EXHIBIT 10.21
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STOCK PURCHASE AGREEMENT
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by and among
LEP INTERNATIONAL WORLDWIDE LIMITED
as "LIW,"
LEP INTERNATIONAL HOLDINGS LIMITED
as "Holdings"
LEP HOLDINGS (NORTH AMERICA) LIMITED
as "Stockholder"
and
INTERNATIONAL LOGISTICS (CANADA) COMPANY
as "Buyer"
Dated: October 31, 1996
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STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . .-2-
ARTICLE II PURCHASE AND SALE OF STOCK . . . . . . . . . . . . . . . . . . -15-
2.1 Transfer of Stock . . . . . . . . . . . . . . . . . . . . . . . -15-
2.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . -16-
2.3 Post-Closing Adjustment. . . . . . . . . . . . . . . . . . . . . -16-
2.4 Intercompany Receivables and Payables. . . . . . . . . . . . . . -19-
ARTICLE III CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . -20-
3.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -20-
3.2 Deliveries at Closing. . . . . . . . . . . . . . . . . . . . . . -20-
3.3 Other Closing Transactions . . . . . . . . . . . . . . . . . . . -21-
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS
WITH RESPECT TO THE TARGET AND ITS SUBSIDIARIES . . . . . . . . . . . -22-
4.1 Organization of the Target and each of its Subsidiaries. . . . . -22-
4.2 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . -23-
4.3 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . -23-
4.4 Absence of Certain Changes or Events . . . . . . . . . . . . . . -24-
4.5 Title to Assets. . . . . . . . . . . . . . . . . . . . . . . . . -27-
4.6 Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . -27-
4.7 Contracts and Commitments. . . . . . . . . . . . . . . . . . . . -29-
4.8 Permits, Consents and Approvals. . . . . . . . . . . . . . . . . -32-
4.9 No Conflict or Violation . . . . . . . . . . . . . . . . . . . . -33-
4.10 Financial Statements . . . . . . . . . . . . . . . . . . . . . . -33-
4.11 Books and Records. . . . . . . . . . . . . . . . . . . . . . . . -34-
4.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . -34-
4.13 Labour Matters . . . . . . . . . . . . . . . . . . . . . . . . . -35-
4.14 Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . -36-
4.15 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . -36-
4.16 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . -36-
4.17 No Other Agreements to Sell the Assets . . . . . . . . . . . . . -36-
4.18 Proprietary Rights . . . . . . . . . . . . . . . . . . . . . . . -37-
4.19 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . -38-
4.20 THIS SECTION INTENTIONALLY OMITTED . . . . . . . . . . . . . . . -41-
4.21 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . -41-
4.22 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . -43-
4.23 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . . -44-
4.24 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . -44-
4.25 INTENTIONALLY OMITTED. . . . . . . . . . . . . . . . . . . . . . -44-
4.26 Customers, Distributors and Suppliers. . . . . . . . . . . . . . -45-
4.27 Compliance With Environmental Laws . . . . . . . . . . . . . . . -45-
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4.28 Banking Relationships. . . . . . . . . . . . . . . . . . . . . . -47-
4.29 Intercompany Loans . . . . . . . . . . . . . . . . . . . . . . . -47-
4.30 Material Misstatements Or Omissions. . . . . . . . . . . . . . . -47-
ARTICLE V INTENTIONALLY OMITTED. . . . . . . . . . . . . . . . . . . . . . -47-
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . . -47-
6.1 Organization of Buyer. . . . . . . . . . . . . . . . . . . . . . -48-
6.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . -48-
6.3 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . -48-
6.4 No Conflict or Violation . . . . . . . . . . . . . . . . . . . . -48-
6.5 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . -49-
6.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . -49-
6.7 Investment Intent. . . . . . . . . . . . . . . . . . . . . . . . -49-
ARTICLE VII COVENANTS OF SELLERS, THE TARGET AND BUYER . . . . . . . . . . -49-
7.1 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . -50-
7.2 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . -50-
7.3 Use of Purchase Price Amount . . . . . . . . . . . . . . . . . . -51-
7.4 1995 Year End Financial Statements . . . . . . . . . . . . . . . -51-
7.5 THIS SECTION INTENTIONALLY OMITTED . . . . . . . . . . . . . . . -51-
7.6 Payment of Royal Obligation. . . . . . . . . . . . . . . . . . . -51-
7.7 Intercompany Receivables and Payables. . . . . . . . . . . . . . -51-
7.8 Franchise Matters. . . . . . . . . . . . . . . . . . . . . . . . -52-
ARTICLE VIII ACTIONS BY SELLERS AND BUYER AFTER THE CLOSING. . . . . . . . -52-
8.1 Books and Records. . . . . . . . . . . . . . . . . . . . . . . . -52-
8.2 Survival of Representations, Etc . . . . . . . . . . . . . . . . -53-
8.3 Indemnifications . . . . . . . . . . . . . . . . . . . . . . . . -53-
8.4 THIS SECTION INTENTIONALLY OMITTED . . . . . . . . . . . . . . . -57-
ARTICLE IX TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . -57-
9.1 Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -57-
9.2 Contests . . . . . . . . . . . . . . . . . . . . . . . . . . . . -58-
9.3 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . -59-
9.4 Notice of Contests . . . . . . . . . . . . . . . . . . . . . . . -60-
9.5 Cooperation. . . . . . . . . . . . . . . . . . . . . . . . . . . -61-
9.6 Purchase Price Adjustment. . . . . . . . . . . . . . . . . . . . -61-
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . -61-
10.1 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . -61-
10.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . -62-
10.3 Choice of Law. . . . . . . . . . . . . . . . . . . . . . . . . -63-
10.4 Service of Process, Consent to Jurisdiction. . . . . . . . . . -63-
10.5 Entire Agreement; Amendments and Waivers . . . . . . . . . . . -63-
10.6 Multiple Counterparts. . . . . . . . . . . . . . . . . . . . . -64-
10.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . -64-
10.8 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . -64-
10.9 Titles; Gender . . . . . . . . . . . . . . . . . . . . . . . . -64-
10.10 Publicity. . . . . . . . . . . . . . . . . . . . . . . . . . . -64-
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10.11 Cumulative Remedies. . . . . . . . . . . . . . . . . . . . . . -64-
10.12 Confidential Information . . . . . . . . . . . . . . . . . . . -65-
10.13 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . -66-
10.14 Limitation of Liability. . . . . . . . . . . . . . . . . . . . -67-
10.15 Knowledge. . . . . . . . . . . . . . . . . . . . . . . . . . . -67-
10.16 Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . -67-
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of October 31, 1996 (this
"AGREEMENT"), is by and among International Logistics (Canada) Company, a
Nova Scotia unlimited liability company ("BUYER"), LEP International
Worldwide Limited, a company organized under the laws of England ("LIW"), LEP
International Holdings Limited, a company organized under the laws of England
("HOLDINGS"), (and, together with LIW, the "PARENT COMPANIES") and LEP
Holdings (North America) Limited, a corporation organized under the laws of
England (the "STOCKHOLDER" and together with the Parent Companies, the
"SELLERS").
RECITALS
A. LIW desires to sell its Canadian business operations, which
operations in Canada are comprised entirely of LEP International Inc., a
Canadian corporation (the "TARGET") and its Subsidiaries.
B. The Stockholder, an indirect subsidiary of LIW, is the owner of all
of the issued and outstanding shares of capital stock of the Target and the
Target is the owner of all of the issued and outstanding shares of capital
stock of each of its Subsidiaries.
C. Buyer desires to purchase from the Stockholder, and the Stockholder
desires to sell to Buyer, all of the issued and outstanding capital stock of
the Target upon the terms and subject to the conditions of this Agreement
(the "ACQUISITION").
D. In connection with the Acquisition, the parties desire to set forth
certain representations, warranties and covenants made each to the other as
an inducement to the consummation of the Acquisition, upon the terms and
subject to the conditions contained herein.
E. In connection with the Acquisition, the Sellers are willing to
indemnify Buyer, and Buyer is willing to indemnify the Sellers, against
certain liabilities they may incur in connection with the Acquisition, upon
the terms and subject to the conditions contained herein.
AGREEMENT
NOW, THEREFORE, in consideration of the respective covenants and
promises contained herein and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. As used herein, the terms set forth below shall
have the following meanings. Any of such terms, unless the context otherwise
requires, may be used in the singular or plural, depending upon the reference.
"1995 YEAR END BALANCE SHEET" shall mean the audited consolidated
balance sheet of the Target and its Subsidiaries for the period ended
December 31, 1995, together with the notes thereon, accordance with GAAP and
previously delivered to Buyer.
"1995 YEAR END FINANCIAL STATEMENTS" shall mean the audited
consolidated balance sheets of the Target and its Subsidiaries and related
audited consolidated statements of operations and income, changes in
stockholders" equity and cash flow of the Target and its Subsidiaries for the
twelve month period ended December 31, 1995, together with notes thereon,
aprepared in accordance with GAAP and previously delivered to Buyer.
"ACCOUNTING FIRM" shall have the meaning set forth in Section 2.3(a)
of this Agreement.
"ACQUISITION PROPOSAL" shall have the meaning set forth in
Section 7.2(a) of this Agreement.
"ACQUISITION TRANSACTION" shall have the meaning set forth in
Section 7.2(a) of this Agreement.
"ACTION" shall mean any action, claim, suit, litigation, proceeding,
labour dispute, arbitral action, governmental audit, inquiry, criminal
prosecution, investigation or unfair labour practice charge or complaint.
"AFFILIATE" shall have the meaning set forth in the Canada Business
Corporations Act, as amended, and the rules and regulations thereunder, and in
addition shall include all directors and officers of a Person that is a
corporation and all managing members of a Person that is a limited liability
company, shall be deemed affiliates of such Person for all purposes hereunder.
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"ANCILLARY AGREEMENTS" shall mean the License Agreement, the Escrow
Agreement, the InterCompany Agreement and the Trademark Assignment.
"ASSETS" shall mean, with respect to the Target and each of its
Subsidiaries, all of the right, title and interest in and to all of the
business, properties, assets and rights of any kind, whether tangible or
intangible, real or personal owned by the Target or any of its Subsidiaries
or in which the Target or any of its Subsidiaries has any interest, including
without limitation all of the right, title and interest of the Target and
each of its Subsidiaries in the following:
(i) all accounts and notes receivable (whether current or
non-current), refunds, deposits, prepayments or prepaid expenses (including
without limitation any prepaid insurance premiums);
(ii) all Contract Rights;
(iii) all shares of common stock and any other ownership interests
owned by the Target or such Subsidiary;
(iv) all tangible personal property;
(v) all Owned Real Property;
(vi) all Leases and Leasehold Estates;
(vii) all Leasehold Improvements;
(viii) all Fixtures and Equipment;
(ix) all Books and Records;
(x) all Proprietary Rights;
(xi) all Insurance Policies;
(xii) all Permits;
(xiii) all computers and software;
(xiv) all available supplies, sales literature, promotional
literature, customer, supplier and distributor lists, art work, employee
uniforms, wrapping, supply and packaging items, display units, telephone and
fax numbers, purchasing records and any other items related to the Business;
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(xv) all rights under or pursuant to all warranties,
representations and guarantees made by suppliers in connection with the
Assets or services furnished to the Target or any of its Subsidiaries
pertaining to the Business or affecting the Assets;
(xvi) all claims, causes of action, chooses in action, rights of
recovery and rights of set-off of any kind, against any person or entity,
including without limitation any liens, security interests, pledges or other
rights to payment or to enforce payment in connection with products delivered
by the Target or any of its Subsidiaries on or prior to the Closing Date; and
(xvii) all goodwill related to the Business.
"ASSOCIATE" shall have the meaning set forth in the Canada Business
Corporations Act.
"BENEFIT ARRANGEMENT" shall mean any employment, consulting,
severance or other similar contract, arrangement or policy and each plan,
arrangement (written or oral), program, agreement or commitment providing for
insurance coverage (including without limitation any self-insured
arrangements), workers' compensation, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement benefits, life, health,
disability or accident benefits or for deferred compensation, profit-sharing
bonuses, stock options, stock appreciation rights, stock purchases or other
forms of incentive compensation or post-retirement insurance, compensation or
benefits which (A) is not a Pension Plan, (B) is entered into, maintained,
contributed to or required to be contributed to, as the case may be, by the
Target or any of its Subsidiaries or under which the Target or any of its
Subsidiaries may incur any Liability, and (C) covers any employee or former
employee of the Target or any of its Subsidiaries (with respect to their
relationship with such entities).
"BOOKS AND RECORDS" shall mean (a) all records and lists of the
Target and each of its Subsidiaries pertaining to the Assets, (b) all records
and lists of the Target and its Subsidiaries Pertaining to the Business,
customers, suppliers or personnel of each of the Target and each of its
Subsidiaries, (c) all product, business and marketing plans of the Target and
each of its Subsidiaries, and (d) all books, ledgers, files, reports, plans,
drawings and operating records of every kind maintained by the Target and
each of its Subsidiaries.
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"BUSINESS" shall mean the business conducted by the Target and its
Subsidiaries of providing origin and destination services, freight
forwarding, logistics, supply chain management, customs clearing services,
transportation and distribution services in Canada, together with any
ancillary services provided therewith.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in Toronto, Ontario are authorized or
obligated by law, regulation or executive order to remain closed.
"BUYER" shall mean International Logistics (Canada) Company, a Nova
Scotia unlimited liability company.
"BUYER INDEMNIFIED PARTIES" shall have the meaning set forth in
Section 8.3(a) of this Agreement.
"CLAIM" shall have the meaning set forth in Section 8.3(d) of this
Agreement.
"CLAIM NOTICE" shall have the meaning set forth in Section 8.3(d) of
this Agreement.
"CLOSING" shall have the meaning set forth in Section 3.1 of this
Agreement.
"CLOSING BALANCE SHEET" shall have the meaning set forth in
Section 2.3(a) of this Agreement.
"CLOSING DATE" shall mean (a) October 31, 1996; or (b) such other
date as Buyer and the stockholder shall mutually agree upon.
"CLOSING FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 2.3(a) of this Agreement.
"CLOSING FINANCIAL STATEMENTS DELIVERY DATE" shall have the meaning
set forth in Section 2.3(h) of this Agreement.
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in
Section 10.12(b) of this Agreement.
"CONTRACT" shall mean any agreement, contract, Lease, note, loan,
evidence of indebtedness, purchase order, letter of credit, indenture,
security or pledge agreement, franchise agreement, covenant not to compete,
employment agreement, license, instrument, obligation, commitment, purchase
and sales order, quotation or other executory commitment to which the Target
or any of its Subsidiaries is a party or is bound, or to
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which any Assets of the Target or any of its Subsidiaries are subject,
whether oral or written, express or implied.
"CONTRACT RIGHTS" shall mean all of the rights and obligations of
the Target and each of its Subsidiaries under the Contracts.
"CORPORATION" shall mean (i) the Target and each of its Subsidiaries,
(ii) all partnerships, joint ventures, limited liability companies,
associations, joint-stock companies or trusts in which the Target or any of
its Subsidiaries was at any time or is a partner, joint venturer,
participant or member and (iii) all predecessor or former corporations,
partnerships, joint ventures, limited liability companies, associations,
joint-stock companies, or trusts, whether in existence as of the date hereof
or at any time prior to the date hereof, the assets or obligations of which
have been acquired or assumed by the Target or any of its Subsidiaries or to
which the Target or any of its Subsidiaries has succeeded.
"COPYRIGHTS" shall mean registered copyrights, copyright applications
and unregistered copyrights.
"COURT ORDER" shall mean any judgment, decision, consent decree,
injunction, ruling or order of any federal, provincial or municipal court or
governmental agency, department or authority that is binding on any person or
its property under applicable law.
"DAMAGES" shall have the meaning set forth in Section 8.3(a) of this
Agreement.
"DEFAULT" shall mean (a) a breach of or default under any Contract
or Permit, (b) the occurrence of an event that with the passage of time or
the giving of notice or both would constitute a breach of or default under
any Contract or Permit, or (c) the occurrence of an event that with or
without the passage of time or the giving of notice or both would give rise
to a right of termination, renegotiation or acceleration under any Contract
or Permit.
"DISCLOSURE SCHEDULE" shall mean a schedule executed and delivered
by the Sellers to Buyer as of the date hereof which sets forth the exceptions
to (i) the representations and warranties of the Sellers with respect to the
Target and its Subsidiaries contained in Article IV hereof, (ii) certain
other information called for by this Agreement. Unless otherwise specified,
each reference in this Agreement to any numbered schedule is a reference to
that numbered schedule which is included in the Disclosure Schedule.
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"DISCONTINUED OPERATIONS" shall mean any businesses or operations
previously sold or otherwise disposed of by any of the Sellers or by the
Target or any of its Subsidiaries including but not limited to the
discontinued subsidiaries set forth in Schedule 1.1 hereto, and any ongoing
indemnification obligations in connection therewith.
"DOWNWARD ADJUSTMENT" shall have the meaning set forth in Section
2.3(b) of this Agreement.
"DORVAL OBLIGATION" shall mean the mortgage in favour of The
Standard Life Assurance Company on the property set forth in Schedule 4.6
hereto.
"EMPLOYEE PLANS" shall mean all Benefit Arrangements and Pension Plans.
"ENCUMBRANCE" shall mean any claim, lien, pledge, option, charge,
easement, security interest, deed of trust, mortgage, right-of-way,
encroachment, conditional sales agreement, encumbrance or other similar right of
any third party, whether voluntarily incurred or arising by operation of law,
and includes, without limitation, any agreement to give any of the foregoing in
the future, and any contingent sale or other title retention agreement or lease
in the nature thereof.
"ENVIRONMENTAL LAWS" shall mean all Regulations which regulate or
relate to the protection or clean-up of the environment, the use, treatment,
storage, transportation, generation, manufacture, processing, distribution,
handling or disposal of, or emission, discharge or other release or
threatened release of, Hazardous Substances, the preservation or protection
of waterways, groundwater, drinking water, air, wildlife, plants or other
natural resources, or the health and safety of persons or property, including
without limitation protection of the health and safety of employees.
Environmental Laws shall include, without limitation, the Environmental
Protection Act (Ontario), Occupational Health & Safety Act (Ontario), the
Ontario Water Resources Act, Environmental Quality Act (Quebec), the Canadian
Environmental Protection Act and all analogous or related federal, provincial
or municipal laws, each as amended.
"ENVIRONMENTAL CONDITIONS" shall mean the introduction into the
environment of any Hazardous Substance (whether or not upon any Facility or
Former Facility or other property and whether or not such pollution
constituted at the time thereof a violation of any Environmental Law as a
result of any Release of any kind whatsoever of any Hazardous Substance)
during and in connection with the ownership, operation or occupancy of any
Corporation as a result of which any Corporation has become or
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becomes liable to any person, or has or may become responsible for any
environmental remediation under current Environmental Laws, or by reason of
which any Facility, Former Facility or any of the Assets suffers or becomes
subject to any lien under current Environmental Laws.
"ESCROW AGREEMENT" shall have the meaning set forth in Section 2.2(b)
of this Agreement.
"ESCROW AMOUNT" shall have the meaning set forth in Section 2.2(b) of
this Agreement.
"FACILITIES" shall mean all plants, offices, manufacturing
facilities, stores, warehouses, improvements, administration buildings, and
all real property and related facilities which are used or held for use in
connection with the Business, all of which are identified or listed on
Exhibit A attached hereto.
"FACILITY LEASES" shall mean all of the leases of Facilities, all of
which are listed in Schedule 4.6(a) hereto.
"FINANCIAL STATEMENTS" shall mean, with respect to the Target and
its Subsidiaries, the (i) monthly unaudited consolidated financial statements
for each of the months beginning at the Most Recent Fiscal Quarter End
through and including the month ended August 31, 1996 (the "MOST RECENT MONTH
END FINANCIAL STATEMENTS"), (ii) the unaudited consolidated financial
statements for the fiscal quarter ended June 30, 1996 (the "MOST RECENT
FISCAL QUARTER END FINANCIAL STATEMENTS"), and (iii) the Year End Financial
Statements.
"FINANCING OBLIGATIONS" shall mean (a) any indebtedness of the
Target or any of its Subsidiaries for borrowed money, including without
limitation the Royal Obligation, (b) the Dorval Obligation (c) any
obligations of the Target or any of its Subsidiaries evidenced by bonds,
notes, debentures, letters of credit or similar instruments, (d) obligations
of the Target or any of its Subsidiaries under capitalized leases, (e)
obligations under conditional sale, title retention or similar agreements or
arrangements creating an obligation of the Target or any of its Subsidiaries
with respect to the deferred purchase price of property (other than customary
trade credit), (f) interest rate and currency obligation swaps, xxxxxx and
similar arrangements of the Target and any of its Subsidiaries and (g) all
obligations of the Target or any of its Subsidiaries to guarantee any of the
foregoing types of obligations on behalf of others.
-8-
"FIXTURES AND EQUIPMENT" shall mean all of the furniture, fixtures,
furnishings, machinery, automobiles, trucks, spare parts, supplies,
equipment, tooling, molds, patterns, dies and other tangible personal
property owned by the Target or any of its Subsidiaries and used, held for
use or useful in connection with the Business, wherever located, and
including any such Fixtures and Equipment in the possession of any suppliers
of the Target or any of its Subsidiaries, together with all warranty rights
with respect thereto.
"FOREIGN SUBSIDIARY" shall mean any Subsidiary organized under the
laws of or with a principal place of business in any country other than Canada.
"FORMER FACILITY" shall mean, with respect to each Corporation, each
plant, office, manufacturing facility, store, warehouse, improvement,
administrative building and all real property and related facilities which
was owned, leased or operated by such Corporation at any time prior to the
date hereof, but excluding any Facilities.
"GAAP" shall mean generally accepted accounting principles in
Canada, as in effect from time to time, consistently applied.
"HAZARDOUS SUBSTANCE" shall mean any pollutant, contaminant,
chemical, waste and any toxic, infectious, carcinogenic, reactive, corrosive,
ignitable or flammable chemical or chemical compound or hazardous substance,
material or waste, whether solid, liquid or gas, that is subject to
regulation, control or remediation under any Environmental Laws including,
without limitation, any quantity of asbestos in any form, urea formaldehyde,
PCB'S, radon gas, crude oil or any fraction thereof, all forms of natural
gas, petroleum products or by-products or derivatives.
"HOLDINGS" shall mean LEP International Holdings Limited, a
corporation organized under the laws of England.
"HOLDINGS LOAN" shall mean the loan payable by Holdings to the
Target in the principal amount of Cdn $3,496,266.32.
"INCLUDED SUBSIDIARIES" shall have the meaning set forth in
Section 9.6 of this Agreement.
"ING OBLIGATION" shall mean the $3.2 Million Loan Facility provided
by International Nederlanden Bank N.V. ("ING") to LEP International, B.V., an
indirect subsidiary of LIW.
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"INSURANCE POLICIES" shall mean the insurance policies related to the
Assets or the Business.
"INTERCOMPANY AGREEMENT" shall mean the operations agreement by and
between LIW, Buyer and the Target and each of its Subsidiaries, substantially in
the form of Appendix A attached hereto.
"INTERCOMPANY DEFICIT" shall mean the amount, if any, as of the
Closing Date, by which all sums owed by the Target or any of its Subsidiaries
to LIW or any of its Subsidiaries (excluding the Target and its Subsidiaries)
exceeds all sums owed by LIW or any of its Subsidiaries (excluding the Target
and its Subsidiaries), to the Target and its Subsidiaries as of such date
(i.e., net payable that is payable by the Target and its Subsidiaries).
"INTERCOMPANY SURPLUS" shall mean the amount, if any, as of the
Closing Date, by which all sums owed by LIW or any of its Subsidiaries
(excluding the Target and its Subsidiaries), to the Target or any of its
Subsidiaries exceeds all sums owed by the Target or any of its Subsidiaries to
LIW or any of its Subsidiaries (excluding the Target and its Subsidiaries) as of
such date (i.e. net receivable owed to the Target and its Subsidiaries).
"LEASED REAL PROPERTY" shall mean all leased property described in the
Facility Leases.
"LEASEHOLD ESTATES" shall mean all rights and obligations of the
Target and each of its Subsidiaries as lessee under the Leases.
"LEASEHOLD IMPROVEMENTS" shall mean all leasehold improvements
situated in or on the Leased Real Property and owned by the Target or any of its
Subsidiaries.
"LEASES" shall mean all of the existing leases with respect to the
personal or real property of the Target or any of its Subsidiaries used or held
for use in connection with the Business.
"LIABILITIES" shall mean any direct or indirect liability,
indebtedness, obligation, commitment, expense, claim, deficiency, guaranty or
endorsement of or by any person of any type, whether accrued, absolute,
contingent, matured, unmatured, known, unknown or other. "LIABILITY" shall have
the correlative meaning.
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"LICENSE AGREEMENT" shall mean the trademark license agreement by and
between Holdings and the Target, substantially in the form of Appendix B
attached hereto.
"LIW" shall mean LEP International Worldwide Limited, a corporation
organized under the laws of England.
"MATERIAL ADVERSE EFFECT" shall mean with respect to the Target or
any of its Subsidiaries, after giving effect to the transactions contemplated
by this Agreement (except with respect to (i)(C) below), (i) a significant or
substantial adverse effect or adverse change in (A) the condition (financial
or otherwise) of or in the Assets of the Target and its Subsidiaries,
collectively, or (B) the Business or properties, Liabilities, reserves,
working capital, earnings, technology or relations with customers, public
image or employees of the Target and its Subsidiaries, collectively, or (C)
the right or ability of the Sellers or the Target to consummate the
transactions contemplated hereby, or (ii) any event or condition, singly or
in the aggregate, which would, with the passage of time, constitute a
"MATERIAL ADVERSE EFFECT."
"MORTGAGES" shall mean with respect to the Target and each of its
Subsidiaries, all deeds of trust, mortgages or other Encumbrances securing
indebtedness and relating to any of the Owned Real Property of the Target or
such Subsidiaries.
"MOST RECENT FISCAL QUARTER END" shall mean June 30, 1996.
"MOST RECENT FISCAL QUARTER-END FINANCIAL STATEMENTS" shall have the
meaning ascribed to it in the definition of "Financial Statements."
"MOST RECENT MONTH END FINANCIAL STATEMENTS" shall have the meaning
ascribed to it in the definition of "Financial Statements."
"MULTIEMPLOYER PLAN" shall have the meaning set forth in Section 1 of
the Pension Benefits Act (Ontario).
"NET WORTH DEFICIENCY" shall have the meaning set forth in
Section 2.3(e) of this Agreement.
"NET WORTH SURPLUS" shall have the meaning set forth in Section 2.3(f)
of this Agreement.
"NET WORTH VALUE" shall have the meaning set forth in Section 2.3(g)
of this Agreement.
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"ORDINARY COURSE OF BUSINESS" or "ORDINARY COURSE" or any similar phrase
when used with respect to the Target or any of its Subsidiaries shall mean
with respect to the Target and each such Subsidiary the ordinary course of
the Business and consistent with the past practices of the Target and each
such Subsidiary.
"OVERLAP PERIOD" shall have the meaning set forth in Section 9.1 of this
Agreement.
"OWNED REAL PROPERTY" shall mean all real property owned in fee by the
Target and any of its Subsidiaries, including without limitation all rights,
easements and privileges appertaining or relating thereto, all buildings,
fixtures, and improvements located thereon and all Facilities thereon, if any.
"PARENT COMPANIES" shall mean, collectively, LIW, and Holdings.
"PATENTS" shall mean all patents and patent applications and registered
designs and registered design applications.
"PAYBACK AMOUNT" shall have the meaning set forth in Section 2.2(c) of
this Agreement.
"PENSION PLAN" shall (a) have the meaning set forth in section 1 of the
Pension Benefits Act (Ontario) (A) which the Target or any of its
Subsidiaries maintains, administers, contributes to or is required to
contribute to, or, within the five years prior to the Closing Date,
maintained, administered, contributed to or was required to contribute to, or
under which the Target or any of its Subsidiaries may incur any Liability and
(B) which covers any employee or former employee of the Target or any of its
Subsidiaries (with respect to their relationship with such entities).
"PERMITTED ENCUMBRANCES" shall mean the Encumbrances listed on Schedule
1.3 hereto and other Encumbrances which, individually and in the aggregate,
do not materially detract from the value or transferability of the property
or Assets subject thereto, or interfere in any material respect with the
present use of the properties or Assets subject thereto.
"PERMITS" shall mean all licenses, permits, franchises, authorizations,
consents or orders of, or filings with, any governmental authority, whether
foreign, federal, provincial or municipal, or any other person, necessary for
the conduct or operations of the Business.
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"PERSON" shall mean an individual, partnership, corporation, limited
liability company, joint venture, trust, association or unincorporated
organization or a government or agency or political subdivision thereof.
"PERSONNEL" shall have the meaning set forth in Section 4.4(b)(i) of
this Agreement.
"POST-CLOSING PERIOD" shall have the meaning set forth in Section 9.2 of
this Agreement.
"PRE-CLOSING ENVIRONMENTAL MATTERS" shall mean (a) the production, use,
generation, storage, treatment, recycling, disposal, discharge, release, or
other handling or disposition at any time on or prior to the Closing Date
(collectively "HANDLING") of any Hazardous Substance, either in, on, under or
from any Facility or Former Facility during and the ownership, operation or
occupancy of any Corporation, including, without limitation, the effects of
such Handling of Hazardous Substances which result in an Environmental
Condition, and (b) the failure on or prior to the Closing Date of any
Facility or Former Facility during the ownership, operation or occupancy of
any Corporation to be in compliance with any applicable Environmental Law or
the failure on or prior to the Closing Date of any operation of any
Corporation to be in compliance with any applicable Environmental Laws or to
have discharged liability for any past non-compliance.
"PRE-CLOSING PERIODS" shall have the meaning set forth in Section 9.1 of
this Agreement.
"PROPRIETARY RIGHTS" shall mean all of the Copyrights, Patents,
Trademarks, technology rights and licenses, computer software (including
without limitation any source or object codes therefor or documentation
relating thereto), trade secrets, franchises, know-how, inventions, designs,
specifications, plans, drawings and intellectual property rights of the
Target and each of its Subsidiaries.
"PURCHASE PRICE" shall have the meaning set forth in Section 2.2(a) of
this Agreement.
"REGULATIONS" shall mean any laws, statutes, ordinances, regulations,
rules, court decisions and orders of any foreign, federal, provincial or
municipal government and any other governmental department or agency,
including without limitation Environmental Laws, energy, motor vehicle
safety, public utility, zoning, building and health codes, occupational
safety and health and laws respecting employment practices,
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employee documentation, terms and conditions of employment and wages and
hours.
"RELEASE" shall mean and include any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, leaching, dumping or
disposing into the environment or the workplace of any Hazardous Substance.
"REPRESENTATIVE" shall mean any officer, director, principal, attorney,
agent, employee or other representative.
"ROYAL OBLIGATION" shall mean the credit facility from The Royal Bank of
Canada to the Target.
"S AGENT" shall mean any sales agent of the Target or any of its
Subsidiaries.
"SELLERS" shall mean, collectively, the Stockholder and the Parent
Companies.
"SELLERS INDEMNIFIED PARTIES" shall have the meaning set forth in
section 8.3(b) of this Agreement.
"SELLERS' SUBSIDIARY" shall mean (a) any corporation in an unbroken
chain of corporations beginning with LIW if each of the corporations other
than the last corporation in the unbroken chain then owns stock possessing
more than 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain, (b) any partnership in
which LIW or any of the Sellers' Subsidiaries is a general partner and any
limited liability company in which LIW or any of the Sellers' Subsidiaries is
a managing member, or (c) any partnership or limited liability company in
which LIW or any of the Sellers' Subsidiaries possesses more than 50%
interest in the total capital or total income of such partnership or limited
liability company. For the purposes of this Agreement, "SELLERS'
SUBSIDIARIES" shall be deemed to exclude the Target and its Subsidiaries.
"SELLERS' ACCOUNTANT" shall have the meaning set forth in Section 2.3(a)
of this Agreement.
"STOCKHOLDER" shall mean LEP Holdings (North America) Limited, a
corporation organized under the laws of England.
"SUBSIDIARY" shall mean (a) any corporation in an unbroken chain of
corporations beginning with the Target if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing more
than 50% or more of the total combined voting power of all classes of stock
in one
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of the other corporations in such chain, (b) any partnership in which the
Target or any of its Subsidiaries is a general partner and any limited
liability company in which the Target or any of its Subsidiaries is a
managing member, or (c) any partnership or limited liability company in which
the Target or any of its Subsidiaries possesses more than 50% interest in the
total capital or total income of such partnership or limited liability
company.
"TAX" shall mean any federal, provincial, municipal or foreign net or
gross income, gross receipts, license, payroll, employment, excise,
severance, stamp, business, occupation, premium, customs duties, capital
stock, capital, employer health, franchise, profits, withholding, including
non-residency withholding, payroll, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, goods and services, alternative or
add-on minimum, estimated, or other tax, levy, impost, governmental fee or
like assessment or charge of any kind whatsoever, including any interest,
penalty or addition thereto, whether disputed or not, imposed by any
governmental authority or arising under any tax law or agreement, including,
without limitation, any joint venture or partnership agreement.
"TRADEMARKS" shall mean registered trademarks, registered service marks,
trademark and service xxxx applications and unregistered trademarks and
service marks.
"TRADEMARK ASSIGNMENT" shall mean the trademark assignment by Target to
Holdings with respect to the "LEP" trademarks, substantially in the form of
Appendix C attached hereto.
"UPWARD ADJUSTMENT" shall have the meaning set forth in Section 2.3(c)
of this Agreement.
ARTICLE II
PURCHASE AND SALE OF STOCK
2.1 TRANSFER OF STOCK. Upon the terms and subject to the conditions
contained herein, at the Closing, the Stockholder shall sell, convey,
transfer, assign and deliver to Buyer, and Buyer shall purchase from the
Stockholder, all of the outstanding shares of capital stock of the Target as
set forth in Schedule 2.1 of this Agreement.
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2.2 PURCHASE PRICE.
(a) PURCHASE PRICE. At the Closing, upon the terms and subject to
the conditions set forth herein, in consideration for the transfer of all the
shares of capital stock of the Target pursuant to Section 2.1 of this
Agreement, the Stockholder shall be entitled to receive and the Buyer shall
be obligated to pay an aggregate of $6,500,000, in cash (the "PURCHASE
PRICE"). The Purchase Price shall be paid by wire transfer of immediately
available funds to an account designated by the Stockholder in an amount
equal to the Purchase Price less the Escrow Amount (which shall be paid
pursuant to Section 2.2(b) below) and the ING Obligation (which shall be paid
pursuant to Section 2.2(c) below).
(b) ESCROW AGREEMENT. In order to establish a procedure for the
satisfaction of any claims by any Buyer Indemnified Party for indemnification
pursuant to Section 8.3 or Article IX hereof, the Sellers shall enter into an
escrow agreement with Buyer and the Escrow Agent, substantially in the form
of Appendix D attached hereto (the "ESCROW AGREEMENT"), pursuant to which
two-hundred and fifty thousand dollars ($250,000) of the Purchase Price shall
be held in escrow until the first anniversary of the Closing Date, subject to
the terms of the Escrow Agreement. Pursuant to the Escrow Agreement, the
Sellers hereby direct Buyer to deliver to the Escrow Agent (as such term is
defined in the Escrow Agreement), and at the Closing Buyer shall wire to the
Escrow Agent in immediately available funds, an aggregate of two-hundred and
fifty thousand dollars ($250,000) in cash out of the aggregate amount of the
Purchase Price (the "ESCROW AMOUNT"). The respective indemnification
obligations of the Sellers hereunder shall not be limited to the Escrow
Amount.
(c) PAYBACK AMOUNT. In order to establish a procedure for the
discharge of the ING Obligation, the Sellers hereby direct Buyer to pay
directly to ING an aggregate of $3.2 million out of the aggregate amount of
the Purchase Price (the "PAYBACK AMOUNT") and apply this Payback Amount to
discharge such ING Obligation. At the Closing, Buyer shall wire to the bank
account designated by ING in immediately available funds the Payback Amount.
2.3 POST-CLOSING ADJUSTMENT.
(a) CLOSING BALANCE SHEET. Schedule 2.3 of the Disclosure Schedule
sets forth a calculation of the consolidated net worth of the Target and its
Subsidiaries based on the balance sheet contained in the Most Recent Month
End Financial Statements. As promptly as practicable after the Closing Date
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(but in no event more than ninety (90) days after the Closing Date), Buyer
will cause the Target to prepare and deliver to the Sellers consolidated
financial statements of the Target and its Subsidiaries as of the close of
business on the day immediately preceding the Closing Date (the "CLOSING
FINANCIAL STATEMENTS"). The Closing Financial Statements shall be
accompanied by a certificate of the Chief Financial Officer of the Target to
the effect that the Closing Financial Statements present fairly, in
accordance with GAAP and the accounting practices of the Target and its
Subsidiaries applied on a basis consistent with the Financial Statements,
except with respect to those changes set forth on Schedule 4.10, the
financial condition of the Target and its Subsidiaries as of the close of
business on the day immediately preceding the Closing Date. The balance
sheet contained in the Closing Financial Statements shall be referred to
herein as the "CLOSING BALANCE SHEET." The closing Financial Statements will
be prepared in accordance with GAAP, applied on a basis consistent with the
1995 Year End Financial Statements, except with respect to certain agreed
changes in accounting policies as set forth in Schedule 4.10 attached hereto
and incorporated herein by this reference. The Closing Balance Sheet shall
be accompanied by reasonably detailed schedules including a calculation of
the Net Worth Value. The Sellers and a firm of independent public
accountants designated by the Sellers (the "SELLERS' ACCOUNTANT") will be
entitled to reasonable access during normal business hours to the relevant
records and working papers of the Target and its Subsidiaries to aid in their
review of the Closing Financial Statements. The Closing Financial Statements
shall be deemed to be accepted by the Sellers and shall be conclusive for the
purposes of the adjustment described in Sections 2.3(b) and 2.3(c) hereof
except to the extent, if any, that the Sellers or the Sellers' Accountant
shall have delivered, within thirty (30) days after the date on which the
Closing Financial Statements are delivered to the Sellers, a written notice
to Buyer stating each and every item to which the Sellers take exception,
specifying in reasonable detail the nature and extent of any such exception
(it being understood that any amounts not disputed as provided herein shall
be paid promptly). If a change proposed by the Sellers is disputed by Buyer,
then Buyer and the Sellers shall negotiate in good faith to resolve such
dispute. If, after a period of twenty (20) days following the date on which
the Sellers give Buyer notice of any such proposed change, any such proposed
change still remains disputed, then Buyer and the Sellers hereby agree that
Ernst & Young, LLP (the "ACCOUNTING FIRM") shall resolve any remaining
disputes. The Accounting Firm shall act as an arbitrator to determine, based
solely on presentations by the Sellers and Buyer, and not by independent
review, only those issues still in dispute. The decision of the Accounting
Firm shall be final and binding and shall be in accordance with the
provisions of this
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Section 2.3(a). The fees and expenses of the Accounting Firm, if any, shall
be paid equally by Buyer and the Stockholder; PROVIDED, HOWEVER, that, if the
Accounting Firm determines that either party's position is totally correct,
then the other party shall pay one hundred percent (100%) of the costs and
expenses incurred by the Accounting Firm in connection with any such
determination.
(b) In the event that there is a Net Worth Deficiency (as defined
below) with respect to the Target and its Subsidiaries, the Sellers shall pay
to Buyer, as an adjustment to the Purchase Price, an amount equal to (i) the
Net Worth Deficiency, (ii) plus the amount of the InterCompany Surplus, if
any, and (iii) minus the amount of the Intercompany Deficit, if any (the
"DOWNWARD ADJUSTMENT"); PROVIDED, HOWEVER, that if the Downward Adjustment is
a negative number, then Buyer shall pay to the Stockholder an amount equal to
(ii) the InterCompany Deficit minus (ii) the Net Worth Deficiency. Any
payments required to be made by the Sellers pursuant to this Section 2.3(b)
or pursuant to Section 2.3(c) shall be made within ten (10) days of the
Closing Financial Statements Delivery Date (as defined below) by wire
transfer of immediately available funds to an account designated by Buyer.
(c) In the event that there is a Net Worth Surplus (as defined
below) with respect to the Target and its Subsidiaries, Buyer shall pay to
the Stockholder, as an adjustment to the Purchase Price, an amount equal to
(i) the Net Worth Surplus, (ii) plus the amount of the InterCompany Deficit,
if any, (iii) minus the amount of the InterCompany Surplus, if any (the
"UPWARD ADJUSTMENT"); PROVIDED, HOWEVER, that if the Upward Adjustment is a
negative number, then the Sellers shall pay to Buyer an amount equal to (i)
the InterCompany Surplus minus (ii) the Net Worth Surplus. Any payments
required to be made by Buyer pursuant to this Section 2.3(c) or pursuant to
Section 2.3(b) shall he made within ten (10) days of the Closing Financial
Statements Delivery Date by wire transfer of immediately available funds to
an account designated by the Stockholder.
(d) For tax allocation purposes, the parties hereto agree that the
fair market value of Trans Navigation Inc. is $750,000.
(e) The term "NET WORTH DEFICIENCY" shall mean, with respect to the
Target and its Subsidiaries, the amount, if any, by which the Net Worth Value
is less than $1,500,000.
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(f) The term "NET WORTH SURPLUS" shall mean, with respect to the
Target and its Subsidiaries, the amount, if any, by which the Net Worth Value
exceeds $1,500,000.
(g) The term "NET WORTH VALUE" shall mean, with respect to the
Target and its Subsidiaries, the (i) net amount of the Assets; (ii) less the
value of the Liabilities as set forth on the Closing Balance Sheet; PROVIDED,
HOWEVER, that if any change to the Closing Financial Statements is agreed to
by the Target and the Stockholder in accordance with Section 2.3(a) or any
dispute between the Target and the Stockholder with respect to the Closing
Financial Statements is resolved in accordance with section 2.3(a), then "NET
WORTH VALUE" shall be calculated after giving effect to any such change or
resolution. In addition, "NET WORTH VALUE" shall be converted from Canadian
dollars to American dollars at the rate of $1.35 Cdn. for each American
dollar.
(h) The term "CLOSING FINANCIAL STATEMENTS DELIVERY DATE" shall
mean the date on which the Closing Financial Statements are delivered
pursuant to Section 2.3(a); PROVIDED, HOWEVER, that if the Sellers take
exception to any item in the Closing Financial Statements the Closing
Financial Statements Delivery Date shall be the date on which the Target and
the Stockholder agree in writing to any change as provided in Section 2.3(a)
or the date on which the Accounting Firm delivers its decision with respect
to such dispute as provided in Section 2.3(a).
(i) In the event the Target at any time collects any amount from
Holdings in payment of either principal or interest with respect to the
Holdings Loan, the Purchase Price shall be increased by an amount equal to
the amount so collected. Such amount shall be paid by the Buyer to
Stockholder or Stockholder's designee promptly following Target's collection
of such amount. Target agrees not to assign or otherwise transfer all or any
interest in the Holdings Loan.
2.4 INTERCOMPANY RECEIVABLES AND PAYABLES. On the Closing Financial
Statements Delivery Date all intercompany payables and receivables between
the Target and its Subsidiaries on the one hand, and the Sellers and the
Sellers' Subsidiaries on the other hand, shall be settled and liquidated in
the manner set forth in Section 2.3(b) and 2.3(c) of this Agreement.
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ARTICLE III
CLOSING
3.1 CLOSING. Upon the terms and subject to the conditions set forth
herein, the closing of the transactions contemplated herein (the "CLOSING")
shall be held at 9:00 a.m. local time on the Closing Date at the offices of
Xxxxxx & Xxxxxxx, Sears Tower, Suite 5800, 000 Xxxxx Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx, 00000, unless the parties hereto otherwise agree.
3.2 DELIVERIES AT CLOSING.
(a) STOCK CERTIFICATES. To effect the Acquisition, the Stockholder
shall, on the Closing Date, deliver to Buyer certificates(s) evidencing all
of the capital stock of the Target, free and clear of any Encumbrances of any
nature whatsoever, duly endorsed in blank for transfer or accompanied by
stock powers duly executed in blank.
(b) BUYER CERTIFICATES. To effect the Acquisition, Buyer will
furnish the Sellers with such certificates of its officers and others as may
be reasonably requested by the Sellers, which certificates shall include, but
not be limited to:
(i) a certificate executed by the Secretary or an Assistant
Secretary of Buyer certifying as of the Closing Date (A) a true and complete
copy of the Charter Documents of Buyer, (B) a true and complete copy of the
resolutions of the board of directors of Buyer authorizing the execution,
delivery and performance of this Agreement by Buyer and the consummation of
the transactions contemplated hereby and thereby, and (C) incumbency matters;
and
(ii) a certificate of the Registrar of Joint Stock Companies
of Nova Scotia certifying the good standing or status of Buyer in Nova Scotia.
(c) OPINION OF COUNSEL. At the Closing, Buyer shall deliver to the
Stockholder an opinion of Stikeman, Elliott, Canadian counsel to Buyer, dated
as of the Closing Date, in form and substance reasonably satisfactory to the
parties and customary in transactions of the type contemplated by this
Agreement.
(d) SELLER CERTIFICATES. To effect the Acquisition, the Sellers
shall and shall cause the Target to furnish the Buyer with such certificates
of its officers and
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others as may be reasonably requested by the Buyer, which certificates shall
include, but not be limited to:
(i) a certificate executed by the Secretary or an Assistant
Secretary of each of the Sellers and of the Target and each of its
Subsidiaries certifying as of the Closing Date (A) a true and complete copy
of the Articles or Certificate of Incorporation (or such other comparable
organizational documents) of each of the Sellers and of the Target and each
such Subsidiary, (B) a true and complete copy of the Bylaws of each of the
Sellers and of the Target and each such Subsidiary, (C) incumbency matters
and (D) with respect to each of the Sellers, (1) a true and correct copy of
the resolutions of the board of directors of such Seller authorizing the
execution, delivery and performance of this Agreement by such Seller and the
consummation of the transactions contemplated hereby, and (2) approval and
adoption of this Agreement by any requisite vote or consent of the
shareholders of such Seller;
(ii) a copy of the Articles or Certificate of Incorporation
(or such other comparable organizational documents) of each of the Sellers
and of the Target and each of its Subsidiaries and all amendments thereto,
certified as of a recent date by the appropriate Secretary of State or such
other appropriate authority;
(iii) a certificate of good standing of the Target and each of
its Subsidiaries in its jurisdiction of incorporation and all jurisdictions
in which it is qualified to do business; and
(e) OPINION OF SELLERS' COUNSEL. The Sellers shall deliver to
Buyer an opinion of Fasken, Campbell, Godfrey, special Canadian counsel to
the Sellers, dated as of the Closing Date, in form and substance reasonably
satisfactory to the parties and customary in transactions of the type
contemplated by this Agreement.
3.3 OTHER CLOSING TRANSACTIONS.
(a) PAYMENT OF PURCHASE PRICE. At the Closing, Buyer shall deliver
to the Stockholder the Purchase Price as provided in Section 2.2.
(b) INTERCOMPANY AGREEMENT. At the Closing, the Buyer, LIW, LIM
and the Target and its Subsidiaries shall enter into the Intercompany
Agreement substantially in the form of APPENDIX A attached hereto.
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(c) LICENSE AGREEMENT. At the Closing, the Target and Holdings
shall enter into the License Agreement substantially in the form of APPENDIX
B attached hereto.
(d) TRADEMARK ASSIGNMENT. At the Closing, the Target shall deliver
the Trademark Assignment, substantially in the form of APPENDIX C attached
hereto, to Holdings.
(e) ESCROW AGREEMENT. At the Closing, the Sellers shall enter into
the Escrow Agreement with Buyer and the Escrow Agent substantially in the
form of APPENDIX D attached hereto and Buyer shall deposit the Escrow Amount
into escrow thereunder contemplated by Section 2.2(b).
(f) PAYMENT OF ROYAL OBLIGATION. Concurrently with the Closing,
Buyer shall cause the Target to retire the aggregate amount of the Royal
Obligation.
(g) PAYMENT OF THE DORVAL OBLIGATION. Concurrently with the
Closing, Buyer shall cause the Target to retire the aggregate amount of the
Dorval Obligation.
(h) PAYMENT OF THE PAYBACK AMOUNT. At the Closing, Buyer shall pay
the Payback Amount as contemplated by Section 2.2(c).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS WITH
RESPECT TO THE TARGET AND ITS SUBSIDIARIES
The Sellers hereby, jointly and severally, represent and warrant to
Buyer as follows (except as otherwise set forth in the numbered section of
the Disclosure Schedule corresponding to the Sections of this Article to
which such exception pertains), which representations and warranties are, as
of the date hereof, true and correct:
4.1 ORGANIZATION OF THE TARGET AND EACH OF ITS SUBSIDIARIES. (a) The
Target and each of its active Subsidiaries is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or formation with full power and authority to conduct the
Business as it is presently being conducted and to own and lease its
properties and Assets. The Target and each of its Subsidiaries is duly
qualified to do business as an extra-provincial corporation or as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is necessary under the applicable law as a result of the
conduct of the Business or
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ownership (or leasing) of its properties, except where the failure to be so
qualified or in good standing would not have a Material Adverse Effect.
Copies of the Certificates or Articles of Incorporation and Bylaws of the
Target and each of its Subsidiaries, and all amendments thereto, heretofore
delivered to Buyer are accurate and complete as of the date hereof. Schedule
4.1(a) contains a true, correct and complete list of all jurisdictions in
which the Target and each of its Subsidiaries is qualified to do business as
an extra-provincial or as a foreign corporation.
(b) The authorized, issued and outstanding shares of capital stock
of the Target and each of its Subsidiaries are set forth in Schedule 4.1(b)
hereto. All of the outstanding shares of capital stock of the Target and
each of its Subsidiaries are duly authorized, validly issued, fully paid and
non-assessable. Except as set forth in Schedule 4.1(b), the Stockholder has
good and valid title to all of the issued and outstanding shares of capital
stock of the Target free and clear of all Encumbrances with full right, power
and authority to transfer such shares to Buyer subject to securing the
consents set forth in Schedule 4.1(b) hereof. Except as set forth in Schedule
4.1(b), the Target owns all of the issued and outstanding shares of capital
stock of each of its Subsidiaries. Except as set forth in Schedule 4.1(b),
there are no outstanding subscriptions, calls, commitments, warrants or
options for the purchase of shares of any capital stock or other securities
of (or other ownership interests in) the Target or any of its Subsidiaries or
any securities convertible into or exchangeable for shares of capital stock
or other securities issued by (or other ownership interests in) the Target or
any of its Subsidiaries or any other commitments of any kind for the issuance
of additional shares of capital stock or other securities issued by (or other
ownership interests in) the Target or any of its Subsidiaries. Upon delivery
to Buyer and the payment in full of the Royal Obligation the capital stock of
the Target and its Subsidiaries will be free and clear of all Encumbrances
and shall be duly authorized, validly issued, fully paid and non-assessable.
4.2 SUBSIDIARIES. Except as set forth in Schedule 4.2 the Target does
not have (a) any Subsidiaries nor (b) any direct or indirect stock or other
ownership interest (whether controlling or not) in any Person.
4.3 AUTHORIZATION. The Target and each of its Subsidiaries have all
requisite corporate power and authority, and have taken all corporate action
necessary, to own, lease and operate their respective Assets and to conduct
the Business as it is presently being conducted. The Target has all
requisite power
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and authority, and has taken all action necessary, to execute and deliver the
Ancillary Agreements to which it is a party, to consummate the transactions
contemplated thereby and to perform its obligations thereunder. The
execution and delivery by the Target of the Ancillary Agreements to which it
is a party and the consummation by the Target of the transactions
contemplated thereby have been duly approved by the board of directors and,
to the extent required under applicable corporate laws, shareholders of the
Target. No other proceedings or actions on the part of the Target are
necessary to authorize the Ancillary Agreements to which it is a party and
the transactions contemplated hereby and thereby. Each of the Ancillary
Agreements to which it is a Party have been duly executed and delivered by
the Target, and each such agreement is a legal, valid and binding obligation
of the Target, enforceable against the Target in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
moratorium, reorganization and other similar laws affecting creditors' rights
generally and (ii) general principles of equity, regardless of whether
asserted in a proceeding in equity or at law.
4.4 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Schedule 4.4:
(a) since June 30, 1996, there has not been any actual or, to the
knowledge of the Sellers, threatened change in the Assets or the Business, or
the Liabilities, earnings, results of operations or financial condition of
the Target or any of its Subsidiaries that would have a Material Adverse
Effect;
(b) since June 30, 1996, there has not been (i) except for normal
periodic increases in the ordinary course of business or pursuant to the
collective bargaining agreements to which the Target or any of its
Subsidiaries are a party as set forth in Schedule 4.13, any increase in the
compensation payable or to become payable by the Target or any of its
Subsidiaries to any of its current or former officers, employees, or agents
(collectively, "PERSONNEL"), (ii) any grant, payment or accrual, contingent
or otherwise, for or to the credit of any of the Personnel with respect to
any bonus, incentive compensation, service award or other like benefit other
than in the ordinary course of business, (iii) any adoption, creation or
amendment of any Employee Plan of the Target or any of its Subsidiaries, (iv)
any written employment agreement made by the Target or any of its
Subsidiaries to which the Target or any of its Subsidiaries is a party or (v)
any other material change in employment terms for any officers, employees or
agents of the Target or any of its Subsidiaries other than in the ordinary
course of business;
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(c) since December 31, 1995, there has not been any sale, lease,
assignment or transfer of any of the Assets, other than to persons that are
not affiliates for fair consideration and in the ordinary course of business;
(d) since June 30, 1996, there has not been any cancellation of any
indebtedness or waiver or release of any right or claim of the Target or any
of its Subsidiaries relating to its activities or properties in connection
with the Assets or the Business, except where such cancellation, release or
waiver would not, individually or in the aggregate, have a Material Adverse
Effect;
(e) since June 30, 1996, there has not been any amendment,
cancellation or termination of any Contract, commitment, agreement,
transaction or Permit relating to the Assets or the Business or entry into
any Contract, commitment, agreement, Lease, transaction or Permit which, in
each case, is not in the ordinary course of business;
(f) since June 30, 1996, there has not been any damage, destruction
or loss of assets (whether or not covered by insurance) which would have a
Material Adverse Effect.
(g) since June 30, 1996, there has not been any change in employee
relations which has or would have a Material Adverse Effect;
(h) since December 31, 1995, there has not been any change in
accounting methods, principles or practices by the Target or any of its
Subsidiaries;
(i) since June 30, 1996, there has not been any revaluation of any
of the Assets of the Target or any of its Subsidiaries, including without
limitation writing down the value of inventory or writing off notes or
accounts receivable except in the ordinary course of business, except for
such revaluation of Assets which would not have, either individually or in
the aggregate, a Material Adverse Effect;
(j) since June 30, 1996, there has not been any mortgage, pledge or
other Encumbrance of any Assets, except Permitted Encumbrances and those
Encumbrances identified in Schedule 4.4(j);
(k) since December 31, 1995, except for the Royal Obligation, and
the Dorval Obligation, there has not been any incurrence of indebtedness by
the Target or any of its Subsidiaries for borrowed money or commitment to
borrow money entered into by the Target or any of its Subsidiaries, or any
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loans made or agreed to be made by the Target or any of its Subsidiaries, or
indebtedness guaranteed by the Target or any of its Subsidiaries, in excess
of $100,000 (exclusive of freight costs and custom duties) for any single
item (or series of similar items with the same party or parties);
(l) since December 31, 1995, there has not been any incurrence,
payment, discharge or satisfaction by the Target or any of its Subsidiaries
of Liabilities, except Liabilities incurred, paid, discharged or satisfied in
the ordinary course of business and not in excess of $100,000 for any single
item (or series of similar items);
(m) since December 31, 1995, there has not been any capital
expenditure or the execution of any Lease or Contract (or series of related
Leases or Contracts) or any incurring of liability therefor in each case by
the Target and its Subsidiaries (i) involving affiliates of the Target or any
of its Subsidiaries by the Target or any of its Subsidiaries, (ii) involving
payments, individually or for a series of related Contracts for payments to
or from the same party or parties in the aggregate, in excess of $100,000, or
(iii) outside of the ordinary course of business;
(n) since June 30, 1996, there has not been any failure to pay or
satisfy when due any Liability of the Target and its Subsidiaries, except
where the failure would not have a Material Adverse Effect;
(o) since June 30, 1996, there has not been any failure of the
Target or any of its Subsidiaries to carry on diligently (given the financial
condition of the Target and its Subsidiaries) the Business in the ordinary
course;
(p) since December 31, 1995, other than pursuant to this Agreement,
there has not been any issuance of any shares of capital stock of the Target
or any of its Subsidiaries or any rights or options to purchase any such
shares, payment of dividends in cash or otherwise or any other distribution
on account of the capital stock of the Target and any of its Subsidiaries;
(q) since June 30, 1996, there has not been any acceleration of the
payment by the Target or any of its Subsidiaries of any accounts payable to
LIW and/or any affiliate of LIW outside of the normal MCS terms (as such
terms are defined in the Intercompany Agreement);
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(r) to the knowledge of the Sellers, since June 30, 1996, there has
not occurred any other event or condition which in any one case or in the
aggregate would have a Material Adverse Effect;
(s) agreement by any Seller or the Target or any of its
Subsidiaries to do any of the things described in the preceding clauses (a)
through (r) other than as expressly provided for herein.
4.5 TITLE TO ASSETS. Schedule 4.5 contains accurate lists or summary
descriptions of categories of all tangible Assets owned or leased by the
Target and any of its Subsidiaries where the value of an individual item
exceeds $50,000 at current book value or where an aggregate of similar items
exceeds $100,000 at current book value. Except as set forth in Schedule 4.5,
the Target and each of its Subsidiaries owns or has the right to use its
respective Assets free and clear of any Encumbrances, except for Encumbrances
specifically identified in Schedule 4.5 and Permitted Encumbrances. The
Assets include without limitation all assets necessary for the conduct of the
Business. All tangible assets and properties which are part of the Assets
conform in all respects to all applicable Regulations (including
Environmental Laws) relating to their construction, use and operation except
where the failure to conform would not have a Material Adverse Effect.
4.6 FACILITIES.
(a) Neither the Target nor any of its Subsidiaries owns any Owned
Real Property except for the property covered by the Dorval Obligation.
Schedule 4.6(a) also contains a complete and accurate description of the
following terms of all Facility Leases of the Target and any of its
Subsidiaries: (i) a general description of the leased property or items,
(ii) the term, (iii) the applicable rent and (iv) any requirements for the
consent of third parties to assignments thereof, or to the change of control
or ownership of the Target. To the knowledge of the Sellers, all Facility
Leases of the Target and any of its Subsidiaries are valid, binding and
enforceable in accordance with their terms and, to the knowledge of the
Sellers, are in full force and effect; no event exists which (whether with or
without notice, lapse of time or both or the happening or occurrence of any
other event) would constitute a Default thereunder on the part of the Target
or any of its Subsidiaries which would terminate or cause a material
Liability under any Facility Leases; and, to the knowledge of the Sellers,
there exists no occurrence of any event of Default which (whether with or
without notice, lapse of time or both or the happening or
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occurrence of any other event) would constitute a Default thereunder by any
other party.
(b) ACTIONS. There are no pending condemnation proceedings,
administrative proceeding or other Actions against the Target or any of its
Subsidiaries with respect to any of the Facility Leases, or to the knowledge
of the Sellers, pending or threatened condemnation proceedings,
administrative proceedings or other Actions otherwise with respect to any of
the Facility Leases.
(c) LEASES OR OTHER AGREEMENTS. Except for Facility Leases listed
in Schedule 4.6, there are no leases, subleases, licenses, occupancy
agreements, options, rights, concessions or other agreements or arrangements
with respect to real property, written or oral, involving, individually or in
the aggregate, the payment of $50,000 or more to or by the Target or any of
its Subsidiaries during any twelve-month period and granting to any Person
the right to purchase, use or occupy any Facility or any real property.
(d) FACILITY LEASES AND LEASED REAL PROPERTY. With respect to each
Facility Lease, the Target and each of its Subsidiaries that is a party to
such Facility Lease has and will have at the Closing an interest in the
Leasehold Estate, subject only to Permitted Encumbrances and those
Encumbrances set forth in Schedule 4.6(d). Except as set forth in Schedule
4.6(d), the Target and each of its Subsidiaries enjoys peaceful and
undisturbed possession of all the Leased Real Property it leases, subject to
the rights of the fee owners and the terms of the Facility Leases, and the
Target and each of its Subsidiaries has performed all the obligations
required to be performed by it through the date hereof, except where the
failure to perform would not, either individually or in the aggregate, have a
Material Adverse Effect.
(e) CERTIFICATE OF OCCUPANCY. To the knowledge of the Sellers, all
Facilities have received all required approvals of governmental authorities
(including without limitation Permits and a certificate of occupancy or other
similar certificate permitting lawful occupancy of the Facilities) required
in connection with the operation thereof and have been operated and
maintained in all respects in accordance with applicable Regulations, except
where the failure to receive such approvals or comply with any such
Regulation would not have a Material Adverse Effect.
(f) UTILITIES. All Facilities are supplied with utilities
(including without limitation water, sewage, disposal, electricity, gas and
telephone) and other services necessary for
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the operation of such Facilities as currently operated, and, to the
knowledge of the Sellers, there is no condition which would result in the
termination of the present access from any Facility to such utility services.
(g) IMPROVEMENTS, FIXTURES AND EQUIPMENT. The improvements
constructed on the Facilities, including without limitation all Leasehold
Improvements are (i) insured to the extent and in a manner customary in the
industry, (ii) to the knowledge of the Sellers, structurally sound with no
material defects, (iii) in good operating condition and repair, subject to
ordinary wear and tear, (iv) to the knowledge of the Sellers, sufficient for
the operation of the Business as presently conducted and (v) in conformity
with all applicable Regulations, except where the failure to be insured,
structurally sound, in good operating condition and repair or to conform with
any such Regulation would not have a Material Adverse Effect. None of the
improvements is subject to any commitment or other arrangement for their sale
or use by any affiliate of the Target or any of its Subsidiaries or, to the
knowledge of the Sellers, any third party that would materially interfere
with the use thereof.
(h) NO SPECIAL ASSESSMENT. Neither the Target nor any of its
Subsidiaries has received notice of any special assessment relating to any
Facility or any portion thereof and, to the knowledge of the Sellers, there
is no pending or threatened special assessment.
4.7 CONTRACTS AND COMMITMENTS.
(a) CONTRACTS. Schedule 4.7(a) lists the following Contracts,
agreements and other written arrangements to which the Target and any of its
Subsidiaries is a party, or by which the Assets of the Target or any such
Subsidiary are bound, including without limitation:
(i) Contracts not made in the ordinary course of business;
(ii) written employment and severance agreements, including
without limitation Contracts (A) to employ or terminate officers or other
Personnel and other Contracts with present or former officers, directors or
shareholders or other Personnel of the Target or any of its Subsidiaries or
(B) that will result in the payment by, or the creation of any Liability to
pay on behalf of Buyer or the Target or any of its Subsidiaries any
severance, termination, ""golden parachute," or other similar payments to any
present or former Personnel following termination of employment or otherwise
as a result of the consummation of the transactions contemplated by this
Agreement;
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(iii) collective bargaining agreements;
(iv) excluding Contracts with S-Agents and employees, written
sales, commission, consulting or agency Contracts related to the Assets or
the Business requiring payments by the Target or its Subsidiaries in excess
of $50,000 during any twelve-month period;
(v) options with respect to any property, real or personal,
whether the Target or any of its Subsidiaries shall be the grantor or grantee
thereunder providing for payments in excess of $50,000;
(vi) excluding Contracts that are cancellable by the Target
(in the case of contracts entered into by the Target) and its Subsidiaries
(in the case of Contracts that are entered into by the Target's Subsidiaries)
without penalty or increased cost, written Contracts for the performance of
services or delivery of goods by the Target or any of its Subsidiaries
involving receipts in excess of $500,000 (exclusive of freight charges and
customs duties) in any twelve-month period;
(vii) excluding Contracts that are cancellable by the Target
(in the case of contracts entered into by the Target) and its Subsidiaries
(in the case of Contracts entered into by the Target's Subsidiaries) without
penalty or increased cost, Contracts involving expenditures or Liabilities,
actual or potential, which individually involve in excess of $50,000
(exclusive of freight charges and customs duties) in any twelve-month period;
(viii) promissory notes, loans, indentures, evidences of
indebtedness, letters of credit, guarantees, or other similar instruments
relating to an obligation to repay borrowed money, individually in excess of
or in the aggregate in excess of $25,000, whether the Target or any of its
Subsidiaries shall be the borrower, lender or guarantor thereunder or whereby
any Assets are pledged (excluding credit provided by the Target or any such
Subsidiary in the ordinary course of business to purchasers of its products)
or services;
(ix) Contracts containing covenants materially limiting the
freedom of the Target or any of its Subsidiaries or any officer, director,
shareholder or affiliate of the Target or any of its Subsidiaries, (i) to
engage in any line of business which is competitive with the Business, or
(ii) except for covenants running in favour of the Target or any of its
Subsidiaries, to compete with any Person with respect to the Business;
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(x) except for agreements with S Agents, written arrangements
(or group of related written arrangements) constituting a partnership or
joint venture between the Target or any of its Subsidiaries and any other
Person;
(xi) written arrangements between the Target or any of its
Subsidiaries and any of their respective directors, officers, shareholders or
employees, any affiliate thereof or any member of any such person's immediate
family (x) providing for the furnishing of material services by, (y)
providing for the rental of material real or personal property from, or (z)
otherwise requiring material payments to (other than for services as
officers, directors or employees of the Target or any such Subsidiary), any
such Person or any corporation, partnership, trust or other entity in which
any such Person has a substantial interest as a shareholder, officer,
director, trustee or partner;
(xii) Contracts that materially limit or contain material
restrictions on the ability of the Target or any of its Subsidiaries to
purchase or sell any Assets;
(xiii) Contracts with the government of Canada, United States,
any provincial or municipal government or any agency or department thereof,
(xiv) Leases of real property; and
(xv) Leases of personal property providing for lease payments
in excess of $50,000 and not cancellable (without Liability) within 30
calendar days.
(xvi) The Target and its Subsidiaries have made available to
Buyer true, correct and complete copies of all of the Contracts listed in
Schedule 4.7(a), including all amendments and supplements thereto.
(b) ABSENCE OF BREACHES AND DEFAULTS. All of the Contracts to
which the Target or any of its Subsidiaries is party or by which it or any of
the Assets is bound or affected are valid, binding and enforceable in
accordance with their terms, except where any such failure, to be
enforceable, would not, either individually or in the aggregate, have a
Material Adverse Effect. Except as set forth in Schedule 4.7(b), each of the
Target and its Subsidiaries has fulfilled, or taken all action necessary to
enable it to fulfil when due, all of its material obligations under each such
Contract, except where the failure to fulfil its obligations thereunder, or
the failure to take any such action to enable it to fulfil its obligations
thereunder, either individually or in the aggregate, could not reasonably be
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expected to have a Material Adverse Effect. Except as set forth in Schedule
4.7(b), the Target and each of its Subsidiaries which is a party to such
Contracts and, to the knowledge of the Sellers, each other party to such
Contracts has complied in all material respects with the provisions thereof
and is not in Default thereunder, except where such Default would not, either
individually or in the aggregate, have a Material Adverse Effect, and no
notice of any claim of Default has been given to the Target or any of its
Subsidiaries. Neither the Target nor any of its Subsidiaries has reason to
believe that any outstanding bid, proposal or any unfinished Contract will
upon performance by the Target or any of its Subsidiaries result in a loss to
the Target or such Subsidiary, except where such loss would not have a
Material Adverse Effect.
(c) SERVICE WARRANTY. Except as set forth in Schedule 4.7(c),
neither the Target nor any of its Subsidiaries has committed any act, and
there has been w omission, which will result in, and there has been no
occurrence which will give rise to, Liability for breach of warranty (whether
covered by insurance or not) on the part of the Target or any of its
Subsidiaries, with respect to products maintained, delivered or installed or
services rendered prior to or on the Closing Date, except for such
Liabilities which would not, either individually or in the aggregate, have a
Material Adverse Effect.
4.8 PERMITS, CONSENTS AND APPROVALS.
(a) Schedule 4.8(a) sets forth a complete list of all material
Permits used in the operation of the Business or otherwise held by the Target
or any of its Subsidiaries with respect to the Business. The Target and each
of its Subsidiaries has all Permits required to be maintained by the Target
or any of its Subsidiaries under any Regulation (including applicable
Environmental Laws) in the operation of its Business or in the ownership of
the Assets, and possesses such Permits free and clear of all Encumbrances,
other than Permitted Encumbrances and Encumbrances identified in Schedule
4.8(a), except Permits the failure of which to obtain would not have a
Material Adverse Effect. To the knowledge of the Sellers neither the Target
nor any of its Subsidiaries is in Default, nor has the Target or any of its
Subsidiaries received any notice of any claim of Default, with respect to any
such Permit. Except as set forth in Schedule 4.8(a), none of the rights of
the Target or any of its Subsidiaries in any Permit will be adversely
affected by the completion of the transactions contemplated by this
Agreement. Except for Permits set forth in Schedule 4.8(a), no present or
former shareholder, director, officer or employee of the Target or any of its
Subsidiaries or any affiliate thereof, or any other Person owns or has any
proprietary, financial or other interest
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(direct or indirect) in any Permit which any Seller owns, possesses or uses.
(b) other than in connection with or in compliance with the
provisions of the Investment Canada Act (in respect of which a notice must be
filed under Section 11 thereof within 30 days of Closing) and except as
disclosed in Schedule 4.8(b) hereto, no notice to, declaration, filing or
registration with, or Permit from, any domestic or foreign governmental or
regulatory body or authority, or any other Person, is required to be made or
obtained by the Target or any of its Subsidiaries in connection with the
execution, delivery or performance of this Agreement and the consummation of
the transactions contemplated hereby. Schedule 4.8(b) sets forth all
Contracts which require the consent of the other parties thereto to any
""change of control" or similar event with respect to the Target or any of
its Subsidiaries.
4.9 NO CONFLICT OR VIOLATION. Except as set forth in Schedule 4.9,
neither the execution, delivery or performance of this Agreement or the
Ancillary Agreements nor the consummation of the transactions contemplated
hereby or thereby, nor compliance by the Target or any of its Subsidiaries
with any of the provisions hereof, will (a) violate any provision of the
Articles of Incorporation or Bylaws of the Target or any of its Subsidiaries,
(b) violate or result in or constitute a Default under, or result in the
termination of, or accelerate the performance required by, or result in a
right of termination or acceleration under, or result in the creation of any
Encumbrance upon any of the Assets under, any of the terms, conditions or
provisions of any Contract or Permit (i) to which the Target or any of its
Subsidiaries is a party or (ii) by which the Assets are bound, (c) violate
any Regulation or Court Order or (d) impose any Encumbrance on any of the
Assets or the Business, other than Permitted Encumbrances, except in the
cases of each of clauses (b), (c) and (d) above, for such violations,
Defaults, terminations, accelerations or creations of Encumbrances which,
individually and in the aggregate, would have a Material Adverse Effect.
4.10 FINANCIAL STATEMENTS. The Target and each of its Subsidiaries
have heretofore delivered to Buyer true and complete copies of the Financial
Statements. The Financial Statements (a) are in accordance with the Books
and Records of the Target and its Subsidiaries in all material respects, (b)
except as set forth in Schedule 4.10 have been prepared in accordance with
GAAP consistently applied (except such changes as may have been required by
GAAP) throughout the period covered thereby (subject, in the case of the
Interim Financial Statements, which have been prepared in accordance with the
historical accounting procedures
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of the Target and its Subsidiaries for the preparation of interim financial
statements, to normal year-end adjustments and the absence of footnotes) and
(c) after giving effect to the adjustments specified therein, fairly and
accurately present in all material respects (i) the combined assets,
liabilities (including all reserves) and financial position of the Target and
its Subsidiaries on the date or for the period covered thereby, (ii) the
combined results and operations of the Target and its Subsidiaries for the
period presented and (iii) the combined cash flows of the Target and its
Subsidiaries for the period presented.
4.11 BOOKS AND RECORDS. The Target and each of its Subsidiaries has
made and kept (and given Buyer access to) Books and Records and accounts,
which, in reasonable detail, accurately reflect in all material respects the
activities of the Target and each such Subsidiary. The minute books of the
Target and each of its Subsidiaries previously delivered to Buyer accurately
and adequately reflect all material action previously taken by the
shareholders, board of directors and committees of the board of directors of
the Target and each such Subsidiary. The copies of the stock ledgers of the
Target and each of its Subsidiaries previously delivered to Buyer are true,
correct and complete in all material respects, and accurately reflect all
transactions effected in the stock of the Target and each of its Subsidiaries
through and including the date hereof.
4.12 LITIGATION. Except as set forth in Schedule 4.12, there are no
Actions, individually or, if related to a single set of circumstances, in the
aggregate, involving more than $50,000 pending, or to the knowledge of the
Sellers, threatened (a) against, or to the knowledge of the Sellers, relating
to or affecting (i) the Target or any of its Subsidiaries, the Business or
the Assets (including with respect to Environmental Laws), (ii) any Employee
Plan of the Target or any of its Subsidiaries or any trust or other funding
instrument or any fiduciary or administrator thereof in their capacity as
such, (iii) any officers or directors of the Target or any of its
Subsidiaries in such capacity, (iv) any shareholder of the Target or any of
its Subsidiaries in such shareholder's capacity as shareholder of the Target
or such Subsidiary or (v) the transactions contemplated by this Agreement or
before or by any federal, provincial or municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, any of which would have a Material Adverse Effect, (b) which, if
determined adversely to the Target or any of its Subsidiaries, could
reasonably be expected to delay, limit or enjoin the transactions
contemplated by this Agreement, (c) that involve the probability of criminal
liability on the part of the Target or any of its Subsidiaries, or (d) in
which
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the Target or any of its Subsidiaries is a plaintiff, including any
derivative suits brought by or on behalf of the Target or any of its
Subsidiaries. Except as set forth in Schedule 4.12, neither the Target nor
any of its Subsidiaries is in Default with respect to or subject to any
judgment, order, writ, injunction or decree of any court or governmental
agency and there are no unsatisfied judgments against the Target or any of
its Subsidiaries, the Business or the Assets, any of which would,
individually or in the aggregate, have a Material Adverse Effect. To the
knowledge of the Sellers, there is not a reasonable likelihood of an adverse
determination of any pending Actions that could, individually or in the
aggregate, have a Material Adverse Effect. There are no Court Orders or
agreements with, or liens of, any governmental authority pursuant to or under
any Environmental Law which regulate, obligate or bind the Target or any of
its Subsidiaries or, to the knowledge of the Sellers, any Facility or Former
Facility.
4.13 LABOUR MATTERS. Except as set forth in Schedule 4.13, neither the
Target nor any of its Subsidiaries is a party to any collective bargaining
agreement with respect to its employees with any labour organization, union
or similar group or association and there are no employee unions (nor any
other similar labour or employee organizations) which represent employees of
the Target or its Subsidiaries. Neither the Target nor any of its
Subsidiaries is experiencing any attempt by organized labour or its
representatives to make the Target or any of its Subsidiaries conform to
demands of organized labour relating to its employees or to enter into a
binding agreement with organized labour that would cover the employees of the
Target or any of its Subsidiaries. There is no labour strike or labour
disturbance pending or, to the knowledge of the Sellers, threatened against
the Target or any of its Subsidiaries nor is any grievance currently being
asserted. The Business is in compliance with all applicable laws respecting
employment practices, employment documentation, terms and conditions of
employment and wages and hours, except where any failure to comply with any
such applicable law would not have a Material Adverse Effect, and is not and
has not engaged in any unfair labour practice which would, individually or in
the aggregate, have a Material Adverse Effect. Schedule 4.13 sets forth the
names and current annual salary rates or current hourly wages of all present
employees of the Target or any of its Subsidiaries whose annual cash
compensation for the 1996 fiscal year exceeds $75,000, and also sets forth
the earnings for each of such employees for the 1995 calendar year. Except
as set forth in Schedule 4.13, there is no unfair labour practice charge or
complaint against the Target or any of its Subsidiaries pending before any
labour relations board or any other domestic or foreign governmental agency
arising out of conduct of the Business,
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and to the knowledge of the Sellers there are no facts or information which
would give rise thereto.
4.14 LIABILITIES. Except as set forth in Schedule 4.14 hereto, neither
the Target nor any of its Subsidiaries has any Liabilities due or to become
due, except (a) Liabilities which are reflected and reserved against on the
1995 Year End Financial Statements, which have not been paid or discharged
since the date thereof, (b) Liabilities hereunder and under the Ancillary
Agreements, (c) Liabilities arising in the ordinary course of business
(including payments of amounts due in the ordinary course under Contracts)
and none of which, individually or in the aggregate, has or would have a
Material Adverse Effect.
4.15 COMPLIANCE WITH LAW. Except as set forth in Schedule 4.15, the
Target and each of its Subsidiaries and the conduct of the Business have not
violated and are in compliance with all applicable Regulations and Court
Orders relating to the Assets or the Business or operations of the Target and
each such Subsidiary, except where the violation or failure to comply,
individually or in the aggregate, would not have a Material Adverse Effect.
Except as set forth in Schedule 4.15, neither the Target nor any of its
Subsidiaries has received any notice to the effect that, or otherwise been
advised that, the Target or any of its Subsidiaries is not in compliance with
any such Regulations or Court Orders, and no Seller has reason to believe
that any existing circumstances are likely to result in violations of any of
the foregoing, which failure to comply or violation would, in any one case or
in the aggregate, have a Material Adverse Effect.
4.16 NO BROKERS. Neither the Target nor any of its Subsidiaries nor
any of their respective officers, directors, employees, shareholders or
affiliates has employed or made any agreement with any broker, finder or
similar agent or any person or firm which will result in the obligation of
Buyer or any of its affiliates to pay any finder's fee, brokerage fees or
commission or similar payment in connection with the transactions
contemplated hereby.
4.7 NO OTHER AGREEMENTS TO SELL THE ASSETS. Neither the Target nor any
of its Subsidiaries nor any of their respective officers, directors,
shareholders or affiliates has any outstanding commitment or legal
obligation, absolute or contingent, to any other Person other than Buyer to
sell, assign, transfer or effect a sale of all or a material portion of the
Assets (other than inventory in the ordinary course of business), to sell or
effect a sale of the capital stock of the Target or any of its Subsidiaries,
to effect any merger, consolidation,
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liquidation, dissolution or other reorganization of the Target or any of its
Subsidiaries, or to enter into any agreement or cause the entering into of an
agreement with respect to any of the foregoing.
4.18 PROPRIETARY RIGHTS.
(a) PROPRIETARY RIGHTS. Schedule 4.18(a) sets forth with respect
to the Target and each of its Subsidiaries: (i) for each Patent owned by the
Target or any of its Subsidiaries, the number, expiration date and subject
matter for each country in which such Patent has been issued, or, if
applicable, the application number, date of filing and subject matter for
each country, (ii) for each Trademark owned by the Target or any of its
Subsidiaries, the application serial number or registration number, the class
of goods covered and the issuance date for each country in which a Trademark
has been registered and (iii) for each Copyright owned by the Target or any
of its Subsidiaries, the number and date of filing for each country in which
a Copyright application has been filed. The Proprietary Rights listed in the
Disclosure Schedule are all of the material Proprietary Rights used by the
Target or any of its Subsidiaries in connection with the Business. True and
correct copies of all Patents (including any and all pending applications)
owned, controlled or created by or on behalf of the Target or any of its
Subsidiaries or in which the Target or any of its Subsidiaries have any
ownership interest whatsoever have been made available to Buyer.
(b) OWNERSHIP AND PROTECTION OF PROPRIETARY RIGHTS. The Target and
its Subsidiaries own or have a valid right to use each of the Proprietary
Rights, and assuming the consents described in Schedule 4.18(b) have been
obtained, no such Proprietary Rights will cease to be valid rights of the
Target or any of its Subsidiaries solely by reason of the execution, delivery
and performance of this agreement or the consummation of the transactions
contemplated hereby. Except for applications pending, all of the material
Patents, registered designs and registered Trademarks listed in the
Disclosure Schedule have been duly issued to the Target or its Subsidiaries
and all of the other Proprietary Rights exist and if possible, are registered
and are subsisting. All of the pending Patent applications have been duly
filed. None of the Proprietary Rights owned by the Target or any of its
Subsidiaries is involved in any pending or, to the knowledge of the Sellers,
threatened litigation. Neither the Target nor any of its Subsidiaries has
received any notice of invalidity of its rights or infringement of any rights
of others with respect to such Proprietary Rights. Except as set forth in
Schedule 4.18(b), no Person (i) has notified the Target or any of its
Subsidiaries that it is
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claiming any ownership of or right to use such Proprietary Rights, or (ii) to
the knowledge of the Sellers, is infringing upon any such Proprietary Rights
in any way. To the knowledge of the Sellers, the use of by the Target or any
of its Subsidiaries of the Proprietary Rights owned by the Target and its
Subsidiaries does not and will not infringe upon the rights of any third
party, and no Action has been instituted against or notices received by the
Target or any of its Subsidiaries that are presently outstanding alleging
that any use by the Target and its Subsidiaries of the Proprietary Rights
infringes upon or otherwise violates any rights of a third party.
4.19 EMPLOYEE BENEFIT PLANS.
(a) DISCLOSURE; DELIVERY OF COPIES OF RELEVANT DOCUMENTS AND OTHER
INFORMATION. Schedule 4.19 contains a complete list of Employee Plans.
Except as set forth in Schedule 4.19, true and complete copies of each of the
following documents have been made available by the Target and its
Subsidiaries to Buyer: (i) each Pension Plan, and Benefit Arrangement (and,
if applicable, related trust agreements) which covers or has covered
employees of the Target or any of its Subsidiaries (with respect to their
relationship with such entities) and all amendments thereto which have been
distributed to any employees of the Target or any of its Subsidiaries, (ii)
each Employee Plan which covers or has covered employees of the Target or any
of its Subsidiaries (with respect to their relationship with such entities)
(including descriptions of the number and level of employees covered thereby)
and a complete description of any Employee Plan which is not in writing, and
(iii) all actuarial reports prepared for the last three plan years for each
Pension Plan which covers or has covered employees of the Target or any of
its Subsidiaries (with respect to its relationship with such entities).
(b) REPRESENTATIONS. Except as set forth in Schedule 4.19:
(i) PENSION PLANS.
(A) The funding method used in connection with each Pension
Plan is acceptable and the actuarial assumptions used in connection with
funding each such plan are reasonable. Neither the Target nor any of its
Subsidiaries has any Liability for unpaid contributions with respect to any
Pension Plan or employee benefit plan of any foreign government.
(B) Each Pension Plan, each related trust agreement,
annuity contract or other funding instrument which covers or has covered
employees or former employees of the
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Target or any Of its Subsidiaries (with respect to their relationship with
such entities) presently complies and has been maintained in all material
respects in compliance with its terms and, both as to form and in operation,
with the requirements prescribed by any and all Regulations and Court Orders
which are applicable to such plans, including without limitation the Income
Tax Act (Canada) and the Pension Benefits Act (Ontario).
(C) All required employer and employee contributions and
premiums under each pension Plan to the date hereof have been made, the
respective fund or funds established under each pension plan is funded in
accordance with applicable laws and the rules of each such Pension Plan, and
no past service funding liabilities exist thereunder. No condition exists
and no event has occurred that could constitute grounds for the termination
of any pension Plan by the Superintendent of Pensions or the Pension
Commission.
(ii) MULTIEMPLOYER PLANS. Neither the Target nor the
Subsidiaries is party to any Multiemployer Plan.
(iii) BENEFIT ARRANGEMENTS. Each Benefit Arrangement which
covers or has covered employees or former employees of the Target or any of
its Subsidiaries (with respect to their relationship with such entities) has
been maintained in substantial compliance with its terms and with the
requirements prescribed by any and all Regulations and Court Orders which are
applicable to such Benefit Arrangement, including without limitation the
Income Tax Act (Canada). Except as set forth in the Disclosure Schedule, and
except as provided by law, the employment of all persons presently employed
or retained by the Target or any of its Subsidiaries (other than those
employees with whom the Target or any of its Subsidiaries has an employment
agreement) is terminable upon reasonable notice.
(iv) FOREIGN PLANS. None of the Foreign Subsidiaries has any
employees and there are no plans that cover any employee or former employee
of any Foreign Subsidiary (with respect to their relationship with such
entities) or is otherwise not subject to the Pension Benefits Act (Ontario)
or the income Tax Act (Canada) has been maintained in substantial compliance
with its terms and with the requirements prescribed by any and all applicable
Regulations and Court Orders (including without limitation any special
provisions relating to the tax status of contributions to, earnings of or
distributions from such Plans where each such Plan was intended to have such
tax status) and has been maintained in good standing with applicable
regulatory authorities.
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(v) VALIDITY AND ENFORCEABILITY. Each Pension Plan, related
trust agreement, annuity contract or other funding instrument and Benefit
Arrangement which covers or has covered employees or former employees of the
Target or any of its Subsidiaries (with respect to their relationship with
such entities) is legally binding in all material respects and in full force
and effect.
(vi) LITIGATION. There is no Action or Court Order
outstanding, relating to or seeking benefits under any Employee Plan that is
pending or, to the knowledge of the Sellers, threatened against the Target or
any of its Subsidiaries, or any Employee Plan.
(vii) NO AMENDMENTS. Neither the Target nor any of its
Subsidiaries has any announced plan or legally binding commitment to create
any additional Employee Plans which are intended to cover employees or former
employees of the Target or such Subsidiary (with respect to their
relationship with such entities) or to amend or modify any existing Employee
Plan which covers or has covered employees or former employees of the Target
or such Subsidiary (with respect to their relationship with such entities).
(viii) NO OTHER MATERIAL LIABILITY. No event has occurred in
connection with which any Sellers or any Employee Plan, directly or
indirectly, would be subject to any material Liability (A) under any
Regulation or Court Order relating to any Employee Plans or (B) pursuant to
any obligation of the Target or such Subsidiary to indemnify any person
against Liability incurred under any such Regulation or Court Order as they
relate to the Employee Plans.
(ix) INSURANCE CONTRACTS. Neither the Target nor any of its
Subsidiaries nor any Employee Plan holds as an asset of any Employee Plan any
interest in any annuity contract, guaranteed investment contract or any other
investment or insurance contract issued by an insurance company that is the
subject of bankruptcy, conservatorship or rehabilitation proceedings.
(x) NO ACCELERATION OR CREATION OF RIGHTS. Neither the
execution and delivery of this Agreement or other related agreements by the
Target or any of its Subsidiaries nor the consummation of the transactions
contemplated hereby or the related transactions will result in the
acceleration or creation of any rights of any person to benefits under any
Employee Plan (including, without limitation, the acceleration of the vesting
or exercisability of any stock options, the acceleration of the vesting of
any restricted stock, the acceleration of the accrual or vesting of any
benefits under any Pension Plan or the accel-
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eration or creation of any rights under any severance, parachute or change in
control agreement).
4.20 THIS SECTION INTENTIONALLY OMITTED.
4.21 TAX MATTERS.
(a) FILING OF TAX RETURNS. Each of the Target and each of its
Subsidiaries (and any affiliated group of which the Target or such Subsidiary
is Dow or has been a member) has timely filed with the appropriate taxing
authorities all returns (including without limitation information returns and
other material information) in respect of Taxes required to be filed through
the date hereof and will timely file any such returns required to be filed on
or prior to the Closing Date, other than those returns, the failure of which
to file would not, individually or in the aggregate, have a Material Adverse
Effect. The returns and other information filed are complete and accurate in
all material respects. Except as specified in Schedule 4.21(a), neither the
Target nor any of its Subsidiaries, nor any group of which the Target or such
Subsidiary is now or was a member, has requested any extension of time within
which to file returns (including without limitation information returns) in
respect of any Taxes. Each of the Target and each of its Subsidiaries has
made available to Buyer complete and accurate copies of the Target's or such
Subsidiary's foreign, federal, provincial and municipal tax returns for the
years 1993, 1994 and 1995.
(b) PAYMENT OF TAXES. All material amounts of Taxes payable by the
Target or any of its Subsidiaries (whether or not shown on any Tax return) in
respect of periods beginning before the Closing Date have been timely paid,
or will be timely paid, or an adequate reserve has been established therefor,
as set forth in Schedule 4.21(b) and the Financial Statements, and neither
the Target nor any of its Subsidiaries has any material Liability for Taxes
in excess of the amounts so paid or reserves so established.
(c) AUDITS, INVESTIGATIONS OR CLAIMS. Except as set forth in
Schedule 4.21(c), no material deficiencies for Taxes have been claimed,
proposed or assessed by any taxing or other governmental authority against
the Target or any of its Subsidiaries. Except as set forth in Schedule
4.21(c), there are no pending or, to the knowledge of the Target or the
Sellers, threatened audits, investigations or claims for or relating to any
material additional Liability in respect of Taxes, and there are no matters
under discussion with any governmental authorities with respect to Taxes that
in the reasonable judgment of any
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Seller, is likely to result in a material additional Liability for Taxes.
Audits, if any, of foreign, federal, provincial and municipal returns for
Taxes by the relevant taxing authorities have been completed for each period
set forth in Schedule 4.21(c) and, except as set forth in Schedule 4.21(c),
neither the Target nor any of its Subsidiaries has been notified that any
taxing authority intends to audit a return for any period. Except as set
forth in Schedule 4.21(c), no extension of a statute of limitations relating
to Taxes is in effect with respect to the Target or any of its Subsidiaries.
(d) LIEN. There are no liens for Taxes (other than for
current Taxes not yet due and payable) on the Assets.
(e) PARTNERSHIP. Except as set forth in Schedule 4.21(e),
neither the Target nor any of its Subsidiaries is a party to any joint
venture, partnership, or other arrangement or contract that could be treated
as a partnership for federal income tax purposes.
(f) WITHHOLDING. Each of the Target and its Subsidiaries
has withheld all material amounts of Taxes required to have been withheld by
it in connection with amounts paid or deemed paid by any taxing statute owing
to any employee, independent contractor, creditor, stockholder, or other
third party, and such withheld Taxes have either been duly paid to the proper
governmental authority or set aside in accounts for such purpose.
(g) ADEQUATE RESERVES. The charges, accruals and reserves
for Taxes (including deferred Taxes) currently reflected on the Financial
Statements in accordance with GAAP are adequate in all material respects to
cover all unpaid Taxes accruing or payable by the Target or any of its
Subsidiaries in respect of taxable periods that end on or before the Closing
Date and for any taxable periods that begin before the Closing Date and end
thereafter to the extent such Taxes are attributable to the portion of such
period ending on the Closing Date (determined under the closing of the books
method of allocation).
(h) CERTAIN ACTIONS. Neither the Target nor any of its
Subsidiaries has taken, and none will take prior to Closing, any action not
in accordance with past practice that would have the effect of deferring any
Tax liability of the Target or any of its Subsidiaries from any taxable
period ending on or before the Closing Date to any subsequent taxable period.
(i) NO TRANSFER PRICING AGREEMENTS. Except as set forth in
Schedule 4.21(i), neither the Target nor any of its Subsidiaries has entered
into transfer pricing agreements or other like arrangements with respect to
any foreign jurisdiction.
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(j) INTERNATIONAL BOYCOTT. Neither the Target nor any of
its Subsidiaries has participated in or co-operated with an international
boycott or has been requested to do so in connection with any transaction or
proposed transaction.
4.22 INSURANCE. Schedule 4.22 contains a complete and accurate
(in all material respects) list of all policies or binders of fire,
liability, title, product liability (which list shall be for three (3) years)
and other forms of insurance (showing as to each policy or binder the
carrier, policy number, coverage limits, expiration dates, annual premiums, a
general description of the type of coverage provided and loss experience
history by line of coverage) maintained by the Target or any of its
Subsidiaries in connection with the Business, the Assets or their respective
employees. To the knowledge of the Sellers, all insurance coverage currently
maintained by the Target and its Subsidiaries applicable to the Target or any
of its Subsidiaries, its employees, the Business or the Assets is in full
force and effect, and provides coverage as may be required by applicable
Regulation and by any and all Contracts to which the Target or any of its
Subsidiaries is a party, except where the failure to provide such coverage
would not, individually or in the aggregate, have a Material Adverse Effect.
To the knowledge of the Sellers, there is no Default under any such coverage
nor, to the knowledge of the Sellers, has there been any failure to give
notice or present any material claim under any such coverage in a due and
timely fashion. There are no outstanding unpaid material amounts of premiums
(other than those not yet due and payable) except in the ordinary course of
business and no notice of cancellation or non-renewal of the Target or any
such coverage has been received. Except as set forth in Schedule 4.22, there
are no provisions in such insurance policies for retroactive or retrospective
premium adjustments that have not been fully provided in the Closing
Financial Statements. Except as set forth in Schedule 4.22, all products
liability and general liability insurance policies maintained by the Target
or any of its Subsidiaries during the three (3) year period prior to the
Closing have been occurrence policies and not claims made policies. Except
for performance bonds obtained in the ordinary course of the Business, there
are no outstanding performance bonds in any material amounts covering or
issued for the benefit of the Target or any of its Subsidiaries. To the
knowledge of the Sellers, there are no facts particular to the Target and its
subsidiaries upon which an insurer would be justified in reducing coverage or
increasing premiums in any material amounts on existing policies or binders.
Except as set forth in Schedule 4.22, no insurer has advised the Target or
any of its Subsidiaries that it intends to reduce coverage, increase premiums
in any material amounts or fail to renew any existing policy or binder with
respect to which such insurer has not acted.
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4.23 ACCOUNTS RECEIVABLE. The accounts receivable reflected on
the balance sheet contained in the Most Recent Month End Financial
Statements, and all accounts receivable arising since June 30, 1996,
represent bona fide claims of the Target and its Subsidiaries against debtors
for sales, services performed or other charges arising on or before the date
hereof, and, to the knowledge of the Sellers, all the goods delivered and
services performed which gave rise to said accounts were delivered or
performed in all material respects in accordance with the applicable orders,
Contracts or customer requirements. To the knowledge of the Sellers, all
accounts receivable in excess of $1,000,000 shall be subject to no defenses,
counterclaims or rights of set-off, except to the extent of the appropriate
reserves for bad debts on accounts receivable as set forth on the Closing
Balance Sheet.
4.24 PAYMENTS. To the knowledge of the Sellers, neither the
Target nor any of its Subsidiaries has, (i) directly or indirectly, paid or
delivered any fee, commission or other sum of money or item or property,
however characterized, to any finder, agent, client, customer, supplier,
government official or other party, in Canada or any other country, which is
in any manner related to the Business, Assets or operations of the Target or
any of its Subsidiaries, which is, or may be with the passage of time or
discovery, illegal under any federal, provincial or municipal laws of Canada
or any other country having jurisdiction; (ii) illegally participate in any
boycotts or other similar practices affecting any of its actual or potential
customers, or (iii) established or maintained any unrecorded fund or asset
for any purpose or made any false entries on the Books and Records of the
Target or such Subsidiary for any reason. In addition, the Target or any of
its Subsidiaries (a) has complied with all applicable laws relating to
employee and human rights and relating to employment opportunities including
the Pay Equity Act, (b) filed in a timely manner all reports or documents it
was required to required to file (and the information contained therein was
correct and complete in all respects) under all applicable laws, (c) has
possession of all records and documents it was required to retain under all
applicable laws and (d) has not violated in any respect or received a notice
or charge asserting any violation of the Securities Act (Ontario) or Canada
Business Corporations Act, each as amended, except in the case of each of
clauses (a), (b), (c) and (d) above, when such failure would not have a
Material Adverse Effect.
4.25 INTENTIONALLY OMITTED
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4.26 CUSTOMERS, DISTRIBUTORS AND SUPPLIERS. Schedule 4.26 sets
forth a complete and accurate list of the names and addresses of (i) the ten
largest customers of the Target and each of its Subsidiaries, showing the
approximate total sales in dollars by the Target and each such Subsidiary to
each such customer during the fiscal year most recently ended; (ii) ten
largest suppliers of the Target of any of its Subsidiaries, showing the
approximate total purchases in dollars by the Target and each such Subsidiary
from each such supplier during such fiscal year; and (iii) all S Agents of
the Target and each of its Subsidiaries. Except as set forth in Schedule
4.26, since June 30, 1996, there has been no adverse change in the business
relationship of the Target or any of its Subsidiaries with any customer,
supplier or S Agent named in Schedule 4.26 which, individually or in the
aggregate, would have a Material Adverse Effect and neither the Target nor
any of its Subsidiaries has received any communication from any customer,
supplier or S Agent named in Schedule 4.26 of any intention to terminate or
materially reduce purchases from or supplies or services to the Target or any
of its Subsidiaries.
4.27 COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set forth in
Schedule 4.27:
(a) FACILITIES. The Facilities are, and at all times
during the ownership, operation or occupancy of any Corporation have been,
and all Former Facilities were at all times when owned, leased or operated by
any Corporation, owned, leased and operated in compliance with all applicable
Environmental Laws and in a manner which would not cause an Environmental
Condition, where such noncompliance or Environmental Condition would have a
Material Adverse Effect. Without limiting the foregoing, (i) there is not
and has not been any Hazardous Substance used, generated, treated, stored,
transported, disposed of, handled or otherwise existing on, under, about or
emanating from any Facility or any Former Facility as a result of any act or
omission of any Corporation, except for quantities of any such Hazardous
Substances used, generated, treated, stored, transported, disposed of,
handled, or otherwise held on, under or about any such Facility by any
Corporation in full compliance with all applicable Environmental Laws, where
such non-compliance would have a Material Adverse Effect, (ii) each
Corporation has at all times used, generated, treated, stored, transported,
disposed of or otherwise handled its Hazardous Substances in compliance with
all applicable Environmental Laws and in a manner which would not cause an
Environmental Condition, where such non-compliance or Environmental Condition
would have a Material Adverse Effect; and (iii) there is not now and has not
been at any time during the ownership, operation or occupancy of any
Corporation any underground or above-ground storage tank or pipeline at any
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Facility or Former Facility where the installation, use, maintenance, repair,
testing, closure or removal of such tank or pipeline by any Corporation was
not in compliance with all applicable Environmental Laws, where such
non-compliance would have a Materially Adverse Effect, and there has been no
Release from any such tank or pipeline during the ownership, operation, or
occupancy of any Corporation, where such Release would have a Material
Adverse Effect.
(b) NOTICE OF VIOLATION. To the knowledge of the Sellers,
no Corporation has received any notice of alleged, actual or potential
responsibility for, or any inquiry or investigation regarding, (i) any
Release or threatened Release of any Hazardous Substance at any location, or
(ii) any Environmental Conditions, or (iii) an alleged violation of or
non-compliance with any Environmental Law.
(c) PRE-CLOSING, ENVIRONMENTAL MATTERS. There are no
Pre-Closing Environmental Matters which would have a Material Adverse Effect.
(d) ENVIRONMENTAL AUDITS OR ASSESSMENTS. True, complete
and correct copies of the written reports, and all parts thereof, of all
environmental audits or assessments which have been conducted at any Facility
or Former Facility within the past five years by or on behalf of the Target
or any of its Subsidiaries or of which any Seller otherwise has knowledge,
have been made available to Buyer and a list of all such reports, audits and
assessments and any other similar report, audit or assessment of which any
Seller has knowledge is included in Schedule 4.27(d).
(e) INDEMNIFICATION AGREEMENTS. Other then agreements
(including, without limitation, leases) entered into in the ordinary course
of business, to the knowledge of the Sellers, no corporation is a party,
whether as a direct signatory or as successor, assign or third party
beneficiary, or otherwise bound, to any Contract (excluding insurance
policies disclosed on the Disclosure Schedule) under which such Corporation
is obligated by or entitled to the benefits of, directly or indirectly, any
representation, warranty, indemnification, covenant, restriction or other
undertaking concerning Environmental Conditions known to any Corporation.
(f) RELEASES OR WAIVERS. To the knowledge of Sellers,
other than agreements entered into in the ordinary course of business
(including without limitation, leases), no Corporation is party to an
agreement under which such Corporation has released any other Person from any
liability to the Cor-
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poration under any Environmental Laws concerning laws for any Environmental
Condition.
(g) NOTICES, WARNINGS AND RECORDS. Each Corporation has
given all notices and warnings, made all reports, and has kept and maintained
all records required by and in compliance with all applicable Environmental
Laws where such non-compliance would have a Material Adverse Effect.
4.28 BANKING RELATIONSHIPS. Schedule 4.28 sets forth a complete
and accurate description of all arrangements that the Target or any of its
Subsidiaries has with any banks, savings and loan associations or other
financial institutions providing for checking accounts, safe deposit boxes,
and certificates of deposit, indicating in each case account numbers, if
applicable, and the person or persons authorized to act or sign on behalf of
the Target and each such Subsidiary in respect of any of the foregoing.
4.29 INTERCOMPANY LOANS. Other than MCS (as defined in the
InterCompany Agreement) related intracompany trading and except as set forth
in Schedule 4.29, since June 30, 1996, neither the Target nor any of its
Subsidiaries has entered into any Contract relating to intercompany
indebtedness between or among the Target and its Subsidiaries and/or LIW
and/or any affiliate of LIW (other than the Target or its Subsidiaries).
4.30 MATERIAL MISSTATEMENTS OR OMISSIONS. No representations or
warranties by any of the Sellers in this Agreement, nor any exhibit,
appendix, certificate or schedule heretofore or hereinafter furnished to
Buyer pursuant hereto, or in connection with the transactions contemplated
hereby, including without limitation the Disclosure Schedule, contains any
untrue statement of a material fact, or omits to state any material fact
necessary to make the statements or facts contained therein not misleading.
ARTICLE V
INTENTIONALLY OMITTED
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Sellers as follows,
which representations and warranties are, as of the date hereof, and will be,
as of the Closing Date, true and correct:
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6.1 ORGANIZATION OF BUYER. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
province of Nova Scotia. Buyer is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is necessary under the applicable law as a result of the
conduct of its business or the ownership (or leasing) of its properties,
except where the failure to be so qualified or in good standing would not
have a material adverse effect on Buyer or its ability to perform its
obligations hereunder or under any of the Ancillary Agreements to which it is
a party.
6.2 AUTHORIZATION. Buyer has all requisite corporate power and
authority, and has taken all corporate action necessary, to execute and
deliver this Agreement and the Ancillary Agreements to which it is a party,
to consummate the transactions contemplated hereby and thereby and to perform
its obligations hereunder and thereunder. The execution and delivery by
Buyer of this Agreement and the Ancillary Agreements to which it is a party
and the consummation by Buyer of the transactions contemplated hereby and
thereby have been duly approved by the board of directors and stockholder of
Buyer. No other corporate proceedings or actions on the part of Buyer are
necessary to authorize this Agreement and the Ancillary Agreements to which
it is a party and the transactions contemplated hereby and thereby. This
Agreement and the Ancillary Agreements to which Buyer is a party have been
duly executed and delivered by Buyer, and are legal, valid and binding
obligations of Buyer, enforceable against Buyer in accordance with their
terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, moratorium, reorganization and other similar laws affecting
creditors' rights generally and (ii) the general principles of equity,
regardless of whether asserted in a proceeding in equity or at law.
6.3 NO BROKERS. Neither Buyer nor any of its subsidiaries nor
any of their respective officers, directors, employees, shareholders or
affiliates has employed any broker, finder, advisor or intermediary in
connection with the transactions contemplated by this Agreement which would
be entitled to a broker's, finder's, or similar fee or commission in
connection therewith or upon the consummation thereof, other than Xxxxxxx X.
Xxxxx & Company, the fees of which will be paid by Buyer.
6.4 NO CONFLICT OR VIOLATION. Neither the execution, delivery or
performance of this Agreement or the Ancillary Agreements, nor the
consummation of the transactions contemplated hereby or thereby, nor
compliance by the Buyer with any of the provisions hereof, will (a) violate
any provision of the Charter Documents of the Buyer, (b) violate or result in
or constitute a
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default under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration under, or
result in the creation or any Encumbrance upon any of the assets under, any
of the terms, conditions or provisions of any contracts or permit (i) to
which the Buyer is a party or (ii) by which its assets are bound, (c) violate
any Regulation or Court Order or (d) impose any Encumbrance on any of the
assets or the business of Buyer, except for permitted encumbrances, except in
the cases of each of clauses (b), (c) and (d) above, for such violations,
defaults, accelerations, or creations of Encumbrances which, individually or
in the aggregate, would not have a material adverse effect on Buyer or its
ability to perform its obligations hereunder or under any of the Ancillary
Agreements to which it is a party.
6.5 CONSENTS AND APPROVALS. Other than in connection with or in
compliance with the provisions of the Investment Canada Act, (in respect of
which a notice must be filed under Section 11 within thirty days of Closing),
no notice to, declaration, filing or registration with, or permit from, any
domestic or foreign governmental or regulatory body or authority, or any
other Person, is required to be made or obtained by Buyer in connection with
the execution, delivery or performance of this Agreement and the consummation
of the transactions contemplated hereby.
6.6 LITIGATION. There are no Actions, individually or, if
relating to a single set of circumstances, in the aggregate, involving in
excess of $50,000, pending or, to Buyer's knowledge, threatened or
anticipated, which, if determined adversely to Buyer could reasonably be
expected to delay, limit or enjoin the transactions contemplated by this
Agreement or the Ancillary Agreements to which it is a party or which would
otherwise, individually or in the aggregate, have a material adverse effect
on the Buyer or its ability to perform its obligations hereunder or under any
of the Ancillary Agreements to which it is a party.
6.7 INVESTMENT INTENT. Buyer is acquiring all of the issued and
outstanding capital stock of the Target solely for purposes of investment and
not with a view to any distribution thereof in violation of applicable
securities laws.
ARTICLE VII
COVENANTS OF SELLERS, THE TARGET AND BUYER
The Sellers and Buyer each covenant with each other as follows:
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7.1 FURTHER ASSURANCES. Upon the terms and subject to the
conditions contained herein, the parties agree (i) to use all reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement, (ii) to execute
any documents, instruments or conveyances of any kind which may be reasonably
necessary or advisable to carry out any of the transactions contemplated
hereunder, and (iii) to cooperate with each other in connection with the
foregoing. Without limiting the foregoing, the parties agree to use their
respective reasonable efforts (A) to obtain all necessary waivers, consents
and approvals from other parties to the Contracts and Permits; PROVIDED,
HOWEVER, that none of the Sellers, the Target or Buyer shall be required to
make any payments, commence litigation or agree to modifications of the terms
thereof in order to obtain all such waivers, consents or approvals, (B) to
obtain all necessary Permits as are required to be obtained under any
Regulations, (C) to give all notices to, and make all registrations and
filings with, third parties, including without limitation submissions of
information requested by governmental authorities, (D) to defend all Actions
challenging this Agreement or the consummation of the transaction
contemplated hereby, (E) to lift or rescind any injunction or restraining
order or other Court Order adversely affecting the ability of the parties to
consulate the transactions contemplated hereby and (F) to fulfil all
conditions to this Agreement.
7.2 EMPLOYEE MATTERS.
(a) Nothing contained in this Agreement shall confer upon
any employee of the Target or any of its Subsidiaries any right with respect
to continuance of employment after the consummation of the transaction
contemplated hereby, nor shall anything herein interfere with the right of
Buyer to terminate the employment of any of the employees of the Target or
any of its Subsidiaries at any time, with or without cause, or restrict Buyer
in the exercise of its independent business judgment in modifying any of the
terms and conditions of the employment of any such employees.
Notwithstanding the foregoing, Buyer acknowledges that Sellers have advised
Buyer of the collective bargaining agreements set forth in Schedule 4.13 and
that Target and its Subsidiaries shall continue to be bound by such
collective bargaining agreements.
(b) No provision of this Agreement shall create any third
party beneficiary rights in any employee of the Target or any of its
Subsidiaries, any beneficiary or dependents thereof, or any collective
bargaining representative thereof, with respect to the compensation, terms
and conditions of employment and benefits that may be provided to any
employee of
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the Target or any of its Subsidiaries by Buyer or under any benefit plan
which Buyer may maintain.
(c) Prior to the second anniversary of the Closing Date, no
Seller nor any affiliate of any Seller nor any Sellers Subsidiary shall,
directly or indirectly, solicit for employment any key employee of the Target
or any of its Subsidiaries whose employment is continued by Buyer after the
Closing Date, unless Buyer first terminates the employment of such employee
or gives its written consent to such employment or offer of employment.
7.3 USE OF PURCHASE PRICE AMOUNT. Each of the Sellers hereby
agrees that it will use commercially reasonable efforts to use the amount of
the Purchase Price (plus any further amounts received by the Stockholder
pursuant to Section 2.3(b) or 2.3(c) of this Agreement) in the manner set
forth in the plan of restructuring, attached hereto as Exhibit C. Any use of
the Adjusted Cash Amount (and any further amounts received by the Sellers
pursuant to Section 2.3(b) or 2.3(c) of this Agreement) in a manner
inconsistent with Exhibit C shall require the prior approval of all of the
Buyer's nominees to the board of directors of LIW.
7.4 1995 YEAR END FINANCIAL STATEMENTS. Prior to the date
hereof, the Sellers shall have delivered to Buyer the 1995 Year End Financial
Statements. The 1995 Year End Financial Statements, attached hereto as
Exhibit B, shall have been audited by Price Waterhouse at Sellers' expense
and shall have been accompanied by an unqualified report to the effect that
the 1995 Year End Financial Statements present fairly, in accordance with
GAAP, the financial condition of the Target and its Subsidiaries for such
period.
7.5 THIS SECTION INTENTIONALLY OMITTED.
7.6 PAYMENT OF ROYAL OBLIGATION. Concurrently with the Closing,
the Buyer shall cause the Target to retire the aggregate amount of the Royal
Obligation.
7.7 INTERCOMPANY RECEIVABLES AND PAYABLES. On the Closing
Financial Statements Delivery Date all intercompany payables and receivables,
between the Target and its Subsidiaries on the one hand, and the Sellers and
the Sellers' Subsidiaries on the other hand, shall be settled on and
liquidated in the manner set forth in Sections 2.3(b) and 2.3(c) of this
Agreement.
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7.8 FRANCHISE MATTERS. Buyer acknowledges that it does not
become a "franchisee" by virtue of the applicable provincial franchise laws
by virtue of the provisions of this Agreement or any of the Ancillary
Agreements. Buyer hereby waives, to the extent permitted by applicable law,
any protection of "franchisees" and rights to xxx for damages as a
"franchisee" that may be provided by any of the Regulations promulgated
under any applicable legislation.
ARTICLE VIII
ACTIONS BY SELLERS AND BUYER AFTER THE CLOSING
8.1 BOOKS AND RECORDS
(a) The Sellers and Buyer agree that each will cooperate
with and make available to the other party, during normal business hours, all
Books and Records, information and Personnel (without substantial disruption
of employment) retained and remaining in existence after the Closing Date
that are necessary or useful in connection with any tax inquiry, audit,
investigation or dispute, any litigation or investigation or any other matter
requiring any such Books and Records, information or employees for any
reasonable business purpose. The party requesting any such Books and
Records, information or employees shall bear all of the out-of-pocket costs
and expenses (including without limitation, attorneys' fees, but excluding
reimbursement for salaries and employee benefits) reasonably incurred in
connection with providing such Books and Records, information or employees.
(b) COOPERATION AND RECORDS RETENTION. The Sellers and
Buyer shall (and Buyer shall cause Target and its Subsidiaries to) (i) each
provide the other with such assistance as may reasonably be requested by any
of them in connection with the preparation of any return, audit, or other
examination by any taxing authority or judicial or administrative proceedings
relating to Liability for Taxes, (ii) each retain and provide the other with
any records or other information that may be relevant to such return, audit
or examination, proceeding or determination, and (iii) each provide the other
with any final determination of any such audit or examination, proceeding, or
determination that affects any amount required to be shown on any tax return
of the other for any period. Without limiting the generality of the
foregoing, Buyer and the Sellers shall each retain, until the applicable
statutes of limitations (including any extensions) have expired, copies of
all tax returns, supporting work schedules, and other records or information
that may be relevant to such returns for all tax periods or portions thereof
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ending on or before the Closing Date and shall not destroy or otherwise
dispose of any such records without first providing the other party with a
reasonable opportunity to review and copy the same.
8.2 SURVIVAL OF REPRESENTATIONS, ETC. All statements contained
in the Disclosure Schedule or in any certificate, schedule, exhibit or
instrument or conveyance delivered by or on behalf of the parties pursuant to
this Agreement or in connection with the transactions contemplated hereby
shall be deemed to be representations and warranties by the parties
hereunder. The representations and warranties of the Sellers, on the one
hand and Buyer on the other hand contained herein and as provided in the
preceding sentence shall survive the Closing Date until sixty days after the
completion of the fiscal-year audit of the Target and its Subsidiaries for
the second full year after the Closing Date (but shall in no event survive to
a date later than April 15, 1998) PROVIDED, HOWEVER, that the representations
and warranties contained in Section 4.19 and 4.21 shall continue to survive
until sixty days after the expiration of the applicable limitation periods,
or, with respect to Section 4.19, the applicable reassessment periods,
(giving effect to any waiver, tolling or extension thereof) and that the
representations and warranties contained in Section 4.27 shall continue to
survive until four (4) years after the Closing Date. The termination of the
representations and warranties provided herein shall not affect the rights of
a party in respect of any Claim made by such party in a writing received by
the other party prior to the expiration of the applicable survival period
provided herein.
8.3 INDEMNIFICATIONS.
(a) BY THE SELLERS. The Sellers shall jointly and
severally indemnify, save and hold harmless Buyer, its affiliates and
subsidiaries, and each of their respective Representatives (collectively, the
"BUYER INDEMNIFIED PARTIES"), from and against any and all costs, losses,
Liabilities, obligations, damages, lawsuits, deficiencies, claims, demands,
and expenses (whether or not arising out of third-party claims), including
without limitation interest, penalties, costs of mitigation, any clean-up,
remedial correction or responsive action, damages to the environment,
attorneys' fees and all amounts paid in investigation, defense or settlement
of any of the foregoing (herein, "DAMAGES"), incurred in connection with,
arising out of, or resulting from (i) any breach of any representation or
warranty or the inaccuracy of any representation made by the Sellers in or
pursuant to this Agreement; (ii) any breach of any covenant or agreement made
by the Sellers in or pursuant to this Agreement; (iii) any Liabilities or
contingent Liabilities, whether arising prior to
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or after the Closing Date, related to, in connection with or arising out of
the activities of the Sellers or any of the Sellers' Subsidiaries; (iv) any
liability with respect to the Discontinued Operations (except for Liabilities
arising out of the operation of the Discontinued Operations after the Closing
Date by the Buyer); (v) any Liabilities arising under any Environmental Law
or concerning any Environmental Condition, occurring after the Closing Date
and resulting from (A) any release or waiver by any Corporation of any other
Person with respect thereto which is not disclosed in the Disclosure Schedule
or (B) any representation, warranty, indemnification, covenant, restriction
or other undertaking of any Corporation with respect thereto which is not
disclosed in the Disclosure Schedule (except with respect to representations
and warranties set forth in Section 4.27 of this Agreement, the Liabilities
with respect to which will be indemnified against pursuant to the terms of
Section 8.3(a)(i) above) or (vi) any breach of any of the Ancillary
Agreements by any of the Sellers or any of the Sellers' Subsidiaries.
The term "DAMAGES" as used in this Section 8.3 is not limited to
matters asserted by third parties against any indemnified party, but includes
Damages incurred or sustained by an indemnified party in the absence of third
party claims. Payments by any indemnified party of amounts for which such
indemnified party is indemnified hereunder shall not be a condition precedent
to recovery. The rights and remedies provided in this Article VIII shall be
exclusive as to any Damages incurred by a party under this Agreement;
PROVIDED, HOWEVER, that nothing herein shall preclude a party from exercising
its rights under this Agreement and applicable law to seek equitable
remedies, including without limitation, specific performance and injunctions.
(b) BY BUYER. Buyer shall indemnify and save and hold
harmless the Sellers and their respective affiliates and Representatives
(collectively, the "SELLERS INDEMNIFIED PARTIES") from and against any and
all Damages incurred in connection with, arising out of, resulting from or
incident to (i) any breach of any representation or warranty or the
inaccuracy of any representation made by Buyer in or pursuant to this
Agreement; and (ii) any breach of any covenant or agreement made by Buyer in
or pursuant to this Agreement or any of the Ancillary Agreements to which it
is a party.
(c) COOPERATION. The indemnified party shall cooperate in
all reasonable respects with the indemnifying party and its representatives
(including without limitation its attorneys) in the investigation, trial and
defense of such lawsuit or action and any appeal arising therefrom; PROVIDED,
HOWEVER, that
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the indemnified party may, at its own cost, participate in negotiations,
arbitrations and the investigation, trial and defense of such lawsuit or
action and any appeal arising therefrom. The parties shall cooperate with
each other in any notifications to insurers.
(d) DEFENSE OF CLAIMS. If a claim for Damages (a "CLAIM") is to
be made by a party entitled to indemnification hereunder against the
indemnifying party, the party claiming such Indemnification shall, subject to
Section 8.2 hereof, give written notice (a "CLAIM NOTICE") to the
indemnifying Party as soon as practicable after the party entitled to
indemnification becomes aware of any fact, condition or event which may give
rise to Damages for which indemnification may be sought under this Section
8.3. If any lawsuit or enforcement action is filed against any party entitled
to the benefit of indemnity hereunder, written notice thereof shall be given
to the indemnifying party as promptly as practicable (and in any event within
five (5) calendar days after the service of the citation or summons). The
failure of any indemnified party to give timely notice hereunder shall not
affect rights to indemnification hereunder, except to the extent that the
indemnifying party demonstrates actual damage caused by such failure. After
such notice, if the indemnifying party shall acknowledge in writing to the
indemnified party that the indemnifying party shall be obligated under the
terms of its indemnity hereunder in connection with such lawsuit or action,
then the indemnifying party shall be entitled, if it so elects at its own
cost, risk and expense, (i) to take control of the defense and investigation
of such lawsuit or action, (ii) to employ and engage attorneys of its own
choice to handle and defend the same unless the named parties to such action
or proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and the indemnified party has been advised in
writing by counsel that there may be one or more legal defenses available to
such indemnified party that are different from or additional to those
available to the indemnifying party, in which event the indemnified party
shall be entitled, at the indemnifying party's cost, risk and expense, to
separate counsel of its own choosing, and (iii) to compromise or settle such
lawsuit or action, which compromise or settlement shall be made only with the
written consent of the indemnified party, such consent not to be unreasonably
withheld. If the indemnifying party fails to assume the defense of such
lawsuit or action within fifteen (15) calendar days after receipt of the
Claim Notice, the indemnified party against which such lawsuit or action has
been asserted will (upon delivering notice to such effect to the indemnifying
party) have the right to undertake, at the indemnifying party's cost and
expense, the defense, compromise or settlement of such lawsuit or action on
behalf of and for the account and risk of the indemnifying party; PROVIDED,
HOW-
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EVER, that such lawsuit or action shall not be compromised or settled without
the written consent of the indemnifying party, which consent shall not be
unreasonably withheld. If the indemnified party settles or compromises such
lawsuit or action without the written consent of the indemnifying party, the
indemnifying party shall not have any liability hereunder for or with respect
to such lawsuit or action. In the event the indemnified party assumes the
defense of the lawsuit or action, the indemnified party will keep the
indemnifying party reasonably informed of the progress of any such defense,
compromise or settlement. The indemnifying party shall be liable for any
settlement of any action effected pursuant to and in accordance with this
Section 8.3 and for any final judgment (subject to any right of appeal), and
the indemnifying party agrees to indemnify and hold harmless an indemnified
party from and against any Damages by reason of such settlement or judgment.
(e) BROKERS AND FINDERS. No agent, broker, investment banker,
financial advisor or other Person is or will be entitled to any broker's or
finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated hereby other than Xxxxxxx X. Xxxxx & Company
(the fees of which will be paid by Buyer). Each party hereto agrees to hold
the other parties hereto harmless from and against any and all claims,
liabilities or obligations with respect to any such fee or commission or
expenses related thereto asserted by any Person (i) with respect to any such
fee or commission or expenses related thereto or (ii) on the basis of any act
or statement alleged to have been made by any party hereto or any of their
respective representatives or affiliates.
(f) REPRESENTATIVES. No individual Representative of any party
shall be personally liable for any Damages under the provisions contained in
this Section 8.3. Nothing herein shall relieve either party of any Liability
to make any payment expressly required to be made by such party pursuant to
this Agreement.
(g) LIMITATION ON INDEMNITY/COMMITMENTS.
(i) The indemnification obligation of the parties hereto with
respect to any breach of any representation or warranty pursuant to Sections
8.3(a) or (b) shall be limited to Claims for Damages made prior to last date
of survival thereof referred to in Section 8.2. The indemnification
obligation of the parties hereto with respect to any breach of any covenant
or agreement pursuant to Sections 8.3(a) or (b) shall survive indefinitely
subject to the terms of this Agreement.
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(ii) Buyer may not recover Damages from the Sellers pursuant
to Section 8.3(a)(i) until the aggregate amount of Damages relating to such
Claims for which Buyer is seeking indemnification exceeds two hundred fifty
thousand dollars ($250,000); PROVIDED, HOWEVER, in the event that the
aggregate amount of Damages for which Buyer is seeking indemnification
exceeds such amount, Buyer may recover the full amount of such Damages less
$250,000. Notwithstanding the foregoing, the maximum amount of damages for
which the Sellers shall be liable pursuant to this Section 8.3 shall be
$10,000,000, plus or minus the amount of any post-Closing adjustment as set
forth in Section 2.3 hereof.
(iii) No Seller may recover damages from Buyer pursuant to
Section 8.3(b)(i) until the aggregate amount of Damages for which such Seller
is seeking indemnification exceeds two hundred and fifty thousand dollars
(250,000); PROVIDED, HOWEVER, in the event that the aggregate amount of
Damages for which such Seller is seeking indemnification exceeds such amount,
such Seller may recover the full amount of such Damages less $250,000.
Notwithstanding the foregoing, the maximum amount of damages for which Buyer
shall be liable pursuant to this Section 8.3 shall be $10,000,000, plus or
minus the amount of any post-Closing adjustment as set forth in Section 2.3
hereof.
(iv) Neither (a) the termination of the representations or
warranties contained herein, nor (b) the expiration of the indemnification
obligations described above, will affect the rights of a Person in respect of
any Claim made by such Person received by the indemnifying party prior to the
expiration of the applicable survival period provided herein.
(h) ESCROW AGREEMENT. Notwithstanding the foregoing, subject to
the terms and conditions of the Escrow Agreement, Claims for indemnification
against any Seller pursuant to this Section 8.3 shall first be satisfied from
the Escrow Amount and, after the Escrow Amount has been exhausted, shall be
recovered directly from the Sellers.
8.4 THIS SECTION INTENTIONALLY OMITTED.
ARTICLE IX
TAX MATTERS
9.1 RETURNS. The Sellers and the Target shall have the exclusive
obligation and authority to file or cause to be filed all Tax returns that
are required to be filed by or with
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respect to the income, assets (including, without limitation, real, personal
and intangible property) or operations of the Target or its Subsidiaries for
all taxable years or other taxable periods ending on or prior to the Closing
Date (the "PRE-CLOSING PERIODS"). Except as provided in the preceding
sentence, Buyer shall have the exclusive obligation and authority to file or
cause to be filed all Tax returns that are required to be filed by or with
respect to the income, assets (including, without limitation, real, personal
and intangible property) or operations of the Target or any of its
Subsidiaries or any successor thereto. No later than thirty days prior to
the due date (or any later date to which such due date has been legally
extended) for the filing of any Tax return with respect to any taxable year
or other taxable period of the Target and its Subsidiaries beginning on or
before the Closing Date and ending after the Closing Date (an "OVERLAP
PERIOD"), Buyer shall (a) provide the Sellers with written notice, which
notice shall set forth Buyer's calculations regarding the amount of Taxes for
which Buyer determines the Sellers are obligated to reimburse Buyer pursuant
to Section 9.3(a) in sufficient detail and particularity to enable the
Sellers to verify the amount of such Taxes for which the Sellers are
obligated to reimburse Buyer, (b) provide the Sellers with a draft of such
Tax return, and (c) provide the Sellers access to all records of the Target
and its Subsidiaries reasonably necessary to enable the Sellers and their
representatives to evaluate the draft Tax returns provided with such notice.
No later than ten days prior to the due date (or any later date to which such
due date has been legally extended) for the filing of such Tax return, the
Sellers shall notify Buyer of any objections the Sellers may have to Buyer's
calculations regarding the amount of such Taxes and to any items set forth in
such draft Tax return. Buyer and the Sellers agree to consult and resolve in
good faith any such objection. In the event that Buyer and the Sellers are
not able to resolve such dispute within seven days of the filing date of such
Tax return, the parties shall appoint Ernst & Young, LLP to resolve such
dispute as soon as shall be practicable after such appointment. The fees and
expenses of Ernst & Young, LLP, if any, shall be paid equally by Buyer and
LIW.
9.2 CONTESTS. The Sellers and their duly appointed representatives
shall have the exclusive authority to control any audit or examination by any
taxing authority, to initiate any claim for refund, to amend any Tax return
and to contest, resolve and defend against any assessment for additional
Taxes, or other adjustment of Taxes of or relating to any liability of the
Target or its Subsidiaries for Taxes reflected on any Tax returns covering
any Pre-Closing Periods; PROVIDED, HOWEVER, that (a) neither the Sellers nor
any of their duly appointed representatives shall, without the prior written
consent of the
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Buyer, which consent shall not be unreasonably withheld, file any claim for
refund, amend any Tax return or enter into any settlement of any contest or
otherwise compromise any issue that affects or may affect the Tax liability
of the Buyer or any of its Affiliates for any Tax period beginning after the
Closing Date (a "POST-CLOSING PERIOD") or any portion of an Overlap Period
beginning after the Closing Date, and (b) neither the Sellers nor any of
their duly appointed shall, without the prior consent of the Buyer, which
consent shall not unreasonably be withheld, enter into any settlement of any
contest or otherwise compromise any issue that would increase any liability
accruals for Taxes as of the Closing Date or would otherwise require payment
by the Buyer of any amount under Section 9.3 unless the Sellers shall have
agreed to indemnify the Buyer for payment of such Taxes. Buyer and its duly
appointed representatives shall have the exclusive authority to control any
audit or other proceeding relating to Taxes for any taxable year or other the
Closing Date; PROVIDED, HOWEVER, that (a) neither Buyer, the Target nor any
of their duly appointed representatives shall, without the prior written
consent of the Sellers, which consent shall not be unreasonably withheld,
enter into any settlement of any contest or otherwise compromise any issue
that affects or may affect the Tax liability of the Sellers or any of their
affiliates for any Pre-Closing Period or any portion of the Overlap Period
ending on the Closing Date, and (b) neither Buyer, the Target nor any of
their duly appointed representatives shall, without the prior consent of the
Sellers, which consent shall not unreasonably be withheld, enter into any
settlement of any contest or otherwise compromise any issue that would reduce
any liability accruals for Taxes as of the Closing Date or would otherwise
require payment by the Sellers of any amount under Section 9.3 unless Buyer
shall have waived or caused to be waived for itself and the Target any right
to indemnification for Taxes from the Sellers. The Sellers shall be entitled
to any Tax refund relating to the Target and its Subsidiaries to the extent
such Tax refund relates to any Pre-Closing Period or any portion of the
Overlap Period ending on the Closing Date, unless such refund has been
recorded as an Asset on the Closing Balance Sheet in which case Buyer shall
be entitled thereto.
9.3 PAYMENT OF TAXES. (a) Taxes of the Target and its Subsidiaries
that relate to an Overlap Period shall be apportioned between the portion of
such period ending on the Closing Date and the portion of such period
beginning after the Closing Date on the basis of an interim closing of the
books, and based on accounting methods, elections and conventions that do not
have the effect of distorting income or expenses. Notwithstanding the
foregoing, real and personal property Taxes of the Target and its
Subsidiaries for any Overlap Period shall be apportioned on a per diem basis.
The Sellers shall pay to
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Buyer or the appropriate taxing authority the Taxes calculated with respect
to the portion of the Overlap Period ending on the Closing Date (as
determined by the Sellers and Buyer using the procedure set forth under
Section 9.1), but any such payment required by the Sellers shall be reduced
by the amount of such Taxes already paid by the Target or the Sellers or any
affiliate of the Sellers on or prior to the Closing Date or accrued or
otherwise reflected as a Tax liability for such period on the Closing Balance
Sheet.
(b) except as otherwise provided in this Section 9.3(b) the Sellers
shall indemnify the Buyer Indemnified Parties and hold them harmless from (i)
all Liability for Taxes of the Target and its Subsidiaries (except Taxes
accrued and accounted for) for all Pre-Closing Tax Periods and the portion
ending on the Closing Date, (ii) all Liability for Taxes of any Person (other
than the Target or its Subsidiaries) with which any of the Sellers or the
Target or any of their respective Subsidiaries is or has been affiliated and
all liabilities arising from the requirement to withhold and remit Canadian
non-resident tax; and (iii) all Taxes arising out of a breach of the Sellers'
representations and warranties contained in Section 4.21 hereof.
Notwithstanding the foregoing provisions of this Section 9.3(b), the Sellers
shall not indemnify and hold harmless Buyer for the amount of recorded
liability accruals for Taxes reflected on the Closing Balance Sheet.
(c) Buyer agrees to pay or cause the Target to pay the Sellers an
amount equal to all payments made by the Sellers or their affiliates after
the Closing Date to any governmental authority for or with respect to Taxes
imposed on or with respect to the income, assets and operation of or with
respect to the Target or any of its Subsidiaries for periods ending on or
prior to the Closing Date, to the extent that the aggregate amount of such
payments does not exceed the amount of liability accruals for such Taxes
reflected on the Closing Balance Sheet.
(d) except as otherwise provided in this Section 9.3, Buyer hereby
indemnifies and agrees to hold harmless the Sellers and their affiliates from
and against all Taxes of or with respect to the Target and each of its
Subsidiaries for all taxable years or other taxable periods beginning after
the Closing Date and, with respect to the Overlap Period, the portion of such
period commencing after the Closing Date.
9.4 NOTICE OF CONTESTS. The Buyer shall promptly notify the Seller, in
connection with any inquiry, examination, or proceeding, any government
authority proposes in writing to make or any assessment or adjustment with
respect to Tax items of
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the Target and its Subsidiaries, which assessments or adjustments could
affect the Sellers following the Closing Date, and shall consult with the
Sellers with respect to any such proposed assessment or adjustment. Buyer
shall notify the Sellers in writing promptly upon learning of any such
inquiry, examination, or proceeding and shall consult with the Sellers with
respect to any such proposed assessment or adjustment relating to periods
ending on or prior to the Closing Date.
9.5 COOPERATION. The Buyer shall cause the Target and its Subsidiaries
to provide the Sellers or their designee with such assistance as may
reasonably be requested by the Sellers or their designee in connection with
the preparation of any Tax return, audit or judicial or administrative
proceeding or determination relating to liability for Taxes of or with
respect to the Target or any of its Subsidiaries, including but not limited
to, access to the books and records, and the assistance of the officers and
employees, of the Target and its Subsidiaries. Buyer and the Sellers
acknowledge that any and all information obtained in connection with the
preparation of any Tax return, audit or judicial or administrative proceeding
or determination pursuant to this Section 9.5 is of a confidential nature and
that all such information shall be used only for the purposes set forth in
the immediately preceding sentence.
9.6 PURCHASE PRICE ADJUSTMENT. To the extent permitted by law, any
payment made pursuant to Article VIII or Article IX hereunder by Buyer to the
Stockholder or by the Stockholder to Buyer shall be treated by all parties
for all purposes as an adjustment to the purchase price of the stock of the
Target.
ARTICLE X
MISCELLANEOUS
10.1 ASSIGNMENT. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party without the prior written
consent of the other parties; PROVIDED, HOWEVER, without the consent of any
other party, the Buyer may, (i) assign all such rights to any lender as
collateral security in connection with the financing of the Purchase Price so
long as Buyer is not in any way released from its obligations hereunder and
(ii) assign all such rights and obligations to any subsidiary or affiliate of
Buyer or to a successor in interest to Buyer which shall assume all
obligations and Liabilities of Buyer under this Agreement; PROVIDED, FURTHER,
that LIW will not unreasonably withhold its consent to the assignment by
Buyer of this Agreement or any of its rights and obligations hereunder in any
sale by
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Buyer of all or a significant portion of the assets of Target and its
Subsidiaries, taken as a whole; and PROVIDED, FURTHER, that the Stockholder
may, without the consent of Buyer, assign its rights hereunder in connection
with the dissolution of the Stockholder. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors-in-interest, personal representatives,
heirs, legatees and permitted assigns, and no other person shall have any
right, benefit or obligation under this Agreement as a third party
beneficiary or otherwise.
10.2 NOTICES. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing
and shall be deemed to have been duly given when received if personally
delivered; when transmitted if transmitted by telecopy, electronic or digital
transmission method; the day after it is sent, if sent for next day delivery
to a domestic address by recognized overnight delivery service (E.G., Federal
Express); and upon receipt, if sent by certified or registered mail, return
receipt requested. In each case notice shall be sent to:
If to the Sellers, addressed to:
LEP International Worldwide Limited
00 Xxxxxx Xxxxxx, Xxxxx
Xxxxxx KT 174QP, London
England
Attention: Xxx Xxxxxxx
Fax Number: 011/44/137/281 3181
With a copy to:
Xxxxxxxx Xxxxxxx LLP Fasken-Xxxxxxxx Xxxxxxx
000 Xxxxxxxxx Xxxxxx, X.X. Xxxxx 0000, Xxxxxxx-Xxxxxxxx Tower
Suite 0000 Xxxxxxx-Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000 Toronto, Ontario
Attention: Xxxx X. Xxxxx Attention: Xxxxx Xxxxx
Fax Number: (000) 000-0000
If to Buyer, addressed to:
International Logistics Limited
000 Xxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx
Fax Number:
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With a copy to:
Xxxxxx & Xxxxxxx Stikeman, Xxxxxxx
633 W. 5th Street, Suite 4000 Suite 5300, X.X. Xxx 00
Xxx Xxxxxxx, XX 00000-0000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxxx: Xxxx X. Xxxxxxx Xxxxxxx, Xxxxxx
Fax Number: (000) 000-0000 X0X XX0
Attention: Xxxxxxx X. Xxxxx
Fax Number: (000) 000-0000
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
10.3 CHOICE OF LAW. This Agreement shall be construed, interpreted and
the rights of the parties determined in accordance with the laws of Ontario,
except with respect to matters of law concerning the internal corporate
affairs of any corporate entity which is a party to or the subject of this
Agreement, and as to those matters the law of the jurisdiction under which
the respective entity derives its powers shall govern.
10.4 SERVICE OF PROCESS, CONSENT TO JURISDICTION.
(a) SERVICE OF PROCESS. Each of the parties hereto irrevocably
consents to the service of any process, pleading, notices or other papers by
the mailing of copies thereof by registered, certified or first class mail,
postage prepaid, to such party at such party's address set forth herein, or
by any other method provided or permitted under Ontario law.
(b) CONSENT TO JURISDICTION. Each party hereto irrevocably and
unconditionally (1) agrees that any suit, action or other legal proceeding
arising out of this Agreement may be brought in the Ontario Court (General
Division) or, if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Ontario; (2) consents
to the jurisdiction or any such court in any such suit, action or proceeding;
and (3) waives any objection which such party may have to the laying of venue
of any such suit, action or proceeding in any such court.
10.5 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement, the
Ancillary Agreements, together with all exhibits and schedules hereto and
thereto (including the Disclosure Schedule), constitutes the entire agreement
among the parties to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. This Agreement may not be amended
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except by an instrument in writing signed on behalf of each of the parties
hereto. No amendment, supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by the party to be bound thereby.
No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
10.6 MULTIPLE COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
10.7 EXPENSES. Except as otherwise specified in this Agreement, each
party hereto shall pay its own legal, accounting out-of-pocket and other
expenses incident to this Agreement and to any action taken by such party in
preparation for carrying this Agreement into effect.
10.8 INVALIDITY. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
10.9 TITLES; GENDER. The titles, captions or headings of the Articles
and Sections herein, and the use of a particular gender, are for convenience
of reference only and are not intended to be a part of or to affect or
restrict the meaning or interpretation of this Agreement.
10.10 PUBLICITY. Neither Buyer, on the one hand, nor the Sellers, the
Target or any of their respective subsidiaries, on the other hand, shall
issue any press release or make any public statement regarding the
transactions contemplated hereby, without prior written approval of the other
parties.
10.11 CUMULATIVE REMEDIES. All rights and remedies of either party
hereto are cumulative of each other and of every other right or remedy such
party may otherwise have at law or in equity, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies.
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10.12 CONFIDENTIAL INFORMATION.
(a) NO DISCLOSURE. The parties acknowledge that the transaction
described herein is of a confidential nature and shall not be disclosed
except to consultants, advisors and affiliates, or as required by law, until
such time as the parties make a public announcement regarding the transaction
as provided in Section 10.10.
(b) PRESERVATION OF CONFIDENTIALITY. In connection with the
negotiation of this Agreement, the preparation for the consummation of the
transactions contemplated hereby, and the performance of obligations
hereunder, Buyer acknowledges that it will have access to confidential
information relating to the Sellers and the Target and its Subsidiaries and
the Sellers acknowledge that they will have access to confidential
information relating to the Buyer and its affiliates, in each case, including
technical, manufacturing or marketing information, ideas, methods,
developments, inventions, improvements, business plans, trade secrets,
scientific or statistical data, diagrams, drawings, specifications or other
proprietary information relating thereto, together with all analyses,
compilations, studies or other documents, records or data prepared by the
Sellers and the Target and its Subsidiaries or Buyer, as the case may be, or
their respective Representatives or affiliates, which contain or otherwise
reflect or are generated from such information ("CONFIDENTIAL
INFORMATION"). The term "CONFIDENTIAL INFORMATION" does not include
information received by one party in connection with the transactions
contemplated hereby which (i) is or becomes generally available to the public
other than as a result of a disclosure by such party or its Representatives,
(ii) was within such party's possession prior to its being furnished to such
party by or on behalf of the other party in connection with the transactions
contemplated hereby, provided that the source of such information was not
known by such party to be bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the other
party or any other Person with respect to such available to such party on a
non-confidential basis from a source other than the other party or any of
their respective Representatives, provided that such source is not bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the other party or any other Person with
respect to such information.
(c) Each party shall treat all Confidential Information of the
other party as confidential, preserve the confidentiality thereof and not
disclose any such Confidential Information, except to its representatives and
affiliates who
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need to know such Confidential Information in connection with the
transactions contemplated hereby. Each party shall use all reasonable
efforts to cause its Representatives to treat all such Confidential
Information of the other party as confidential, preserve the confidentiality
thereof and not disclose any such Confidential Information. Each party shall
be responsible for any breach of this Agreement by any of its
Representatives. If, however, Confidential Information is disclosed, the
party responsible for such disclosure shall immediately notify the other
Party in writing and take all reasonable steps required to prevent further
disclosure.
(d) All Confidential Information shall remain the property of
the party who originally possessed such information. In the event of the
termination of this Agreement for any reason whatsoever, each party shall,
and shall cause its representatives to, return to the other party all
Confidential information (including all copies, summaries and extracts
thereof) furnished to such party by the other party in connection with the
transactions contemplated hereby.
(e) If one party or any of its representatives or affiliates is
requested or required (by oral questions, interrogatories, requests for
information or documents in legal proceedings, subpoena, civil investigative
demand or other similar process) or is required by operation of law to
disclose any Confidential Information, such party shall provide the other
party with prompt written notice of such request or requirement, which notice
shall, if practicable, be at least forty-eight hours prior to making such
disclosure, so that the other party may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this
Agreement. If, in the absence of a protective order or other remedy or the
receipt of such a waiver, such party or any of its representatives are
nonetheless, in the opinion of counsel, legally compelled to disclose
Confidential Information, then such party may disclose that portion of the
Confidential Information which such counsel advises is legally required to be
disclosed, provided that such party uses its reasonable efforts to preserve
the confidentiality of the Confidential Information, whereupon such
disclosure shall not constitute a breach of this Agreement.
10.13 ATTORNEYS' FEES. If any party to this Agreement brings an action
to enforce its rights under this Agreement, the prevailing party shall be
entitled to recover its costs and expenses, including without limitation
reasonable attorneys' fees, incurred in connection with such action,
including any appeal of such action.
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10.14 LIMITATION OF LIABILITY. Notwithstanding anything to the
contrary in this Agreement, in no event shall any party hereto be liable for
any incidental or consequential damages occasioned by any failure to perform
or the breach of any obligation (including, without limitation, the breach of
any representation or warranty) under this Agreement.
10.15 KNOWLEDGE. Whenever a phrase herein is qualified by "to the
knowledge of the Seller" or a similar phrase, it is intended to refer to the
knowledge, after the exercise of reasonable diligence, of lack Wasp, Xxx
Series, Digby Davies, Xxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxx Xxxxx, Xxxxxxxx
Xxxxxxxxxx and Xxx Xxxxxx.
10.16 CURRENCY. All references in this Agreement to dollars, unless
otherwise specifically indicated, are expressed in the currency of the United
States.
PAGES 49 TO 52, INCLUSIVE, INTENTIONALLY DELETED.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their respective behalf, by their respective officers
thereunto duly authorized, all as of the day and year first above written.
LEP INTERNATIONAL WORLDWIDE INTERNATIONAL LOGISTICS
LIMITED (CANADA) LIMITED
By: /s/ By: /s/
------------------------ ------------------------
Name: DIGBY X. XXXXXX Name: XXXXX X. XXXXXX
Its: DIRECTOR Its: PRESIDENT AND CEO
LEP INTERNATIONAL HOLDINGS
LIMITED
By: /s/
------------------------
Name: DIGBY X. XXXXXX
Its: DIRECTOR
LEP HOLDINGS (NORTH AMERICA)
LIMITED
By: /s/
-------------------------
Name: DIGBY X. XXXXXX
Its: DIRECTOR
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