or other
portion of this Agreement.
(6) "APPLICABLE EMPLOYEE BENEFIT LAWS" has the meaning given in Section
5.1(31).
(7) "APPLICABLE LAW" means, with respect to any Person, property,
transaction, event or other matter, any law, rule, statute, regulation, order,
judgment, decree, treaty or other requirement having the force of law
(collectively, the "LAW") relating or applicable to such Person, property,
transaction, event or other matter. Applicable Law also includes, where
appropriate, any interpretation of the Law (or any part thereof) by any Person
having jurisdiction over it, or charged with its administration or
interpretation.
(8) "ASSETS" means all the properties, assets, interests and rights of a
Corporation including the following:
(a) the Real Property;
(b) all rights and interests of the Corporations in respect of
the Premises Leases affecting the Residential Property,
including prepaid rents, security deposits and options to
renew or purchase, rights of first refusal under the
Premises Leases and all leasehold improvements owned by a
Corporation and forming part of the Residential Property;
(c) the Personal Property;
(d) the Inventories;
(e) the Receivables;
(f) all rights and interests under or pursuant to all
warranties, representations and guarantees, express,
implied or otherwise, of or made by suppliers or others in
connection with the Assets;
(g) the Intellectual Property;
(h) the Contracts;
(i) the Licences and Permits;
(j) the Books and Records;
(k) all prepaid charges, deposits, sums and fees paid by a
Corporation before the Closing Time;
(l) all goodwill of a Corporation including the present
telephone numbers, internet domain addresses and other
communications numbers and addresses of a Corporation;
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(m) all of the issued and outstanding shares in the capital of
WSI and the Subsidiaries; and
(n) all proceeds of any or all of the foregoing received or
receivable after the Closing Time.
(9) "ASSOCIATE" has the meaning ascribed thereto in the BUSINESS
CORPORATIONS ACT, (Ontario).
(10) "BOOKS AND RECORDS" means all books, records, files and papers of
a Corporation including drawings, engineering information, computer programs
(including source code), software programs, manuals and data, sales and
advertising materials, sales and purchases correspondence, trade association
files, research and development records, lists of present and former customers
and suppliers, personnel, employment and other records, and the minute and share
certificate books of each Corporation and each Subsidiary, and all copies and
recordings of the foregoing.
(11) "BUSINESS" means the business carried on by the Corporation and
the Subsidiaries which primarily involves waste transportation and disposal
services in the Province of Ontario.
(12) "BUSINESS DAY" means any day except Saturday, Sunday or any day on
which banks are generally not open for business in the City of Ottawa.
(13) "CANADIAN DOLLARS" means the lawful currency of Canada.
(14) "CERI SHARES" means collectively those shares of the Purchaser to
be issued to the Dion Group, the Dick Group, Xxxx and TD Canada Trust on
Closing.
(15) "CLAIM" has the meaning given in Section 7.1.
(16) "CLOSING" means the completion of the purchase and sale of the
Shares in accordance with the provisions of this Agreement.
(17) "CLOSING DATE" means January 30, 2002 or such earlier or later
date as may be agreed upon in writing by the Parties; "DATE OF CLOSING" has the
same meaning.
(18) "CLOSING TIME" means the time of closing on the Closing Date
provided for in Section 3.1; "TIME OF CLOSING" has the same meaning.
(19) "COMMERCIAL PROPERTY" means those portions of the Real Property
other than the Residential Property.
(20) "CONTRACTS" means all rights and interests of a Corporation in all
ending and/or executory contracts, agreements, leases and arrangements to which
a Corporation is a party or by which a Corporation or any of the Assets or the
Business is bound or affected including the Material Contracts and the Leases.
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(21) "CORPORATIONS" means collectively, WSI and all of the Subsidiaries
set forth in Schedule 5.2(5).
(22) Intentionally Deleted.
(23) "DEPOSIT" has the meaning given in Section 2.8.
(24) "DICK" means Xxxxxx Xxxx.
(25) "DICK GROUP" means collectively, Dick, Dick Trust and Dick Newco.
(26) "DICK PURCHASE PRICE" has the meaning given in Section 2.5.
(27) "DICK SHARES" means the total number of shares of 1364928 being
sold by the Dick Group pursuant to Section 2.2.
(28) "DICK TRUST" means the trust deed of settlement dated July 12,
1999.
(29) "DION" means Xxx Xxxx.
(30) "DION AND DICK CONSENTS AND APPROVALS" means all consents and
approvals of governmental authorities and other third parties required to be
obtained in connection with the execution and delivery of this Agreement by the
Dion Group and the Dick Group or in order to enable the Dion Group and the Dick
Group to properly complete the transactions contemplated by this Agreement.
(31) "DION AND DICK NOTICES" means the notices required to be given by
the Dion Group and the Dick Group to any Person under Applicable Law or pursuant
to any contract or other obligation to which a Corporation is a party or by
which a Corporation is bound or which is applicable to any of the Assets in
connection with the execution and delivery of this Agreement or the completion
of the transactions contemplated by this Agreement.
(32) "DION PURCHASE PRICE" has the meaning given in Section 2.4.
(33) "DION GROUP" means Xxxx, Xxxx Trust and Dion Newco.
(34) "DION GROUP, DICK GROUP AND WSI SOLICITORS" means Xxxx & Berlis
LLP, BCE Place, Xxx 000, Xxxxx 0000, 000 Xxx Xxxxxx, Xxxxxxx, Xxxxxxx, X0X 0X0.
(35) "DION SHARES" means the total number of shares of 1364927 being
sold by the Dion Group and Dion Family Trust pursuant to Section 2.1.
(36) "DION TRUST" means the trust deed of settlement dated July 12,
1999.
(37) "DIRECT CLAIM" has the meaning given in Section 7.4.
(38) "DIRECTOR" means a director of a Corporation; and "DIRECTORS"
means every Director.
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(39) "EMPLOYEE" means an individual who is employed by a Corporation;
and "EMPLOYEES" means every Employee.
(40) "EMPLOYEE PLANS" has the meaning given in Section 5.1(23).
(41) "ESTIMATE" has the meaning ascribed thereto in Section 2.10.
(42) "FINANCIAL STATEMENTS" means collectively, the audited
consolidated financial statements of the Corporations for the year ended
December 31, 2000 and the management prepared unaudited consolidated financial
statements of the Corporations for the period ended September 30, 2001 attached
as Schedule 1.1(40).
(43) "FORMULA" means the lower of the closing price of the common
shares of the Purchaser on NASDAQ on November 30, 2001 and on the trading day
immediately preceding the Closing Date, with U.S. dollar values converted to
Canadian dollar values on the basis of the closing exchange rate posted by the
Bank of Canada on the trading day immediately preceding the Closing Date.
(44) "GAAP" means those accounting principles which are recognized as
being generally accepted in Canada from time to time as set out in the handbook
published by the Canadian Institute of Chartered Accountants, consistently
applied.
(45) "GOVERNMENTAL AUTHORITY" means any federal, provincial, regional
or municipal government in Canada or other political subdivision thereof and any
entity or person of competent jurisdiction in Canada exercising executive,
legislative, judicial, regulatory or administrative functions of, or pertaining
to government.
(45A) "GUARANTEED AGREEMENTS" has the meaning given in Section 6.1.
(46) "IMPROVEMENTS" means all buildings, fixtures, sidings, parking
lots, roadways, structures, erections, fixed machinery, fixed equipment and
appurtenances situate on, in, under, over or forming part of the Real Property.
(47) "INCLUDING" means "including without limitation", and "INCLUDES"
means "includes without limitation".
(48) "INDEMNIFIED PARTY" means a Person whom the Vendor or the
Purchaser, as the case may be, has agreed to indemnify under Article 7.
(49) "INDEMNIFYING PARTY" means, in relation to an Indemnified Party,
the Party to this Agreement that has agreed to indemnify that Indemnified Party
under Article 7.
(50) "INTELLECTUAL PROPERTY" means all rights to and interests in:
(a) all business and trade names, corporate names, brand names
and slogans Related to the Business;
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(b) all inventions, patents, patent rights, patent applications
(including all reissues, divisions, continuations,
continuations-in-part and extensions of any patent or
patent application), industrial designs and applications
for registration of industrial designs Related to the
Business;
(c) all copyrights and trade-marks (whether used with wares or
services and including the goodwill attaching to such
trade-marks), registrations and applications for
trade-marks and copyrights (and all future income from such
trade-marks and copyrights) Related to the Business;
(d) all rights and interests in and to processes, lab journals,
notebooks, data, trade secrets, designs, know-how, product
formulae and information, manufacturing, engineering and
other drawings and manuals, technology, blue prints,
research and development reports, agency agreements,
technical information, technical assistance, engineering
data, design and engineering specifications, and similar
materials recording or evidencing expertise or information
Related to the Business;
(e) all of the intellectual property affected by the
registrations and applications for registration listed in
Schedule 5.1(28) and the permissions and licences listed in
Schedules 5.1(28);
(f) all other intellectual and industrial property rights
throughout the world Related to the Business;
(g) all licences of the intellectual property listed in items
(a) to (f) above;
(h) all future income and proceeds from any of the intellectual
property listed in items (a) to (f) above and the licences
listed in item (g) above; and
(i) all rights to damages and profits by reason of the
infringement of any of the intellectual property listed in
items (a) to (g) above.
(51) "INTERIM PERIOD" means the period from the date of this Agreement
to the Closing or until terminated in accordance with Article 4.
(52) Intentionally Deleted.
(53) "INVENTORIES" means all inventories of stock-in-trade and
merchandise including materials, supplies, work-in-progress, finished goods,
tooling, service parts and purchased finished goods owned by a Corporation
(including those in possession of suppliers, customers and other third parties).
(54) "LANDS" means all real property that is owned by a Corporation.
(55) "LEASES" means Personal Property Leases.
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(56) "LETTER OF INTENT" means the letter of intent among 1364927,
1364928, Xxxx, Xxxx and the Purchaser dated November 30, 2001.
(57) "LIABILITIES" means all costs, expenses, charges, debts,
liabilities, claims, demands and obligations, whether primary or secondary,
direct or indirect, fixed, contingent, absolute or otherwise, under or in
respect of any contract, agreement, arrangement, lease, commitment or
undertaking, Applicable Law and Taxes.
(58) "LICENCES AND PERMITS" means all licences, permits, filings,
authorizations, approvals or indicia of authority issued to a Corporation
including the Environmental Permits.
(59) "LIEN" means any lien, mortgage, charge, hypothec, pledge,
security interest, prior assignment, option, warrant, lease, sublease, right to
possession, encumbrance, claim, right or restriction which affects, by way of a
conflicting ownership interest or otherwise, the right, title or interest in or
to any particular property.
(60) "MATERIAL ADVERSE CHANGE" means a change in the business,
operations or capital of an entity, determined on a consolidated basis which has
had or could reasonably be expected to have a significant adverse effect on the
value of the Shares.
(61) "MATERIAL CONTRACT" has the meaning given in Section 5.1(20).
(62) "NET WORKING CAPITAL STATEMENT" has the meaning give in Section
2.10(2).
(63) "OFFICER" means an officer of a Corporation; and "OFFICERS" means
every Officer.
(64) "PARTY" means a party to this Agreement and any reference to a
Party includes its successors and permitted assigns; and "PARTIES" means every
Party.
(65) "PERMITTED LIENS" means:
(a) Liens for Taxes if such Taxes are not due and payable;
(b) mechanics', construction, carriers', workers', repairers',
storers' or other similar liens (inchoate or otherwise)
which individually and in the aggregate are not material,
arising or incurred in the ordinary course of business
which have not been filed, recorded or registered in
accordance with Applicable Law or of which notice has not
been given to the Corporation;
(c) minor title defects or irregularities consisting of minor
survey exceptions, minor unregistered easements or rights
of way, restrictions in the original grant from the Crown,
restrictions implied by Applicable Law and other minor
unregistered restrictions as to the use of Real Property
which title defects, irregularities or restrictions do not,
in the aggregate, materially impair the operation of the
Business or the continued use of the Real Property to which
they relate after the Closing on substantially the same
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basis as such Real Property is currently being used and the
Business is currently being operated;
(d) easements, covenants, rights of way and other restrictions
which are registered, provided that they do not, in the
aggregate, materially impair the operation of the Business
or the continued use of the Real Property to which they
relate after the Closing on substantially the same basis as
the Business is currently being operated and such Real
Property is currently being used;
(e) registered agreements with municipalities provided that
they have been complied with or adequate security has been
furnished to secure compliance and provided that they do
not, in the aggregate, materially impair the operation of
the Business or the continued use of the Real Property to
which they relate after the Closing on substantially the
same basis as the Business is being operated and such Real
Property is currently being used; and
(f) the mortgages, charges and other liens listed in Schedule
1.1(65).
(66) "PERSON" is to be broadly interpreted and includes an individual,
a corporation, a partnership, a trust, an unincorporated organization, the
government of a country or any political subdivision thereof or any agency or
department of any such government, and the executors, administrators or other
legal representatives of an individual in such capacity.
(67) "PERSONAL PROPERTY" means all machinery, equipment, furniture,
motor vehicles and other chattels owned or leased by a Corporation (including
those in possession of third parties).
(68) "PERSONAL PROPERTY LEASES" means all chattel leases, equipment
leases, rental agreements, conditional sales contracts and other similar
agreements.
(69) "PREMISES LEASES" means all the leases, agreements to lease,
subleases, licence agreements and occupancy or other agreements of which any one
of the Corporations is a landlord as identified on Schedule 1.1(69).
(70) "PREPAID EXPENSES" means all prepayments, prepaid charges,
deposits, sums and fees Related to the Business or in respect of the Assets.
(71) "PURCHASER'S CONSENTS AND APPROVALS" means all consents and
approvals of governmental authorities or other third parties required to be
obtained in connection with the execution and delivery of this Agreement by the
Purchaser or in order to enable the Purchaser to properly complete the
transactions contemplated by this Agreement.
(72) "PRIME RATE" means the prime rate of interest per annum quoted by
TD Canada Trust from time to time as its reference rate of interest for Canadian
dollar demand loans made to its commercial customers in Canada and which TD
Canada Trust refers to as its "prime rate", as such rate may be changed from
time to time.
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(73) "PURCHASER'S SOLICITORS" means Blake, Xxxxxxx & Xxxxxxx LLP, Suite
2800, Box 25, Commerce Court West, 000 Xxx Xxxxxx, Xxxxxxx, Xxxxxxx, X0X 0X0.
(74) "PURCHASER'S NOTICES" means the notices required to be given by
the Purchaser to any Person under Applicable Law or pursuant to any contract or
other obligation to which a Corporation is a party or by which a Corporation is
bound or which is applicable to any of the Assets in connection with the
execution and delivery of this Agreement or the completion of the transactions
contemplated by this Agreement.
(74A) "QET" has the meaning given in Section 2.11(1).
(74B) "QET ESCROW AMOUNT" has the meaning given in Section 2.11(3)(c).
(75) "REAL PROPERTY" means the Lands and the Improvements.
(76) "RECEIVABLES" means all accounts receivable, bills receivable,
trade accounts, book debts and insurance claims of a Corporation together with
any unpaid interest accrued on such items and any security or collateral for
such items, including recoverable deposits.
(77) "RELATED TO THE BUSINESS" means, directly or indirectly, used in,
arising from or relating in any manner to the Business.
(78) "REGISTRATION DATE" means the earlier of:
(a) the date upon which the current stakeholders of the
Purchaser may exercise demand registration rights (being
September 10, 2002); and
(b) the date before September 10, 2002 upon which any current
or future stakeholder of the Purchaser may exercise any
demand registration rights for securities of the Purchaser.
(79) "REGISTRATION CONDITION" means the delivery by the Purchaser to
the Vendors of:
(a) a fully executed Registration Rights Agreement in the form
annexed hereto as Schedule 1.1(79) together with the
opinion of the Purchaser's Solicitors as to the corporate
power, corporate proceedings, execution and delivery of the
Registration Rights Agreement, together with an opinion of
the U.S. attorneys for the Purchaser as to the
enforceability of such Registration Rights Agreement
together with its compliance with U.S. securities laws, all
in form satisfactory to the solicitors to the Dion Group,
Dick Group, WSI and TD Canada Trust each acting reasonably;
and
(b) the contemporaneous delivery by the Purchaser of a ruling
of the Ontario Securities Commission to the effect that the
Ontario resident Vendors would not be subject to the
prospectus and registration for trading requirements of the
SECURITIES ACT (Ontario) in trading their CERI Shares so
long as those shares were traded through NASDAQ (or other
evidence
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satisfactory to the Dion Group, Dick Group, Xxxx and WSI
Solicitors and TD Canada Trust and its Solicitors, all
acting reasonably, to the effect that CERI Shares are
otherwise qualified the CERI Shares for trading without a
hold period by residents of Ontario).
(80) "RELEASE" includes an actual or potential discharge, deposit,
spill, leak, pumping, pouring, emission, emptying, injection, escape, leaching,
seepage or disposal of a Hazardous Substance which is or may be in breach of any
Environmental Laws.
(81) "REORGANIZATION" means the transactions set out in the steps memo
attached as Schedule 2.11 and the fact that the Purchaser is purchasing the
shares of 1364927 and 1364928 rather than purchasing directly all of the shares
of WSI.
(82) "RESIDENTIAL PROPERTY" means those portions of the Real Property
described by municipal addresses listed on Schedule 1.1(76).
(83) "XXXX" means Xxxxxx Xxxx.
(84) "XXXX PURCHASE PRICE" has the meaning given in Section 2.6
(85) "XXXX SHARES" means the common shares in the capital of WSI to be
registered in the name and beneficially held by Xxxx.
(86) "SHARES" means collectively, all of the issued and outstanding
common shares and all the issued and outstanding Series A preference shares of
1364927; all of the issued and outstanding common shares and all of the issued
and outstanding Series A preference shares of 1364928; and the WSI Shares.
(87) "STATEMENT OF OBJECTIONS" has the meaning given in Section
2.10(3).
(88) "SUBSIDIARIES" means the corporations listed in Schedule 5.1(5).
(89) "TAXES" means all taxes, charges, fees, levies, imposts and other
assessments, including all income, sales, use, goods and services, value added,
capital, capital gains, alternative, net worth, transfer, profits, withholding,
payroll, employer health, excise, franchise, real property and personal property
taxes, and any other taxes, customs duties, fees, assessments or similar charges
in the nature of a tax including Canada Pension Plan and provincial pension plan
contributions, unemployment insurance payments and workers' compensation
premiums, together with any instalments with respect thereto, and any interest,
fines and penalties imposed by any governmental authority (including federal,
state, provincial, municipal and foreign governmental authorities), and whether
disputed or not; "TAX" means anyone of the foregoing.
(89A) "TERMINATION TIME" has the meaning given in Section 4.1(3).
(90) "THIRD PARTY" has the meaning given in Section 7.6.
(91) "THIRD PARTY CLAIM" has the meaning given in Section 7.4.
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(92) "TD CANADA TRUST SHARES" means the 32.31 WSI Shares which, at the
Closing Time, will be held by TD Canada Trust;
(93) "TD CANADA TRUST" means collectively Finova (Canada) Capital
Corporation and The Toronto-Dominion Bank;
(94) "TD CANADA TRUST PURCHASE PRICE" has the meaning given in Section
2.6A.
(95) "VENDORS" means collectively the Dion Group, the Dick Group, Xxxx
and TD Canada Trust and "VENDOR" means any one of the foregoing.
(96) "WSI" means Waste Services Inc.
(97) "WSI SHARES" means in the aggregate all of the issued and
outstanding common shares in the capital of WSI registered to and beneficially
held by Xxxx and TD Canada Trust.
1.2 HEADINGS AND TABLE OF CONTENTS. The division of this Agreement into Articles
and Sections, the insertion of headings, and the provision of any table of
contents are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
1.3 NUMBER AND GENDER. Unless the context requires otherwise, words importing
the singular include the plural and vice versa and words importing gender
include all genders.
1.4 BUSINESS DAYS. If any payment is required to be made or other action is
required to be taken pursuant to this Agreement on a day which is not a Business
Day, then such payment or action shall be made or taken on the next Business
Day.
1.5 CURRENCY AND PAYMENT OBLIGATIONS. Except as otherwise expressly provided in
this Agreement:
(1) all dollar amounts referred to in this Agreement are stated in
Canadian Dollars;
(2) any payment contemplated by this Agreement shall be made by cash,
certified cheque or any other method that provides immediately available funds;
and
(3) except in the case of any payment due on the Closing Date, any
payment due on a particular day must be received and available not later than
2:00 p.m. on the due date and any payment made after that time shall be deemed
to have been made and received on the next Business Day.
1.6 CALCULATION OF INTEREST. In calculating interest payable under this
Agreement for any period of time, the first day of such period shall be included
and the last day of such period shall be excluded.
1.7 STATUTE REFERENCES. Any reference in this Agreement to any statute or any
section thereof shall, unless otherwise expressly stated, be deemed to be a
reference to such statute or section as amended, restated or re-enacted from
time to time.
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1.8 SECTION AND SCHEDULE REFERENCES. Unless the context requires otherwise,
references in this Agreement to Sections, Exhibits or Schedules are to Sections,
Exhibits or Schedules of this Agreement. The Exhibits and Schedules to this
Agreement are as follows:
EXHIBITS
3.2(b) Share Transfer Forms
3.2(d) Dion Bring-Down Certificate
3.2(e) Dion Trust Bring Down Certificate
3.2(f) Dion Newco Bring Down Certificate
3.2(g) Dick Bring Down Certificate
3.2(h) Dick Trust Bring Down Certificate
3.2(i) Dick Newco Bring Down Certificate
3.2(k-1) Vendors Opinion - Corporate
3.2(k-2) Vendors Opinion - re: Real Estate
3.2(l) Resignation
3.2(m) Release by Xxx Xxxx
3.2(n) Release by Dion Trust
3.2(o) Release by Dion Newco
3.2(p) Release by Xxxxxx Xxxx
3.2(q) Release by Dick Trust
2.3(r) Release by Dick Newco
3.2(s) Non-Competition Agreement
3.3(b) Share Assignment - Xxxx
3.3(c) Xxxx Bringdown
3.3(d) Release by Xxxx
3.4(a) Purchaser Bringdown
3.4(e) Purchaser Canadian Counsel Opinion
3.4(f) Purchase U.S. opinion
3.4(h) Release by WSI and subsidiaries of all Vendors
3.5(a) Purchaser Bringdown
3.6(b) Share Assignment - TD Canada Trust
3.6(e) Purchaser's Bringdown
SCHEDULES
1.1(40) Financial Statements
1.1(65) Permitted Liens
1.1(69) Premises Leases
1.1(79) Form of Registration Rights Agreement
1.1(82) Residential Property
2.8 Escrow Agreement
2.9 Steps Memo
2.10 Net Working Capital Methodology
5.1(2) Issued Capital
5.1(11) Exceptions to Financial Statements
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5.2(5) Subsidiaries
5.1(20) Material Contracts
5.1(22) Employment Arrangements
5.1(23) Employee Benefit Plans
5.1(28) Intellectual Property
5.1(29) Bank Accounts and Safety Deposit Boxes
5.1(30) Insurance
5.1(42) Bank Indebtedness
5.1(44) Real Property
5.1(44)(b) Real Property Exceptions
5.1(47) Premises Leases
5.1(48) Licences and Permits
5.1(49) Consents & Approvals
5.1(50) Notices
5.1(51) Information
5.6(4) Purchaser Notices
5.6(7) Purchaser Consents and Approval
9.17 Environmental Matters
ARTICLE 2
PURCHASE OF SHARES
2.1 AGREEMENT TO PURCHASE AND SELL THE DION SHARES. At the Closing, subject to
the terms and conditions of this Agreement, Dion Group shall sell to the
Purchaser, and the Purchaser shall purchase from Dion Group, 100 common shares
and 150,000 Series A Preference shares in the capital of 1364927 ("DION
SHARES").
2.2 AGREEMENT TO PURCHASE AND SELL THE DICK SHARES. At the Closing, subject to
the terms and conditions of this Agreement, Dick Group shall sell to the
Purchaser, and the Purchaser shall purchase from Dick Group, 100 common shares
and 150,000 Series A Preference shares in the capital of 1364928 ("DICK
SHARES").
2.3 AGREEMENT TO PURCHASE AND SELL THE XXXX SHARES. At the Closing, subject to
terms and conditions of this Agreement, Xxxx shall sell to the Purchaser and the
Purchaser shall purchase from Xxxx, 5.38 common shares in the capital of WSI
(the "XXXX SHARES").
2.4 AMOUNT OF PURCHASE PRICE FOR DION SHARES. Subject to the adjustments
referred to herein, the purchase price (the "DION PURCHASE PRICE") payable by
the Purchaser to the Dion Group for the Dion Shares shall be $13,000,000 to be
paid and satisfied as follows:
(1) as to $11,050,000, in cash or by certified cheque at the Closing
Time;
(2) as to $1,950,000, payable without interest, on or before the
Registration Date:
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(a) by delivery by the Purchaser to the Dion Group on the
Registration Date of that number of fully paid and
non-assessable common shares in the capital of the
Purchaser determined in accordance with the Formula
provided that the Registration Condition is satisfied in
full at least 15 days prior to the Registration Date and
the Purchaser has given written notice of the satisfaction
of the Registration Condition at least 15 days prior to the
Registration Date; or
(b) if the condition set forth in (a) above is not satisfied
and notice thereof given to the Vendors by the Purchaser on
or before the date which is 15 days prior to the
Registration Date, by the payment of such amount in cash or
by certified cheque on the Registration Date.
(3) The Dion Purchase Price shall be allocated among members of the Dion
Group in accordance with the following, namely:
(a) $150,000 shall be paid to the holders of the 150,000 Series
A Preference Shares in the capital of 1364927; and
(b) the balance of the cash purchase price and the non-cash
purchase price shall be allocated among the members of the
Dion Group in an equal amount for each common share in the
capital of 1364927.
2.5 AMOUNT OF PURCHASE PRICE FOR DICK SHARES. Subject to the adjustments
referred to herein, the purchase price (the "DICK PURCHASE PRICE") payable by
the Purchaser to the Dick Group for the Dick Shares shall be $13,000,000 to be
paid and satisfied as follows:
(1) as to $11,050,000, in cash or by certified cheque or at the Closing
Time;
(2) as to $1,950,000, payable without interest, on or before the
Registration Date:
(a) by delivery by the Purchaser to the Dick Group on the
Registration Date of that number of fully paid and
non-assessable common shares in the capital of the
Purchaser determined in accordance with the Formula
provided that the Registration Condition is satisfied in
full at least 15 days prior to the Registration Date and
the Purchaser has given written notice of the satisfaction
of the Registration Condition at least 15 days prior to the
Registration Date; or
(b) if the condition set forth in (a) above is not satisfied
and notice thereof given to the Vendors by the Purchaser on
or before the date which is 15 days prior to the
Registration Date, by the payment of such amount in cash or
by certified cheque on the Registration Date.
(3) The Dick Purchase Price shall be allocated among members of the Dick
Group in accordance with the following, namely:
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(a) $150,000 shall be paid to the holders of the 150,000 Series
A Preference Shares in the capital of 1364928; and
(b) the balance of the cash purchase price and the non-cash
purchase price shall be allocated among the members of the
Dick Group in an equal amount for each common share in the
capital of 1364928.
2.6 AMOUNT OF PURCHASE PRICE FOR XXXX SHARES. Subject to the adjustments
referred to herein, the purchase price (the "XXXX PURCHASE PRICE") payable by
the Purchaser to Xxxx for the Xxxx Shares shall be $2,000,000 to be paid and
satisfied as follows:
(1) as to $1,700,000, in cash or by certified cheque at the Closing Time;
(2) as to $300,000 payable without interest, on or before the
Registration Date:
(a) by delivery by the Purchaser to Xxxx on the Registration
Date of that number of fully paid and non-assessable common
shares in the capital of the Purchaser determined in
accordance with the Formula provided that the Registration
Condition is satisfied in full at least 15 days prior to
the Registration Date and the Purchaser has given written
notice of the satisfaction of the Registration Condition at
least 15 days prior to the Registration Date; or
(b) if the condition set forth in (a) above is not satisfied
and notice thereof given to the Vendors by the Purchaser on
or before the date which is 15 days prior to the
Registration Date, by the payment of such amount in cash or
by certified cheque on the Registration Date.
2.6A PURCHASE AND SALE OF TD CANADA TRUST SHARES. At the Closing, subject to the
terms and conditions of this Agreement, Dion and Dick shall cause TD Canada
Trust to sell to the Purchaser, and the Purchaser shall purchase from TD Canada
Trust, the TD Canada Trust Shares, and at the same time Dion and Dick shall
cause TD Canada Trust to deliver to and in favour of the Purchaser share
certificates, properly endorsed in blank for transfer to the Purchaser,
representing the TD Canada Trust Shares, and written, binding representations
and warranties, of TD Canada Trust, which shall survive indefinitely, in
substantially the form and substantially to the same effect in relation to the
TD Canada Trust Shares, as the representations and warranties of Xxxx set out in
Sections 5.4(1), (2) and (3) of this Agreement. Subject to the adjustments
referred to herein, the purchase price (the "TD CANADA TRUST PURCHASE PRICE")
payable by the Purchaser to TD Canada Trust for the TD Canada Trust Shares shall
be $12,000,000 to be paid and satisfied as follows:
(1) as to $10,200,000, in cash or by certified cheque at the Closing
Time; and
(2) as to $1,800,000, payable without interest, on or before the
Registration Date:
(a) by delivery by the Purchaser to TD Canada Trust on the
Registration Date of that number of fully paid and
non-assessable common shares in the capital of the
Purchaser determined in accordance with the Formula
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provided that the Registration Condition is satisfied in
full at least 15 days prior to the Registration Date and
the Purchaser has given written notice of the satisfaction
of the Registration Condition at least 15 days prior to the
Registration Date; or
(b) if the condition set forth in (a) above is not satisfied
and notice thereof given to the Vendors by the Purchaser on
or before the date which is 15 days prior to the
Registration Date, by the payment of such amount in cash or
by certified cheque on the Registration Date.
2.7 PREVIOUS PAYMENT. The Parties acknowledge and agree that the $500,000
previously paid to Xxxx & Berlis LLP in trust by the Purchaser shall forthwith
upon the execution of this Agreement be released, together with interest earned
thereon, if any, to the Vendors or as they may direct and that the Purchaser has
no further claim with respect to this amount either against the Vendors or Xxxx
& Berlis LLP except such amount will be deemed to have been paid against the
cash payable at the Closing Time.
2.8 DEPOSIT. Concurrently with the execution of this Agreement, the Purchaser
shall pay to the Dion Group. Dick Group and WSI Solicitors, in trust, the sum of
$1,500,000 (the "DEPOSIT") as a deposit. The Vendors shall cause the Dion Group,
Dick Group and WSI Solicitors to invest the Deposit in an interest-bearing
account of a Canadian chartered bank or trust company in the name of the
Purchaser , in trust, to be disbursed in accordance with the following
provisions:
(1) if the purchase and sale of the Shares is completed at the Closing
Time, then the aggregate of the Deposit plus all interest earned thereon shall
be released from trust and paid to or to the direction of the Purchaser;
(2) if the purchase and sale of the Shares is not completed at the
Closing Time for any reason other than the breach by the Purchaser of its
obligations under this Agreement, then the aggregate of the Deposit plus all
interest thereon shall be released from trust and paid to the Purchaser; and
(3) if the purchase and sale of the Shares is not completed at the
Closing Time because of the breach by the Purchaser of its obligations under
this Agreement, then the aggregate of the Deposit plus all interest earned
thereon shall be released from trust and paid in equal portions to the Vendors
in full satisfaction of all damages, losses, costs and expenses incurred by the
Vendors as a result of such failure.
(4) ESCROW AGREEMENT. Concurrently with the execution of this Agreement
in order to give effect to the holding of the Deposit, the parties hereto shall
execute and deliver the Escrow Agreement in the form attached hereto as Schedule
2.8.
2.9 STEPS MEMO
(1) The Purchaser acknowledges and agrees that during the Interim Period,
members of the Dion Group and/or members of the Dick Group shall be transferring
certain shares of 1364927 or 1364928, as the case may be by and among
themselves, all in accordance with the steps memo attached hereto as Schedule
2.9.
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(2) Each Vendor shall be entitled to make an income tax election
pursuant to section 85 of the Income Tax Act (Canada) (and the equivalent
provision of any provincial income tax law) with respect to the transfer of
shares of 1364927, shares of 1364928 or shares of WSI, as the case may be, to
the Purchaser in exchange for common shares of the Purchaser. Each Vendor must
provide two completed copies of the necessary election forms which have been
executed by such Vendor to the Purchaser. The amount to be elected in such forms
shall be an amount determined by such Vendor (or his or her professional
advisors), provided that such elected amount complies with the statutory
limitations. The parties agree that for income and corporations tax purposes the
acquisition cost to the Purchaser and proceeds of disposition to the Vendor of
the shares of 1364927, shares of 1364928 or shares of WSI, as the case may be,
disposed of to the Purchaser in consideration of common shares of the Purchaser
shall be deemed to be an amount equal to the amount so elected. The Purchaser
agrees to execute any proper election forms provided to it by a Vendor and to
return such forms to such Vendor within 30 days of the receipt thereof for
filing by such Vendor with the applicable tax authority. With the exception of
execution or causing execution of the election by the Purchaser, compliance with
the requirements to a valid election and the filing of such election shall be
the sole responsibility of the Vendor making the election.
2.10 NET WORKING CAPITAL ADJUSTMENTS.
(1) (a) On or immediately prior to the Closing Date, Dion and Dick shall
deliver to the Purchaser a statement of the estimated Net Working Capital (the
"ESTIMATE") of the Business as at the Closing Date in accordance with the
methodology set forth in Schedule 2.10.
(b) If the Net Working Capital of the Business as at the closing date
prepared and delivered as contemplated in Section 2.10(1) hereof is positive,
then the cash portion of the Dion Purchase Price, the Dick Purchase Price, the
Xxxx Purchase Price and the TD Canada Trust Purchase Price payable at the Time
of Closing shall be increased proportionately. If the estimated Net Working
Capital of the Business as at Closing Date prepared in accordance with the
aforementioned section is negative, then the cash portion of the Dion Purchase
Price, the Dick Purchase Price, the Xxxx Purchase Price and the TD Canada Trust
Purchase Price payable at the Time of Closing shall be reduced proportionately.
(2) As promptly as possible, but in any event no later than sixty (60)
days after the Closing Date, Purchaser shall provide to the Dion Group and the
Dick Group a statement of the Net Working Capital of the Business as of the
Closing Date prepared by the Purchaser (the "NET WORKING CAPITAL STATEMENT")
together with a written explanation of differences, if any, from the Estimate.
The Net Working Capital Statement shall be prepared in accordance with the
methodology for the calculation of Net Working Capital set forth in Schedule
2.10. The Net Working Capital Statement, together with the working papers
relating thereto, shall be reviewed by the Dion Group and the Dick Group within
ten (10) Business Days following receipt of the Net Working Capital Statement.
The Purchaser shall make its working papers relating to the Net Working Capital
Statement available for the Dion Group's and the Dick Group's inspection and
review.
(3) Unless the Dion Group and the Dick Group deliver a written statement
of any objections (the "STATEMENT OF OBJECTIONS") to the Purchaser regarding the
Net Working Capital
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Statement within ten (10) Business Days after receipt of same, the Net Working
Capital Statement shall be deemed to be finalized. If the Net Working Capital on
the finalized Net Working Capital Statement is positive from the Estimate, then
the aggregate cash portion of the Dion Purchase Price, Dick Purchase Price, the
Xxxx Purchase Price and the TD Canada Trust Purchase Price shall be adjusted and
increased by the amount of such excess to be allocated proportionately and the
Purchaser shall within ten (10) Business Days from the Dion Group's and the Dick
Group's receipt of the finalized Net Working Capital Statement, pay to each
Vendor the amount of such excess, by way of certified cheque; if the Net Working
Capital shown on the finalized Net Working Capital Statement is negative from
the Estimate, then the cash portion of each of the Dion Purchase Price, the Dick
Purchase Price, the Xxxx Purchase Price and the TD Canada Trust Purchase Price
shall be decreased by an amount equal to such deficiency and the Dion Group and
the Dick Group shall be jointly and severally liable to pay to the Purchaser
within ten (10) Business Days from the Dion Group's and the Dick Group's receipt
of the finalized Net Working Capital Statement the amount of such decrease, by
way of certified cheque or wire transfer of immediately available funds.
(4) In the event that the Dion Group and the Dick Group deliver a
written Statement of Objections regarding the Net Working Capital Statement
within ten (10) Business Days of receipt of same, and such objections cannot be
resolved by agreement between the Dion Group and the Dick Group and the
Purchaser within ten (10) Business Days after the delivery of the written
Statement of Objections, the matters in dispute shall be submitted to an
independent accounting firm (the "ACCOUNTANT") mutually acceptable to the
parties hereto to determine the final Net Working Capital of the Business as at
the Closing Date. All costs and expenses of such jointly elected Accountant
shall be borne by the Purchaser and the Dion Group and the Dick Group in inverse
proportion as each may prevail on matters resolved by the Accountant, which
proportionate allocations shall also be determined by the Accountant at the time
the determination of the Accountant is rendered on the merits of the matters
submitted or at the time a settlement is reached by the parties hereto. In the
event a Net Working Capital adjustment is determined to be payable, the
adjustments shall be paid within five (5) Business Days of the receipt by both
parties of the Accountant's report. The Accountant's report shall be final,
binding and conclusive on the parties hereto, absent manifest mathematical
error, and such report shall not be subject to appeal or judicial review by any
party. Notwithstanding the foregoing, any amount not in dispute shall be paid
within five (5) Business Days following agreement between the Dion Group and the
Dick Group and the Purchaser.
2.11 QUALIFIED ENVIRONMENTAL TRUST
(1) On December 29, 2000, WSI contributed approximately $918,000 to a
qualified environmental trust ("QET") as such term is defined in Section 248(1)
of the INCOME TAX ACT (Canada), known as the WSI QET, and claimed a deduction in
like amount under Paragraph 20(1)(ss) of the INCOME TAX ACT (Canada) from its
taxable income for the taxation year ended December 31, 2000.
(2) On or before December 31, 2001, WSI intends to contribute an
approximate additional $400,000 to a QET whether or not to the same WSI QET or
another QET.
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(3) If at closing PriceWaterhouseCoopers, historical auditors of WSI,
determine that the deduction from taxable income of WSI in the amount of
$918,000 with respect to the taxation year ended December 31, 2000 or the
approximate $400,000 deducted in the taxation year ended December 31, 2001, if
applicable, is not available, the Vendors and the Purchasers agree as follows:
(a) the Vendors will pay the Tax equal to the amount of income
taxes that otherwise should have been paid by WSI but for
the claiming of the deductions of the amounts deposited by
WSI in a QET for the taxation year ended December 31, 2000
and or December 31, 2001, respectively, together with
interest and penalties, if any;
(b) the Vendors and the Purchaser shall co-operate and do all
things reasonably and commercially practicable to
facilitate WSI setting up a QET which would properly permit
the deduction by WSI from income for income tax purposes of
the amount contributed to such QET with respect to the
cumulative amounts necessary for all taxation years to and
including those ended on December 31, 2001;
(c) in order to secure the payment of the Taxes, interest and
penalties, if any, of the amount that will be payable if
the deductions in the aggregate amount of $1,318,000 to
QET's by WSI is not permitted, contemporaneously with the
closing of the transactions of purchase and sale
contemplated herein, the Vendors and the Purchaser agree
that the Purchase Price for all of the shares being
purchased and sold hereunder shall be adjusted and the cash
amount of the Purchase Price payable in accordance with the
terms hereof and the Purchase Price for the shares being
purchased and sold hereunder shall be reduced (rateably in
respect of the Vendors) by an aggregate amount of $600,000
and a cash amount of $600,000 shall be deposited with the
Purchaser's Solicitors to be held in escrow by them upon
and subject to the terms hereof (such escrowed amount
hereinafter sometimes called the "QET ESCROW AMOUNT");
(d) the QET Escrow Amount shall be held by the Purchaser's
Solicitors and shall be released by them upon the first to
occur of:
(i) the determination by PriceWaterhouseCoopers, the
historical auditors of WSI, that the deductions
from income in respect of contributions to a QET
previously claimed by WSI with respect to either
or both of the 2000 and 2001 taxation years was
inappropriate and Taxes, interest and penalties,
if any, are due and payable, an amount equal to
the amount of Taxes, interest and penalties, if
any, shall be paid to the Canada Customs and
Revenue Agency on account of such Taxes, interest
and penalties, if any;
(ii) if on or before December 31, 2004,
PriceWaterhouseCoopers, historical auditors of
WSI, has not indicated, in writing, its view
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that the deductions taken by WSI for the 2000
taxation year and the 2001 taxation year were
inappropriate, to the Vendors in accordance with
their proportionate interest as an adjusted
increase in the Purchase Price for the shares
being purchased and sold in the transactions of
purchase and sale contemplated herein;
(iii) if any of the QET Escrow Amount is paid to the
Canada Customs and Revenue Agency in accordance
with the foregoing and at any time on or before
December 31, 2004, WSI contributes all or any
portion of approximately $1,318,000 to a QET and
is able to properly claim a deduction in respect
of such amount in computing its income for income
tax purposes then WSI shall pay to the Vendors, in
cash, in accordance with their proportionate
interests, an amount equal to 45.52% of the amount
so deducted by WSI and such amount shall be
treated as an increase in the Purchase Price.
(4) For greater clarity, if it is determined that is any amount on
account of Taxes, interest and penalties, if any, are due and payable by WSI for
the 2000 taxation and/or the 2001 taxation year as a result of the claiming of a
deduction the amount of the contributions to a QET in the aggregate amount of
approximately $1,318,000 and the aggregate amount of such Taxes, interest and
penalties, if any, is less than the QET Escrow Amount, the excess amount, if
any, shall be forthwith paid to the Vendors as an adjusted increase to the
Purchase Price for the shares being purchased and sold in accordance with the
transactions of purchase and sale contemplated herein.
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ARTICLE 3
CLOSING ARRANGEMENTS
3.1 CLOSING. The Closing shall take place at 10:00 a.m. on the Closing Date at
the offices of the Dion Group, Dick Group and WSI Solicitors, or at such other
time on the Closing Date or such other place as may be agreed orally or in
writing by the Dion Group, the Dick Group and the Purchaser (the "CLOSING
TIME").
3.2 DION GROUP AND DICK GROUP CLOSING DELIVERIES. At the Closing, all of the
members of the Dion Group and the Dick Group shall be jointly and severally
liable to deliver or cause to be delivered to the Purchaser the following
documents:
(a) certificates representing the Shares;
(b) assignments of the Shares in the form of Exhibit 3.2(b),
duly executed by the relevant members of Dion Group, the
Dick Group and TD Canada Trust;
(c) the minute books, share certificate books and corporate
seals of 1364927, 1364928 and the Corporations;
(d) a certificate of Dion dated as of the Closing Date in the
form of Exhibit 3.2(d) (bring down);
(e) a certificate of the Dion Trust dated as of the Closing
Date in the form of Exhibit 3.2(e) (bring down);
(f) a certificate of Dion Newco dated as of the Closing Date in
the Form of Exhibit 3.2(f) (bring down);
(g) a certificate of Dick dated as of the Closing Date in the
form of Exhibit 3.2(g) (bring down);
(h) a certificate of Dick Trust dated as of the Closing Date in
the form of Exhibit 3.2(h) (bring down);
(i) a certificate of Dick Newco dated as of the Closing Date in
the form of Exhibit 3.2(i) (bring down);
(j) evidence in form satisfactory to the Purchaser acting
reasonably that the Dion and Dick Consents and Approvals
have been obtained;
(k) the opinion of Dion Group, Dick Group and WSI Solicitors
addressed to the Purchaser and the Purchaser's Solicitors
substantially in the form of Exhibit 3.2(k-1) and 3.2(k-2);
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(l) the written resignation of each Director and Officer and a
release of all claims against the Corporations in the form
of Exhibit 3.2(l);
(m) a release of claims against 1364927, 1364928 and the
Corporations in the form of Exhibit 3.2(m) duly executed by
Dion;
(n) release of claims against 1364927, 1364928 and the
Corporations in the form of Exhibit 3.2(n) duly executed by
Dion Trust;
(o) release of claims against 1364927, 1364928 and the
Corporations in the form of Exhibit O duly executed by Dion
Newco;
(p) release of claims against 1364927, 1364928 and the
Corporations in the form of Exhibit P duly executed by
Dick;
(q) release of claims against 1364927, 1364928 and the
Corporations in the form of Exhibit Q duly executed by Dick
Trust;
(r) release of claims against 1364927, 1364928 and the
Corporations in the form of Exhibit 3.2(r) duly executed by
Dick Newco;
(s) a non-competition agreement in the form of Exhibit 3.2(s)
duly executed by each of Dion and Dick;
(t) all such other assurances, consents, agreements, documents
and instruments as may be reasonably required by Purchaser
to complete the transactions provided for in this
Agreement.
3.3 XXXX' CLOSING DELIVERIES. At the Closing, Xxxx shall deliver to the
Purchaser, the following documents:
(a) the share certificates representing the Xxxx Shares;
(b) an assignment of shares in the form of Exhibit 3.3(b), duly
executed by Xxxx;
(c) a certificate of Xxxx dated as of the Closing Date in the
form of Exhibit 3.3(c) (bring down);
(d) a release of claims against the Corporations in the form of
Exhibit 3.3(d) duly executed by Xxxx (not including as an
employee);
(e) all such other assurances, consents, agreements, documents
and instruments as may be reasonably required by the
Purchaser to complete the transactions provided for in this
Agreement.
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3.4 PURCHASER'S CLOSING DELIVERIES. At the Closing, the Purchaser shall deliver
or cause to be delivered to Dion Group, Dick Group and TD Canada Trust the
following documents and payments:
(a) a certificate of the President or other senior officer of
the Purchaser dated as of the Closing Date in the form of
Exhibit 3.4(a) (bring down);
(b) the payment referred to in Article 2;
(c) evidence in form satisfactory to Dion Group and Dick Group
acting reasonably that the Purchaser's Consents and
Approvals have been obtained;
(d) an opinion of the Purchaser's Solicitors addressed to the
Vendors and the Dion Group, Dick Group and WSI Solicitors
and solicitors to TD Canada Trust substantially in the form
of Exhibit 3.4(e);
(e) intentionally deleted;
(f) intentionally deleted;
(g) the release of claims against each member of the Dion
Group, the Dick Group, Xxxx and TD Canada Trust or any
matter of things to the Time of Closing except with respect
matters arising out of this Agreement of Purchase and Sale
in the form of Exhibit 3.4(h) duly executed by each of the
Corporations.
(h) all such other assurances, consents, agreements, documents
and instruments as may be reasonably required by Dion
Group, Dick Group, Xxxx, XX Canada Trust and WSI to
complete the transactions provided for in this Agreement;
3.5 PURCHASER'S CLOSING DELIVERIES TO XXXX. At the Closing, the Purchaser shall
deliver or cause to be delivered to Xxxx the following documents and payments:
(a) a certificate of the President or other senior officer of
the Purchaser dated as of the Closing Date in the form of
Exhibit 3.4(a) (bring down);
(b) payments of the cash referred to in Section 2.6;
(c) intentionally deleted; and
(d) all such other assurances, consents, agreements, documents
and instruments as may be reasonably required by Xxxx to
complete the transactions provided for in this Agreement.
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3.6 TD CANADA TRUST CLOSING DELIVERIES AND PURCHASER'S CLOSING DELIVERIES TO TD
CANADA TRUST At the Closing, Dion and Dick shall be jointly and severally liable
to ensure that TD Canada Trust delivers to the Purchaser the following
documents:
(a) the share certificates representing the TD Canada Trust
Shares;
(b) an assignment of shares in the form of Exhibit 3.6(b), duly
executed by TD Canada Trust;
(c) the written representations and warranties as and in the
manner specified in Section 2.6A; and
(d) such other assurances, consents, agreements, documents and
instruments as may be reasonably required by the Purchaser
to complete the transfer to the Purchaser of the TD Canada
Trust Shares.
At the Closing the Purchaser shall deliver or cause to be delivered to TD Canada
Trust the following documents and payments:
(e) a certificate of the President or other senior officer of
the Purchaser dated as of the Closing Date in the form of
Exhibit 3.6(e) (bring down);
(f) payments of the cash referred to in Section 2.6A;
(g) intentionally deleted; and
(h) all such other assurances, consents, agreements, documents
and instruments as may be reasonably required by TD Canada
Trust to complete the transactions provided for in this
Agreement.
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ARTICLE 4
CONDITIONS OF CLOSING
4.1 PURCHASER'S CONDITIONS. The Purchaser shall not be obliged to complete the
purchase and sale of the Shares pursuant to this Agreement unless, at or before
the Closing Time, each of the following conditions has been satisfied, it being
understood that the following conditions are included for the exclusive benefit
of the Purchaser and may be waived, in whole or in part, in writing by the
Purchaser at any time; and the Dion Group and the Dick Group agree with the
Purchaser to take all such actions, steps and proceedings as are reasonably
within its control as may be necessary to ensure that the following conditions
are fulfilled at or before the Closing Time:
(1) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Dion Group, the Dick Group and Xxxx in Section 5.1, the Dion Group in
Section 5.2, the Dick Group in Section 5.3 and Xxxx in Section 5.4 shall be true
and correct at the Closing Time.
(2) COMPLIANCE. Each of the Dion Group, the Dick Group and Xxxx shall
have performed and complied with all of the terms and conditions in this
Agreement on its part to be performed or complied with at or before Closing and
shall have executed and delivered or caused to have been executed and delivered
to the Purchaser at the Closing all the documents contemplated in this
Agreement.
(3) DUE DILIGENCE INVESTIGATION. By 5:00 p.m. on January 15, 2002, (the
"TERMINATION TIME") the Purchaser shall have conducted and completed its
investigation of the Dion Group, the Dick Group and the Corporations, the
Business and the Assets, and the Purchaser, in its sole discretion, shall have
been satisfied in all respects with the results of such investigation and, in
its sole discretion, shall have determined to proceed with the transactions
contemplated by this Agreement. If prior to the Termination Time the Purchaser
determines that any of the statements set out in clauses (a) through (i) of
Schedule 9.17 is untrue, incorrect or inaccurate in any respect, then by written
notice to the Dion Group, the Dick Group and Xxxx delivered prior to the
Termination Time, it may terminate its obligations hereunder without any ongoing
liability of any of the Parties to one another other than an obligation of the
Vendors to refund the Deposit. If prior to the Termination Time the Purchaser
determines for any reason other than pursuant to the immediately preceding
sentence, that it is not satisfied with the results of its investigations:
(a) if the reason or reasons for dissatisfaction do not aggregate in
value more than $250,000, then the Purchase Price shall be reduced
by the amount involved but otherwise this Agreement shall remain
in full force and effect; but
(b) if the reason or reasons for dissatisfaction aggregate in excess
of $250,000 then, in its discretion, the Purchaser may by written
notice to the Dion Group, the Dick Group and Xxxx delivered prior
to the Termination Time terminate its obligations hereunder
without any ongoing liability of any of the Parties to one another
other than an obligation of the Vendors to refund the Deposit.
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(4) MATERIAL ADVERSE CHANGE. During the Interim Period, there shall have
been no Material Adverse Change with respect to 1364927, 1364928 and the
Corporations taken as a whole
(5) NO LITIGATION. There shall be no litigation or proceedings:
(a) pending or threatened against any of the Parties or against
any of their respective Affiliates or any of their
respective directors or officers, for the purpose of
enjoining, preventing or restraining the completion of the
transactions contemplated by this Agreement; or
(b) pending or threatened against any of the Parties or against
any of their respective Affiliates or any of their
respective directors or officers which:
(i) in the result, could adversely affect the right of
the Purchaser to acquire or retain the Shares; or
(ii) in the judgment of the Purchaser, would make the
completion of the transactions contemplated by
this Agreement inadvisable.
(6) INVESTMENT CANADA ACT. If the purchase of the Shares by the Purchaser
is a reviewable investment under the INVESTMENT CANADA ACT (Canada), then
either:
(a) the Purchaser shall have received written confirmation that
the Minister responsible for the INVESTMENT CANADA ACT
(Canada) is satisfied that the purchase of the Shares by
the Purchaser is likely to be of net benefit to Canada; or
(b) the time within which the Minister is required to advise
the Purchaser whether the Minister is satisfied that the
purchase of the Shares is likely to be of net benefit to
Canada has expired (unless within that time the Minister
has sent a notice to the Purchaser confirming that the
Minister is not satisfied that the purchase of the Shares
is likely to be of net benefit to Canada).
The Purchaser covenants and agrees to use its reasonable commercial efforts to
diligently prosecute in a timely manner all documents and filing necessary and
desirable in order to pursue an application under S. 17 of the INVESTMENT CANADA
ACT (Canada).
(7) CONSENTS AND APPROVALS. All the Dion and Dick Consents and Approvals
have been obtained.
(8) EXERCISE OF WARRANTS. On or before Closing, each of TD Canada Trust
and Xxxx shall have exercised all of their respective warrants.
(9) SALE BY TD CANADA TRUST. Dion and Dick shall have caused TD Canada
Trust to make all of the deliveries to the Purchaser specified in Section 3.6.
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4.2 CONDITION NOT FULFILLED. If any condition in Section 4.1 has not been
fulfilled at or before the Closing Time or January 15, 2001, as the case may be,
then the Purchaser in its sole discretion may, without limiting any rights or
remedies available to the Purchaser at law or in equity, (provided that in no
circumstances will the aggregate amount of damages payable to the Purchaser
exceed the aggregate amount of $2.0 million) either:
(1) terminate this Agreement by notice to the Dion Group, the Dick Group
and Xxxx, in which event the Purchaser shall be released from its obligations
under this Agreement to complete the purchase of the Shares; or
(2) waive compliance with any such condition without prejudice to its
right of termination in the event of non-fulfilment of any other condition.
4.3 DION GROUP, DICK GROUP AND XXXX CONDITIONS. The Dion Group, the Dick Group
and Xxxx shall not be obliged to complete the transactions contemplated by this
Agreement unless, at or before the Closing Time, each of the following
conditions has been satisfied, it being understood that the following conditions
are included for the exclusive benefit of the Dion Group, the Dick Group and
Xxxx, and may be waived, in whole or in part, in writing by the Dion Group, the
Dick Group and Xxxx at any time; and the Purchaser agrees with the Dion Group,
the Dick Group and Xxxx to take all such actions, steps and proceedings as are
reasonably within the Purchaser's control as may be necessary to ensure that the
following conditions are fulfilled at or before the Closing Time:
(1) NO LITIGATION. There shall be no litigation or proceedings:
(a) pending or threatened against any of the Parties or against
any of their respective Affiliates or any of their
respective directors or officers, for the purpose of
enjoining, preventing or restraining the completion of the
transactions contemplated by this Agreement; or
(b) pending or threatened against any of the Parties or against
any of their respective Affiliates or any of their
respective directors or officers which:
(i) in the result, could adversely affect the right of
the Dion Group and the Dick Group and Xxxx to
acquire or retain the CERI Shares; or
(ii) in the judgment of the Dion Group and the Dick
Group, would make the completion of the
transactions contemplated by this Agreement
inadvisable.
(2) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Purchaser in Section 5.5 shall be true and correct at the Closing Time.
(3) PURCHASER'S COMPLIANCE. The Purchaser shall have performed and
complied with all of the terms and conditions in this Agreement on its part to
be performed or complied with at or before the Closing Time and shall have
executed and delivered or caused to have been executed and delivered to the
Vendors at the Closing Time all the documents contemplated in this Agreement.
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(4) NO MATERIAL ADVERSE CHANGE. During the Interim Period, there shall
have been no material adverse change with respect to the Purchaser.
(5) PURCHASER'S CONSENTS AND APPROVALS. All the Purchaser's Consents and
Approvals have been obtained.
(6) RETIREMENT OF LONG TERM DEBT. To the extent that there is at the
Closing Time any long term debt existing in 1364927, 1364928 and the
Corporations determined on a consolidated basis, then the parties shall adjust
the cash portion of the Purchase Price downward by the amount of the long term
debt (including any costs, fees or penalties that are associated with retirement
thereof only if such amounts are actually paid at the Closing Time) if it was
retired and the Purchaser shall as part of the completion of the transactions
contemplated herein, fund the Corporations with sufficient amounts to enable
them to retire in full at the Time of Closing such long term debt to the extent
any holder thereof requires payment.
(7) COMPLETION OF ALL TRANSACTIONS OF PURCHASE AND SALE The Purchaser
shall not at Closing acquire less than all of the Dion Shares, the Dick Shares,
the Xxxx Shares and TD Canada Trust Shares.
4.4 CONDITION NOT FULFILLED. If any condition in Section 4.3 shall not have been
fulfilled at or before the Closing Time, then the Dion Group, the Dick Group and
Xxxx (collectively and not individually) in their sole discretion may, without
limiting any rights or remedies available to the Dion Group, the Dick Group and
Xxxx (collectively and not individually) at law or in equity (except to the
extent so limited by Section 2.8), either:
(1) terminate this Agreement by notice to the Purchaser in which event
the Vendors shall be released from all obligations under this Agreement; or
(2) waive compliance with any such condition without prejudice to its
right of termination in the event of non-fulfilment of any other condition.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES OF THE DION GROUP, THE DICK GROUP AND XXXX.
As a material inducement to the Purchaser's entering into this Agreement and
completing the transactions contemplated by this Agreement and acknowledging
that the Purchaser is entering into this Agreement in reliance upon the
representations and warranties of the Dion Group, the Dick Group and Xxxx set
out in this Section 5.1, all of the members of the Dion Group, the Dick Group
and Xxxx, jointly and severally represent and warrant to the Purchaser as
follows:
(1) AUTHORIZED CAPITAL. The authorized capital of WSI consists of an
unlimited number of common shares.
(2) ISSUED CAPITAL. As at the date of execution and delivery of this
Agreement, the only issued and outstanding shares in the capital of WSI are 70
common shares. The 1364927 Shares and the 1364928 Shares represent all of the
issued and outstanding shares in the capital of WSI, the 1364927 Shares and the
1364928 Shares are owned, beneficially and of record, by 1364927 and 1364928 in
those numbers set forth in Schedule 5.1(2) hereof. As at the Time of Closing,
there will be an additional 37.69 common shares in the capital of WSI issued and
outstanding and registered in the name of Xxxx as to 5.38 common shares and TD
Canada Trust as to 32.31 common shares.
(3) UNISSUED SHARES. No person, firm or corporation has any agreement or
option or any right capable of becoming an agreement for the purchase,
subscription or issuance of any of the unissued securities in the capital of WSI
other than Xxxx and TD Canada Trust.
(4) CORPORATION SUBSISTING. The Corporations have been duly and validly
incorporated and organized under the laws of the Province of Ontario and have
not been dissolved.
(5) SUBSIDIARIES. WSI owns, both beneficially and of record, all of the
issued and outstanding shares of those Subsidiaries set forth in Schedule
5.1(5). Other than the Subsidiaries set forth in Schedule 5.1(5), WSI does not
have any subsidiaries, own any shares of any other corporation or unincorporated
entity or any rights, options, warrants or other securities of any other
corporation or other incorporated or unincorporated entity, or have any
agreement for the purchase, subscription or issuance of any of the unissued
shares or securities in the capital of any other corporation or unincorporated
entity.
(6) GOOD STANDING. The Corporations have all requisite corporate power
and authority to carry on their business and the Business and to own, lease and
operate the properties and assets now owned, leased and operated by them. The
Corporations are duly qualified to do business and to own, lease and operate its
properties and assets and are in good standing in every jurisdiction in which
the character of the business conducted, or the nature of the properties owned,
leased or operated by such corporation, makes such qualification necessary.
Currently, the Corporations carry on business only in the Province of Ontario.
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(7) MINUTE BOOKS COMPLETE. Each minute book of the Corporations contains
complete copies of its Articles (as that term is defined in the BUSINESS
CORPORATIONS ACT (Ontario)). There are outstanding no applications or filings
which would alter in any way the constating documents or corporate status of any
Corporation. No resolutions or by-laws have been passed, enacted, consented to
or adopted by the directors or shareholders of any Corporation, except those
contained in the said minute books.
(8) NO CONTRAVENTION. The execution and delivery of this Agreement by the
Dion Group and the Dick Group and the observance and performance of the terms
and provisions of this Agreement on the part of the Dion Group and the Dick
Group to be observed and performed by them do not: (i) constitute a violation or
breach of the charter documents, by-laws or any provision of any contract,
indenture, undertaking or other instrument to which any Corporation is a party
or by which any Corporation is bound, or any order, writ, injunction, decree,
statute, rule, by-law or regulation applicable to it, nor do they constitute a
default (either with the passage of time or the giving of notice or both, or
otherwise, constitute a default) under any contract or agreement or instrument
to which any Corporation is a party or by which any Corporation is bound; (ii)
require any consent, approval or authorization of, or declaration, filing or
registration with, any Person, including any Governmental Authority; (iii)
result in any acceleration or termination of, or the creation in any party of
the right to accelerate, terminate, modify or cancel, any contract, indenture,
undertaking or other instrument to which any Corporation is a party or by which
any Corporation is bound; or (iv) result in the creation of any encumbrance upon
the assets of any Corporation.
(9) NO BANKRUPTCY/INSOLVENCY. The Corporations are not insolvent, have
not committed an act of bankruptcy, proposed a compromise or arrangement to its
creditors generally, had any petition for a receiving order in bankruptcy filed
against it, taken any proceeding with respect to a compromise or arrangement,
taken any proceeding to have itself declared bankrupt or wound-up, taken any
proceeding to have a receiver appointed of any part of its assets, had any
encumbrancer take possession of any of its property, or had any execution or
distress become enforceable or become levied upon any of its property.
(10) BOOKS AND RECORDS COMPLETE. The Books and Records have been kept
in accordance with applicable law on a consistent basis and fairly and correctly
set out and disclose in all material respects the current financial position of
the Corporations. All transactions involving the Corporations have been
accurately recorded in such Books and Records. All vacation pay, bonuses,
commissions and other emoluments relating to each of the Employees of the
Business have been accrued to date in such Books and Records.
(11) FINANCIAL STATEMENTS. Except as set forth in Schedule 5.1(11), the
Financial Statements: (i) have been prepared in accordance with GAAP except that
unaudited financial statements may not contain footnotes and are subject to
normal and reoccurring year-end audit adjustments, which will not, individually
or in the aggregate, be material in amount; (ii) present fully, fairly and
correctly, in all material respects, the assets, liabilities and financial
condition of the Corporations as at the relevant dates, and the results of its
operations and the changes in its financial position for the periods then ended;
(iii) are in accordance with the Books and Records; (iv) contain and reflect all
necessary adjustments for a fair presentation of the results of operations and
the financial condition of the Business and the Corporations for the period
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covered thereby; and (v) contain and reflect adequate provision or allowance for
all reasonably anticipated liabilities, expenses and losses of the Corporations.
(12) NO MATERIAL ADVERSE CHANGE. Except as disclosed elsewhere in this
Agreement, since the date of the Financial Statements, there has been no
Material Adverse Change.
(13) RELATED PARTY TRANSACTIONS. Since the date of the Financial
Statements, no payments have been made or authorized of the Corporations to and
the Corporations have not entered into any transactions with, their officers,
directors, shareholders or employees, any of the Affiliates of such persons
except to employees in the ordinary course of the business and at the regular
rates of salary or remuneration, including bonuses payable to such persons.
(14) TITLE OF ASSETS. Subject to Section 5.1(44) and except as set
forth in the Financial Statements, the Corporations are the owners of all the
property and assets shown in the Financial Statements or used by it in
connection with the Business (excluding property and assets leased to or
licensed by a Corporation), with good and marketable title thereto free of any
lien, claim, security interest or encumbrance of any nature or kind and of any
rights or privileges capable of becoming claims, liens, security interests or
encumbrances. Without limiting the generality of the foregoing, none of the Dion
Group, the Dick Group, their Affiliates, their Associates, the Corporations'
consultants or clients, nor the Employees own or possess any of the assets
(including, any Intellectual Property) used by the Corporations in the Business.
(15) OTHER LIABILITIES. The Corporations are not now subject to any
liabilities or obligations, direct or indirect, absolute or contingent, other
than the liabilities or obligations set forth in the Financial Statements and
those arising since the date of the Financial Statements in the ordinary course
of business, none of which is materially adverse and all of which in the
aggregate are not materially adverse. There are no facts or circumstances which
might reasonably serve as the basis for, or give rise to, any material
liabilities or obligations on the part of the Corporations, other than
liabilities or obligations disclosed in the Financial Statements, or arising
thereafter in the ordinary course of business (none of which is materially
adverse).
(16) SHAREHOLDER INDEBTEDNESS. Except amounts owing among the
Corporations, as disclosed in the Financial Statements, the Corporations are not
indebted to any of its Employees, officers, directors or shareholders in any
manner whatsoever or to any of their respective Affiliates, including the Dion
Group or the Dick Group.
(17) NO GUARANTEES. Except for guarantees among the Corporations, the
Corporations have not guaranteed or otherwise given security for or agreed to
guarantee or give security for any liability, debt or obligation of any other
person, firm or corporation.
(18) NO JUDGMENTS. There are no judgments or executions outstanding
against the Corporations nor are there any suits, actions or legal,
administrative, arbitration or other proceedings or governmental investigations
affecting the business, operations, prospects, property or affairs of the
Corporations pending or, threatened against the Corporations.
(19) REGULATORY COMPLIANCE. The Business has been and is now being
conducted and operated in compliance, in all material respects, with all
statutes, by-laws, regulations, orders, covenants, restrictions or plans of all
federal, provincial or municipal authorities, agencies,
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boards or licensing bodies applicable to the Corporations and the Business. To
the best of Dion's or Dick's knowledge, there is no threatened suspension,
cancellation or invalidation of any approval, license, permit or certificate
held by the Corporations, the Dion Group or the Dick Group in connection with
the Business.
(20) MATERIAL CONTRACTS. Except as set out in Schedule 5.1(20), the
Corporations are not a party to, bound by, or entitled to rights or bound by
obligations under, any material contracts, agreements, undertakings,
commitments, letters of intent, understandings, licenses, instruments,
arrangements, leases or other documents (oral or written) (collectively, the
"MATERIAL CONTRACTS") or any amendments, modifications or supplements thereto
which in any way affect the Business (which term excludes those entered into in
the ordinary course of business which involve a cost, expenditures or liability
of less than $20,000 for each such Material Contract or which are terminable by
the Corporations on thirty (30) days notice without financial or other
liability). There are no leases or other instruments or agreements pursuant to
which the Corporations have granted a right to use any personal property
comprising part of its assets to any other person, firm or corporation.
(21) COMPLIANCE WITH MATERIAL CONTRACTS. The Corporations are not in
default in any material respect of any obligation under any Material Contract to
which it is a party, or by which it is bound. There exists no state of facts,
conditions, events or circumstances which, after notice or lapse of time or
both, would constitute a default in any material respect of any obligation under
any Material Contracts by the Corporations or, to the best of Dion's or Dick's
knowledge, by any other party thereto, and all Material Contracts are now in
good standing and in full force and effect and the Corporations are entitled to
all its benefits thereunder. The execution of this Agreement and the
consummation of the transactions herein contemplated will not, in any way,
affect the validity, enforceability or continuity of any Material Contract or
result in an increase or decrease in any amounts payable thereunder. The
Corporations have not made any assignment or sub-lease of any of its rights
under any of the Material Contracts. Upon request of the Purchaser, the Dion
Group and the Dick Group will provide to the Purchaser a true and complete copy
of any written Material Contract. None of the written Material Contracts has
been amended or modified except as set out in Schedule 5.1(20). Each of the
Material Contracts is a legal, valid and binding obligation of the Corporations
and is enforceable except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization and other laws affecting creditors rights
and by general principles of equity.
(22) EMPLOYMENT ARRANGEMENTS.
(a) Schedule 5.1(22) contains a complete list of:
(i) all written or oral contracts or arrangements for
the employment of any officer, Employee, agent or
consultant to which the Corporations are a party,
other than oral contracts or arrangements for the
employment of any person, which employment is
terminable upon the delivery by the applicable
Corporation of reasonable notice of termination
determined in accordance with applicable laws; and
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(ii) all full-time Employees (other than hourly-paid
Employees), their salaries and wage rates, their
positions and their length or service and
particulars of any contracts, arrangements or
understandings with them.
(b) The Corporations are not a party to or otherwise bound by,
any consent decree with, or citation by, any Governmental
Authority relating to Employees or employment practices,
wages, hours, and terms and conditions of employment. The
Corporations have paid in full to all of its Employees, or
accrued in its financial books and records, all wages,
salaries, commissions, bonuses, benefits, and other
compensation due to such employees or otherwise arising
under any policy, practice, agreement, plan, program,
statute or other law. The Corporations are liable for any
notice of termination, severance pay or other payments to
any Employee or former employee arising from the
termination of employment prior to closing, and the
Corporations will not have liability under any benefit or
severance policy, practice, agreement, plan, or program
which exists or arises, or may be deemed to exist or arise,
and under any applicable law or otherwise, as a result of
or in connection with the transactions contemplated
hereunder or as a result of the termination by the
Corporations of any persons employed by the Corporations on
or prior to the date hereof. The Corporations have not
closed any plant or facility, nor implemented any early
retirement program within the past five years nor has any
of the Corporations planned or announced any such action or
program for the future.
(23) EMPLOYEE BENEFIT PLANS.
(a) Schedule 5.1(23) contains a true and complete list of each
bonus, deferred compensation, incentive compensation, share
purchase, share appreciation and share option, severance or
termination pay, hospitalization or other medical benefits,
life or other insurance, dental, disability, salary
continuation, dependent care, vacation, supplemental
unemployment benefits, profit-sharing, mortgage assistance,
pension, retirement or supplemental retirement plan,
program, agreement or arrangement, and each other Employee
benefit plan, program, agreement or arrangement sponsored,
maintained or contributed to or required to be contributed
to by the Corporations for the benefit of any Employee or
former employee of the Corporations, whether or not insured
or funded, whether formal or informal, whether or not
subject to any applicable legislation and whether or not
legally binding (collectively the "EMPLOYEE PLANS"). The
Corporations do not have a "registered pension plan" as
that term is defined in the INCOME TAX ACT (Canada). The
Corporations do not have a formal plan or commitment,
whether legally binding or not, to create any additional
Employee Plan or to modify or change any existing Employee
Plan that would affect any Employee or former employee of
the Corporations, except such modification or amendment
required to ensure
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the continued registration of any existing Employee Plan
with any applicable governmental authority having
jurisdiction over such Employee Plan.
(b) With respect to each of the Employee Plans, the Purchaser
has received true and complete copies of each of the
following documents:
(i) a copy of the current text of the Employee Plan
(including all amendments thereto and all prior
Employee Plan texts);
(ii) a copy of all employee communications relating to
the Employee Plan, whether or not such
communications have been, or are required to be,
filed with any governmental authority;
(iii) if the Employee Plan is funded through a trust or
any third party funding arrangement, a copy of the
trust or other funding agreement (including all
amendments thereto and any prior funding
agreement) and the financial statements thereof
for the last three completed fiscal years; and
(iv) any contract under which the any of the
Corporations may have any liability in connection
with any of the Employee Plans, including
insurance contracts, investment management
agreements, subscription and participation
agreements and record keeping agreements.
(c) No Employee Plan provides benefits, including death or
medical benefits (whether or not insured) to Employees or
former employees of the Corporations beyond retirement or
other termination of service, other than (i) coverage
required by law, (ii) deferred compensation benefits
accrued as liabilities in the Financial Statements, or
(iii) benefits the full cost of which are borne by the
Employee or former employee (or his beneficiary).
(d) There are no pending, and to the best of Dion's and Dick's
knowledge, threatened or anticipated claims involving any
of the Employee Plans, including claims by or on behalf of
any of the Employee Plans against any other party (other
than routine claims for benefits). All of the Employee
Plans are in good standing.
(24) LABOUR UNIONS. The Corporations have not made any agreements with
any labour union or employee association or made commitments to or conducted
negotiations with any labour union or employee association with respect to any
future agreements, and the Dion Group and the Dick Group are not aware of any
current attempts to organize or establish any labour union or employee
association relating to the Business. No grievance is pending or, to the best of
Dion's and Dick's knowledge, threatened and there are no pending or outstanding
arbitration awards in respect of the Corporations. No action, suit, complaint,
charge, arbitration, enquiry, prosecution, proceeding or investigation by or
before any court, governmental ministry, governmental agency, administrative
agency, commission or tribunal brought by or on behalf of
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any employee of the Corporations is pending or threatened against the
Corporations including any labour relations board.
(25) SOLICITATION OF EMPLOYEES. With the exception that Dion and Dick
will cease to be Employees of the Corporations, no Corporation nor any of the
Dion Group and the Dick Group has entered into any agreement or made any
arrangements with any of the Employees which would have the effect of depriving
the Purchaser or the Corporation of the continued services of any such Employee
following the Closing Date.
(26) PERSONAL PROPERTY LEASES. Each of the Leases is in good standing
and the Corporations are not in default in payment of rent or in the performance
in any material respect of any of its other obligations thereunder. The Dion
Group and the Dick Group have provided to the Purchaser true and complete copies
of all such Personal Property Leases, including supplements, amendments and
modifications thereof. None of such Personal Property Leases has been or is
being further modified or amended or assigned. In addition, the lessors under
the Personal Property Leases are not in breach, in any material respect, of any
of their obligations thereunder. No state of facts exists which after notice or
lapse of time or both or otherwise would result in a breach or default, in any
material respect, under any of the Personal Property Leases. The Corporations do
not have any interest in, or any right or obligation to acquire any interest in,
any other leased property. The Dion Group and the Dick Group and the
Corporations, as lessee under the Personal Property Leases, have not entered
into or agreed to enter into any subleases, licenses or concessions with respect
to any such Lease. Assuming proper authorization and execution thereof by the
lessors, the Personal Property Leases are valid, legally binding and
enforceable, except that the rights and remedies of the parties thereto may be
subject to and affected by the law relating to bankruptcy, insolvency,
reorganization and creditors' rights generally and except that a court may or
may not order an injunction, specific performance or other equitable remedies
with respect to any particular provision of the Personal Property Leases.
(27) ORDINARY COURSE OF BUSINESS. Since the date of the Financial
Statements of the Corporations, the Corporations have carried on the Business in
the ordinary course. Without limiting the generality of the foregoing, since the
date of the Financial Statements of the Corporations, except as otherwise
disclosed herein, the Corporations have continued to incur, pay, satisfy and
discharge its obligations and liabilities in the ordinary course of its business
and has not:
(a) written off and/or disposed of any of its Inventories or
accrued volume rebates or advertising allowances, other
than in the ordinary course of its business;
(b) sold or transferred any of its tangible assets or cancelled
or released any debts or claims, except for obsolete items
which had a nil value on the Financial Statements or
replaced items, or in the ordinary course of its business;
(c) sold, leased, mortgaged, pledged or otherwise encumbered or
disposed of any of its assets or properties, except for
obsolete items which had a nil
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value on the Financial Statements or replaced items in the
ordinary course of its business;
(d) purchased or agreed to purchase, nor leased or agreed to
lease, nor acquired or agreed to acquire any additional
assets or property, except as disclosed in this Agreement
and except for purchases of materials and supplies for use
in the ordinary course of its business;
(e) suffered any material damage, destruction or physical loss,
whether or not covered by insurance;
(f) sold, assigned, transferred, encumbered or granted any
rights with respect to its trade marks or trade names or
other intangible assets;
(g) incurred any debt, liability or obligation whatsoever,
absolute or contingent, secured or unsecured, other than
current liabilities in the ordinary course of its business,
or entered into any transaction or into any Material
Contract whatsoever, other than in the ordinary course of
its business; or
(h) made any change in its accounting principles, practices or
methods as heretofore applied, including the basis upon
which its assets and liabilities are recorded on its books,
its earnings and profits and losses are ascertained, or in
its methods or rates of depreciation or amortization except
for the treatment of the item formerly noted as a
post-closure fund (which is now being noted as "Investment
Fund") and except for the treatment of the regional tax
accrual which was a current liability (which is now shown
as a separate liability and not included in the current
liabilities).
(28) INTELLECTUAL PROPERTY. The Corporations are the sole owner of all
right, title and interest in and is entitled to use, without payment of any
royalty or other fee, all Intellectual Property now used by it in the course of
carrying on the Business. All registered Intellectual Property held by the
Corporations is valid and subsisting. Schedule 5.1(28) contains a complete and
accurate list of all Intellectual Property, together with full registration and
other particulars thereof, including any fees payable in connection therewith.
The Intellectual Property used in conjunction with the Business has not been and
is not at present being used by any other person, firm or corporation. The right
of the Corporations to use the Intellectual Property used by it in connection
with the Business has never been called into question or challenged and the
Corporations are not infringing upon any industrial or intellectual property
rights of any other person, firm or corporation. None of the Corporations nor
either of the Dion Group or the Dick Group has received any notice (written or
oral) that, and is not otherwise aware that, any person, firm or corporation
claims that the conduct of the Business infringes upon the Intellectual Property
rights of any person, firm or corporation. The Corporations have not granted any
right, title or interest in and to the Intellectual Property used by it in
connection with the Business to any other firm, person or corporation.
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(29) BANKING. Schedule 5.1(29) contains a true and complete list
showing the name and address of each financial institution in which the
Corporations have an account or safety deposit box (and the details of the said
accounts and safety deposit box(es)) and the names of all persons authorized to
draw thereon or who have access thereto, and a complete list and brief
description of each power of attorney presently in force and given of the
Corporations.
(30) INSURANCE. Schedule 5.1(30) contains a true and complete list
setting forth all insurance policies now in full force and effect (specifying
the insurer, the amount of the coverage, the type of insurance, the annual
premium, the amount of deductible, if any, the policy number and any pending
claims thereunder) maintained by the Corporations on the assets of the
Corporations or in relation to the Business and true and complete copies of the
most recent inspection reports, if any, received from insurance underwriters as
to the condition of the assets of the Corporations. Neither the Dion Group and
the Dick Group nor the Corporations are in default in any material respect under
any of the provisions contained in any insurance policy or has failed to pay all
premiums due under any such insurance policy to date or to give any notice or
present any claim under any such insurance policy in due and timely fashion.
Since the date of the Financial Statements, there have been no material claims
under any such insurance policy.
(31) NO BROKER. There is no broker, finder or other person who has any
valid claim against the Purchaser for a commission, finder's fee or brokerage
fee in connection with this Agreement or the consummation of the transactions
contemplated hereby, by virtue of any action taken by the Dion Group, the Dick
Group or the Corporations.
(32) FORWARD COMMITMENTS. All forward commitments by or to the
Corporation for supplies or services for use in connection with the Business
(whether or not there are any contracts in writing with respect thereto) which
are in existence as of the date of this Agreement have been entered into by it
in the ordinary course of business and upon terms and conditions consistent with
the Corporations' usual past practices.
(33) TAXATION.
(a) The Corporations have duly and timely filed in proper form
all federal, provincial and other income, franchise, value
added, sales and other tax returns and all reports required
to be filed by law. All Taxes, fees and other assessments
of whatsoever nature relating thereto (including tax
instalment payments) upon the Corporations or its assets or
property which are due and payable up to the date hereof
(including with respect to the taxation year ending as a
result of the closing of this transaction) have been paid,
or have had a charge, accrual or reserve in respect thereof
established on the books of the Corporations.
(b) There are no outstanding agreements, waivers or other
arrangements extending the statutory period of limitation
applicable to the filing of any federal, provincial or
other income tax return of the Corporations for any period,
nor has there been any assessment or reassessment by any
taxing authority issued or threatened against any
Corporation with respect to the
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payment of any Taxes, charges or deficiencies of any
Corporation which remains outstanding.
(c) All information set forth in all federal, provincial or
other income or corporation tax returns which have been
filed by the Corporation is true and correct in all
material respects. Complete copies of the Corporations tax
returns for the previous two (2) taxation years, together
with all notices of assessment or reassessment for such
taxation years, will be provided to the Purchaser upon
execution of this Agreement.
(d) There are no liabilities for Taxes, rates or assessments of
any nature or kind not shown as charges, accruals or
reserves on the Financial Statements of the Corporations
for the period(s) covered thereby. There are no actions,
suits, proceedings, investigations or claims, pending or,
threatened against any Corporation in respect of any Taxes
or assessments or any claims for additional Taxes or
assessments asserted by any taxing authority. The charges,
accruals and reserves on the books of the Corporations in
respect of any liability for Taxes for any year not finally
determined are sufficient to meet any assessment or
reassessment for additional Taxes for any year not finally
determined.
(e) The Corporations have withheld from payments made to its
officers, directors, employees, debt holders, shareholders
or any spouse, Associate or Affiliate of any of the
foregoing, the amount of all Taxes including but not
limited to, income tax, federal or provincial pension and
medical plan contributions, unemployment insurance
contributions and other deductions required to be withheld
therefrom, and has paid the same to the proper tax
receiving officers or authorities. The Corporations have
withheld from payments to any non-resident person and
remitted to the Receiver General for Canada all amounts
required to be withheld by the Corporations pursuant to
Part XIII of the INCOME TAX ACT (Canada).
(f) All of the Corporations (except Mer Bleue Developments
Inc.) are registered under Part IX of the EXCISE TAX ACT.
(34) ENVIRONMENTAL.
(a) The Corporations have not received a notice that has not
been fully resolved that the Corporations are a party
potentially responsible to commence clean-up or remedial
action or to prepare studies, action plans or clean-up
strategies in respect to the environmental condition of its
business facilities or properties. The Corporations have
not received any request for information in connection with
any inquiry or investigation by any Governmental Authority
concerning environmental matters that had not been fully
resolved.
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(b) The Corporations have not received any notice or other
written communication that the Real Property is located
within an environmentally sensitive area as determined and
made public by any Governmental Authority.
(35) WORKERS' COMPENSATION MATTERS. The Corporations have paid all
assessments pursuant to worker's compensation legislation levied by all
Governmental Authorities and the Corporations do not have any liability for and
there is not pending, to the best of Dion and Dick's knowledge, any state of
facts which may result in the levying of a special assessment or a penalty
charge of any nature with respect to the period prior to the Closing Time. The
Corporations have filed on a timely basis all payroll statements and other
returns and statements required to be filed pursuant to applicable worker's
compensation legislation. The Corporations are not liable to indemnify any of
its employees or any governmental body in respect of compensation and/or
health-care payable to its employees pursuant to applicable worker's
compensation legislation. The Corporations have notified the relevant
Governmental Authorities, within the time periods specified by applicable
legislation, of all occurrences of accidents for which notification is required
by applicable legislation and has provided requisite details thereof. The
Corporation has complied with all requirements of the assessors/auditors from
Workers' Compensation with respect to any deficiencies including any arrears in
payments.
(36) CLIENT RELATIONS. Save and except for the expiry of any customer
contract by passage of time, there has not been any Material Adverse Change in
relations with clients or suppliers of the Business since January 1, 2001and no
such change is anticipated including as a result of the transactions
contemplated herein other than changes that may occur in relations with
customers who are engaged in the waste haulage and/or disposal business. The
Corporations have not had a significant problem in obtaining in a timely manner
and at reasonable cost any and all materials (raw, finished or otherwise) used
or to be used in the business of the Corporations, nor do Dion and Dick have any
reason to believe the Corporations will have any significant problem in
obtaining such materials in the future. The Corporations have not received
written notice of intent to terminate any material contracts or agreements for
the purchase of the products of the Corporations, nor do Dion and Dick have
knowledge of any circumstances which are likely to result in the five largest
customers of the Corporations (based upon sales in the last fiscal year),
materially decreasing their use of the services of the Business during the 12
months immediately after the Closing Date other than the circumstance it is
possible that customers in the waste haulage and/or disposal business may cease
to carry on business with the Corporation for an indeterminate period of time as
a result of the acquisition of the Corporation by the Purchaser.
(37) DIVIDENDS. No dividends or other distributions (in cash or other
property) on any of the shares of the Corporations have been authorized,
declared or paid since the date of the Financial Statements.
(38) ACCOUNTS RECEIVABLE. All accounts receivable of the Corporations
have been bona fide created in the ordinary course of business and the provision
for doubtful accounts established in connection therewith is or will be at the
Closing Time reasonable. The accounts receivable of the Corporations are free of
all claims, liens, security interests, encumbrances and rights of set-off
whatsoever.
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(39) COMPUTER SYSTEMS. The Corporations' computer system, including
mainframes, mini-computers, personal computers and special purpose systems are
fully operational and have adequate documentation describing, among other
things, the operation of the hardware, required maintenance or other operational
procedures, all operating systems, applications and utilities. The documentation
matches the implementation of the hardware and software in use as of the date
thereof. The Corporations are in material compliance with all legal obligations
with respect to all software used by it and have licenses to use all software
currently used by it which it does not own.
(40) UNFILLED ORDERS. All unfilled orders received by the Corporations
in connection with the Business which are in existence as of the date of this
Agreement have been accepted by it in the ordinary course of business and upon
terms and conditions consistent with the Corporations' usual past practices.
(41) PAY EQUITY. The Corporations have complied with all of its
obligations under applicable "pay equity" legislation and is not required to and
has not filed or published any "pay equity" plans with any governmental or
regulatory authority or with its Employees.
(42) BANK INDEBTEDNESS. Schedule 5.1(42) contain a summary as at the
date hereof of all amounts which would constitute Long-Term Debt, including all
accrued and unpaid interest. No other amounts, whether current or long-term are
owing by any Corporation to its lenders.
(43) CONDITION AND SUFFICIENCY OF ASSETS. All facilities, machinery and
equipment owned or used by the Corporations in connection with the Business are
in good operating condition and in a state of good repair and maintenance,
reasonable wear and tear excepted.
(44) REAL PROPERTY.
(a) Schedule 5.1(44) contains a list which sets out the
registered and beneficial owner(s) of the Real Property.
Except for Permitted Liens, each parcel of Real Property is
held by the owner(s) thereof, with a good and marketable
title in fee simple and there is no indebtedness,
agreement, lease, option, right of first refusal, right of
first opportunity, claim, account or other outstanding
obligation which may, by operation of law or otherwise,
whether registered or unregistered, constitute a lien on
the Real Property (including liens arising pursuant to
construction lien laws in connection with the supply of
materials to or provision of labour or services on the Real
Property) and there is no security interest, mortgage,
charge, encumbrance, encroachment, easement, right-of-way,
restriction, lease or other interest whatsoever affecting
the Real Property or any part thereof. Each beneficial
owner as disclosed in Schedule 5.1(44) has held beneficial
ownership of its interest in the respective Real Property
as shown in Schedule 5.1(44) and there has been no change
in the beneficial ownership of such Real Property since
July 17, 1999.
(b) With respect to the Real Property except as set out on
Schedule 5.1(44)(b):
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(i) the structures, appurtenances, fixtures and
improvements on the said properties do not
encroach on property of others, and are not
encroached upon by structures or improvements of
others;
(ii) there are full, uninterrupted and unencumbered
rights of ingress to and egress from the Real
Property, to and from the public roads abutting or
adjacent to the Real Property for all pedestrians
and vehicles utilizing the Real Property along the
full frontages of the Real Property along such
road(s), all entrances and exits to the Real
Property are permitted under law, and the Dion
Group and the Dick Group have no knowledge of any
fact or condition which could result in the
amendment or termination of such rights;
(iii) the buildings and all other improvements, fixtures
and structures located on the Commercial Property
(including all walls, roofs, floors, sub-floors,
foundations, partitions and ceilings) and the
pavement, sidewalks, driveways and parking areas
situate upon each of the said properties are in
good working order and sound condition and in a
good state of repair and maintenance and free from
all structural defects, weaknesses and leakages,
and the elevators, if any, and equipment and all
plumbing, drainage, electrical systems and all
wiring and mechanical equipment (including all
heating, ventilating and air-conditioning
equipment and related accessories and
installations), and all other equipment contained
in, on, about or used in connection with the
Commercial Property are in good working order and
repair, and sufficient for use for which such
equipment is being employed;
(iv) all hydro, water, sewer, gas, electric, telephone,
drainage and other utility equipment, facilities
and services and all mechanical systems (as
aforesaid), in each case as required by law and/or
necessary for the proper operation of the
Commercial Property as now being operated, are
installed and connected pursuant to valid permits,
and are adequate to service the Commercial
Property and the cost thereof is not chargeable
against any of the Commercial Property by way of
local improvement charges;
(v) all buildings, fixtures, structures and other
improvements upon the Real Property and the
purposes for which the Real Property is currently
used by the Corporations comply in all respects
with all relevant governmental laws, by-laws,
ordinances, requirements, rules and regulations
(including municipal and provincial fire
regulations and pollution control regulations) and
with Fire Underwriters' regulations;
(vi) the Real Property is currently used in compliance
with all laws applicable thereto; each of the
owners of the Real Property has all
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of the necessary licenses and permits for the
operation of the Real Property for its present
use, such licenses and permits are in full force
and effect and the Real Property is zoned to
permit all of the uses for which the Real Property
is used;
(vii) none of the Corporations nor any of the Dion Group
and the Dick Group has received any notice from
any insurance carrier of defects or inadequacies
in the Real Property which, if not corrected,
could result in termination of insurance coverage
or an increase in the cost thereof, and there are
no such defect or inadequacies;
(viii) there has not been received by any of the
Corporations, the Dion Group or the Dick Group or
by anyone on their behalf, any notice with respect
to any by-law change affecting the Real Property
nor any notice relating to any threatened or
pending condemnation or expropriation of any of
the Real Property from any governmental
department, branch, agency, office or other
authority, and, to the best of Dion's and Dick's
knowledge, there are no pending or threatened
requests, applications or proceedings to alter or
restrict the zoning or other use restrictions
applicable to the Real Property or changes or
events which might curtail or interfere with the
use of the Real Property;
(ix) no notice has been received by the Corporations,
the Dion Group or the Dick Group or by anyone on
their behalf from any government authority or from
any other source whatsoever, advising of any
defect in the buildings and all other
improvements, fixtures and structures located on
the Real Property or ordering, directing or
requiring that any alteration, repair, improvement
or other work be done with respect thereto or
relating to non-compliance with any law regarding
construction, state of repair, state of completion
or land use or any other law (including, without
limitation, federal, provincial and municipal
legislation, regulations, orders and ordinances);
(x) no part of the Real Property has been expropriated
and no notice has been received by the
Corporations, the Dion Group or the Dick Group or
by anyone on their behalf, with respect to an
expropriation or pending expropriation of part or
all of the Real Property;
(xi) the realty taxes applicable to the Real Property
have not been reduced, deferred or eliminated
pursuant to government schemes such as (but not
limited to) the Ontario Farm Tax Rebate Program,
the Ontario Managed Forest Tax Rebate Program and
the Conservation Land Tax Rebate Program; neither
the Dion Group
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nor the Dick Group has any knowledge of any
proposal by a municipal corporation or other
government authority to increase the realty taxes
applicable to the Real Property;
(xii) each of any outstanding site-plan, development and
other municipal agreements affecting the Real
Property have been fully complied with and
satisfied or the relevant municipality holds
sufficient security to ensure compliance; and
(xiii) the Corporations, the Dion Group and the Dick
Group nor anyone on their behalf has received
notice of and is not otherwise aware of any
pending or proposed amendment to any law
(including federal, provincial and municipal
legislation, regulations, orders and ordinances)
applicable to the Real Property, or of any
planning report or other government study
concerning the Real Property, any of which shall
or could result in any material change to the Real
Property or materially limit or affect the use
thereof.
(45) CAPITAL EXPENDITURES. No capital expenditures or leasehold
improvements have been made by the Corporations or in connection with the
Business since the date of the Financial Statements for the Corporations, except
in the ordinary course of business.
(46) NO UNDISCLOSED FACTS. In the course of the conduct of the purchase
investigations made by the Purchaser and its representatives and agents neither
the Dion Group and the Dick Group nor any of the Corporations have made any
untrue statement of fact or omitted to state a fact that is required to be
stated or that is necessary to make a statement not misleading in the light of
the circumstances in which such statement was made.
(47) REAL PROPERTY LEASES. None of the Corporations (in connection with
or for use by the Business) leases any real property as a tenant.
(48) LICENCES AND PERMITS. Schedule 5.1(48) lists all the Licences and
Permits and identifies the ones that by their terms are not transferable. The
Corporation holds the Licences and Permits free and clear of any and all Liens.
All the Licences and Permits are in full force and effect, the Corporation is
not in violation of any term or provision or requirement of any such Licences
and Permits, and no Person has threatened to revoke, amend or impose conditions
in respect of, any Licence or Permit.
(49) DION AND DICK CONSENTS AND APPROVALS. All the Dion and Dick
Consents and Approvals are listed in Schedule 5.1(49). Except for the Dion and
Dick Consents and Approvals, no consent or approval of any Person is required in
connection with the execution and delivery of this Agreement and the completion
by the Dion Group, the Dick Group, TD Canada Trust and Xxxx of the transactions
contemplated by this Agreement or to permit the Corporations to carry on the
Business after the Closing as the Business is currently carried on by the
Corporations.
(50) DION AND DICK NOTICES. All the Dion and Dick Notices are listed in
Schedule 5.1(50). Except for the Dion and Dick Notices, no notice is required to
be delivered to any Person in connection with the execution and delivery of this
Agreement and the completion
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of the transactions contemplated by this Agreement or to permit the Corporations
to carry on the Business after the Closing as the Business is currently carried
on by the Corporations.
(51) INFORMATION The information previously provided to the Purchaser
as attached in Schedule 5.1(51) is accurate in all material respects except as
otherwise disclosed in this Agreement.
(52) NO LIABILITIES At the Closing Time, neither 1364927 nor 1364928
shall have any Liabilities.
5.2 REPRESENTATIONS AND WARRANTIES OF DION GROUP . The Dion Group hereby jointly
and severally represent and warrant as follows and hereby acknowledge and
confirm that the Purchaser is relying on such representations and warranties in
connection with the purchase by the Purchaser of the Dion Shares:
(1) GOOD TITLE OF WSI SHARES. 1364927 is the owner, beneficially and of
record, of 35 common shares of WSI being 50% of the issued and outstanding
shares of WSI with good and marketable title thereto, free of any claim, lien,
security interest or encumbrance of any nature or kind.
(2) GOOD TITLE OF SHARES OF 1364922 At the Time of Closing the members of
the Dion Group will own all of the issued and outstanding shares of all classes
in the capital of 1364927 with good and marketable title thereto, free of any
claim, lien, security interest or encumbrance of any nature or kind and as such
will have the exclusive right and full power to transfer and assign the Dion
Shares to the Purchaser free of any claim, lien, security interest or
encumbrance of any nature or kind. In addition, no person, firm or corporation
has any agreement or option or any right capable of becoming an agreement for
the purchase of the Dion Shares. There is not pending any suit, action or other
legal proceeding of any sort to in any manner restrain or prevent the Dion Group
from effectually and legally transferring the Dion Shares to the Purchaser, free
and clear of all claims, liens, security interests and encumbrances, or any
action or proceeding, the effect of which would be to cause a lien to attach to
any of such Dion Shares or to divest title to any of such member of the Dion
Group in any manner whatsoever, or to make the Purchaser, or 1364927 liable for
damages as a result of the execution and delivery of this Agreement by the Dion
Group or the completion by the Dion Group of the transactions contemplated
herein and the members of the Dion Group knows of no such claim in connection
with any of the foregoing knows of no such claim in connection with any of the
foregoing.
(3) NO CONTRAVENTION. The execution and delivery of this Agreement by the
Dion Group and the observance and performance of the terms and provisions of
this Agreement on the part of the Dion Group to be observed and performed by
them do not: (i) constitute a violation or breach of the Dion Group's respective
governing documents or any provision of any contract, indenture, undertaking or
other instrument to which any member of the Dion Group is a party or by which
any of them is bound, or any order, writ, injunction, decree, statute, rule,
by-law or regulation applicable to any of them, nor do they constitute a default
(either with the passage of time or the giving of notice or both, or otherwise,
constitute a default) under any contract or agreement or instrument to which any
of them is a party or by which any member of the Dion Group is bound;
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or (ii) require any consent, approval or authorization of, or declaration,
filing or registration with, any Person, including, without limitation any
Governmental Authority.
(4) EXECUTION AND DELIVERY.
(a) The execution and delivery of this Agreement by each of
Xxxx, Xxxx Trust and Dion Newco and the sale of the Dion
Shares herein provided for have been duly authorized by all
necessary action and each of Xxxx, Xxxx Trust and Dion
Newco has all requisite power and authority or legal
capacity, as the case may be, to enter into this Agreement
and to carry out the transactions of purchase and sale
contemplated herein and to perform its obligations
hereunder and pursuant to all other agreements required to
be delivered hereunder.
(b) This Agreement has been duly and validly executed and
delivered by each of Xxxx, Xxxx Trust and Dion Newco and
constitutes a valid and legally binding agreement,
enforceable against each of Xxxx, Xxxx Trust and Dion Newco
in accordance with its terms; except that the rights and
remedies of the Purchaser hereunder may be subject to and
affected by the law relating to bankruptcy, insolvency,
reorganization and creditors' rights generally and except
that a court may or may not order an injunction, specific
performance or other equitable remedies with respect to any
particular provision of this Agreement.
(5) NO BANKRUPTCY/INSOLVENCY. Each of Xxxx, Xxxx Trust and Dion Newco is
not insolvent, has not committed an act of bankruptcy, proposed a compromise or
arrangement to its creditors generally, had any petition for a receiving order
in bankruptcy filed against it, taken any proceeding with respect to a
compromise or arrangement, taken any proceeding to have itself declared bankrupt
or wound-up, taken any proceeding to have a receiver appointed for any part of
its assets, had an encumbrancer take possession of any of its property, or had
any execution or distress become enforceable or become levied upon any of its
property.
(6) RELATED AGREEMENTS. There are no agreements, written or oral, to
which any member of the Dion Group or any of its Affiliates or Associates is a
party with the Corporation or to which any of such Persons is a party or by
which any of them is bound in respect of the Dion Shares that would prevent the
Dion Group from carrying out the transactions contemplated by this Agreement.
5.3 REPRESENTATIONS AND WARRANTIES OF DICK GROUP. The Dick Group hereby jointly
and severally represent and warrant as follows and hereby acknowledge and
confirm that the Purchaser is relying on such representations and warranties in
connection with the purchase by the Purchaser of the Dick Shares:
(1) GOOD TITLE OF WSI SHARES. 1364928 is the owner, beneficially and of
record, of the 35 common shares of WSI being 50% of the issued and outstanding
shares of WSI owned by 1364928 with good and marketable title thereto, free of
any claim, lien, security interest or encumbrance of any nature or kind.
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(2) GOOD TITLE OF 1364928 SHARES At the Time of Closing the members of
the Dick Group will own all of the issued and outstanding shares of all classes
in the capital of 1364928 with good and marketable title thereto, free of any
claim, lien, security power to transfer and assign the Dick Shares to the
Purchaser free of any claim, lien, security interest or encumbrance of any
nature or kind. In addition, no person, firm or corporation has any agreement or
option or any right capable of becoming an agreement for the purchase of the
Dick Shares. There is not pending any suit, action or other legal proceeding of
any sort to in any manner restrain or prevent the Dick Group from effectually
and legally transferring the Dick Shares to the Purchaser, free and clear of all
claims, liens, security interests and encumbrances, or any action or proceeding,
the effect of which would be to cause a lien to attach to any of such Dick
Shares or to divest title to any of such Dick Shares in any manner whatsoever,
or to make the Purchaser or 1364928 liable for damages as a result of the
execution and delivery of this Agreement by The Dick Group or the completion by
the Dick Group of the transactions contemplated herein and no member of the Dick
Group knows of no such claim in connection with any of the foregoing.
(3) NO CONTRAVENTION. The execution and delivery of this Agreement by the
Dick Group and the observance and performance of the terms and provisions of
this Agreement on the part of the Dick Group to be observed and performed by
them do not: (i) constitute a violation or breach of any of the Dick Group's
respective governing documents or any provision of any contract, indenture,
undertaking or other instrument to which any member of the Dick Group is a party
or by which any of them is bound, or any order, writ, injunction, decree,
statute, rule, by-law or regulation applicable to any of them, nor do they
constitute a default (either with the passage of time or the giving of notice or
both, or otherwise, constitute a default) under any contract or agreement or
instrument to which any of them is a party or by which any member of the Dick
Group is bound; or (ii) require any consent, approval or authorization of, or
declaration, filing or registration with, any Person, including, without
limitation any Governmental Authority.
(4) EXECUTION AND DELIVERY.
(a) The execution and delivery of this Agreement by each of
Dick, Dick Trust and Dick Newco and the sale of the Dick
Shares herein provided for have been duly authorized by all
necessary action and each of Dick, Dick Trust and Dick
Newco has all requisite power and authority or legal
capacity, as the case may be, to enter into this Agreement
and to carry out the transactions of purchase and sale
contemplated herein and to perform its obligations
hereunder and pursuant to all other agreements required to
be delivered hereunder.
(b) This Agreement has been duly and validly executed and
delivered by each of Dick, Dick Trust and Dick Newco and
constitutes a valid and legally binding agreement,
enforceable against each of Dick, Dick Trust and Dick Newco
in accordance with its terms; except that the rights and
remedies of the Purchaser hereunder may be subject to and
affected by the law relating to bankruptcy, insolvency,
reorganization and creditors' rights generally and except
that a court may or may not order an injunction, specific
performance or other equitable remedies with respect to any
particular provision of this Agreement.
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(5) NO BANKRUPTCY/INSOLVENCY. Each of Dick, Dick Trust and Dick Newco is
not insolvent, has not committed an act of bankruptcy, proposed a compromise or
arrangement to its creditors generally, had any petition for a receiving order
in bankruptcy filed against it, taken any proceeding with respect to a
compromise or arrangement, taken any proceeding to have itself declared bankrupt
or wound-up, taken any proceeding to have a receiver appointed for any part of
its assets, had an encumbrancer take possession of any of its property, or had
any execution or distress become enforceable or become levied upon any of its
property.
(6) RELATED AGREEMENTS. There are no agreements, written or oral, to
which any member of the Dick Group or any of its Affiliates is a party with the
Corporation or to which any of such Persons is a party or by which any of them
is bound in respect of the Dick Shares that would prevent the Dick Group from
carrying out the transactions contemplated by this Agreement.
5.4 REPRESENTATIONS AND WARRANTIES OF XXXX Xxxx represents and warrants as
follows and hereby acknowledge and confirm that the Purchaser is relying on such
representations and warranties in connection with the purchase by the Purchaser
of the Xxxx Shares:
(1) GOOD TITLE. At the Time of Closing, Xxxx will be the owner,
beneficially and of record of the Xxxx Shares with good and marketable title
thereto, free of any claim, lien, security interest or encumbrance of any nature
or kind, and as such has the exclusive right and full power to sell, transfer
and assign the Xxxx Shares to the Purchaser free of any claim, lien, security
interest or encumbrance of any nature or kind. In addition, no person, firm or
corporation has any agreement or option or any right capable of becoming an
agreement for the purchase of the Xxxx Shares. There is not pending any suit,
action or other legal proceeding of any sort to in any manner restrain or
prevent Xxxx from effectually and legally transferring the Xxxx Shares to the
Purchaser, free and clear of all claims, liens, security interests and
encumbrances, or any action or proceeding, the effect of which would be to cause
a lien to attach to any of such Xxxx Shares or to divest title to any of such
Xxxx Shares in any manner whatsoever, or to make the Purchaser or Xxxx liable
for damages as a result of the execution and delivery of this Agreement by Xxxx
or the completion by Xxxx of the transactions contemplated herein and Xxxx knows
of no such claim in connection with any of the foregoing.
(2) NO CONTRAVENTION. The execution and delivery of this Agreement by
Xxxx and the observance and performance of the terms and provisions of this
Agreement on the part of Xxxx to be observed and performed by them do not: (i)
constitute a violation or breach of any provision of any contract, indenture,
undertaking or other instrument to which Xxxx is a party or by which Xxxx is
bound, or any order, writ, injunction, decree, statute, rule, by-law or
regulation applicable to Xxxx, nor do they constitute a default (either with the
passage of time or the giving of notice or both, or otherwise, constitute a
default) under any contract or agreement or instrument to which Xxxx is a party
or by which Xxxx is bound; or (ii) require any consent, approval or
authorization of, or declaration, filing or registration with, any Person,
including, without limitation any Governmental Authority.
(3) EXECUTION AND DELIVERY. This Agreement has been duly and validly
executed and delivered by Xxxx and constitutes a valid and legally binding
agreement, enforceable against Xxxx in accordance with its terms; except that
the rights and remedies of the Purchaser hereunder may be subject to and
affected by the law relating to bankruptcy, insolvency, reorganization and
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creditors' rights generally and except that a court may or may not order an
injunction, specific performance or other equitable remedies with respect to any
particular provision of this Agreement.
(4) NO BANKRUPTCY/INSOLVENCY. Xxxx is not insolvent, has not committed an
act of bankruptcy, proposed a compromise or arrangement to its creditors
generally, had any petition for a receiving order in bankruptcy filed against
it, taken any proceeding with respect to a compromise or arrangement, taken any
proceeding to have itself declared bankrupt, taken any proceeding to have a
receiver appointed for any part of its assets, had an encumbrancer take
possession of any of its property, or had any execution or distress become
enforceable or become levied upon any of its property.
(5) RELATED AGREEMENTS. There are no agreements, written or oral, to
which Xxxx or any of its Affiliates is a party with the Corporation or to which
any of such Persons is a party or by which any of them is bound in respect of
the Xxxx Shares that would prevent 1364928 from carrying out the transactions
contemplated by this Agreement.
5.5 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser represents
and warrants to the Dion Group, the Dick Group, Xxxx and TD Canada Trust as
follows:
(1) INCORPORATION AND POWER. The Purchaser is a corporation duly
incorporated under the laws of the jurisdiction of its incorporation and is duly
organized, validly subsisting and in good standing under such laws.
(2) DUE AUTHORIZATION. The Purchaser has all necessary corporate power,
authority and capacity to enter into this Agreement and all other agreements and
instruments to be executed by it as contemplated by this Agreement and to carry
out its obligations under this Agreement and such other agreements and
instruments. The execution and delivery of this Agreement and such other
agreements and instruments and the completion of the transactions contemplated
by this Agreement and such other agreements and instruments have been duly
authorized by all necessary corporate action on the part of the Purchaser.
(3) ENFORCEABILITY OF OBLIGATIONS. This Agreement constitutes a valid and
binding obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms subject, however, to limitations on enforcement
imposed by bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally and to the extent that equitable remedies such as
specific performance and injunctions are only available in the discretion of the
court from which they are sought.
(4) NOTICES. All the Purchaser Notices are listed in Schedule 5.5(4).
Except for the Purchaser Notices, no notice is required to be delivered to any
Person in connection with the execution and delivery of this Agreement and the
completion of the transactions contemplated by this Agreement or to permit the
Corporations to carry on the Business after the Closing as the Business is
currently carried on by the Corporations.
(5) AUTHORIZED AND ISSUED CAPITAL.
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(a) The authorized capital of the Purchaser consists of an
unlimited number of common shares, of which, as at
October 31, 2001, 23,696,627 common shares were issued and
outstanding as fully paid and non-assessable shares and no
other shares of any series or class were issued and
outstanding.
(b) All of the common shares in the capital of the Purchaser to
be issued at the Registration Time:
(i) have been and will be duly authorized and validly
allotted, issued, fully paid and non-assessable
when issued;
(ii) assuming the accuracy of the representations and
warranties of the Vendors herein will be allotted,
issued, sold and delivered by the Purchaser in
compliance with all applicable Canadian and U.S.
securities laws;
(6) NO CONTRAVENTION. The execution and delivery of this Agreement by the
Purchaser and the observance and performance of the terms and provisions of this
Agreement on the part of the Purchaser to be observed and performed by it do
not: (i) constitute a violation or breach of the Purchaser's respective
governing documents or any provision of any contract, indenture, undertaking or
other instrument to which the Purchaser is a party or by which the Purchaser is
bound, or any order, writ, injunction, decree, statute, rule, by-law or
regulation applicable to the Purchaser, nor do they constitute a default (either
with the passage of time or the giving of notice or both, or otherwise,
constitute a default) under any contract or agreement or instrument to which the
Purchaser is a party or by which the Purchaser is bound; or (ii) require any
consent, approval or authorization of, or declaration, filing or registration
with, any Person, including, without limitation any Governmental Authority.
(7) CONSENTS AND APPROVALS OF GOVERNMENT AUTHORITIES. All of the
Purchaser Consents and Approvals are listed on Schedule 5.5(7). Except for the
Purchaser Consents and Approvals, no Consent or Approval of the Purchaser is
required in connection with the execution and delivery of this agreement and the
completion by the Purchaser of the transaction is contemplated by this Agreement
or permit the Purchaser to carry on its business as its business is currently
being carried on.
(8) REPRESENTATIONS COMPLETE. None of the representations and warranties
the of Purchaser contained in this Section 5.5 contains any untrue statement of
a material fact or omits to state any material fact necessary to make such
representations and warranties, in light of the circumstances under which they
were made, not misleading to a prospective purchaser of shares of the Purchaser.
(9) SEC FILINGS; FINANCIAL STATEMENTS All statements, reports, schedules,
forms and other documents required to have been filed by the Purchaser with the
SEC have been so filed. As of the time it was filed with the SEC (or, if amended
or superseded by a filing prior to the date of this Agreement, then on the date
of such filing): (i) each of such documents complied in all material respects
with the applicable requirements of the Securities Act or the Exchange Act (as
the case may be); and (ii) none of such documents contained any untrue statement
of a material
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fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The consolidated
financial statements contained in such documents: (i) complied as to form in all
material respects with the published rules and regulations of the SEC applicable
thereto; (ii) were prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods covered (except
as may be indicated in the notes to such financial statements and, in the case
of unaudited statements, as permitted by form 6-K of the SEC, and except that
unaudited financial statements may not contain footnotes and are subject to
normal and reoccurring year-end audit adjustments which will not, individually
or in the aggregate, be material in amount); and (iii) fairly present, in all
material respects, the consolidated financial position, in all material respect
of the Purchaser and its subsidiaries as of the respective dates hereof and the
consolidated results of operations of the Purchaser and its subsidiaries for the
periods covered thereby. To the knowledge of senior management of the Purchaser,
no material adverse change in the Purchasers business or financial condition,
taken as a whole, has occurred since its most recently filed form 6-K, except
(i) as disclosed in any document referred to above filed or amended after the
date of such form 6-K, (ii) as disclosed to the Dion Group and the Dick Group or
(iii) for any changes in the economy in general (or in the overall industry in
which the Purchaser operates) or in any stock market or trading system
(including, without limitation, any change in the value of any trading indices
with respect thereto).
5.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(1) The representations and warranties of the Dion Group, the Dick Group
and Xxxx contained in Sections 5.1, 5.2, 5.3 and 5.4 or any other agreement,
certificate or instrument delivered pursuant to this Agreement shall survive the
Closing for a period of three years from the Closing Date, and notwithstanding
the Closing and any inspection or inquiries made by or on behalf of the
Purchaser, shall continue in full force and effect for the benefit of the
Purchaser, after which time the Dion Group and the Dick Group shall be released
from all obligations in respect of such representations and warranties except
with respect to any Claims asserted by the Purchaser in writing (setting out in
reasonable detail the nature of the Claim and the approximate amount of such
Claim) before the expiration of such period, but there shall be (i) no time
limit on the representations and warranties of the Dion Group, the Dick Group
and Xxxx set out in Sections 5.1, 5.2, 5.3 and 5.4 which relate to the
incorporation of either Vendor, the due authorization of this Agreement by
either Vendor, the enforceability of either Vendor's obligations under this
Agreement or to the title of any Person to any property (whether real or
personal, tangible or intangible); and (ii) a time limit of the period of
reassessment re tax matters.
(2) The representations and warranties of the Purchaser contained in
Section 5.5 or any other agreement, certificate or instrument delivered pursuant
to this Agreement shall survive the Closing for a period of three years from the
Closing Date, and notwithstanding the Closing, shall continue in full force and
effect for the benefit of the Vendors and the Guarantors, after which time the
Purchaser shall be released from all obligations in respect of such
representations and warranties except with respect to any Claims asserted by the
Vendors in writing (setting out in reasonable detail the nature of the Claim and
the appropriate amount thereof) before the expiration of such period, but there
shall be no time limit on the representations and warranties of the Purchaser
set out in Section 5.5 which relate to the incorporation of the Purchaser, the
due
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authorization of this Agreement the due allotment and issuance of the common
shares in the capital of Purchaser comprising part of the purchase price to be
paid to the Vendors and to the enforceability of any or all registration rights
agreements by the Purchaser and the enforceability of the Purchaser's
obligations under this Agreement or any agreement executed and delivered in
accordance with the terms hereof.
ARTICLE 6
GUARANTEE
6.1 GUARANTEE. Subject to Section 6.2, the Dion Group and the Dick Group
unconditionally, irrevocably, jointly and severally guarantee to the Purchaser,
the due and punctual performance of each and every obligation of the Dion Group,
the Dick Group and Xxxx under this Agreement and any other document delivered
pursuant to, or in connection with this Agreement (collectively, the "GUARANTEED
AGREEMENTS"). The obligations of Dion Group and the Dick Group under this
Section 6.1 shall be absolute and unconditional; The obligations of the Dion
Group and the Dick Group under this Agreement shall remain in full force and
effect without regard to, and shall not be released, discharged or in any way
affected by any circumstance or condition other than the performance in full of
the obligations of each of the Dion Group, the Dick Group and Xxxx guaranteed
hereunder, and without limiting the generality of the foregoing, the obligations
of the Dion Group and the Dick Group shall not be affected:
(a) if any of the Guaranteed Agreements shall be terminated,
rejected or disaffirmed as a result of bankruptcy,
insolvency, reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar
proceedings with respect to any of the Dion Group, the Dick
Group and Xxxx;
(b) by any notices which may be required by statute or rule of
law to preserve any rights against Dion and Dick as
guarantors;
(c) by a requirement for the enforcement, assertion or exercise
of any right, remedy, power or privilege under or in
respect of any of the Dion Group, the Dick Group and Xxxx
prior to the Purchaser enforcing its rights under this
Section 6.1;
(d) by any requirement that any of the Dion Group, the Dick
Group and Xxxx be joined as a party or parties to any
proceedings for the enforcement of any provision of this
Section 6.1; or
(e) by the grant by the Purchaser to any of the Dion Group, the
Dick Group and Xxxx of any extension of time to perform, or
the waiver of any obligation of any of the Dion Group, the
Dick Group and Xxxx to perform, any obligation of any of
the Dion Group, the Dick Group and Xxxx hereunder or under
any of the Guaranteed Agreements.
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If for any reason any of the Dion Group, the Dick Group and Xxxx shall fail to
duly and punctually pay any amount or otherwise perform any obligation
guaranteed by Dion and Dick under this Section 6.1, upon written demand Dion and
Dick shall promptly pay such amount or cause to be performed such obligation, to
the extent not already paid or performed by such party.
6.2 LIMITATION. Notwithstanding the provisions of Section 6.1, the obligations
of Dion and Xxxx thereunder do not extend to or include the representations and
warranties set out in Section 5.3 and the obligations of Dick and Xxxx
thereunder do not extend to or include the representations and warranties set
out in Section 5.2 on the obligations Dion and Dick thereunder do not extend to
or include the representations and warranties set out in Section 5.3.
ARTICLE 7
INDEMNIFICATION
7.1 INDEMNITY BY THE VENDOR. The Vendors shall jointly and severally indemnify
and hold harmless the Purchaser, its directors, officers, employees, agents,
representatives and the Purchaser's Affiliates and their respective directors,
officers, employees, agents, representatives in respect of any claim, demand,
action, cause of action, damage, loss, cost, liability or expense (hereinafter
referred to as a "CLAIM") which may be made or brought against an Indemnified
Party or which it may suffer or incur directly or indirectly as a result of, in
respect of or arising out of:
(1) any incorrectness in or breach of any representation or warranty of
any Vendor contained in this Agreement or under any other agreement, certificate
or instrument executed and delivered pursuant to this Agreement; or
(2) any breach of or any non-fulfilment of any covenant or agreement on
the part of either of the Vendors under this Agreement or under any other
agreement, certificate or instrument executed and delivered pursuant to this
Agreement.
(3) any liability, cost or expense incurred by the Purchaser which but
for the Reorganization the Purchaser would not have incurred, and any liability,
cost or expense incurred after the Closing Date by any of the Corporations or by
1364927 or 1364928 which but for the Reorganization the Corporations, 1364927 or
1364928 (as the case may be) would not have incurred.
7.2 INDEMNITY BY THE PURCHASER. The Purchaser shall indemnify and hold harmless
the Vendors, their directors, officers, employees, agents, representatives and
the Vendors' Affiliates and their respective directors, officers and employees
in respect of any Claim which may be made or brought against an Indemnified
Party or which it may suffer or incur directly or indirectly as a result of, in
respect of or arising out of:
(1) any incorrectness in or breach of any representation or warranty of
the Purchaser contained in this Agreement or under any other agreement,
certificate or instrument executed and delivered pursuant to this Agreement; or
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(2) any breach or non-fulfilment of any covenant or agreement on the part
of the Purchaser under this Agreement or under any other agreement, certificate
or instrument executed and delivered pursuant to this Agreement.
7.3 LIMITATIONS.
(1) No Party shall have any Liability for indemnification pursuant to
Sections 7.1(1), (2) or 7.2 or relating to any breach of any of the
representations and warranties contained in Sections 5.1, 5.2, 5.3 or 5.4 unless
and until the accumulated aggregate amount of Claims of such party exceeds
$250,000, following which all such accumulated Claims and all further Claims of
such party shall be recoverable as provided in this Agreement. The aggregate
amount of indemnity payable by the Vendors to the Purchaser, or by the Purchaser
to the Vendors collectively, as a result of Claims shall not exceed the
aggregate amount of $5,000,000. For greater certainty, there is no limitation of
liability set out in Section 7.1(3).
(2) All parties acknowledge and agree that under no circumstance xxxx
Xxxx have any liabilities for any reason or cause for any aggregate liabilities
under this Agreement which will exceed, in the aggregate, the aggregate
consideration to be paid to him with respect to the Xxxx Shares.
7.4 NOTICE OF CLAIM. If an Indemnified Party becomes aware of a Claim in respect
of which indemnification is provided for pursuant to either of Section 7.2 or
7.1, as the case may be, the Indemnified Party shall promptly give written
notice of the Claim to the Indemnifying Party. Such notice shall specify whether
the Claim arises as a result of a claim by a Person against the Indemnified
Party (a "THIRD PARTY CLAIM") or whether the Claim does not so arise (a "DIRECT
CLAIM"), and shall also specify with reasonable particularity (to the extent
that the information is available):
(a) the factual basis for the Claim; and
(b) the amount of the Claim, if known.
If, through the fault of the Indemnified Party, the Indemnifying Party does not
receive notice of any Claim in time effectively to contest the determination of
any liability susceptible of being contested, then the Liability of the
Indemnifying Party to the Indemnified Party under this Article shall be reduced
by the amount of any losses incurred by the Indemnifying Party resulting from
the Indemnified Party's failure to give such notice on a timely basis.
7.5 DIRECT CLAIMS. In the case of a Direct Claim, the Indemnifying Party shall
have 60 days from receipt of notice of the Claim within which to make such
investigation of the Claim as the Indemnifying Party considers necessary or
desirable. For the purpose of such investigation, the Indemnified Party shall
make available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both parties
agree at or before the expiration of such 60 day period (or any mutually agreed
upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
agreed upon amount of the Claim, failing which the matter shall be referred to
binding arbitration
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in such manner as the parties may agree or shall be determined by a court of
competent jurisdiction.
7.6 THIRD PARTY CLAIMS. In the case of a Third Party Claim, the Indemnifying
Party shall have the right, at its expense, to participate in or assume control
of the negotiation, settlement or defence of the Claim. If the Indemnifying
Party elects to assume such control, the Indemnifying Party shall reimburse the
Indemnified Party for all of the Indemnified Party's out-of-pocket expenses
incurred as a result of such participation or assumption. The Indemnified Party
shall have the right to participate in the negotiation, settlement or defence of
such Third Party Claim and to retain counsel to act on its behalf, provided that
the fees and disbursements of such counsel shall be paid by the Indemnified
Party unless the Indemnifying Party consents to the retention of such counsel at
its expense or unless the named parties to any action or proceeding include both
the Indemnifying Party and the Indemnified Party and a representation of both
the Indemnifying Party and the Indemnified Party by the same counsel would be
inappropriate due to the actual or potential differing interests between them
(such as the availability of different defences). The Indemnified Party shall
cooperate with the Indemnifying Party so as to permit the Indemnifying Party to
conduct such negotiation, settlement and defence and for this purpose shall
preserve all relevant documents in relation to the Third Party Claim, allow the
Indemnifying Party access on reasonable notice to inspect and take copies of all
such documents and require its personnel to provide such statements as the
Indemnifying Party may reasonably require and to attend and give evidence at any
trial or hearing in respect of the Third Party Claim. If, having elected to
assume control of the negotiation, settlement or defence of the Third Party
Claim, the Indemnifying Party thereafter fails to conduct such negotiation,
settlement or defence with reasonable diligence, then the Indemnified Party
shall be entitled to assume such control and the Indemnifying Party shall be
bound by the results obtained by the Indemnified Party with respect to such
Third Party Claim. If any Third Party Claim is of a nature such that (i) the
Indemnified Party is required by Applicable Law or the order of any court,
tribunal or regulatory body having jurisdiction, or (ii) it is necessary in the
reasonable view of the Indemnified Party acting in good faith and in a manner
consistent with reasonable commercial practices, in respect of (A) a Third Party
Claim by a customer relating to products or services supplied by the Business or
(B) a Third Party Claim relating to any Contract which is necessary to the
ongoing operations of the Business or any material part thereof in order to
avoid material damage to the relationship between the Indemnified Party and any
of its major customers or to preserve the rights of the Indemnified Party under
such an essential Contract, to make a payment to any person (a "THIRD PARTY")
with respect to the Third Party Claim before the completion of settlement
negotiations or related legal proceedings, as the case may be, then the
Indemnified Party may make such payment and the Indemnifying Party shall,
promptly after demand by the Indemnified Party, reimburse the Indemnified Party
for such payment. If the amount of any liability of the Indemnified Party under
the Third Party Claim in respect of which such a payment was made, as finally
determined, is less than the amount which was paid by the Indemnifying Party to
the Indemnified Party, the Indemnified Party shall, promptly after receipt of
the difference from the Third Party, pay the amount of such difference to the
Indemnifying Party. If such a payment, by resulting in settlement of the Third
Party Claim, precludes a final determination of the merits of the Third Party
Claim and the Indemnified Party and the Indemnifying Party are unable to agree
whether such payment was unreasonable in the circumstances having regard to the
amount and merits of the Third Party Claim, then such
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dispute shall be referred to and finally settled by binding arbitration from
which there shall be no appeal.
7.7 SETTLEMENT OF THIRD PARTY CLAIMS. If the Indemnifying Party fails to assume
control of the defence of any Third Party Claim, the Indemnified Party shall
have the exclusive right to contest, settle or pay the amount claimed. Whether
or not the Indemnifying Party assumes control of the negotiation, settlement or
defence of any Third Party Claim, the Indemnifying Party shall not settle any
Third Party Claim without the written consent of the Indemnified Party, which
consent shall not be unreasonably withheld or delayed; provided, however, that
the liability of the Indemnifying Party shall be limited to the proposed
settlement amount if any such consent is not obtained for any reason within a
reasonable time after the request therefor.
(1) INTEREST ON CLAIMS. The amount of any Claim submitted under Section
7.1 or 7.2 as damages or by way of indemnification shall bear interest from and
including the date any Indemnified Party is required to make payment in respect
thereof at the Prime Rate calculated from and including such date to but
excluding the date reimbursement of such Claim by the Indemnifying Party is
made, and the amount of such interest shall be deemed to be part of such Claim.
7.8 SET-OFF. The Purchaser shall be entitled to set-off a finally adjudicated
amount of any Claim against any other amounts payable by the Purchaser to the
Vendors or any of them whether under this Agreement or otherwise.
7.9 LIMITED DEFINITION OF VENDORS The parties acknowledge and agree that for the
purposes of this Article 7 hereof "Vendor" and "Vendors" shall not include TD
Canada Trust.
ARTICLE 8
INTERIM PERIOD
8.1 INVESTIGATION. Until the Closing or earlier termination of this Agreement,
the Purchaser and its representatives and advisers shall be permitted to make
such investigations, inspections, surveys or tests of the properties and assets
of the Corporations, its predecessor companies and its Associates and Affiliates
and of their respective financial and legal condition as the Purchaser deems
necessary or desirable to familiarize itself with such properties, assets and
other matters. Without limiting the generality of the foregoing, the Purchaser
shall, during normal business hours, be permitted complete access to all
documents relating to information scheduled or required to be disclosed under
this Agreement, to the Books and Records, the Contracts, the Real Property, the
Leased Premises, the Employees, records regarding suppliers, customers and
regulators and environmental reports, surveys, inspection reports and all other
reports prepared by advisers of the Corporations, its predecessor companies and
its Affiliates (and the Dion Group and the Dick Group shall provide photocopies
to the Purchaser of all such written information and documents as may be
reasonably requested by the Purchaser). Any such investigations, inspections,
surveys or tests shall not, however, affect or mitigate the representations and
warranties of the Dion Group and the Dick Group under this Agreement which shall
continue in full force and effect as provided under this Agreement.
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8.2 AUTHORIZATIONS. The Dion Group and the Dick Group shall cause 1364927,
1364928 and the Corporations to execute and deliver any authorizations required
to permit the investigations, inspections, surveys or tests described in Section
8.1.
8.3 RISK OF LOSS. Until the Closing, the Dion Group and the Dick Group shall
cause 1364927, 1364928 and the Corporations to maintain in force all the
policies of property damage insurance under which any of the Assets is insured.
If before the Closing any of the Assets is lost, damaged or destroyed and the
loss, damage or destruction constitutes a Material Adverse Change, then:
(a) the Purchaser may terminate this Agreement in accordance
with the provisions of Section 4.1 hereof in which event
all parties shall be released from all obligations and
liability hereunder and the Deposit shall be returned to
the Purchaser; or
(b) the Purchasers may complete the transaction and have no
claim for any breach of warranty, misrepresentation or
failure to satisfy any covenant or condition arising from
such loss.
8.4 ACTION DURING INTERIM PERIOD. During the Interim Period, the Dion Group and
the Dick Group shall cause 1364927, 1364928 and the Corporations:
(a) not to make or agree to make any material change in the
compensation of any Director, Officer or Employee and,
except in ordinary course of business, not to pay or agree
to pay or set aside any bonus except Xxxx' bonus of
$30,000, profit sharing, retirement, insurance, death,
severance or fringe benefit or other extra-ordinary or
indirect compensation to, for or on behalf of any 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 normal course of business;
(c) not to enter into any contract, agreement, commitment or
transaction outside the normal course of business;
(d) not to issue any shares or other securities of 1364927,
1364928 and the Corporations;
(e) not to declare or cause to be paid any dividend or make any
other form of distribution or payment on the Shares or any
other securities of 1364927, 1364928 and the Corporations;
(f) not to default in the performance of any term or condition
of any Material Contract or Licenses and Permits;
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(g) not to cancel or amend any policy of insurance which
relates to 1364927, 1364928 and the Corporations or any of
the Assets, except with the prior written consent of the
Purchaser;
(h) not to enter into any Material Contracts, except in the
normal course of business;
(i) to maintain relations with the suppliers, customers and
landlords of the Corporations in accordance with past
custom and practice;
(j) to pay before delinquency all Taxes and other obligations
which become due and payable by 1364927, 1364928 and the
Corporations; and
(k) generally, to carry on the Business in the normal course.
8.5 EXCLUSIVE DEALINGS. During the Interim Period, Dion and Dick shall not, the
Dion Group and the Dick Group shall not, and shall cause their shareholders and
the Corporations not to, take any action, directly or indirectly, to encourage,
initiate or engage in discussions or negotiations with, or provide any
information to, any Person, other than the Purchaser and its designated and
authorized representatives, concerning any sale, transfer or assignment of the
Shares or the Assets involving 1364927, 1364928 and the Corporations. The Dion
Group and the Dick Group shall notify the Purchaser promptly if any such
discussions or negotiations are sought or if any proposal for a sale, transfer
or assignment of the Shares or the Assets is received or being considered.
8.6 REGULATORY APPROVALS. The Dion Group and the Dick Group shall cooperate, and
shall cause 1364927, 1364928 and the Corporations to cooperate, with the
Purchaser and render all necessary assistance required by the Purchaser in
connection with any application, notification or filing of the Purchaser
pursuant to the INVESTMENT CANADA ACT (Canada).
8.7 UPDATES TO INFORMATION.
(1) The Dion Group and the Dick Group shall update on or before the
Closing, by amendment or supplement, any of the informational disclosure
schedules referred to in this Agreement as soon as reasonably possible after new
or conflicting information comes to the attention of the Dion Group and the Dick
Group. The Purchaser shall not be obligated to accept any such amendment or
supplement and receipt of any such amendment or supplement shall not be deemed
to be a waiver or release by the Purchaser of any provision of this Agreement.
(2) The Purchaser shall update on or before the Closing, by amendment or
supplement, any of the informational disclosure schedules referred to in this
Agreement as soon as reasonably possible after new or conflicting information
comes to the attention of the Purchaser. The Dion Group and the Dick Group shall
not be obligated to accept any such amendment or supplement and receipt of any
such amendment or supplement shall not be deemed to be a waiver or release by
the Dion Group, the Dick Group, Xxxx or TD Canada Trust of any provision of this
Agreement.
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ARTICLE 9
GENERAL
9.1 EXPENSES. Each Party shall be responsible for its own legal and other
expenses (including any Taxes imposed on such expenses) incurred in connection
with the negotiation, preparation, execution, delivery and performance of this
Agreement and the transactions contemplated by this Agreement and for the
payment of any broker's commission, finder's fee or like payment payable by it
in respect of the purchase and sale of the Shares pursuant to this Agreement.
9.2 PAYMENT OF TAXES. Except as otherwise provided in this Agreement, the
Purchaser shall pay all Taxes directly applicable to, or resulting directly from
purchase of the Shares by the Purchaser pursuant to this Agreement (other than
Taxes payable under applicable legislation by the Dion Group, the Dick Group and
Xxxx) and any filing or recording fees payable in connection with the
instruments of transfer provided for in this Agreement.
9.3 PUBLIC ANNOUNCEMENTS. Except to the extent otherwise required by law or with
the prior consent of the other Party, neither Party shall make any public
announcement regarding this Agreement or the transactions contemplated by this
Agreement.
9.4 NOTICES.
(1) Any notice, certificate, consent, determination or other
communication required or permitted to be given or made under this Agreement
shall be in writing and shall be effectively given and made if (i) delivered
personally, (ii) sent by prepaid courier service or mail, or (iii) sent prepaid
by fax or other similar means of electronic communication, in each case to the
applicable address set out below:
(a) if to one or any more of Xxxx, Xxxx Trust, Dion Newco,
Dick, Dick Trust, Dick Newco and Xxxx
c/o Dion
c/o 000 Xxxxxx Xxxxxxxx
Xxxxxxxxx, Xxxxxxx X0X 0X0
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx
Xxxx & Berlis LLP
BCE Place
Xxx 000
Xxxxx 0000
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile: (000) 000-0000
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(b) if to the Purchaser, to:
Capital Environmental Resource Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx
X0X 0X0
Facsimile: (000) 000-0000
with a copy to:
Xxxxx XxXxx
Blake, Xxxxxxx & Xxxxxxx LLP
Commerce Court West, Xxx 00, Xxxxx 0000
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile: (000) 000-0000
(2) Any such communication so given or made shall be deemed to have been
given or made and to have been received on the day of delivery if delivered, or
on the day of faxing or sending by other means of recorded electronic
communication, provided that such day in either event is a Business Day and the
communication is so delivered, faxed or sent before 4:30 p.m. on such day.
Otherwise, such communication shall be deemed to have been given and made and to
have been received on the next following Business Day. Any such communication
sent by mail shall be deemed to have been given and made and to have been
received on the fifth Business Day following the mailing thereof; provided
however that no such communication shall be mailed during any actual or
apprehended disruption of postal services. Any such communication given or made
in any other manner shall be deemed to have been given or made and to have been
received only upon actual receipt.
(3) Any Party may from time to time change its address under this Section
by notice to the other Party given in the manner provided by this Section.
9.5 TIME OF ESSENCE. Time shall be of the essence of this Agreement in all
respects.
9.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the Parties pertaining to the subject matter of this Agreement and supersedes
all prior agreements, understandings, negotiations and discussions, whether oral
or written. There are no conditions, warranties, representations or other
agreements between the Parties in connection with the subject matter of this
Agreement (whether oral or written, express or implied, statutory or otherwise)
except as specifically set out in this Agreement.
9.7 WAIVER. A waiver of any default, breach or non-compliance under this
Agreement is not effective unless in writing and signed by the party to be bound
by the waiver. No waiver shall be inferred from or implied by any failure to act
or delay in acting by a party in respect of any default, breach or
non-observance or by anything done or omitted to be done by the other party. The
waiver by a party of any default, breach or non-compliance under this Agreement
shall not
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operate as a waiver of that party's rights under this Agreement in respect of
any continuing or subsequent default, breach or non-observance (whether of the
same or any other nature).
9.8 SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such prohibition or unenforceability and shall be severed from
the balance of this Agreement, all without affecting the remaining provisions of
this Agreement or affecting the validity or enforceability of such provision in
any other jurisdiction.
9.9 LIABILITY OF TRUSTEES. The parties hereto acknowledge and agree that the
persons acting as trustees in respect of the trusts herein referred to are
acting only in their capacity as trustees and that no claims shall be made
against the personal estates of the trustees. Any liability of the trustees
under this agreement shall be limited to and shall be satisfied only out of the
assets, from time to time, of the trust4 estate of the trust of which such
person is a trustee.
9.10 FURTHER ASSURANCES. Each Party shall promptly do, execute, deliver or
cause to be done, executed and delivered all further acts, documents and things
in connection with this Agreement that the other Party may reasonably require
for the purposes of giving effect to this Agreement.
9.11 ATTORNMENT. Each party agrees (i) that any action or proceeding relating
to this Agreement may (but need not) be brought in any court of competent
jurisdiction in the Province of Ontario, and for that purpose now irrevocably
and unconditionally attorns and submits to the jurisdiction of such Ontario
court; (ii) not to oppose any such Ontario action or proceeding on the basis of
FORUM NON CONVENIENS or for any other reason; and (iii) not to oppose the
enforcement against it in any other jurisdiction of any judgment or order duly
obtained from an Ontario court as contemplated by this Section.
9.12 LANGUAGE. The Parties have required that this Agreement and all deeds,
documents and notices relating to this Agreement be drawn up in the English
language. Les parties aux presentes ont exige que le present contrat et tous
autres contrats, documents ou avis afferents aux presentes soient rediges en
langue anglaise.
9.13 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable in that Province and shall be treated, in all respects, as a Ontario
contract.
9.14 SUCCESSORS AND ASSIGNS. This Agreement shall enure to the benefit of, and
be binding on, the Parties and their respective successors and permitted
assigns. Neither Party may assign or transfer, whether absolutely, by way of
security or otherwise, all or any part of its respective rights or obligations
under this Agreement without the prior written consent of the other Party.
9.15 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same instrument.
Counterparts may be executed either in original or faxed form and the Parties
adopt any signatures received by a receiving fax machine as original signatures
of the Parties; provided, however, that either Party providing its signature in
such manner shall promptly forward to the other Party an original of the signed
copy of this Agreement which was so faxed.
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9.16 DISCLOSURE. The Parties acknowledge, warranty and agree that if there is
a disclosure by a Party of any fact or circumstances in any representation or
covenant contained in this Agreement or in any Exhibit or Schedule referred to
in this Agreement, such disclosure by that Party shall be deemed to apply to and
have been given by a Party with respect to every other representation, warranty,
covenant, Schedule and Exhibit in which that Party makes any disclosure.
9.17 NO ENVIRONMENTAL REPRESENTATION. For greater clarity, the Purchaser
acknowledges and agrees that for the purpose of interpreting any representation,
warranty, covenant or condition referred to in this Agreement, none of the
matters referred to in this Agreement shall be construed or interpreted as
including any matter relating to environmental matters including, without
limitation, any of the matters referred to in Schedule 9.17
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IN WITNESS WHEREOF the Parties have executed this Agreement.
/s/ Xxx Xxxx
------------------------------ ----------------------------------------
Witness XXX XXXX IN HIS CAPACITY AS A TRUSTEE OF
THE DION FAMILY TRUST
/s/ Xxxxxx Xxxx
------------------------------ ----------------------------------------
Witness XXXXXX XXXX IN HIS CAPACITY AS A
TRUSTEE OF THE DION FAMILY TRUST
/s/ Xxxxx Xxxx
------------------------------ ----------------------------------------
Witness XXXXX XXXX IN HIS CAPACITY AS A
TRUSTEE OF THE DION FAMILY TRUST
------------------------------ 1503549 ONTARIO LIMITED
Witness
By: /s/ Xxx Xxxx
------------------------------------
/s/ Xxxxxx Xxxx
------------------------------ ----------------------------------------
Witness XXXXXX XXXX IN HIS CAPACITY AS A
TRUSTEE OF THE DICK FAMILY TRUST
/s/ Xxxxx Xxxx
------------------------------ ----------------------------------------
Witness XXXXX XXXX IN HER CAPACITY AS A
TRUSTEE OF THE DICK FAMILY TRUST
/s/ Xxxxx Xxxxxx
------------------------------ ----------------------------------------
Witness XXXXX XXXXXX IN HIS CAPACITY AS A
TRUSTEE OF THE DICK FAMILY TRUST
------------------------------ 1503550 ONTARIO LIMITED
Witness
By: /s/ Xxxxxx Xxxx
------------------------------------
/s/ Xxx Xxxx
------------------------------ ----------------------------------------
Witness XXX XXXX
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/s/ Xxxxxx Xxxx
------------------------------ ----------------------------------------
Witness XXXXXX XXXX
/s/ Xxxxxx Xxxx
------------------------------ ----------------------------------------
Witness XXXXXX XXXX
CAPITAL ENVIRONMENTAL
RESOURCE INC.
By: /s/ Xxxxxx X. Xxxxxx, III
------------------------------------
SENIOR VICE PRESIDENT
XXX X. XXXX
- and -
DION FAMILY TRUST
- and -
1503549 ONTARIO LIMITED
- and -
XXXXXX XXXX
- and -
DICK FAMILY TRUST
- and -
1503550 ONTARIO LIMITED
- and -
XXXXXX XXXX
- and -
CAPITAL ENVIRONMENTAL RESOURCE INC.
--------------------------------------------------------------------------------
AGREEMENT FOR THE PURCHASE OF ALL THE SHARES,
DIRECTLY OR INDIRECTLY
OF
WASTE SERVICES INC.
--------------------------------------------------------------------------------
DATED DECEMBER 11, 2001
SCHEDULE 9.17
"ENVIRONMENTAL LAWS" means Applicable Law in respect of the natural
environmental, public or occupational health or safety, and the manufacture,
importation, handling, transportation, storage, disposal and treatment of
Hazardous Substances.
"ENVIRONMENTAL PERMITS" means all permits, certificates, approvals, consents,
registrations and licences issued or required by any Environmental Laws or any
court or governmental authority and relating to or required for the ownership
and/or operation of the Business and/or the Assets.
"HAZARDOUS SUBSTANCE" means any solid, liquid, gas, odour, heat, sound,
vibration, radiation or combination of them that may impair the natural
environment, injure or damage property or plant or animal life or harm or impair
the health of any individual.
(a) The Business and the Assets as carried on or used by the Corporations and
their predecessors (including the condition of the Lands and the waters on or
under the Lands and air above the Lands) have been carried on and used and are
currently carried on and used in compliance with all Environmental Laws and
regulations.
(b) The Corporations and their predecessors have not used any machinery,
equipment or facility included in the Assets or in any Real Property, or
permitted them to be used, to generate, manufacture, refine, treat, transport,
store, handle, dispose of, transfer, produce or process any Hazardous Substance
except in compliance with all Environmental Laws.
(c) The Corporations are not, and has not been, subject to any proceedings
alleging the violation of any Environmental Law or to determine whether any
remedial action is needed to respond to a Release or the presence of a Hazardous
Substance on the Lands.
(d) There are no circumstances that could reasonably be expected to give rise
to any civil or criminal proceedings or Liability regarding the Release or
presence of a Hazardous Substance or the violation of any Environmental Law by
the Corporations, its employees, agents or others for whom it is responsible.
(e) The Corporations hold all Environmental Permits required by law to
operate the Business and Assets and Environmental Permits including the
Certificates of Approval presently held are valid and in full force and effect
and do not require amendment, and no violations thereof have been experienced,
noted or recorded, and no proceedings are pending or threatened to revoke or
limit any of them, and the Corporations are in full compliance of the same.
(f) All non-hazardous and Hazardous Substances disposed of, treated or stored
by the Corporation or its predecessors have been disposed of, treated and stored
in compliance with all Environmental Laws and no part of the Real Property or
Assets contains a Hazardous Substance which exceeds an applicable soil,
groundwater or other environmental, health or safety criteria or standard
published or enacted by a governmental authority or agency having jurisdiction
over the Real Property or Assets, whether or not such criteria or standard
constitutes Environmental Law.
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(g) There are no proceedings nor any circumstances or material facts which
could, if true, give rise to any proceedings, in which it is alleged that the
Corporations or their predecessors are potentially responsible for a domestic or
foreign federal, provincial, state, municipal or local clean-up or remediation
of lands contaminated with Hazardous Substances or for any other remedial or
corrective action under an Environmental Law.
(h) The Corporations or their predecessors have maintained all environmental
and operating documents and records in the manner and for the time periods
required by any Environmental Law and have never conducted an environmental
audit of the Business and Assets. For purposes of this Section, an environmental
audit includes any evaluation, assessment, review or study performed at the
request of or on behalf of the Corporations, a prospective purchaser of the
Business or the Assets, a court or governmental authority.
(i) There are no underground storage tanks located on the Real Property
except for septic systems and a temporary steel storage tank used for leachate
circulation into the waste pile.
(j) There are no pending or proposed changes to Environmental Laws which
would render illegal or materially restrict the Business or the operations of
the Corporation.
(k) No waste has been placed by the Corporations or their predecessors
outside the permitted boundaries of the landfill.
