SHARE AND ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made the 28th day of October, 1997.
BETWEEN:
CCL INDUSTRIES INC.,
a corporation incorporated under the laws of Canada
(herein called "CCL")
- and -
CCL INDUSTRIES CORPORATION,
a corporation incorporated under the laws of the State of
Delaware
(hereinafter called "CCL Delaware")
- and -
OUTSOURCING SERVICES GROUP, INC.
a corporation incorporated under the laws of Delaware
(hereinafter called the "Purchaser")
WHEREAS CCL Delaware, a wholly-owned indirect subsidiary of CCL, owns all
of the issued and outstanding shares of Kolmar Laboratories, Inc., a
corporation incorporated under the laws of the State of Delaware
("Kolmar");
AND WHEREAS Kolmar and its wholly-owned subsidiaries, Kolmar de Mexico,
S.A. de C.V., Kolmar (Aust.) Pty. Limited and Designed Cosmetics, Inc.
carry on the business of manufacturing and packaging of cosmetics,
toiletries and skin care products in the United States, Mexico and
Australia;
AND WHEREAS CCL, through its operating division, Kolmar Canada (the
"Division") carries on the business of manufacturing and packaging of
cosmetics, toiletries and skin care products at the Division's facilities
located in Barrie, Ontario;
AND WHEREAS the Purchaser desires to purchase from CCL Delaware and CCL
Delaware desires to sell to the Purchaser all of the issued and outstanding
shares of Kolmar;
AND WHEREAS the Purchaser desires to purchase from CCL and CCL desires to
sell to the Purchaser substantially all of the assets of the Division and
in connection therewith, the Purchaser will assume certain liabilities of
the Division;
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the covenants,
agreements, warranties and payments herein set out, the parties hereto
respectively covenant and agree as follows:
ARTICLE I - INTERPRETATION
1.1 Where used herein the following terms shall have the following
meanings:
(a) "Accounts Receivable" has the meaning set out in subsection 4.1(b);
(b) "Adjustment Amount" has the meaning set out in subsection 5.2(e) and
"Adjustment Request" has the meaning set out in subsection 5.2(c);
(c) "Assignable Permits" has the meaning set out in subsection 4.1(g);
(d) "Assumed Liabilities" has the meaning set out in Section 4.3;
(e) "Barrie Facility" means the real property located at Barrie, Ontario
as described in Schedule 6.8 - Real Property, and the buildings,
structures and fixtures thereon or thereto and the equipment used in
the Business located on such property;
(f) "Business" means collectively, the business of manufacturing and
packaging of cosmetics, toiletries and skin care products carried on
by the Division, Kolmar and the Subsidiaries;
(g) "CCL's Accountants" means KPMG, Chartered Accountants;
(h) "Closing" means the consummation of the transaction of purchase and
sale as contemplated herein in accordance with Article XII;
(i) "Closing Statement of Net Assets" means the audited statement of net
assets of the Business as of the Closing Date, prepared on a basis
consistent with the preparation of the Reference Pro Forma Statement
of Net Assets;
(j) "Closing Date" means December 31, 1997 or such other date as the
parties hereto may mutually agree;
(k) "Code" means the United States Internal Revenue Code of 1986, as
amended;
(l) "Customer Owned Inventory" means all raw materials, work-in-progress,
finished goods and other materials used in the business of the
Division and owned by customers of or suppliers to the Division;
(m) "Division" means Kolmar Canada, a division of CCL;
(n) "Division Contracts" means the Division's agreements, contracts,
leases or commitments relating to the Business, as of the Closing Date
described in subsection 4.1(f) hereof;
(o) "Environmental Laws" means all applicable laws in effect on the
Closing Date which regulate or relate to (i) the protection or clean-
up of the environment; (ii) the use, treatment, storage,
transportation, generation, manufacture, processing, distribution,
handing or disposal of, or emission, discharge or other release of
Hazardous Substances or otherwise dangerous substances, wastes,
pollution or materials (whether gas, liquid or solid); or (iii) the
preservation or protection of waterways, groundwater, drinking water,
air, wildlife, plants or other natural resources;
(p) "ERISA" means the Employee Retirement Income Securities Act of 1974,
as amended;
(q) "ERISA Affiliate" of any person means only other person that together
with such person as of the relevant hearing date under ERISA, was or
is required to be treated as a single employer under Section 414 of
the Code;
(r) "Excluded Assets" has the meaning set out in Section 4.2;
(s) "Excluded Liabilities" has the meaning set out in Section 4.4;
(t) "Financial Statements" means the audited historical financial
statements of the Business, for the years ended December 31, 1995 and
1996, and the nine months ended September 30, 1997 copies of which are
attached hereto as Schedule 1.1(t) - Financial Statements;
(u) "GAAP" means generally accepted accounting principles as set forth in
statements from Auditing Standards No. 69 entitled "The Meaning of
Present Fairly in Conformance with Generally Accepted Accounting
Principles in the Independent Auditors Reports" issued by the Auditing
Standards Board of American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting
Standards Board that are applicable to the circumstances as of the
date of determination;
(v) "Governmental Entity" means any government, governmental agency,
bureau, board, commission, department or regulatory agency;
(w) "Hazardous Substances" shall mean any substance, material or waste
that is subject to regulation, control or remediation under any
Environmental Laws;
(x) "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of
1976, as amended;
(y) "Independent Accountants" has the meaning set out in subsection
5.2(c);
(z) "Intellectual Property" has the meaning set out in Section 6.15;
(aa) "Inventories" means all finished goods, work-in-progress and raw
materials used in the Business;
(bb) "Liens" means all mortgages, claims, charges, liens, security
interests, adverse claims and other restrictions of any kind and
nature whatsoever;
(cc) "Net Asset Value" means the amount by which the assets exceed the
liabilities of the Business as determined from the Reference Balance
Sheet or the Closing Balance Sheet, as the case may be;
(dd) "Offsite Locations" has the meaning set out in subsection 9.1(c);
(ee) "Purchaser's Accountants" means Deloitte & Touche, LLP;
(ff) "Purchaser Party" shall have the meaning given in Section 9.1;
(gg) "Permitted Liens" means those liens set forth on Schedule 1.1 (gg) -
Permitted Liens;
(hh) "Purchased Assets" has the meaning set out in Section 4. l;
(ii) "Purchased Shares" means all of the issued and outstanding shares of
Kolmar;
(jj) "Real Property" has the meaning set out in Section 6.8;
(kk) "Reference Pro Forma Statement of Net Assets" means the estimated pro
forma statement of net assets of the Business as of December 31, 1997
attached hereto as Schedule 1.1 (kk) - Reference Pro Forma Statement
of Net Assets;
(ll) "Subsidiaries" means, collectively, Kolmar de Mexico, S.A. de C.V.
("Kolmar Mexico"), Kolmar (Aust.) Pty. Limited ("Kolmar Australia")
and Designed Cosmetics, Inc.;
(mm) "Taxes" means all taxes, including, without limitation, payroll and
other taxes or charges related to employment, customs duties, rates,
levies, assessments, reassessments and other charges together with all
penalties, interest and fines with respect thereto, payable to any
federal, provincial, state, municipal, local or other government or
government agency or authority, domestic or foreign; and
(nn) "Time of Closing" means 10:00 a.m. on the Closing Date.
1.2 For purposes of this Agreement "business day" means a day other than
Saturday, Sunday or a statutory holiday in the Province of Ontario, the
State of New York or the State of California.
1.3 "Agreement, "this Agreement", "hereto", "hereof", "herein",
"hereunder" and similar expressions refer to this Agreement including its
Schedules and not to any particular Article, Section, paragraph, clause or
other portion of this Agreement and include every amendment or instrument
supplementary hereto or in implementation hereof.
1.4 All dollar amounts referred to herein are in lawful currency of the
United States of America.
1.5 Except where the context otherwise indicates, words importing the
singular number only shall include the plural, and vice versa, and words
importing the masculine gender shall include the feminine gender and
"persons" shall include individuals, partnerships, joint ventures,
associations, corporations, unincorporated organizations and all other
forms of legal or business organizations, governments, regulatory or
governmental agencies, commissions, departments or instrumentalities.
1.6 The headings of all Articles hereof are inserted for convenience of
reference only and shall not affect the construction or interpretation
hereof.
ARTICLE II - SCHEDULES AND EXHIBITS
The following are the Schedules and Exhibits to this Agreement:
Schedule 1.1(t) - Financial Statements
Schedule 1.1 (gg) - Permitted Liens
Schedule 1. 1 (kk) - Reference Pro Forma Statement of Net Assets
Schedule 4. 1 (f) - Division Contracts
Schedule 4.1(g) - Permits
Schedule 4.1(i) - Pension Plan
Exhibit 5.2 - Excluded Indebtedness
Schedule 5.3 - Allocation of Purchase Price
Schedule 6.7 - Consents
Schedule 6.8 - Real Property
Schedule 6.9 - Financial Statement Exceptions
Schedule 6.10 - Material Changes
Schedule 6.11 - Contracts
Schedule 6.12 - Litigation
Schedule 6.13 - Employment Agreements
Schedule 6.14 - Compliance with Laws
Schedule 6. 15 - Intellectual Property
Schedule 6.16 - Taxes
Schedule 6. 17 - Benefit Plans
Schedule 8.4 - Environmental Insurance
Schedule 9. 1 - Environmental Matters
Exhibit 12.2 - Opinion of Counsel to CCL
Exhibit 12.3 - Opinion of Counsel to the Purchaser
Schedule 13.11 - Hands-Off
ARTICLE III - PURCHASE OF PURCHASED SHARES
3.1 Subject to the terms and conditions hereof, CCL covenants and
agrees to cause CCL Delaware and CCL Delaware covenants and agrees to sell,
assign and transfer to the Purchaser and the Purchaser covenants and agrees
to purchase from CCL Delaware at Closing, all but not less than all of the
Purchased Shares.
ARTICLE IV -
PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES
4.1 Subject to the terms and conditions hereof, CCL covenants and
agrees to sell, assign and transfer to the Purchaser and the Purchaser
covenants and agrees to purchase from CCL, effective as of the close of
business on the Closing Date, the following property and assets of the
Division wheresoever located as a going concern (collectively, the
"Purchased Assets") with good and marketable title therein and thereto,
free and clear of all Liens except for Permitted Liens:
(a) the Barrie Facility;
(b) all accounts receivable, trade accounts, notes receivable, book
debts, credits, rebates and allowances and other debts due or
accruing due to CCL with respect to the Division and the full
benefit of all security for such accounts, notes and debts
("Accounts Receivable");
(c) all Inventories of the Division, other than Customer Owned
Inventory;
(d) all machinery, equipment, vehicles, fixtures, storage tanks, jigs,
dies, molds, material handling equipment, spare parts, data
processing equipment, computer software, office equipment,
furniture and furnishings located at the Division or for use at the
Division but under repair or maintenance at third party premises
(collectively the "Division Equipment");
(e) the prepaid expenses and deposits of the Division;
(f) the full benefit of:
(i) the contracts, agreements and commitments described in Schedule
4.l (f) - Division Contracts;
(ii) all executory agreements entered into by CCL with respect to the
Division in the ordinary course of business of the Division on
normal commercial terms for the provision of services or goods to
the Division;
(iii) all executory agreements entered into by CCL with respect to
the Division in the ordinary course of the business of the
Division on normal commercial terms for the sale of
Inventories or the provision of services by the Division; and
(iv) all employment and collective bargaining agreements;
(g) the licenses, permits, approvals, consents, registrations,
certificates and other authorizations described in Schedule 4.1(g)
- Permits and noted thereon as being assignable or transferable to
the Purchaser whether with or without the consent of any person
(the "Assignable Permits");
(h) all trade marks and trade names, patents, copyrights, know-how,
trade secrets, technology and industrial or intellectual property
rights related thereto described in Schedule 6.15 - Intellectual
Property as owned by or licensed to the Division;
(i) the pension plan described in Schedule 4.1(i) - Pension Plan;
(j) all books, records, files and documents of the Division, including,
without limitation, (i) all operations or other manuals pertaining
to the Division and its business, product and component
specifications, (ii) lists of customers of or suppliers of or goods
and services to the Division, (iii) sales catalogues, advertising
material, manufacturing data, production records, quality control
and product recall records, inventory and supply records and
equipment manufacturer records, employee manuals and personnel
records (and the copyright pertaining thereto), (iv) all other
records pertaining to the Division and its business, (together
with, in the case of any such information that is stored
electronically, the media on which same is stored), (v) all
restrictive or negative covenant agreements, non-competition
agreements or non-solicitation agreements which CCL has with past
or present employees of the Division and (vi) all letters (or
extracts therefrom pertaining to the Division) from attorneys,
accountants and consultants; and
(k) the goodwill of the Division and its business, including the right
to the use of the name "Kolmar" in Canada.
4.2 Except as set out in Section 4.1 and except for the Purchased
Shares, the Purchaser is not purchasing or acquiring any property or assets
of CCL or the Division or any entity affiliated with CCL (collectively the
"Excluded Assets").
4.3 The Purchaser covenants and agrees to assume and thereafter
discharge, fulfill and perform in accordance with their terms, from and
after the Closing Date, all of the liabilities and obligations of the
Division (except Excluded Liabilities) including without limitation the
following liabilities and obligations of CCL with respect to the Division
(the "Assumed Liabilities"):
(a) all liabilities of the Division related to the Business included
in, reserved against or accrued in the Closing Balance Sheet;
(b) all liabilities or obligations of CCL under the Division Contracts
and the Assignable Permits;
(c) all employment obligations as provided for in Section 10.7; and
(d) all product warranty obligations as provided in Section 10.8.
4.4 Except as set out in Section 4.3, the Purchaser is not assuming any
other liabilities or obligations of CCL (collectively the "Excluded
Liabilities").
ARTICLE V - PAYMENT AND ALLOCATION OF THE PURCHASE PRICE
5.1 In consideration for the purchase of the Purchased Shares and the
Purchased Assets, at the Time of Closing the Purchaser shall assume the
Assumed Liabilities and shall pay $80,000,000 (the "Purchase Price") by
certified cheque or wire transfer of immediately available finds payable to
or to the order of CCL or as CCL may otherwise in writing direct the
Purchaser.
5.2(a) CCL shall prepare or cause to be prepared as soon as possible
after the Closing Date, the Closing Statement of Net Assets
and the Purchaser covenants and agrees to provide to CCL all
reasonable access to the premises and records of the Business
and all necessary assistance to permit CCL to complete the
Closing Statement of Net Assets on a timely basis. The Closing
Statement of Net Assets shall be prepared from the books and
records of the Business in accordance with GAAP applied on a
basis consistent with the preparation of the Reference Pro
Forma Statement of Net Assets. In particular, the Closing
Statement of Net Assets will use the same rate of exchange for
conversion into U.S. dollars as was used in the preparation of
the Reference Pro Forma Statement of Net Assets. In addition,
the Closing Statement of Net Assets shall be prepared on the
basis that all cash of the Business as at the Closing Date
belongs to CCL and the indebtedness described in Schedule 5.2
- Excluded Indebtedness as at December 31, 1997 has been
eliminated by CCL in a manner acceptable to the Purchaser
acting reasonably.
(b) CCL shall cause CCL's Accountants to audit the Closing Statement
of Net Assets and review the estimated Adjustment Amount of the
Business and shall, within 45 days after the Closing Date deliver
the Closing Statement of Net Assets to the Purchaser, along with a
report concerning the computation of the Adjustment Amount. CCL and
Kolmar shall cooperate fully and completely in responding to
questions and requests for information submitted by CCL's
Accountants in connection with their audit of the Closing Statement
of Net Assets and, with reasonable prior notice, provide them with
full access to all books and records of the Business to the extent
related to their audit of the Closing Statement of Net Assets or
the computation of the Adjustment Amount. CCL shall cause CCL's
Accountants, (i) to provide Purchaser's Accountants with full
access to all work papers of CCL's Accountants prepared in
connection with their audit of the Closing Statement of Net Assets
and the report concerning the computation of the Adjustment Amount
and (ii) to fully cooperate with all reasonable requests by
Purchaser's Accountants for the purpose of expediting and simplying
the review of the Closing Statement of Net Assets and the review of
the computation of the Adjustment amount to be performed by
Purchaser's Accountants pursuant to Section 5.2(c).
(c) Purchaser's Accountants shall have the longer of 30 days following
the delivery of the Closing Statement of Net Assets or 45 days
following the Closing in which to review the Closing Statement of
Net Assets and the computation of the Adjustment Amount at
Purchaser's expense, and if, in Purchaser's Accountants' reasonable
judgment, the Closing Statement of Net Assets does not fairly
present the Net Asset Value of the Business as at the Closing Date
as adjusted as described in subsection 5.2(e) or the computation of
the Adjustment amount is not correct, then Purchaser's Accountants
and Purchaser shall, within such 30-day period or 45-day period, as
the case may be, deliver to CCL and CCL's Accountants a proposed
adjustment to the Closing Statement of Net Assets and the
Adjustment Amount in writing (the "Adjustment Request") setting
forth (x) the amount of the proposed adjustment, (y) the item or
items to which such proposed adjustment relates, and (z) the facts
and circumstances supporting the reasonableness and propriety of
such adjustment; provided, however, that no proposed adjustments
shall be delivered to CCL or CCL's Accountants under this
subsection 5.2(c) unless, and then only to the extent that, the
aggregate of all adjustments proposed under this subsection 5.2(c)
exceeds $250,000 on a net basis. CCL shall cause CCL's Accountants
and the Purchaser shall cause Purchaser's Accountants to use their
best efforts for 15 days after the delivery of the Closing
Statement of Net Assets Adjustment Request to agree upon any
proposed adjustments to the Closing Statement of Net Assets or the
Adjustment Amount. Upon the expiration of such 15-day period, CCL
or Purchaser may submit in writing for resolution to Price
Waterhouse, Certified Public Accountants (the "Independent
Accountants") any dispute with respect to the Closing Statement of
Net Assets or the computation of the Adjustment Amount which has
not been resolved. As promptly as practicable, but in no event
later than 30 days after such submission, CCL shall cause CCL's
Accountants and the Purchaser shall cause Purchaser's Accountants
to deliver to the Independent Accountants written submissions in
support of their respective positions with respect to such dispute,
and CCL and the Purchaser shall cause the Independent Accountants
to resolve such dispute based solely on such written submissions
without any independent investigation of the books and records of
the Business. The costs of the Independent Accountants with
respect to the Closing Statement of Net Assets or the computation
of the Adjustment Amount shall be divided equally between CCL and
the Purchaser. The decision of the Independent Accountants with
respect to the Closing Statement of Net Assets or the computation
of the Adjustment Amount shall be final and binding on each of the
parties hereto.
(d) In connection with the preparation of the Closing Statement of Net
Assets, a physical inventory shall be taken at such time as CCL
and the Purchaser mutually agree pursuant to which all
Inventories will be counted as to quantity by personnel of CCL
and the Purchaser, using procedures normally used by Kolmar to
take inventory. The Inventory count will be rolled forward to
the Closing Date. For purposes of determining the value of the
Inventories (including the roll-forward), Kolmar's cost
accounting systems and methodology shall be utilized. Any
disputes as to physical count, usability or saleability of any
item of the Inventories will, if possible, be resolved which
such physical inventory is being taken. Any unresolved disputes
regarding the foregoing not resolved by the date on which CCL
is required to provide the Closing Statement of Net Assets to
the Purchaser pursuant to subsection 5.2(b) will be settled in
the same manner as provided for in subsection 5.2(c).
(e) The Adjustment Amount shall equal the Net Asset Value as of the
Closing Date as shown on the Closing Statement of Net Assets
less the Net Asset Value as reflected on the Reference Pro
Forma Statement of Net Assets. Subject to subsection 5.2(c), if
the Net Asset Value as of the Closing Date exceeds the Net
Asset Value as reflected on the Reference Pro Forma Statement
of Net Assets, the Purchase Price shall be increased by such
excess amount and if the Net Asset Value as of the Closing Date
is less than the Net Asset Value as reflected on the Reference
Pro Forma Statement of Net Assets, the Purchase Price will be
reduced by the amount of such deficiency. Subject to subsection
5.2(c), the Adjustment Amount shall be paid by the Purchaser to
CCL if the Purchase Price is to be increased, or by CCL to the
Purchaser if the Purchase Price is to be reduced, two business
days following the day on which the Closing Pro Forma Statement
of Net Assets is finalized pursuant to the provisions of this
Section 5.2.
5.3 The Purchase Price shall be allocated between the Purchased Shares
and the Purchased Assets and among the Purchased Assets as set out in
Schedule 5.3 - Allocation of Purchase Price, but such allocation will be
subject to adjustment following determination of the Adjustment Amount.
5.4 The Purchaser shall be liable for and shall pay all federal and
provincial sales taxes (including any land transfer taxes) properly payable
in respect of the transfer of the Purchased Assets by CCL to the Purchaser.
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF CCL
CCL represents and warrants to the Purchaser as follows and acknowledges
that the Purchaser is relying upon such representations and warranties in
connection with the completion of the transactions herein contemplated:
6.1 Each of CCL, CCL Delaware, Kolmar and the Subsidiaries is a
corporation duly incorporated and subsisting under the laws of its
jurisdiction of incorporation, has all necessary corporate power and
authority to own and lease its property and to carry on its business as now
being conducted by it and is duly qualified, licensed or registered to
carry on its business as now being conducted in all jurisdictions in which
the nature of the business conducted by it or the property owned or leased
by it makes such qualification, licensing or registration necessary.
6.2 Each of CCL and CCL Delaware has all necessary corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated herein. This Agreement has been duly authorized, executed and
delivered by each of CCL and CCL Delaware and constitutes the legal, valid
and binding obligation of each of CCL and CCL Delaware, enforceable against
CCL and CCL Delaware, in accordance with its terms.
6.3 CCL is the beneficial owner of the Purchased Assets, free and clear
of all Liens, except Permitted Liens. CCL Delaware is the registered and
beneficial owner of the Purchased Shares free and clear of all Liens.
Kolmar and the Subsidiaries are the beneficial owners of all of their
respective assets, free and clear of all Liens except Permitted Liens, and
such assets, plus the Purchased Assets, constitute all the assets needed to
carry on the Business as currently conducted. Except for the Purchaser
under this Agreement, no person has any written or oral agreement or option
or any right or privilege (whether by law, pre-emptive or contractual)
capable of becoming an agreement or option for the purchase or acquisition:
(i) from CCL, of any of the Purchased Assets, other than in the ordinary
course of the business of the Division; (ii) from CCL Delaware, of any of
the Purchased Shares; (iii) from Kolmar any shares of a Subsidiary or (iv)
from Kolmar or any of the Subsidiaries, for the purchase, subscription,
allotment or issuance of any shares (whether issued or unissued) or
securities convertible into shares of Kolmar or any of the Subsidiaries or
(except for sales of inventory in the ordinary course of business) any
material assets of Kolmar or any of the Subsidiaries.
6.4 Kolmar is the registered and beneficial owner of all of the shares
of the Subsidiaries, free and clear of all Liens.
6.5(a) The authorized capital of Kolmar consists of 1,000 common shares,
of which 2 common shares are, and will be at the Time of Closing,
issued and outstanding as fully paid and non-assessable and
registered in the name of CCL Delaware, free and clear of all
Liens;
(b) The authorized capital of Kolmar Mexico consists of 151,615 common
shares, of which 151,615 common shares are, and will be at the Time
of Closing, issued and outstanding as fully paid and non-assessable
and registered in the name of Kolmar (or in respect of one share,
its nominee), free and clear of all Liens;
(c) The authorized capital of Kolmar Australia consists of 49,900
preferred shares and 1,000 ordinary shares, of which 24,000
preferred shares and 1,000 ordinary shares are, and will be at the
Time of Closing, issued and outstanding as fully paid and non-
assessable and registered in the name of Kolmar, free and clear of
all Liens; and
(d) The authorized capital of Designed Cosmetics, Inc. consists of
1,000 common shares, of which 200 common shares are and will be at
the Time of Closing, issued and outstanding as fully paid and non-
assessable and registered in the name of Kolmar, free and clear of
all Liens.
6.6 Neither the execution and delivery of this Agreement nor the
consummation of the transactions herein contemplated will result in:
(a) a breach or violation of any provision of the charter documents,
by-laws or resolutions of the board of directors (or any committee
thereof) or shareholders of CCL or CCL Delaware;
(b) a breach of, or a default under, any term or provision of any
material contract to which CCL, CCL Delaware, Kolmar or the
Subsidiaries is a party or by which any of them are bound which
would give a third party the right to terminate or materially
modify such agreement or claim damages in an amount material in
relation to such contract;
(c) a violation by CCL or CCL Delaware of any statute, regulation,
rule, order, judgment, injunction, decree or award of any court or
governmental body having jurisdiction, which violation would have a
material adverse effect on the Business or on CCL and CCL
Delaware's ability to consummate the transactions contemplated
hereby, subject to preparing the requisite filing and obtaining the
requisite consents under the HSR Act;
(d) an imposition of any material Liens or other restriction on the
Business or on any of the Purchased Assets, the Purchased Shares,
on the assets of Kolmar or on the assets of the Subsidiaries; or
(e) a requirement for the consent, authorization or approval of any
person in addition to those described in Schedule 6.7 - Consents.
6.7 No consent, approval or authorization of, or declaration, filing or
registration with any person is required to be made or obtained by CCL or
CCL Delaware except for the filings, notifications and applications set out
in Schedule 6.7 - Consents or that relates solely to the identity of the
Purchaser. There is no requirement under any material contract relating to
the Business, the Purchased Shares or the Purchased Assets to which CCL,
CCL Delaware, Kolmar or any of the Subsidiaries is a party or by which it
is bound to give any notice to or to obtain the consent or approval of any
party to such agreement relating to the consummation of the transactions
herein contemplated, except for those notifications, consents and approvals
set out in Schedule 6.7.
6.8 Schedule 6.8 - Real Property provides an accurate and complete
description of (i) all real property owned by or leased to Kolmar and the
Subsidiaries; and (ii) the real property included in the Purchased Assets:
(collectively the real properties referred to in (i) and (ii) herein are
referred to as the "Real Property"). The Real Property includes all real
estate used to conduct the Business as presently conducted. Each of Kolmar
and the Subsidiaries and CCL in respect of the Division's Barrie Facility,
has good and marketable title to the Real Property specified as owned by it
in Schedule 6.8 - Real Property, free and clear of Liens except as set out
in Schedule 6.8 - Real Property and except for Permitted Liens. To the
knowledge of CCL, none of the Real Property is subject to any expropriation
or condemnation proceedings which would preclude the use of any such
properties by Kolmar, the Subsidiaries or the Division for the purposes for
which it is currently used. All leases of Real Property specified as leased
to Kolmar, the Subsidiaries or CCL in respect of the Division, are in good
standing in all material respects and none of Kolmar, the Subsidiaries or
CCL is in material default thereunder.
6.9 CCL has delivered to the Purchaser the Financial Statements,
accompanied by the unqualified opinion of CCL's accountants. The Financial
Statements (a) are prepared in accordance with GAAP consistently applied as
at the dates and for the periods covered thereby, and except as otherwise
noted therein, (b) fairly present the financial condition and results of
operations of the Business as of the dates and for the periods then ended,
and (c) in all material respects (i) are in agreement with the books and
records of the Division, Kolmar and the Subsidiaries, (ii) contain and
reflect adequate provisions for all liabilities and all taxes, federal,
state, local or foreign, with respect to the periods then ended and in all
prior periods, (iii) with respect to contracts and commitments, contain and
reflect adequate reserves for all reasonably anticipated losses and costs
and expenses, and (iv) contain and reflect adequate allowances for excess
and obsolete Inventory. Except as set forth in Schedule 6.9 hereto, neither
the Division, Kolmar nor any of the Subsidiaries has any liabilities or
obligations, either accrued, contingent or otherwise, which, individually
or in the aggregate, are material to the Business or which individually or
in the aggregate could cause any material adverse change in the financial
condition or results of operations of the Business and which have not been
reflected in the Financial Statements. Neither the Division, Kolmar nor any
Subsidiary is in default in respect to any material term or condition of
any indebtedness or liability.
6.10 Except as contemplated by this Agreement and except as set out in
Schedule 6.10 - Material Changes, since September 30, 1997:
(a) the Business has been conducted only in the ordinary and usual
course;
(b) there has been no material adverse change to the Business;
(c) there has been no amendment, modification or termination of any
contract listed on Schedule 6. 11 - Contracts;
(d) there has been no increase (other than the usual yearly increase)
in the compensation (including, without limitation, the rate of
commissions) payable to, or any payment of a cash salary bonus to,
any officer, director or employee of, or consultant to the Business
receiving remuneration of more than $75,000 per annum; and
(e) there has been no material alteration in the manner of keeping the
books, accounts or records of the Business, or in the accounting
practices therein reflected.
6.11 Schedule 6.11 - Contracts provides an accurate and complete list of
all contracts, other than purchase orders for the sale of inventory or the
purchase of supplies in the ordinary course of business, related to the
Business and involving the payment of an amount (whether in a lump sum or
in a series of installments) in excess of $250,000 per annum or which have
more than one year remaining in the term thereof. Except as set out in
Schedule 6.11, there has not been any material default by CCL, Kolmar or
the Subsidiaries, or to the knowledge of CCL, by any other party under any
of such contracts nor any event which with notice or lapse of time or both
would constitute a material default or material breach by CCL, Kolmar or
any of the Subsidiaries, or to the knowledge of CCL, by any other party
under any such contracts.
6.12 Except as described in Schedule 6.12 - Litigation, there are no
actions, suits or proceedings pending or to the knowledge of CCL,
threatened against or affecting the Division, Kolmar or the Subsidiaries,
or any of their respective properties or rights or any of the Purchased
Assets or the Purchased Shares involving claims (exclusive of legal costs)
individually exceeding $250,000.
6.13 Schedule 6.13 - Employment Agreements lists all collective
bargaining agreements and employment contracts with respect to the
Business, copies of which have been furnished to the Purchaser. The
Purchaser has been provided with a complete list of the names, positions
and annual salaries of the officers of Kolmar and the Subsidiaries, the
divisional management team and the site general managers.
6.14 To the knowledge of CCL and except as noted in Schedule 6.14 -
Compliance with Laws, the current operation of the Business is in
compliance in all material respects with all applicable laws, including
without limitation, Environmental Laws and regulations of the United States
Food and Drug Administration or its equivalent in other countries. Each of
CCL (with respect to the Division), Kolmar and the Subsidiaries holds all
material governmental licenses and permits for the carrying on of the
Business and none of CCL, Kolmar or the Subsidiaries has received any
notice that any appropriate governmental authority intends to cancel,
terminate or not renew any material license or permit.
6.15 Schedule 6.15 - Intellectual Property provides a complete and
accurate list of all trademarks, licenses, patents, business names and
copyrights included in the Purchased Assets or owned by CCL, any CCL
affiliate, Kolmar or the Subsidiaries and used in the Business except for
the name "CCL" (collectively the "Intellectual Property") and the
Intellectual Property is owned by or validly licensed to, CCL, Kolmar or
the Subsidiaries, as the case may be, and the Division, Kolmar or the
Subsidiaries have the right to use the same. To the knowledge of CCL, the
conduct of the Business does not infringe upon the patents, licenses,
trademarks, trade names, service marks, copyrights or similar intellectual
property rights of any other person. The Intellectual Property includes
all intellectual property used in the Business other than the name "CCL".
6.l6(a) CCL has duly filed within the times and in the manner
prescribed by law all Tax returns and reports required to be
filed by it in respect of the Business and such returns and
reports are true and correct in all material respects. CCL
has paid all Taxes in respect of the Business which are due
and payable by it other than as specifically disclosed and
accrued for in the Financial Statements and other than
amounts or assessments being contested in good faith and for
which appropriate - reserves are established as identified
on Schedule 6.16 - Taxes. CCL has withheld from each payment
made by it in respect of the Division the amount of all
applicable Taxes and other deductions required to be
withheld therefrom and has paid the same to the proper
taxing or other authority within the time prescribed under
applicable legislation or regulation.
(b) Each of Kolmar and each of the Subsidiaries has duly filed within the
times and in the manner prescribed by law all returns and reports in
respect of Taxes required to be filed by it and such returns and
reports are true and correct in all material respects. Each of Kolmar
and the Subsidiaries has paid all Taxes which are due and payable by
it, other than as specifically disclosed and provided for in the
Financial Statements and other than amounts or assessments being
contested in good faith and for which appropriate reserves are
established as identified on Schedule 6.16 - Taxes. (c) There are no
actions, suits, proceedings, audits, written inquiries or claims now
pending against Kolmar or any of the Subsidiaries in respect of Taxes
or against CCL in respect of Taxes or against CCL in respect of Taxes
relating to the Business.
(c) There are no agreements, waivers or other arrangements providing for
the extension of time with respect to the filing of any return or
report or payment of Taxes by Kolmar or any Subsidiaries or the period
of assessment or reassessment of Taxes in respect of Kolmar or any of
the Subsidiaries. Each of Kolmar and each of the Subsidiaries has
withheld from each payment made by it the amount of all applicable
Taxes and other deductions required to be withheld therefrom and has
paid the same to the proper taxing or other authority within the time
prescribed under applicable legislation or regulation.
6.17 Schedule 6. 17 - Benefit Plans provides a complete list of the
pension, retirement, profit sharing and other employee benefit plans
established by or for the employees of the Division, Kolmar and the
Subsidiaries (collectively the "Employee Plans").
(a) Each of the Employee Plans has been registered under and is in
compliance with all applicable legislation and has been maintained in
compliance with its terms.
(b) No individual shall accrue or receive additional benefits, service or
accelerated rights to payments of benefits under any Benefit Plan,
including the right to receive any parachute payment, as defined in
Section 280G of the Code or any similar legislation, or become
entitled to severance, termination allowance or similar payments as a
direct result of the transactions contemplated by this Agreement.
(c) No Employee Plan has participated in, engaged in or been a party to
any non-exempt Prohibited Transaction, and neither CCL, Kolmar nor and
of its ERISA Affiliates has had asserted against it any claim for
taxed under Chapter 43 Subtitle A of the Code, Section 5000 of the
Code, or for penalties under ERISA Section 502(c), (I) or (l), with
respect to any Employee Plan nor is there a basis for any such claim.
No officer, director or employee of CCL, Kolmar or any Subsidiary has
committed a material breach of any responsibility or obligation
imposed upon fiduciaries by Title I of ERISA with respect to any
Employee Plan.
(d) Other than routine claims for benefits, there is no claim pending, or
to the knowledge of CCL, Kolmar and the Subsidiaries threatened,
involving any Employee Plan by any person against such plan or CCL,
Kolmar or any ERISA Affiliate. There is no pending or to the knowledge
of CCL, Kolmar and the Subsidiaries threatened, proceeding involving
any Employee Plan before the Internal Revenue Service, the U.S.
Department of Labor or any other governmental authority.
(e) There is no violation of any reporting or disclosure requirement
imposed by ERISA or the Code with respect to any Employee Plan.
(f) Each Employee Plan has at all times prior hereto been maintained in
all material respects, by its terms and in operation, in accordance
with ERISA and the Code. CCL, Kolmar, each Subsidiary and their
respective ERISA Affiliates have made full and timely payment of all
amounts required to be contributed under the terms of each Employee
Plan and applicable law or required to be paid as expenses under such
Employee Plan, and shall continue to do so through the Closing. Each
Employee Plan intended to be qualified under Code Section 401(a) has
received a determination letter to that effect from the Internal
Revenue Service and no event has occurred and no amendment has been
made that would adversely affect such qualified status.
(g) With respect to any group health plans maintained for the benefit of
employees of the Business, CCL, Kolmar and each Subsidiary and its
respective ERISA Affiliates have complied in all material respects
with the provisions of Part y of Title I of ERISA and 4980B of the
Code. The Business is not obligated to provide health care benefits
of any kind of its retired employees pursuant to any Employee Plan,
including without limitation any group health plan, or pursuant to any
agreement or understanding.
(h) The Purchaser has received a copy of the three (3) most recently filed
Federal Form 5500 series and accountant's opinion's, if applicable,
for each Employee Plan and all applicable Internal Revenue Service
determination letters.
6.18 To the knowledge of CCL and subject to the reserve for doubtful
accounts set out on Closing Balance Sheet, all Accounts Receivable are good
and collectible.
ARTICLE VII - REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to CCL and CCL Delaware as follows
and acknowledges that CCL and CCL Delaware are relying upon such
representations and warranties in connection with the completion of the
transactions herein contemplated:
7.1 The Purchaser is a corporation duly incorporated and subsisting under
the laws of its jurisdiction of incorporation and has all necessary
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated herein.
7.2 This Agreement has been duly authorized, executed and delivered by the
Purchaser and constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms.
7.3 Neither the execution and delivery of this Agreement nor the
consummation of the transactions herein contemplated will result in:
(a) a breach or violation of the constating documents, by-laws or
resolutions of the board of directors (or any committee thereof) or
shareholders of the Purchaser;
(b) a violation by the Purchaser of any statute, regulation, rule, order,
judgment, injunction, decree or award of any court or governmental
body having jurisdiction which would have a material adverse effect on
the Purchaser's ability to consummate the transactions contemplated
hereby; or
(c) a requirement for the consent, authorization or approval of any person
other than under the HSR Act.
7.4 The Purchaser has the requisite cash and cash equivalents or financing
available under existing committed credit facilities in the aggregate
amount of not less than the Purchase Price available to consummate the
transactions contemplated hereby and such cash, cash equivalents or
financing will be available to the Purchaser at the Time of Closing to pay
the Purchase Price.
ARTICLE VIII - SURVIVAL AND LIMITATION OF REPRESENTATIONS,
WARRANTIES AND COVENANTS
8.1 The representations and warranties of each of CCL on the one hand, and
the Purchaser, on the other, contained in this Agreement or contained in
any document or certificate delivered pursuant to this Agreement shall
survive the Closing and notwithstanding the Closing, shall continue in full
force and effect for the benefit of the Purchaser or CCL and CCL Delaware,
as the case may be, for the following periods:
(a) with respect to those representations and warranties of CCL set out in
Section 6.14 relating to compliance with Environmental Laws, until the
fifth anniversary of the Closing Date;
(b) with respect to all other representations and warranties of CCL or the
Purchaser, until the earlier of 18 months after the Closing Date and
delivery of the audited financial statements of the Business for the
year ending December 31, 1998;
(c) with respect to Taxes and statements relating to Taxes, until the
expiration of the applicable statute of limitations; and
(d) with respect to the title of CCL to a Purchased Asset, Purchased
Shares, or with respect to the title of Kolmar and the Subsidiaries to
their respective assets, indefinitely.
8.2 The covenants of the parties hereto (other than the indemnities of the
parties as shall hereinafter be provided) shall survive the Closing and
notwithstanding the Closing, shall continue in full force and effect
without limitation.
8.3 Any claim by a party hereunder for a breach of representation,
warranty or covenant or indemnification with respect thereto shall be
preserved despite the subsequent occurrence of the termination of the
applicable survival period hereunder provided notice of such claim is given
in accordance with Section 9.4 prior to the termination of the survival
peri0d.
8.4 The amount of any damages which may be claimed by the Purchaser for
indemnification for a breach of a representation or warranty by CCL shall
be calculated to be the cost or loss to the Purchaser after giving effect
to any insurance proceeds available to the Purchaser, Kolmar and the
Subsidiaries in relation to the matter which is the subject of the claim
and after giving effect to the value of any related tax benefits realized
or which may reasonably be anticipated to be realized by the Purchaser,
Kolmar or any of the Subsidiaries in relation to the matter which is the
subject of the claim. To the extent that insurance is available on
reasonable commercial terms, the Purchaser agrees to cause the assets and
the operations of the Business as conducted by it to be insured by
reputable insurers against risks of the nature normally insured against by
corporations in the same or similar lines of business and in coverage
amounts normally carried by such corporations in the ordinary course of
business. In addition and provided that CCL has agreed to any Phase II
testing or investigatory work pursuant to Section l0. 1, the Purchaser
agrees to purchase and maintain a policy of environmental liability
insurance on the terms set out in Schedule 8.4 - Environmental Insurance
and such policy shall name CCL and its affiliates, directors, officers,
employees and agents as named insureds.
8.5(a) Notwithstanding any other provision of this Agreement, but
save and except in respect of the Offsite Locations, the Purchaser shall
not be entitled to make any claim for breach of representation, warranty or
covenant or indemnity with respect thereto until and only to the extent
that the aggregate amount of all damages, costs, expenses, liabilities,
penalties or losses (collectively, "Losses") incurred by the Purchaser,
after taking into account the provisions of Section 8.4 hereof, exceeds
$750,000 (the "Threshold Amount") (with Losses in an aggregate amount equal
to the first $750,000 treated as a deductible and not paid); provided that
the Threshold Amount shall not apply and there shall be no maximum
indemnity limit with respect to Losses arising under Sections 6.3, 6.4 and
6.8; and provided that there shall be no maximum indemnity limit with
respect to Losses arising under Section 6.16 (other than for Taxes
disclosed in the Closing Balance Sheet or any schedule hereto);
(b) In respect of all Losses incurred or expenditures required to be made
by the Purchaser, Kolmar or any of the Subsidiaries pursuant to
Environmental Laws (save and except in respect of the Offsite
Locations) and whether or not the Threshold Amount has been exceeded,
the Purchaser covenants and agrees to pay or cause to be paid by
Kolmar or the Subsidiaries the first $250,000 in such remedial
expenditures and CCL's obligation to indemnify and save harmless the
Purchaser relating to Environmental Laws will only arise when and to
the extent that the aggregate expenditures made by the Purchaser,
Kolmar and the Subsidiaries to remediate the matter or matters giving
rise to a Claim or Claims relating to Environmental Laws exceeds
$250,000 (with remedial expenditures in an aggregate amount equal to
the first $250,000 treated as a deductible and not paid); and
(c) The maximum aggregate liability of CCL to the Purchaser in respect of
all breaches, non-performance, claims and indemnities howsoever
arising under this Agreement will be limited to $6,500,000, save and
except in respect of the offsite Locations and as provided in
subsection 8.5(a).
ARTICLE IX - INDEMNIFICATION
9.1 Subject to the provisions of Sections 8.4 and 9. 10, CCL covenants and
agrees to indemnify and save harmless the Purchaser, Kolmar and the
Subsidiaries and their respective officers, directors and their employees
(the "Purchaser Parties") from all damages, costs, expenses, liabilities,
penalties or losses (collectively, "Losses") suffered or incurred by the
Purchaser as a result of or arising directly or indirectly out of or in
connection with:
(a) any breach by CCL of or any inaccuracy of any representation or
warranty of CCL contained in this Agreement provided that CCL shall
not be required to indemnify and save harmless the Purchaser Parties
in respect of any breach of a representation or warranty unless the
Purchaser shall have provided notice to CCL in accordance with Section
9.4 on or prior to the expiry of the survival period for such
representation and warranty as set out in Section 8.1 hereof;
(b) any breach or non-performance by CCL or CCL Delaware of any covenant
to be performed by it that is contained in this Agreement or in any
agreement, certificate or document delivered pursuant hereto; and
(c) any obligations imposed upon any Purchaser Party pursuant to
Environmental Laws that arise in respect of those properties and
facilities listed in Schedule 9. 1 - Environmental Matters
(collectively, such scheduled properties and facilities are herein
referred to as "Offsite Locations").
9.2 The obligations of indemnification by CCL pursuant to this Article IX
are subject to the limitations with respect to the survival of the
REPRESENTATIONS and warranties referred to in Section 1 and to the
limitations referred to in Sections 8.4 and 8.5 hereof.
9.3 The Purchaser covenants and agrees to indemnify and save harmless CCL
and CCL Delaware from all Losses suffered or incurred by CCL or CCL
Delaware as a result of or arising directly or indirectly out of or in
connection with:
(a) any breach by the Purchaser of or any inaccuracy of any representation
or warranty of the Purchaser contained in this Agreement, provided
that the Purchaser shall not be required to indemnify or save harmless
CCL and CCL Delaware in respect of any breach of any representation or
warranty unless CCL shall have provided notice to the Purchaser in
accordance with Section 9.4 on or prior to the expiry of the survival
period for such representation and warranty as set out in Section 8.1
hereof;
(b) any breach or non-performance by the Purchaser of any covenant to be
performed by it that is contained in this Agreement or in any
agreement, certificate or other document delivered pursuant hereto,
including without limitation, any failure by the Purchaser to pay,
satisfy, discharge, perform or fulfill any of the Assumed Liabilities;
(c) any obligations or liabilities relating to the Business or the Real
Property imposed upon CCL (or any of its affiliates) by any party
hereto, any Governmental Entity or any other entity, whether pursuant
to the terms of this Agreement or otherwise in respect of
Environmental Laws (other than in respect of the Offsite Locations) to
the extent that such obligations or liabilities relate only to actions
or occurrences after the Closing Date and the aggregate of all such
obligations and liabilities exceeds $6,500,000; and
(d) any other matter relating to the Business or the Purchased Assets and
arising based on acts or occurrences after the Closing that is not
subject to indemnification by CCL pursuant to Section 9. 1 of this
Agreement.
9.4 In the event that a party (the "Indemnified Party") shall become aware
of any claim, proceeding or other matter (a "Claim") in respect of which
the other party (the "Indemnifying Party") has agreed to indemnify the
Indemnified Party pursuant to this Agreement, the Indemnified Party shall
promptly give written notice thereof to the Indemnifying Party. Such
notice shall specify whether the Claim arises as a result of a claim by a
person against the Indemnified Party (a "Third Party Claim") or whether the
Claim does not so arise (a "Direct Claim"), and shall also specify with
reasonable particularity (to the extent that the information is available)
the factual basis for the Claim and the amount of the Claim, if known. If,
the Indemnified Party does not notify the Indemnifying Party of any Claim
in time to effectively contest the determination of any liability
susceptible of being contested, the Indemnifying Party shall be entitled to
set off against the amount claimed by the Indemnified Party the amount of
any Losses incurred by the Indemnifying Party resulting from the
Indemnified Party's failure to give such notice on a timely basis.
9.5 With respect to any Direct Claim, following receipt of notice from the
Indemnified Party of the Claim, the Indemnifying Party shall have 60 days
to make such investigation of the Claim as is considered necessary or
desirable. For the purpose of such investigation, the Indemnified Party
shall make available to the Indemnifying Party the information relied upon
by the Indemnified Party to substantiate the Claim, together with all such
other information as the Indemnifying Party may reasonably request. If both
parties agree at or prior to the expiration of such 60-day period (or any
mutually agreed upon extension thereof) to the validity and amount of such
Claim, the Indemnifying Party shall immediately pay to the indemnified
Party the full agreed upon amount of the Claim, failing which the matter
shall be referred to binding arbitration pursuant to Section 13.6.
9.6 With respect to any Third Party Claim, the Indemnifying Party shall
have the right, at its expense, to participate in or assume control of the
negotiation, settlement or defence of the Claim and, in such event, the
Indemnifying Party shall reimburse the Indemnified Party for all of the
Indemnified Party's out-of-pocket expenses as a result of such
participation or assumption. If the Indemnifying Party elects to assume
such control, the Indemnified Party shall have the right to participate in
the negotiation, settlement or defence of such Third Party Claim and to
retain counsel to act on its behalf, provided that the fees and
disbursements of such counsel shall be paid by the Indemnified Party unless
the Indemnifying Party consents to the retention of such counsel or unless
the named parties to any action or proceeding include both the Indemnifying
Party and the Indemnified Party and a representation of both the
Indemnifying Party and the Indemnified Party by the same counsel would be
inappropriate due to the actual or potential differing interests between
them (such as the availability of different defenses). If the Indemnifying
Party, having elected to assume such control, thereafter fails to defend
the Third Party Claim within a reasonable time, the Indemnified Party shall
be entitled to assume such control and the Indemnifying Party shall be
bound by the results obtained by the Indemnified Party with respect to such
Third Party Claim. If any Third Party Claim is of a nature such that the
Indemnified Party is required by applicable law to make a payment to any
person (a "Third Party") with respect to the Third Party Claim before the
completion of settlement negotiations or related legal proceeding, the
Indemnified Party may make such payment and the Indemnifying Party shall,
forthwith after demand by the Indemnified Party, reimburse the Indemnified
Party for such payment. If the amount of any liability of the Indemnified
Party under the Third Party Claim in respect of which such payment was
made, as finally determined, is less than the amount that was paid by the
Indemnifying Party to the Indemnified Party, the Indemnified Party shall,
forthwith after receipt of the difference from the Third Party, pay the
amount of such difference to the Indemnifying Party.
9.7 If the Indemnifying Party fails to assume control of the defence of
any Third Party Claim, the Indemnified Party shall have the exclusive right
to contest, settle or pay the amount claimed. Whether or not the
Indemnifying Party assumes control of the negotiation, settlement or
defence of any Third Party Claim, the Indemnifying Party shall not settle
any Third Party Claim without the written consent of the Indemnified Party,
which consent shall not be unreasonably withheld or delayed, provided such
settlement includes a full release of the indemnified Party; provided,
however, that the liability of the Indemnifying Party shall be limited to
the proposed settlement amount if any such consent is not obtained for any
reason.
9.8 The Indemnified Party and the Indemnifying Party shall co-operate
fully with each other with respect to Third Party Claims, and shall keep
each other fully advised with respect thereto (including supplying copies
of all relevant documentation promptly as it becomes available).
9.9(a) With respect to any Losses relating to or arising from any
Environmental Laws for which the Purchaser seeks indemnity, CCL
shall have the right to control and investigate and/or remediate,
at CCL's cost, any condition giving rise to a claim or demand for
indemnification by the Purchaser under this Agreement. CCL
(including its employees, contractors, representatives and agents)
shall have reasonable access (in time, manner and scope) to the
Real Property and, to the extent under Purchaser's control, the
Offsite Locations, as the case may be, for the purpose of
conducting any investigation and/or remediation, including any
sampling or monitoring which may be required to be performed by
CCL.
(b) The Purchaser shall use its best efforts to cooperate with CCL to
minimize costs with respect to Losses arising pursuant to
Environmental Laws.
(c) Each party shall give prompt written notice to the other of any report
or other document submitted, whether voluntarily or by requirement of
any Governmental Entity which describes any environmental condition
existing prior to the Closing Date on any of the Real Property or on
any of the offsite Locations. Each party shall have the right to
review and comment upon any submission made by the other to a
Governmental Entity which describes or addresses any environmental
condition for which a party is claiming indemnification from the other
hereunder, and each party, to the extent reasonable, shall revise such
submission in accordance with the other's comments thereon. Each party
shall give the other prompt written notice of, and each party and its
representatives shall have the right at its cost to participate in,
any telephone call or meeting with any Governmental Entity at which
any environmental condition for which such party is claiming
indemnification from the other party hereunder is to be discussed or
addressed in any manner.
(d) CCL will not have any obligation to indemnify the Purchaser from and
against any Losses arising from or related to Environmental Laws: (i)
which are not asserted by a third party (including government
entities); (ii) which do not relate to an environmental condition on a
Real Property or one of the offsite Locations and which condition
existed prior to the Closing Date; (iii) arising with respect to any
release or disposal of any Hazardous Substances by the Purchaser; (iv)
resulting, directly or indirectly, from the Purchaser, its employees,
contractors, representatives or agents, voluntarily conducting an
investigation, sampling or monitoring of the Offsite Locations after
the Closing unless required to do so by a Governmental Entity; (v)
resulting from, directly or indirectly, any voluntary or involuntary
after the Closing action by or omission of the Purchaser, its
employees, contractors, representatives or agents to accelerate or
delay the timing, to increase the cost or to further cause,
exacerbate, contribute to or aggravate the leaking, migration or
release of any Hazardous Substances at the Offsite Locations or on a
Real Property; or (vi) in the event the Purchaser fails to give notice
as required by Section 9.4 of this Agreement prior to, in respect of
the Real Property, the fifth anniversary of the Closing Date. The
Purchaser acknowledges and agrees that nothing contained herein
absolves it of any obligation under any Environmental Laws for Losses
arising from any condition that did not exist as of the Closing Date
or with respect to violations of Environmental Laws by the Purchaser,
its employees, contractors, representatives or agents.
9.10 Neither party hereto will be liable to the other under this Agreement
for any punitive, consequential or incidental damages (including loss of
revenue or income, business interruption, cost of capital or loss of
business reputation or opportunity) relating to any Claim for which either
such party may be entitled to recover under this Agreement (other than
indemnification of amounts paid or payable to third parties in respect of
any Third Party Claim for which indemnification hereunder is required).
9.11 The provisions of this Article IX shall apply to any Claim for breach
of any representation, warranty, covenant or other provision of this
Agreement or any agreement, certificate or other document delivered hereto
(other than a claim for specific performance or injunctive relief) with the
intent that all such Claims shall be subject to the limitations and other
provisions contained in this Article IX.
ARTICLE X - COVENANTS
10.1 CCL shall make available to the Purchaser and their authorized
representatives, to the CCL is logically able to do so, all title
documents, contracts, agreements, leases, customer lists, financial
statements, plans, reports, licenses, orders, permits, books of account,
accounting records and other information and data relating to the Business,
the Division, Kolmar and the Subsidiaries. CCL shall afford the Purchaser
and its authorized representatives reasonable access to the Purchased
Assets and to the property, assets, undertaking, properties, records and
documents of the Division, Kolmar and the Subsidiaries and any other
records of CCL pertaining to the Business. All information shall be
provided to the Purchaser in such form as such information may presently
exist or be readily available. In particular, without limitation, CCL shall
permit the Purchaser's representatives or consultants to conduct all such
Phase I testing and inspection (but no Phase II testing or investigatory
work unless (i) required in order to obtain the policy of insurance
contemplated by Section 8.4 and (ii) consented to in writing by CCL acting
reasonably) in respect of environmental matters at the Real Property as the
Purchaser may determine, in its sole discretion, to be required by the
Purchaser to satisfy itself in respect of such martyrs.
10.2(a) If, prior to the Closing Date, the Purchaser obtains
knowledge that a representation and warranty of CCL is
materially untrue or inaccurate or that a covenant is
breached, the Purchaser shall immediately provide notice of
same to CCL. The giving of notice shall not constitute a
release of CCL or CCL Delaware from their obligations under
this Agreement. The parties hereto agree to negotiate in
good faith during the seven days immediately following
delivery of such notice to CCL to determine the consequences
of such disclosure and if the parties hereto fail to reach
agreement during such seven-day period, either of CCL or the
Purchaser may, in its sole and absolute discretion, elect to
terminate this Agreement after the expiration of such seven-
day period, in which event each of the parties hereto will
be released from all obligations and liabilities under this
Agreement (other than pursuant to Section 13.8).
(b) CCL will deliver to the Purchaser as soon as possible after the date
hereof drafts of the Schedules and Exhibits referred to in Article II.
The Purchaser shall have 15 days after receipt of the last of the
Schedules and Exhibits to be delivered by CCL to the Purchaser (other
than Schedule 1.1(t) - Financial Statements and Schedule 1.1 (kk) -
Reference Proforma Statement of Net Assets) to advise CCL as to
whether or not it accepts such Schedules and Exhibits. With respect to
each of Schedule 1.1(t) - Financial Statements and Schedule 1.l (kk) -
Reference Proforma Statement of Net Assets the Purchaser shall have 15
days after delivery of such Schedule as to whether it accepts such
Schedule. In the event the Purchaser does not accept a Schedule or
Exhibit, the parties will negotiate in good faith during the 7 day
period immediately following the delivery of such Schedules and
Exhibits as set out above to settle the contents of such Schedules and
Exhibits. If the parties are unable to reach such an agreement within
such 7 day period, then either CCL or the Purchaser may, in its sole
and absolute discretion, elect to terminate this Agreement as to the
expiration of such 7 day period, in which event each of the parties
hereto will be released from all obligations and liabilities under
this Agreement (other than pursuant to Section 13.8).
(c) CCL will deliver to the Purchaser at last two business days prior to
the Closing Date, a written update or supplement to the Schedules
attached to this Agreement reflecting events occurring and material
contracts and agreements entered into in the ordinary course of the
operations of the Business from the date of this Agreement through the
Closing Date. All changes from the Schedules attached to this
Agreement will be marked clearly on such updated or supplemental
Schedules. To the extent that such updated or supplemental Schedules
reflect matters or events which have occurred after the date of this
Agreement in the ordinary course of the Business, which do not
constitute a violation of any of CCL's covenants set forth in this
Article X and which do not, alone or in the aggregate, represent a
material adverse change in the business financial condition or results
of operations of the Business, then the Schedules shall be deemed to
be amended as of the Closing Date to include the information set forth
on such updated or supplemental Schedules. To the extent that such
updated or supplemental Schedules reflect matters or events which have
occurred after the date of this Agreement and which alone or in the
aggregate, represent a material adverse change in the business,
financial condition or results of operations of the Business then: (i)
the parties will negotiate in good faith during the seven-day period
immediately following the delivery of the updated or supplemental
Schedules to determine the consequences of such disclosures; (ii) the
Schedules attached to this Agreement will be amended only to the
extent that the parties mutually agree as a result of such
negotiation; and (iii) either of CCL or the Purchaser may, in its sole
and absolute discretion, elect to terminate this Agreement after the
expiration of such seven-day period, in which event each of the
parties hereto will be released from all obligations and liabilities
under this Agreement (other than pursuant to Section 13.8).
10.3 During the period from the date of this Agreement until Closing:
(a) CCL will or will cause the Business to be conducted in the ordinary
and normal course thereof, consistent with past practices and will not
take any action inconsistent therewith or with the consummation of the
Closing;
(b) CCL will use reasonable commercial efforts to obtain, at or prior to
Closing, all the consents and approvals described in Schedule 6.7 -
Consents and to make all such filings and submissions under applicable
laws, regulations and rules as may be required for CCL and CCL
Delaware to consummate the transactions herein contemplated, provided
that CCL will not be obligated hereunder to pay any consideration to
the third party from whom such approval or consent is required;
(c) CCL will take or cause to be taken all necessary corporate action and
proceedings to approve and authorize the valid and effective transfer
of the Purchased Assets and the Purchased Shares to the Purchaser;
(d) CCL will cause all of the directors of Kolmar and the Subsidiaries to
resign in favour of the nominees of the Purchaser; and
(e) CCL will cause to be delivered the closing documentation of CCL and
CCL Delaware referred to in Article XII hereof.
10.4 CCL and the Purchaser covenant and agree:
(a) to make all necessary notification and filings under the HSR Act and
to use their reasonable efforts to obtain early termination of the
applicable waiting period and to make all further filings pursuant
thereto as may be necessary or desirable;
(b) on Closing, to jointly execute and promptly file with Revenue Canada
an election under Section 22 of the Income Tax Act (Canada) as to the
sale of the Accounts Receivable included in the Purchased Assets and
such election will designate the portion of the Purchase Price
allocated to the Accounts Receivable as the consideration paid
therefor by the Purchaser; and
(c) on Closing, to jointly elect and to file, within the required time,
under subsection 167(1) of the Excise Tax Act (Canada) that no tax be
payable pursuant to Part IX of the Excise Tar Act (Canada) with
respect to the sale by CCL to the Purchaser of the Purchased Assets.
10.5 The Purchaser hereby waives compliance by CCL with the Bulk Sales Act
(Ontario) CCL shall indemnify the Purchaser with respect to all Losses
which the Purchaser incurs as a result of CCL's non-compliance with such
legislation except to the extent that such Losses arise from the
Purchaser's failure to pay and satisfy any of the Assumed Liabilities.
10.6 The Purchaser covenants and agrees to deliver or cause to be delivered
the Purchaser's closing documentation referred to in Article XII hereof.
10.7 As of the Closing Date, the Purchaser covenants and agrees to make
bona fide offers of employment to each employee of CCL who is employed by
the Division (collectively the "Transferred Employees"). Such offers of
employment shall be substantially on the same terms and conditions
(including, without limitation, rights and entitlements with respect to
benefits) as CCL provided immediately prior to the Closing Date as
disclosed by CCL to the Purchaser in writing. The Purchaser shall
recognize the length of service with CCL or its affiliates of the
Transferred Employees, including entitlement to vacation, notice of
termination or pay in lieu hereof and severance pay, entitlement to
benefits, including the vesting of pension benefits and recognition of
deductible amounts previously paid by Transferred Employees in respect of
health insurance and other benefit plans, such that the employment of the
Transferred Employees shall not be deemed terminated for purposes of
applicable law. The Purchaser shall be liable for all pay and benefits
payable to Transferred Employees which relate to periods on or after the
Closing Date and for all other obligations assumed pursuant hereto and
shall indemnify and hold harmless CCL from any and all liabilities or
obligations relating to any such Transferred Employees assumed or agreed to
be performed hereunder or arising on or after the Closing Date. The
Purchaser shall not have any responsibility or liability with respect to
any employee of the Division who does not accept the Purchaser's offer of
employment.
10.8 At and as of the Closing Date, the Purchaser covenants and agrees to
assume and agrees to perform, all liabilities and obligations which exist
as of the Closing Date, or which arise thereafter, for repairs,
replacements, returns or allowances and related services required by the
terms and conditions of all warranties, express or implied, of CCL or the
Division with respect to:
(a) products manufactured and shipped to a purchaser or user by the
Division, or services performed by the Division on or prior to the
Closing Date, and
(b) all products manufactured by the Division prior to or the manufacture
of which by the Division is in process on, the Closing Date and which
are shipped to a purchaser or user after the Closing Date.
10.9 As soon as possible after the Closing Date, Xxxxxxx X. Xxxxxx
Incorporated (the "Actuary") shall determine the amount of unfunded
liabilities or surplus, if any, of the Employee Plans using assumptions
consistent with those to determine unfunded liabilities or surplus for the
year 1995. The final report of the Actuary shall be final and binding on
all parties hereto unless objected to by the Purchaser within 30 business
days after review by its own actuary and the parties hereto agree that the
aggregate amount of unfunded liabilities, or aggregate surplus, as the case
may be, shall constitute a reduction in the Purchase Price, in the case of
an unfunded liability, or an increase in the Purchase Price, in the case of
a surplus. Such surplus shall be paid by the Purchaser to CCL in such
amounts and at such times as matches the timing of the funding the
Purchaser would otherwise be required to make if such surplus did not exist
if the calculations for funding requirements were made on the same basis as
used to determine the surplus. Such reduction shall be paid by CCL to the
Purchaser in such amounts and at such times as matches the timing of the
funding by the Purchaser of such reduction without acceleration thereof if
the calculations for funding requirements were made on the same basis as
used to determine the amount of such unfunded liabilities. CCL and the
Purchaser shall each pay one-half of the fees and expenses charged by the
Actuary.
10.10 CCL agrees to provide such reasonable assistance as the Purchaser
may request (and the Purchaser shall reimburse CCL for its reasonable costs
in connection therewith) in connection with an orderly transition of the
Business.
ARTICLE XI - CONDITIONS OF CLOSING
11.1 The purchase and sale of the Purchased Assets and the Purchased Shares
are subject to the following terms and conditions for the exclusive benefit
of the Purchaser to be fulfilled and/or performed at or prior to Closing
except in the case of paragraph (h) below which must be fulfilled by
November 7, 1997 or such later date as CCL shall approve acting reasonably:
(a) the Purchaser shall be satisfied that the representations and
warranties of CCL contained in this Agreement shall be true and
correct in all material respects on the date hereof, except those
representations and warranties that are qualified by the word
"material", which representations shall be true and correct in all
respects as of the date hereof;
(b) the representations and warranties of CCL contained in this Agreement
shall be true and correct on and as of the Closing Date in all
material respects, except those representations and warranties that
are qualified by the word "material", which representations and
warranties shall be true and correct in all respects and the Purchaser
shall have received on the Closing Date a certificate dated the
Closing Date, in form reasonably satisfactory to counsel for the
Purchaser, executed by CCL to the foregoing effect;
(c) CCL shall have fulfilled and/or complied with, in all material
respects, its obligations, covenants and agreements herein contained
to be performed or caused to be performed by it and CCL shall have
executed and delivered a certificate dated the Closing Date to the
foregoing effect;
(d) the consents and approvals referred to in Schedule 6.7 - Consents
shall have been obtained in form and on terms satisfactory to the
Purchaser, acting reasonably;
(e) there is available to the Purchaser a policy of environmental
liability insurance on substantially the terms set out in Schedule 8.4
- Environmental Insurance;
(f) all Liens, except Permitted Liens, shall have been discharged;
(g) no action or proceeding shall be pending or to the knowledge of CCL or
the Purchaser, threatened by any person to enjoin, restrict or
prohibit and no order shall have been obtained by any person
enjoining, restricting or prohibiting the sale of any of the Purchased
Assets or of the Purchased Shares to the Purchaser or the right of
Kolmar and the Subsidiaries to continue to conduct the Business; and
(h) Xx. Xxxxxxxxxxx Xxxxxx shall have entered into an employment.
arrangement with the Purchaser satisfactory to the Purchaser acting
reasonably.
If any of the foregoing conditions shall not be fulfilled and/or performed
at or before the Time of Closing or in the case of paragraph (h) by
November 7, 1997 or such later date as CCL shall approve acting reasonably,
the Purchaser may terminate this Agreement by written notice to CCL and, in
such event, the Purchaser shall be released from all obligations hereunder
(other than pursuant to Section 13.8) without prejudice to any rights or
remedies that the Purchaser may have against CCL and CCL Delaware, provided
however that the Purchaser may waive compliance with any of such conditions
in whole or in part, without prejudice to any of its rights of termination
in the event of non fulfillment or non performance of any other condition,
obligation or covenant, any such waiver to be binding on the Purchaser only
if the same is in writing.
11.2 The obligation of CCL to sell the Purchased Assets and of CCL Delaware
to sell the Purchased Shares are subject to the following terms and
conditions for the exclusive benefit of CCL and CCL Delaware to be
fulfilled and/or performed at or prior to Closing:
(a) the representations and warranties of the Purchaser contained in this
Agreement shall be true and correct, in all material respects, on the
date hereof and shall be true and correct, in all material respects,
on and as of the Closing Date and CCL and CCL Delaware shall have
received on the Closing Date a certificate dated the Closing Date, in
form and content reasonably satisfactory to counsel for CCL and CCL
Delaware, executed by the Purchaser to the foregoing effect;
(b) the Purchaser shall have fulfilled and/or complied with, in all
material respects, its obligations, covenants and agreements herein
contained to be performed or caused to be performed by it and the
Purchaser shall have executed and delivered a certificate dated the
Closing Date to the foregoing effect;
(c) the consents and approvals referred to in Schedule 6.7 - Consents
shall have been obtained in form and on terms satisfactory to CCL and
CCL Delaware, acting reasonably; and
(d) no action or proceeding shall be pending, or to the knowledge of the
Purchaser or CCL, threatened by any person to enjoin, restrict or
prohibit, and no order shall have been obtained by any person
enjoining, restricting or prohibiting the sale of any of the Purchased
Assets or the Purchased Shares to the Purchaser or the right of Kolmar
and the Subsidiaries to continue to conduct the Business.
If any of the foregoing conditions shall not be fulfilled and/or performed
at or before the Time of Closing, CCL and CCL Delaware may terminate this
Agreement by written notice to the Purchaser and, in such event, CCL and
CCL Delaware shall be released from all obligations hereunder (other than
pursuant to Section 13.8) without prejudice to any rights or remedies that
CCL and CCL Delaware may have against the Purchaser, provided, however,
that CCL and CCL Delaware may waive compliance with any of such conditions,
in whole or in part, without prejudice to their rights of termination in
the event of the non-fulfillment or nonperformance of any other condition
or conditions, any such waiver to be binding on CCL and CCL Delaware only
if the same is in writing.
ARTICLE XII - CLOSING ARRANGEMENTS
12.1 The Closing of the transactions contemplated by this Agreement shall
take place at the Time of Closing on the Closing Date at the offices of
Lang Xxxxxxxx, Suite 2500, BCE Place, 000 Xxx Xxxxxx, Xxxxxxx, Xxxxxxx.
12.2 At the Time of Closing, CCL shall deliver to the Purchaser actual
possession of the Purchased Assets and CCL and CCL Delaware shall deliver
to the Purchaser the following documents duly executed by all persons other
than the Purchaser, or do the following acts or things which delivery and
performance constitute a condition precedent in favour of the Purchaser to
the completion of the transactions herein provided for:
(a) assignments of the Purchased Assets and any necessary notices and
consents to perfect such assignments in form and content acceptable to
the Purchaser, acting reasonably;
(b) the share certificates evidencing all of the Purchased Shares duly
endorsed for transfer in favour of the Purchaser together with the
share certificates evidencing the issued and outstanding shares of the
Subsidiaries registered in the name of Kolmar;
(c) the approvals and consents referred to in subsection 10.3(b);
(d) the certificates referred to in subsection 11.1(b) and (c);
(e) a certified copy of the resolutions duly adopted by the board of
directors of CCL authorizing the execution, delivery and performance
of this Agreement by CCL, together with a certificate as to the
incumbency and signatures of the officers executing this Agreement and
the other documents executed pursuant hereto;
(f) a certified copy of the resolutions duly adopted by the board of
directors of CCL Delaware authorizing the execution, delivery and
performance of this Agreement by CCL Delaware, together with a
certificate as to the incumbency and signatures of the officers
executing this Agreement and the other documents executed pursuant
hereto;
(g) a certified copy of the resolutions duly adopted by the board of
directors of Kolmar authorizing the transfer of the Purchased Shares
to the Purchaser:
(h) the resignations referred to in subsection 10.3(d);
(i) the minute books, securities registers and corporate seals of Kolmar
and the Subsidiaries;
(j) an opinion of counsel to CCL in the form attached as Schedule 12.2 -
Opinion of Counsel to CCL; and
(k) all other documents and instruments, conveyances and transfers
reasonably required by the Purchaser to vest in or confirm to the
Purchaser good and marketable title to the Purchased Assets and the
Purchased Shares as contemplated by this Agreement.
12.3 Subject to the satisfaction and fulfillment of all conditions provided
for in this Agreement (unless waived in writing by the Purchaser at the
Time of Closing), the Purchaser shall deliver to CCL and CCL Delaware the
following documents duly executed by all persons other than CCL and CCL
Delaware or do the following acts or things which delivery and performance
constitute a condition precedent in favour of CCL and CCL Delaware to the
completion of the transactions herein provided for:
(a) an assumption of the Assumed Liabilities in form and content
acceptable to CCL acting reasonably;
(b) the certificates referred to in subsections 11.2(a) and (b);
(c) a certified copy of the resolutions duly adopted by the board of
directors of the Purchaser authorizing the execution, delivery and
performance of this Agreement by the Purchaser, together with a
certificate as to the incumbency and signature of the officers of the
Purchaser executing this Agreement and the other documents executed
pursuant hereto;
(d) the payment and deliveries referred to in Section 5.l hereof due on
Closing; and
(e) an opinion of counsel the form of opinion attached hereto is Schedule
12.3 - Opinion of Counsel to the Purchaser.
ARTICLE XIII - GENERAL
13.1 Any announcement with respect to this Agreement by any of the parties
hereto shall be submitted in advance for the comments of the other parties
hereto where practicable; provided always that nothing herein contained
shall prevent or restrict CCL from making any announcement with respect to
this Agreement which it is required by law or by any stock exchange to
make.
13.2 Any notice required or permitted to be given for purposes of this
Agreement shall be in writing and shall be sufficiently given if personally
delivered at the applicable address set out below, or sent by registered
letter, postage prepaid or transmitted by telecopy:
(a) if to the Purchaser:
The Xxxxxx + Xxxxxx Group
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx
00000
Attention: Xxxx Xxxxx
Telecopy No. (000) 000-0000
and with a copy to its counsel at:
Law Offices of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
Seventeenth Floor
000 Xxxx Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx
00000-0000
Attention: Xxxxx X. Xxxxxxxx
Telecopy No. (000) 000-0000
(b) if to CCL or CCL Delaware addressed to it as follows:
CCL Industries Inc.
000 Xxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
X0X0X0
Attention: President
Telecopy No. (000) 000-0000
and with a copy to its counsel at:
Lang Xxxxxxxx
Barristers & Solicitors
Suite 2500, BCE Place
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X0X0
Attention: Xxxxxxx Xxxxx
Telecopy No. (000) 000-0000
or at such other address as the party to whom such writing is to be given
shall have notified the party giving the same in the manner provided in
this Section. Any notice delivered to the party to whom it is addressed as
hereinbefore provided shall be deemed to have been given and received on
the date it is so delivered at such address, provided that if such day is
not a business day, then a notice shall be deemed to have been given and
received on the next business day following such day. Any notice mailed as
aforesaid shall be deemed to have been given and received on the fifth
business day next following the date of its mailing. Any notice transmitted
by telecopy shall be deemed given and received on the first business day
after its transmission.
13.3 Time shall be of the essence of this Agreement.
13.4 This Agreement, including the Schedules and Exhibits hereto, and the
confidentiality agreement dated August l, 1997 between CCL and the
Purchaser, constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof. There are not and shall not be any
verbal statements, representations, warranties, undertakings or agreements
between the parties with respect to the purchase and sale of the Purchased
Shares and the Purchased Assets and this Agreement may not be amended or
modified in any respect except by written instrument signed by the parties
hereto.
13.5 No waiver of any of the provisions of this Agreement shall be deemed
to constitute a waiver of any other provision (whether or not similar) nor
shall such waiver be effective or binding unless in writing and, unless
otherwise provided, shall be limited to the specific breach waived.
13.6 This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario without reference to conflicts or
choice of law principles. Any dispute between the parties arising under
this Agreement or the transactions contemplated by this Agreement
(including without limitation any claim based on contract, tort or statute)
shall be decided by arbitration as provided in this Section 13.6 and not by
lawsuit (other tan disputes arising under Section 5.2, which shall be
resolved as set forth therein). The arbitration shall be conducted in New
York, New York, by a mutually acceptable single arbitrator, and shall be
administered by the American Arbitration Association (the "ACP / AWP") in
accordance with its then existing commercial arbitration rules, except as
otherwise provided in this Section 13.6. In the event that the parties are
unable to agree on a single arbitrator, the arbitration shall be conducted
by an arbitrator agreed upon by CCL and Purchaser from a panel of five
potential arbitrators selected by the ACP / AWP, with each of CCL and
Purchaser being entitled to reject up to two arbitrators on the panel
selected by the ACP / AWP. The parties shall strike arbitrators from the
panel alternately, with CCL striking first. The parties shall not be
entitled to conduct discovery except as permitted by the commercial
arbitration rules of the ACP / AWP. The prevailing party, if any, will be
entitled to recover reasonable fees and costs if awarded by the arbitrator.
The parties to the dispute shall share equally the payment of the fees of
the arbitrator, though the arbitrator, in his or her sole discretion, may
order the non-prevailing party to pay the prevailing party's shall be
signed by the arbitrator and shall include a statement of the basis of the
award. Judgment on the award may be entered in any court having
jurisdiction thereof. The arbitrator may not award punitive damages, and
the parties hereby irrevocably waive any right to punitive damages.
13.7 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns but
shall not be assignable by any of the parties hereto without the prior
written consent of the other parties hereto, provided that the Purchaser
may assign this Agreement and its rights and obligations hereunder to an
affiliate of the Purchaser provided that such affiliate enters into a
written agreement with CCL and CCL Delaware to be bound by the provisions
of this Agreement in all respects and to the same extent as the Purchaser
is bound and provided that the Purchaser shall continue to be bound by all
of the obligations hereunder as if such assignment had not occurred and
perform such obligations to the extent that such affiliate fails to do so.
For purposes hereof, a corporation is an affiliate of another if one of
them, directly or indirectly, is the subsidiary of the other or both are
subsidiaries of the same corporation.
13.8 Except as specified herein, each party hereto shall pay its own legal,
accounting and other expenses arising in respect of this Agreement and to
any action taken by such party in preparation for carrying this Agreement
into effect. The Purchaser shall pay all costs of applying for new permits
and all costs of obtaining the transfer of existing Assignable Permits.
13.9 This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement, and each of which
shall be deemed an original.
13.10 For a period of six years after the Closing Date, the Purchaser
agrees to permit CCL to have reasonable access to and to make copies of the
books and records of the Division, Kolmar and the Subsidiaries relating to
periods prior to the Closing Date, as may be necessary or desirable and
reasonable in connection with the prosecution or defense of any claims,
actions or proceedings by or against CCL or CCL Delaware which relate to
the period prior to the Closing Date and for which CCL or CCL Delaware has
or may have liability or for tax compliance purposes with respect to
periods prior to the Closing Date. In connection with the right of access
hereby granted, the Purchaser agrees to not intentionally discard, destroy
or dispose of any such records or files without providing CCL with a
reasonable right to take, at its own expense, possession of any such
records or files or copies thereof.
13.11 For a period of three years after the Closing Date, CCL on its own
behalf, and on behalf of its subsidiaries, agrees that neither it nor its
subsidiaries will solicit for employment any of the individuals named in
Schedule 13.11 - Hands-Off.
13.12 Each of the parties hereto upon the request of the other, whether
before or after the Time of Closing shall do, execute, acknowledge and
deliver or cause to be done, executed, acknowledged or delivered all such
further acts, deeds, documents, transfers, assignments, conveyances and
assurances as may be reasonably necessary or desirable to effect complete
consummation of the transactions contemplated by this Agreement.
IN WITNESS WHEREOF this Agreement has been executed and delivered by
the parties hereto on the date first above written.
CCL INDUSTRIES, INC.
By: /s/ Xxx Xxxxxx
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By: /s/ Xxxxxx Xxxxxxxxx
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CCL INDUSTRIES CORPORATION
By: /s/ Xxx Xxxxxx
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By: /s/ Xxxxxx Xxxxxxxxx
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OUTSOURCING SERVICES GROUP, INC.
By: /s/ Xxx Xxxxxxx, CFO
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By: /s/ Xxxxxx X. Xxx
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