Exhibit 10
GESTION XXXXX XXXXXX INC.
- and -
RUSTICO CAPITAL INC.
- and -
0000-0000 XXXXXX INC.
- and -
XXXX XXXXXXX
- and -
XXXXXXX XXXX
- and -
XXXX XXXXXX
as Vendors
- and -
GLACIER WATER SERVICES, INC.
as Purchaser
--------------------------------------------------------------------------------
SHARE PURCHASE AGREEMENT
October 7, 2005
TABLE OF CONTENTS
Title Page
----- ----
ARTICLE 1 INTERPRETATION..................................................2
1.1 Definitions...........................................................2
1.2 Construction..........................................................9
1.3 Certain Rules of Interpretation.......................................9
1.4 Computation of Time...................................................9
1.5 Performance on Business Days.........................................10
1.6 Currency and Payment.................................................10
1.7 Accounting Terms.....................................................10
1.8 Schedules............................................................10
ARTICLE 2 PURCHASE AND SALE OF PURCHASED SHARES..........................11
2.1 Purchase and Sell....................................................11
2.2 Purchase Price Allocation............................................11
2.3 Payment of Purchase Price............................................11
2.4 Adjustment to the Adjustment Amount based upon the Indebtedness
and the Closing Working Capital.....................................12
2.5 Payment of the Adjustment to the Initial Payment.....................12
2.6 Letters of Credit....................................................14
ARTICLE 3 CLOSING ARRANGEMENTS...........................................14
3.1 Closing..............................................................14
3.2 Vendors' Closing Deliveries..........................................14
3.3 Purchaser's Closing Deliveries.......................................15
3.4 Purchaser's Conditions...............................................16
3.5 Vendors' Conditions..................................................18
ARTICLE 4 REPRESENTATIONS AND WARRANTIES.................................19
4.1 Representations and Warranties of the Vendors........................19
4.2 Representations and Warranties of the Purchaser......................33
4.3 Survival of Representations, Warranties and Covenants of
the Vendors.........................................................34
4.4 Survival of the Representations, Warranties and Covenants of
the Purchaser.......................................................35
ARTICLE 5 INDEMNIFICATION................................................35
5.1 Indemnification by the Vendors.......................................35
5.2 Indemnification by the Purchaser.....................................36
5.3 Obligation to Reimburse..............................................36
5.4 Notice of Claim......................................................37
5.5 Direct Claims........................................................37
5.6 Third Party Claims...................................................37
5.7 Settlement of Third Party Claims.....................................38
5.8 Co-Operation.........................................................39
5.9 Gross-up.............................................................39
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5.10 Franchise............................................................39
5.11 Set off..............................................................39
ARTICLE 6 COVENANTS OF THE PARTIES.......................................40
6.1 Public Announcements.................................................40
6.2 Expenses.............................................................40
6.3 Assumed Liabilities..................................................40
6.4 Due Diligence Review.................................................40
6.5 Release of Suretyship (Guarantee)....................................40
6.6 Termination of the Consulting Agreement signed by Xx.
Xxxxxxx Xxxx........................................................41
ARTICLE 7 GENERAL........................................................42
7.1 No Third Party Beneficiary...........................................42
7.2 Entire Agreement.....................................................42
7.3 Non-Merger...........................................................42
7.4 Time of Essence......................................................42
7.5 Amendment............................................................43
7.6 Waiver of Rights.....................................................43
7.7 Jurisdiction.........................................................43
7.8 Governing Law........................................................43
7.9 Notices..............................................................43
7.10 Assignment...........................................................45
7.11 Further Assurances...................................................45
7.12 Severability.........................................................46
7.13 Successors and Assigns...............................................46
7.14 Counterparts.........................................................46
7.15 Effective Date.......................................................46
7.16 Language.............................................................46
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SHARE PURCHASE AGREEMENT dated October 7, 2005
BETWEEN: GESTION XXXXX XXXXXX INC., a business corporation constituted
under the laws of the Province of Quebec, having its head office
at 0000 Xxxx-Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxx, X0X 0X0;
(hereinafter "Gestion Xxxxxx")
AND: RUSTICO CAPITAL INC., a business corporation constituted under
the laws of Canada, having its head office at 0000
Xxxxxx-Xxxxxxxxx Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxx, X0X 0X0;
(hereinafter "Rustico")
AND: 0000-0000 XXXXXX INC., a business corporation constituted under
the laws of the Province of Quebec, having its head office at
0000 Xxxxxxxxx Xxxxxx, Xx-Xxxx-xxx-Xxxxxxxxx, Xxxxxx, X0X 0X0;
(hereinafter "9089")
AND: Xx. XXXX XXXXXXX, businesswoman, domiciled and residing at 0000
Xxxxxxx Xxxxxx, Xxxxx #000, Xxxxxxxxxxxx, Xxxxxx, X0X 0X0;
(hereinafter "Xxxxxxx")
AND: Xx. XXXXXXX XXXX, businessman, domiciled and residing at 000
Xxxxxx Xxxxx Xxxxxx, Xxxxxx-Xxxxx, Xxxxxx, X0X 0X0;
(hereinafter "Xxxx")
AND: Xx. XXXX XXXXXX, businessman, domiciled and residing at 000
Xx-Xxxxxxxxx Xxxxxx, xxx. 00, Xxxxxxxxx, Xxxxxx, X0X 0X0;
(hereinafter "Xxxxxx")
AND: GLACIER WATER SERVICES, INC., a business corporation constituted
under the laws of the State of Delaware, USA, having its head
office at 0000, Xxxx Xxxxxx Xxxxx, Xxxxx, Xxxxxxxxxx, 00000,
Xxxxxx Xxxxxx;
RECITALS:
WHEREAS Bi-Eau Pure has wound-up all of its assets into B.P. Water which assumes
also all of the liabilities and obligations of Bi-Eau Pure pursuant to the terms
of the wind-up agreement dated October 3rd, 2005;
WHEREAS Gestion Bi-Eau Pure inc. / Bi-Eau Pure Management inc. (the
"Corporation") is a corporation resulting from the amalgamation of B.P. Water ,
Sagard and SDLT;
WHEREAS, the Vendors together own 100% of the issued and outstanding shares in
the capital of Corporation;
WHEREAS, the Corporation is engaged in the business of providing water to
consumers through self-service vending machines in the Canadian market (the
"Business"); and
WHEREAS, the Purchaser desires to purchase and the Vendors desire to sell 100%
of the issued and outstanding shares of the Corporation, all on and subject to
the terms set forth in this Agreement;
THE PARTIES AGREE AS FOLLOWS:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement, including the Recitals to this Agreement, unless the
context otherwise requires:
(1) "Affiliate", with respect to the relationship between two or more
corporations, has the meaning attributed to "affiliated bodies
corporate" under the Canada Business Corporations Act as of the date
of this Agreement and, with respect to the relationship between two or
more Persons (including corporations), a Person is deemed to be an
Affiliate of another Person if one of them is controlled by the other
or if both are controlled by the same Person, and "Affiliated" has a
corresponding meaning.
(2) "Agreement" means this share purchase agreement, including all
Schedules to this share purchase agreement, as amended, supplemented,
restated and replaced from time to time in accordance with its
provisions.
(3) "Applicable Law" means (a) any domestic or foreign statute, law
(including common and civil law), code, ordinance, rule, regulation,
restriction or by-law (zoning or otherwise); (b) any judgement, order,
writ, injunction, decision, ruling, decree or award; any regulatory
policy, practice or guideline; or (c) any permit of any Governmental
Authority, binding on or affecting the Person referred to in the
context in which the term is used or binding on or affecting the
property of that Person.
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(4) "Approvals" means franchises, licences, qualifications,
authorizations, consents, certificates, registrations, exemptions,
waivers, filings, grants, notifications, privileges, rights, orders,
judgements, rulings, directives, permits, and other permits and
approvals.
(5) "Assets" means all of the assets, properties, goodwill and rights of
every kind and description, moveable and immoveable, real and
personal, tangible and intangible, wherever situated, of the
Corporation.
(6) "Base Financial Statements" has the meaning attributed to that term in
Section 4.1(28).
(7) "Bi-Eau Pure" means 0000-0000 Xxxxxx Inc. formerly known as Gestion
Bi-Eau Pure Inc.
(8) "Books and Records" means all books, records, files and papers of the
Corporation, including computer programs (including source codes and
software programs), computer manuals, computer data, financial and tax
working papers, financial and tax books and records, business reports,
business plans and projections, sales and advertising materials, sales
and purchases records and correspondence, trade association files,
research and development records, lists of present and former
customers and suppliers, personnel and employment records, minute and
share certificate books, and all copies and recordings of the
foregoing.
(9) "B.P. Water" means formerly B.P. Water Treatment Warehouse Inc.,
continued as of October 3, 2005 into the Corporation.
(10) "Business" has the meaning attributed to that term in the Recitals.
(11) "Business Day" means any day, except Saturdays and Sundays, on which
banks are generally open for business in Montreal, Canada and in Los
Angeles, California, United States of America.
(12) "Charter of the French Language" means the Charter of the French
Language, R.S.Q., chapter C-11, as amended from time to time.
(13) "Claim" means: (a) any suit, action, dispute, investigation, claim,
arbitration, order, summons, citation, directive, ticket, charge,
demand or prosecution, whether legal or administrative; (b) any other
proceeding; or (c) any appeal or application for review; including
before or by any Governmental Authority.
(14) "Closing" means the completion of the Transactions.
(15) "Closing Date" means October 7th, 2005 or such other date for the
Closing as the Parties may agree.
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(16) "Closing Financial Statements" means the audited financial statements
of the Corporation prepared in accordance with GAAP for the period
commencing on February 1, 2005 and ending on the Closing Date.
(17) "Closing Working Capital" means, as of the Closing Date, the current
assets of the Corporation minus the current liabilities of the
Corporation, in each case determined in accordance with GAAP, applied
consistently with the financial statements of Bi-Eau Pure for the year
ended January 31st, 2005. For greater certainty, the Closing Working
Capital shall be calculated as specified in Schedule 2.5 attached
hereto.
(18) "Constating Documents" means, with respect to any Person, its articles
or certificate of incorporation, amendment, amalgamation or
continuance, memorandum of association, letters patent, supplementary
letters patent, by-laws, partnership agreement, limited liability
company agreement or other similar document.
(19) "Contract" means any agreement, contract, indenture, lease, deed of
trust, licence, option, undertaking, promise or any other commitment
or obligation, whether oral or written, express or implied, other than
a permit.
(20) "Corporation" has the meaning attributed to that term in the Recitals.
(21) "Direct Claim" has the meaning attributed to that term in Section
5.4(1).
(22) "Creditors": means collectively Banque Laurentienne du Canada, Banque
de Developpement du Canada, Investissement Quebec and Caisse Populaire
Xxxxxxxxxx de l'Ouest de Longueuil;
(23) "Domain Names" means computer addresses for a reserved site on the
Internet.
(24) "Employment Agreement" means the Employment Agreement to be entered
into between Xxxxxxxx Xxxx and the Corporation on the Closing Date.
(25) "Encumbrance" means any hypothec, pledge, encumbrance, lien, charge,
mortgage, title retention agreement, security interest of any nature,
adverse claim, exception, reservation, easement, right of occupation,
option, right of pre-emption, privilege or any matter capable of
registration against title or any Contract to create any of the
foregoing.
(26) "Environmental Laws" means all applicable statutes, regulations,
ordinances, by-laws, and codes in existence in Canada (whether
federal, provincial or municipal) relating to the protection and
preservation of the environment, occupational health and safety,
product safety, product liability or Hazardous Substances.
(27) "Financial Statements" has the meaning attributed to that term in
Section 4.1(28).
(28) "GAAP" means generally accepted accounting principles in effect from
time to time in Canada.
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(29) "Governmental Authority" means any federal, provincial, state,
territorial, local, regional, municipal, or other political
jurisdiction, and any agency, authority, instrumentality, court,
tribunal, board, commission, bureau, arbitrator, arbitration tribunal
or other tribunal, or any quasi-governmental or other entity, insofar
as it exercises a legislative, judicial, regulatory, administrative,
expropriation or taxing power or function of or pertaining to
government.
(30) "Hazardous Substances" means any material, waste or substance
(including, without limitation, any product) that may or could pose a
hazard to the environment or human health or safety including, without
limitation, any contaminant, toxic substance, dangerous goods or
pollutant or any other substance which when released to the natural
environment is likely to cause, at some immediate or future time,
material harm or degradation to the natural environment or material
risk to human health as the whole is regulated under any laws or court
orders.
(31) "Immoveable Property" means the immoveable property of the Corporation
and any title or interest therein, all of which are described in
Schedule 4.1(16) attached hereto.
(32) "Indebtedness" means, as of the Closing Date, any indebtedness of the
Corporation, whether having a maturity of greater than, less than or
equal to one year, as determined in accordance with GAAP, applied
consistently with the financial statements of Bi-Eau Pure for the year
ended January 31st, 2005, with the exception of the Term Loan
Agreement related to the Immoveable Property, the redeemable preferred
shares, the Line of Credit and the Consulting Agreement entered into
as of January 1st, 2001 between Bi-Eau Pure and Xx.Xxxxxxx Xxxx. For
greater certainty, Indebtedness includes only the debts mentioned in
Schedule 2.5 attached hereto as well as any debt owed to
Investissement Quebec and Banque Laurentienne du Canada guaranteed by
hypothec on the Inmmoveable Property.
(33) "Indemnified Party " has the meaning attributed to that term in
Section 5.3.
(34) "Indemnifying Party" has the meaning attributed to that term in
Section 5.3.
(35) "Intellectual Property" means all trade marks, trade names, domain
names, business names, patents, inventions, know-how, copyrights,
industrial designs and all other industrial or intellectual property
owned or used by the Corporation in carrying on the Business in Canada
and all applications therefore and all goodwill connected therewith,
including all licences and all like rights used by or granted to the
Corporation in connection with the Business and all rights to register
or otherwise apply for the protection on any of the foregoing.
(36) "Interim Financial Statements" has the meaning attributed to that term
in Section 4.1(28).
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(37) "IP License" means any option, license, or agreement of any kind
relating to the exercise, use, non-use, registration, enforcement,
non-enforcement of or remuneration for any Intellectual Property or
Software.
(38) "Knowledge" of a Person means the knowledge of such Person, after due
inquiry, or, 2in the case of a corporate entity, such knowledge, after
due inquiry, of its chief executive officer and any other officer
responsible for the matter at issue.
(39) "Line of Credit" means the variable credit facility for up to an
amount of $135,000 entered into between Bi-Eau Pure and Caisse
Populaire Xxxxxxxxxx de l'Ouest de Longueuil dated as of August 18,
2005.
(40) "Losses" means, in respect of any matter, all Claims, demands, losses,
damages, liabilities, deficiencies, costs and expenses (including all
legal and other professional fees and disbursements, interest,
penalties and amounts paid in settlement) arising as a consequence of
that matter, including any reduction in the value of the Purchased
Shares resulting from a misrepresentation or breach of warranty or
covenant or other obligation.
(41) "Material Adverse Effect" means a material adverse effect on the (i)
Business, results of operation or financial condition of the
Corporation, or (ii) ability of the Corporation to perform its
obligations under this Agreement.
(42) "Non-Competition Agreements" means the separate non-competition
agreements to be entered into by each of the Vendors, Xxxxx Xxxxxx,
Xxxx Xxxx and Xxxxxx Xxxxx with the Purchaser and the Corporation on
the Closing Date.
(43) "Ordinary Course" means, with respect to an action taken by a Person,
that the action is consistent with the past practices of the Person
and is taken in the normal day-to-day operations of the Person.
(44) "Outstanding IP License" means any IP License by or to the Corporation
or to which the Corporation is otherwise a party, or by which the
Corporation or any of its Intellectual Property, Software or other
property is subject or bound.
(45) "Parties" means collectively, Gestion Xxxxxx, Xxxxxxx, 9089, Tanguay,
Dube, Xxxxxx and the Purchaser, and "Party" means any of them.
(46) "Permitted Encumbrances" means:
a) undetermined or inchoate liens, charges and privileges incidental
to current construction or current operations, except for liens,
charges and privileges related to Taxes;
b) statutory liens, charges, adverse Claims, security interests or
Encumbrances of any nature whatsoever claimed or held by any
Governmental Authority that have not at the time been filed or
registered against the title to the asset or served on the
Corporation or either Vendor pursuant to Applicable Law or that
relate to obligations not due or delinquent, except for statutory
liens, charges, adverse Claims, security interests or
Encumbrances related to Taxes;
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c) assignments of insurance provided to landlords or their
mortgagees or hypothecary creditors pursuant to the terms of any
lease and liens or rights reserved in any lease for rent or for
compliance with the terms of that lease;
d) security given in the Ordinary Course to any public utility or
Governmental Authority in connection with the operations of the
Business, other than security for borrowed money;
e) such minor imperfections in title as do not detract in any
material respect from the value or utility of the subject
property in the operation of the Business; and
f) the Permitted Encumbrances described in Schedule 1.1(46)f).
(47) "Person" is to be broadly interpreted and includes an individual, a
corporation, a partnership, a joint venture, a trust, an association,
an unincorporated organization, a Governmental Authority, an executor
or administrator or other legal or personal representative, or any
other juridical entity.
(48) "Purchase Price" has the meaning attributed to that term in Section
2.2.
(49) "Purchased Shares" means 100% of the issued and outstanding shares in
the capital of the Corporation as described in Schedule 1.1(49).
(50) "Purchaser" means Glacier Water Services, Inc., a company incorporated
under the laws of the State of Delaware (USA).
(51) "Reorganization" means the winding-up of Bi-Eau Pure into B.P. Water
and the amalgamation of B.P. Water, Sagard and SDLT pursuant to the
terms and conditions set forth in the Amalgamation Agreement attached
hereto as Schedule 1.1(51), the whole of which shall occur prior to
the Closing.
(52) "Representatives" means, with respect to any Party, its Affiliates
and, if applicable, its and their respective directors, officers,
employees, agents and other representatives and advisors.
(53) "Retained Accountants" means KPMG doing business in Montreal.
(54) "Sagard" means formerly Investissements Sagard Inc., continued as of
October 3, 2005 into the Corporation.
(55) "SDLT" means formerly Societe Immobiliere S.D.L.T. Inc., continued as
of October 3, 2005 into the Corporation.
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(56) "Software" means source or object code instructions for controlling
the operation of a central processing unit or computer, and computer
files containing data.
(57) "Tax Act" or any reference to a specific provision thereof means the
Income Tax Act (Canada) and legislation of any legislature of any
province or territory of Canada (including the Taxation Act (Quebec))
and any regulations thereunder in force of like or similar effect.
(58) "Taxes" means taxes, duties, fees, premiums, assessments, imposts,
levies and other charges of any kind whatsoever imposed by any
Governmental Authority, including all interest, penalties, fines,
additions to tax or other additional amounts imposed in respect
thereof (including those levied on, or measured by, or referred to as,
income, gross receipts, profits, capital, transfer, land transfer,
sales, goods and services, harmonized sales, use, valued-added,
excise, stamp, withholding, premium, business, franchising, property,
employer health, payroll, employment, health, social services,
education and social security taxes, surtaxes, customs duties and
import and export taxes, licence, franchise and registration fees and
employment insurance, health insurance and Canada, Quebec and other
government pension plan premiums or contributions), and "Tax" has a
corresponding meaning.
(59) "Tax Returns" has the meaning attributed to that term in Section
4.1(31).
(60) "Term Loan Agreement" means the Term Loan Agreement entered into on
February 26, 2002 between Caisse Populaire Xxxxxxxxxx de l'Ouest de
Longueuil, as lender, and 3652327 Canada Inc. (currently known as B.P.
Water), as borrower, in the amount of $650,000.00 bearing interest at
a variable rate consisting of the Caisse centrale Desjardin's
preferred rate plus 1.50% percentage point per annum, payable 60
consecutive and monthly payments of $4,513.89, and the immoveable
hypothec registered in the cadastre of Quebec, Registration division
of Chambly, under number 1,125,405.
(61) "Termination Letter" has the meaning attributed to that term in
Section 3.2(11).
(62) "Third Party Claim" has the meaning attributed to that term in Section
5.4(1).
(63) "Transactions" means the transactions contemplated by this Agreement.
(64) "Vendor's Shares" means, with respect to a Vendor, the number of the
Purchased Shares set out opposite that Vendor's name on Schedule
1.1(49).
(65) "Vendors" means collectively Gestion Xxxxxx, Xxxxxxx, 9089, Xxxxxxx,
Xxxx and Xxxxxx and a "Vendor" means either of them.
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1.2 Construction
This Agreement has been negotiated by each Party with the benefit of legal
representation, and any rule of construction to the effect that any
ambiguities are to be resolved against the drafting Party shall not apply
to the construction or interpretation of this Agreement.
1.3 Certain Rules of Interpretation
In this Agreement:
(1) the division into Articles and Sections and the insertion of headings
are for convenience of reference only and do not affect the
construction or interpretation of this Agreement;
(2) the expressions "hereof", "herein", "hereto", "hereunder", "hereby"
and similar expressions refer to this Agreement and not to any
particular portion of this Agreement; and
(3) unless specified otherwise or the context otherwise requires:
i) references to any Article, Section or Schedule are references to
the Article or Section of, or Schedule to, this Agreement;
ii) "including" or "includes" means "including (or includes) but is
not limited to" and shall not be construed to limit any general
statement preceding it to the specific or similar items or
matters immediately following it;
iii) references to any legislation, statutory instrument or regulation
or a section thereof, unless otherwise specified, is a reference
to the legislation, statutory instrument, regulation or section
as amended, restated and re-enacted from time to time.
1.4 Computation of Time
In this Agreement, unless specified otherwise or the context otherwise
requires:
a) a reference to a period of days is deemed to begin on the first
day after the event that started the period and to end at 5:00
p.m. on the last day of the period, but if the last day of the
period does not fall on a Business Day, the period ends at 5:00
p.m. on the next Business Day;
b) all references to specific dates mean 11:59 p.m. on the dates;
c) all references to specific times shall be references to Montreal,
Canada time; and
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d) with respect to the calculation of any period of time, references
to "from" mean "from and excluding" and references to "to" or
"until" mean "to and including".
1.5 Performance on Business Days
If any action is required to be taken pursuant to this Agreement on or by a
specified date that is not a Business Day, the action is valid if taken on
or by the next Business Day.
1.6 Currency and Payment
In this Agreement, unless specified otherwise:
(1) references to dollar amounts or "$" are to Canadian dollars; and
(2) any payment is to be made by negotiable cheque certified by a
chartered bank, an official bank draft drawn on a chartered bank, wire
transfer or any other method (other than cash payment) that provides
immediately available funds.
1.7 Accounting Terms
In this Agreement, unless specified otherwise, each accounting term has the
meaning assigned to it under GAAP.
1.8 Schedules
The following Schedules are attached to and form part of this Agreement:
Schedule 1.1(46)f) Permitted Encumbrances
Schedule 1.1(49) Purchased Shares
Schedule 1.1(51) Amalgamation Agreement
Schedule 2.2 Purchase Price Allocation
Schedule 2.5 Calculation of the Indebtedness and the Closing
Working Capital
Schedule 3.4(1)d) Third party Approvals
Schedule 3.5(1)i) Release of guarantees
Schedule 4.1(5) Encumbrances on Purchased Shares
Schedule 4.1(13) Authorizations and Consents
Schedule 4.1(14) Assets of the Corporation
Schedule 4.1(16) Immoveable Property
Schedule 4.1(17) Intellectual Property
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Schedule 4.1(18) Outstanding IP Licenses
Schedule 4.1(19) Title to Intellectual Property
Schedule 4.1(20) Infringement
Schedule 4.1(21) Domain Names
Schedule 4.1(23) Employees
Schedule 4.1(28) Financial Statements
Schedule 4.1(29) Changes since January 31st, 2005
Schedule 4.1(30) Tax Matters
Schedule 4.1(34) Insurance
Schedule 4.1(35) Health and Safety Matters
Schedule 4.1(39) Material Contracts and Other Contracts
Schedule 4.1(42) Litigation
Schedule 4.1(43) Customers
Schedule 4.1(44) Suppliers
Schedule 4.1(45) Transactions with Affiliates
Schedule 6.3 Assumed Liabilities
ARTICLE 2
PURCHASE AND SALE OF PURCHASED SHARES
2.1 Purchase and Sell
Upon Closing on the Closing Date, the Vendors shall sell to the Purchaser
and the Purchaser hereby purchases from the Vendors, the Purchased Shares,
constituting 100% of the issued and outstanding shares in the capital of
the Corporation, free and clear of all Encumbrances.
2.2 Purchase Price Allocation
Subject to the terms and conditions of this Agreement, the aggregate
purchase price (the "Purchase Price") to be paid by the Purchaser to the
Vendors for the Purchased Shares is $1,500,000, subject to any adjustments
as hereinafter provided, and shall be allocated in accordance with Schedule
2.2.
2.3 Payment of Purchase Price
Subject to any adjustments as described in this Article 2, the Purchaser
shall pay and satisfy the Purchase Price as follows:
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(1) as to the amount of $1,200,000, payment at Closing Date (the "Initial
Payment") by the Purchaser to Xxxxxxxx Xxxxx LLP in trust for the
benefit of the Vendors to be disbursed in the proportions set out in
Schedule 2.2; it being understood that the Initial Payment will be
subject to adjustment as set forth in Section 2.4 below;
(2) as to the amount of $150,000 (the "Adjustment Amount"), it shall be
deposited at Closing by the Purchaser with Xxxxxxxx Xxxxx L.L.P. to be
held in trust and which Adjustment Amount shall be released and
disbursed to the appropriate Parties in accordance with the terms
provided for in Section 2.3 (3);
(3) if the Closing Working Capital (as determined below in Section 2.5)
equals or exceeds $350,000 and the Indebtedness (as determined in
Section 2.5) equals or is less than $540,000, then the Adjustment
Amount shall be disbursed by Xxxxxxxx Xxxxx, L.L.P. to the Vendors
within 5 Business Days of receipt of the Closing Financial Statements
provided under Section 2.5 in the proportions set out in Schedule 2.2.
However, if the Closing Working Capital is less than $350,000 or the
Indebtedness is greater than $540,000, then the Adjustment Amount or
any amount thereof as determined pursuant to Section 2.5 shall be
disbursed, as the case may be, either to the Purchaser or to the
Vendors in the proportions set out in Schedule 2.2 within the delays
set forth in Section 2.5;
(4) as to the amount of $75,000 (subject to reduction pursuant to Section
5.11), payment on the first anniversary date of the Closing Date (the
"First Subsequent Payment") by the Purchaser to the Vendors in the
proportions set out in Schedule 2.2;
(5) as to the amount of $75,000 (subject to reduction pursuant to Section
5.11), payment on the second anniversary date of the Closing Date (the
"Second Subsequent Payment") by the Purchaser to the Vendors in the
proportions set out in Schedule 2.2.
2.4 Adjustment to the Adjustment Amount based upon the Indebtedness and the
Closing Working Capital
(1) If the Closing Financial Statements shows that the Indebtedness
exceeds $540,000, then the Adjustment Amount shall be reduced by an
amount equal to such excess. If the Indebtedness equals or is less
than $540,000, there will be no adjustment on that account.
(2) In the event that the Closing Working Capital is less than $350,000,
then the Adjustment Amount shall be reduced by an amount equal to such
shortfall. If the Closing Working Capital equals or exceeds $350,000,
there will be no adjustment on that account.
2.5 Payment of the Adjustment to the Initial Payment
(1) The Corporation and the Purchaser shall cause the Retained Accountants
i) to prepare, within forty-five (45) Business Days after the Closing
Date, the Closing Financial Statements and ii) based upon such Closing
Financial Statements, to calculate and determine the Indebtedness and
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the Closing Working Capital as at the Closing Date. The Indebtedness
and the Closing Working Capital shall be calculated as specified in
Schedule 2.5 attached hereto. Upon receipt from the Retained
Accountants of the Closing Financial Statements, the Purchaser, on the
one hand, and each of the Vendors, on the other hand, shall have ten
(10) Business Days to provide a written notice of contestation of the
determination of the Indebtedness or the Closing Working Capital
calculation. If none of the Purchaser or the Vendors provides a
written contestation within the prescribed period, then the Closing
Financial Statements, the Indebtedness and the Closing Working Capital
shall be deemed final and accepted.
(2) In the event of a disagreement between the Purchaser and any of the
Vendors with regard to the Closing Financial Statements, the
Indebtedness or the Closing Working Capital, the relevant Parties
undertake, following a written notice to the other Parties, to submit
the disagreement to arbitration in accordance with the provisions of
the Code of civil procedure of the province of Quebec under sections
940 to 947.4 inclusively and the provisions included herein aside at
the exclusion of any other remedy available before the civil courts.
(3) Within ten (10) days following the receipt of the arbitration written
notice as provided in Subsection 2.5(1) hereinabove, as the case may
be, the relevant Parties shall appoint, by mutual agreement, an
independent arbitrator which shall be a chartered accountant working
within a large firm having an office in Montreal. Unless the Parties
agree within the prescribed delay to appoint the arbitrator, any Party
shall be entitled to ask the Court to make appointment.
(4) The arbitration sessions shall be held in Montreal in a location
chosen by the Parties or in case of a disagreement, by the arbitrator.
Other than the requirement that the proceedings be held in English,
the arbitrator shall have the authority to determine his own rules of
procedure and shall render his arbitration award in writing. The
allocation of the arbitration fees and allowances shall be determined
within the arbitration award.
(5) The arbitrator shall render his arbitration award and notify the
Parties within a thirty (30) days delay from the date when the dispute
was submitted to him, unless such a delay is otherwise determined by
mutual agreement by the Parties or the arbitrator.
(6) The arbitration award shall be final and without appeal. The award
shall be binding upon the Parties and the provisions of the Code of
civil procedure of the province of Quebec under sections 940 to 946.6
shall prevail.
(7) Any payment owed by the Vendors under this Section 2.5 shall be paid
by the Vendors in the proportions set out in Schedule 2.2 as follows:
a) first out of the Adjustment Amount within five (5) Business Days
of the expiration of the period of contestation stated above or
of receipt of the arbitration award from the arbitrator as set
forth in Subsection 2.5(5), as the case may be;
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b) if the total amount by which the Closing Working Capital is less
than $350,000 and the Indebtedness is greater than $540,000
exceeds the Adjustment Amount, then the difference shall be paid
by the Vendors within thirty (30) Business Days of the expiration
of the period of contestation stated above or of receipt of the
arbitration award from the arbitrator as set forth in Subsection
2.5(5), as the case may be;
(8) If the amount owed by the Vendors under this Section 2.5 is less than
the Adjustment Amount, then the difference shall be disbursed among
the Vendors in the proportions set out in Schedule 2.2 within five (5)
Business Days of the final determination of the Indebtedness and the
Closing Working Capital.
2.6 Letters of Credit
Subject to the terms set forth in Section 2.5, the payment of the First
Subsequent Payment and the Second Subsequent Payment shall be secured by
two irrevocable standby letters of credit of $75,000 (subject to reduction
pursuant to Section 5.11) each issued as at or prior to Closing, at the
Corporation's cost, to the benefit of the Vendors and payable subject to
the terms of this Agreement. The first letter of credit shall be cancelled
promptly after the payment of the First Subsequent Payment and the second
letter of credit shall be cancelled promptly after the payment of the
Second Subsequent Payment.
ARTICLE 3
CLOSING ARRANGEMENTS
3.1 Closing
The Closing shall occur on October 7, 2005 in Montreal, or at such other
time and place as may be agreed between the Parties.
3.2 Vendors' Closing Deliveries
On or prior to the Closing Date, the Vendors shall deliver or cause to be
delivered to the Purchaser the following:
(1) certificates representing the Purchased Shares, accompanied by share
transfer powers duly executed in blank or duly executed instruments of
transfer, and all such other assurances, consents and other documents
as the Purchaser may reasonably request to effectively transfer to the
Purchaser title to the Purchased Shares free and clear of all
Encumbrances;
(2) a certified copy of a resolution of the board of directors of the
Corporation consenting to the transfer of the Purchased Shares from
the Vendors to the Purchaser as contemplated by this Agreement and
authorizing the execution, delivery and performance of all contracts,
agreements, instruments, certificates and other documents required by
this Agreement to be delivered by the Corporation;
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(3) a certificate duly executed by each of the Vendors (or officer
thereof, as the case may be) in respect of their representations,
warranties and covenants herein as at the Closing Date;
(4) releases by the Vendors as shareholders, directors, officers and/or
employees of the Corporation as at the Closing Date;
(5) written resignations of all the directors and officers of the
Corporation, in each case with effect from the Closing Date;
(6) a Termination Agreement in respect of the current shareholders'
agreement;
(7) a Termination Agreement in respect of the Distribution Agreement dated
March 24, 2004 among Pure Water Technologies Inc. and Bi-Eau Pure;
(8) the Non-Competition Agreements, duly executed by the parties to those
agreements;
(9) the Books and Records of the Corporation;
(10) the Employment Agreement, duly executed by Xxxxxxxx Xxxx;
(11) a Termination Letter signed by Xx. Xxxxxxx Xxxx and Xxx. Xxxxxxxxxx
Xxxx (the "Termination Letter") in respect of the Consulting Agreement
entered into as of January 1st, 2001 between Bi-Eau Pure and Xx.
Xxxxxxx Xxxx and the Assignment of Rights Agreement entered into
between Xx. Xxxxxxx Xxxx, Xxx. Xxxxxxxxxx Xxxx and Bi-Eau Pure, dated
as at January 11, 2001, the whole conditional to the payment by the
Purchaser to Xx. Xxxxxxx Xxxx and Xxx. Xxxxxxxxxx Xxxx of an aggregate
amount of $200,000.00 as provided for in Section 6.6 of this
Agreement; and
(12) such other documentation as the Purchaser may reasonably request in
order to establish the completion of the Transactions and the taking
of all corporate proceedings in connection with the Transactions (as
to certification and otherwise), in each case in form and substance
satisfactory to the Purchaser, acting reasonably.
3.3 Purchaser's Closing Deliveries
On or prior to the Closing Date, the Purchaser shall deliver or cause to be
delivered to the Vendors the following:
(1) payment of the amounts required to be paid on the Closing Date under
Section 2.3;
(2) a certified copy of a resolution of the board of directors of the
Purchaser consenting to the acquisition of the Purchased Shares from
the Vendors as contemplated by this Agreement and authorizing the
execution, delivery and performance of all contracts, agreements,
instruments, certificates and other documents required by this
Agreement to be delivered by the Purchaser;
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(3) a certificate duly executed by an officer of the Purchaser in respect
of the Purchaser's representations, warranties and covenants herein as
at the Closing Date;
(4) the Employment Agreement duly executed by the Corporation;
(5) payment on the Closing Date of the amount owed under the Termination
Letter to Xx. Xxxxxxx Xxxx and Xxx. Xxxxxxxxxx Xxxx against receipt of
a full and final release by Xx. Xxxxxxx Xxxx and Xxx. Xxxxxxxxxx Xxxx
in favour of the Purchaser and the Corporation;
(6) two letters of credit of $75,000 each issued by City National Bank to
the benefit of the Vendors as provided for in Section 2.6;
(7) four letters of credit of $25,000 each issued by City National Bank to
the benefit of Xx. Xxxxxxx Xxxx and Xxx. Xxxxxxxxxx Xxxx respectively
as provided for in Section 6.6;
(8) such other documentation as the Vendors may reasonably request in
order to establish the completion of the Transactions and the taking
of all corporate proceedings in connection with the Transactions (as
to certification and otherwise), in each case in form and substance
satisfactory to the Vendors, acting reasonably.
3.4 Purchaser's Conditions
(1) The Purchaser shall be obliged to complete the Transactions only if
each of the following conditions precedent has been satisfied in full
at or before the Closing Date (each of which conditions precedent is
acknowledged to be for the exclusive benefit of the Purchaser):
a) all of the representations and warranties of each of the Vendors
made in this Agreement shall be true and correct as at the
Closing Date with the same effect as if made at and as of the
Closing Date (except as those representations and warranties may
be affected by events or transactions (i) expressly permitted by
this Agreement, (ii) that do not have a Materially Adverse Effect
and arise in the Ordinary Course of the Business, or (iii)
approved in writing by the Purchaser);
b) the Vendors shall have complied with or performed all of the
obligations, covenants and agreements under this Agreement to be
complied with or performed by the Vendors or either of them at or
before the Closing Date, including the Vendors' Closing
deliveries specified in Section 3.2, to the satisfaction of the
Purchaser, acting reasonably;
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c) all Approvals required from all relevant Governmental Authorities
to permit the completion of the Transactions shall have been
obtained, if any;
d) all third party Approvals (except as described in Schedule 3.4(d)
shall have been obtained, in each case in form and substance
satisfactory to the Purchaser, acting reasonably;
e) all documentation relating to the Transactions is satisfactory to
the Purchaser, acting reasonably;
f) there shall be no injunction or restraining order issued
preventing, and no pending or threatened Claim, against any
Party, for the purpose of enjoining or preventing, the completion
of the Transactions or otherwise claiming that this Agreement or
the completion of the Transactions is improper or would give rise
to a Claim under any Applicable Law;
g) Xxxxxxxx Xxxx shall have duly executed and delivered the
Employment Agreement;
h) Xx. Xxxxxxx Xxxx and Xxx. Xxxxxxxxxx Xxxx shall have delivered a
full and final release to the Purchaser and the Corporation,
subject to the payment of the amount owed by the Purchaser to Xx.
Xxxxxxx Xxxx and Xxx. Xxxxxxxxxx Xxxx under the Termination
Letter;
i) the Distribution Agreement dated March 24, 2004 among Pure Water
Technologies Inc. and Bi-Eau Pure shall have been terminated;
j) the Vendors and the other parties to the Non-Competition
Agreements (other than the Purchaser and the Corporation) shall
have executed and delivered those agreements;
k) the Corporation shall have completed the Reorganization in form
and substance satisfactory to the Purchaser;
l) the Corporation shall be the registered and beneficial owner of,
and have good and marketable title to, the Immovable Property,
free and clear of any Encumbrances except for Permitted
Encumbrances;
m) Gestion Xxxxxx shall have obtained full and final release of all
Encumbrances affecting its Purchased Shares, as more fully
described in Schedule 4.1(5).
(2) If any of the conditions in this Section 3.4(1) shall not be satisfied
or fulfilled in full at or before the Closing Date to the satisfaction
of the Purchaser, acting reasonably, the Purchaser in its sole
discretion may, without limiting any rights or remedies available to
the Purchaser at law or in equity, either:
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a) terminate this Agreement by notice in writing to Xxxxxxxx Xxxx,
000 Xxxxxx Xxxxxx, Xx-Xxxxx-xx-Xxxxxxxxxxx, Xxxxxx, Xxxxxx, X0X
0X0, except with respect to the obligations contained in Sections
6.1 and 6.2 which shall survive that termination; or
b) waive compliance with any such condition in whole or in part by
notice in writing to Xxxxxxxx Xxxx, 000 Xxxxxx Xxxxxx,
Xx-Xxxxx-xx-Xxxxxxxxxxx, Xxxxxx, Xxxxxx, X0X 0X0, except that no
such waiver shall operate as a waiver of any other condition.
3.5 Vendors' Conditions
(1) The Vendors shall be obliged to complete the Transactions only if each
of the following conditions precedent has been satisfied in full at or
before the Closing Date (each of which conditions precedent is
acknowledged to be for the exclusive benefit of the Vendors):
a) all of the representations and warranties of the Purchaser made
in this Agreement shall be true and correct as at the Closing
Date with the same effect as if made at and as of the Closing
Date (except as those representations and warranties may be
affected by events or transactions expressly permitted by or
resulting from the entering of this Agreement);
b) the Purchaser shall have complied with or performed all of the
obligations, covenants and agreements under this Agreement to be
complied with or performed by the Purchaser at or before the
Closing Date, including the Purchaser's Closing deliveries
specified in Section 3.3, to the satisfaction of the Vendors,
acting reasonably;
c) there shall be no injunction or restraining order issued
preventing, and no pending or threatened Claim against any Party
for the purpose of enjoining or preventing, the completion of the
Transactions or otherwise claiming that this Agreement or the
completion of the Transactions is improper or would give rise to
a Claim under any Applicable Law;
d) all documentation relating to the Transactions is satisfactory to
the Vendors, acting reasonably;
e) the Corporation shall have duly executed and delivered the
Employment Agreement;
f) the Purchaser shall have paid to Pure Water Technologies Inc. the
amounts mentioned in Section 6.3;
g) the Purchaser shall have paid to Xx. Xxxxxxx Xxxx and Xxx.
Xxxxxxxxxx Xxxx, at the Closing, the amount owed to them under
the Termination Letter;
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h) the Purchaser shall have taken all necessary measures to
reimburse all amounts owed to the Creditors.
i) the Purchaser shall have obtained full and final releases of all
guarantees granted by any of the Vendors in favour of Caisse
Populaire Xxxxxxxxxx de l'Ouest de Longueuil pursuant to the Line
of Credit as more fully described in Schedule 3.5(1)i).
(2) If any of the conditions in this Section 3.5(1) shall not be satisfied
or fulfilled in full at or before the Closing Date to the satisfaction
of the Vendors, acting reasonably, the Vendors in their sole
discretion may, without limiting any rights or remedies available to
the Vendors, either:
a) terminate this Agreement by notice in writing from Xxxxxxxx Xxxx
to the Purchaser, except with respect to the obligations
contained in Sections 6.1 and 6.2 which shall survive that
termination; or
b) waive compliance with any such condition in whole or in part by
notice in writing from Xxxxxxxx Xxxx to the Purchaser, except
that no such waiver shall operate as a waiver of any other
condition.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Vendors
The Vendors solidarily represent and warrant to the Purchaser as follows as
of the date of this Agreement and as of the Closing Date and acknowledge
that the Purchaser is relying on these representations and warranties in
connection with its purchase of the Purchased Shares:
(1) Holdings Organization and Status. Gestion Xxxxxx is a corporation duly
incorporated and organized, and is validly subsisting under the laws
of the Province of Quebec and is up-to-date in the filing of all
corporate and similar returns under the laws of that jurisdiction.
Rustico is a corporation duly incorporated and organized, and is
validly subsisting under the laws of Canada and is up-to-date in the
filing of all corporate and similar returns under the laws of that
jurisdiction. 9089 is a corporation duly incorporated and organized,
and is validly subsisting under the laws of the Province of Quebec and
is up-to-date in the filing of all corporate and similar returns under
the laws of that jurisdiction.
(2) Corporate Power. Each of Gestion Xxxxxx, Xxxxxxx and 9089 has all
necessary power and authority to own or lease or dispose of its
undertakings, property and assets (including its Vendor's Shares), to
enter into this Agreement and the contracts, agreements and
instruments required by this Agreement to be delivered by it, and to
perform its obligations hereunder and thereunder.
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(3) Authorization. All necessary corporate action has been taken by each
of Gestion Xxxxxx, Xxxxxxx and 9089 or on its part to authorize its
execution and delivery of this Agreement and the contracts, agreements
and instruments required by this Agreement to be delivered by it and
the performance of its obligations hereunder and thereunder.
(4) Enforceability. This Agreement has been duly executed and delivered by
each of the Vendors and (assuming due execution and delivery by the
Purchaser) is a legal, valid and binding obligation of it enforceable
against each of the Vendors in accordance with its terms, except as
that enforcement may be limited by bankruptcy, insolvency and other
similar laws affecting the rights of creditors generally and except
that equitable remedies may be granted only in the discretion of a
court of competent jurisdiction. Each of the contracts, agreements and
instruments required by this Agreement to be delivered by each or any
of the Vendors will at the Closing have been duly executed and
delivered by it and (assuming due execution and delivery by the other
parties thereto) will be enforceable against it in accordance with its
terms, except as that enforcement may be limited by bankruptcy,
insolvency and other laws affecting the rights of creditors generally
and except that equitable remedies may be granted only in the
discretion of a court of competent jurisdiction.
(5) Ownership of Vendor's Shares. Each of the Vendors is the registered
and beneficial owner of its Vendor's Shares, with good and marketable
title thereto, free and clear of all Encumbrances, and has the
exclusive right to dispose of its Vendor's Shares as provided in this
Agreement. None of the Purchased Shares is subject to (i) any Contract
or restriction which in any way limit or restrict the transfer to the
Purchaser of Purchased Shares other than the transfer restrictions in
the Corporation's articles and (ii) any voting trust, pooling
agreement, shareholder agreement, voting agreement or other Contract,
arrangement or understanding with respect to the voting of Purchased
Shares (or any of them). On completion of the Transactions, none of
the Vendors will have any other ownership interest in the Corporation,
whether direct or indirect, actual or contingent, and the Purchaser
shall have good title to all of Purchased Shares, free and clear of
all Encumbrances.
(6) Bankruptcy. None of the Vendors is an insolvent Person within the
meaning of the Bankruptcy and Insolvency Act (Canada) and none of them
has made an assignment in favour of its creditors or a proposal in
bankruptcy to its creditors or any class thereof, and no petition for
a receiving order has been presented in respect of it. None of the
Vendors has initiated proceedings with respect to a compromise or
arrangement with its creditors or for its winding up, liquidation or
dissolution. No receiver or interim receiver has been appointed in
respect of it or any of the Vendors' undertakings, property or assets
(including its Vendor's Shares) and no execution or distress has been
levied on any of the Vendors' undertakings, property or assets
(including its Vendor's Shares), nor have any proceedings been
commenced in connection with any of the foregoing.
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(7) Absence of Conflict - Vendors. The execution, delivery and performance
by each of the Vendors of this Agreement and the completion of the
Transactions will not (whether after the passage of time or notice or
both), result in:
a) the breach or violation of any of the provisions of, or
constitute a default under, or conflict with or cause the
acceleration of any Vendor's obligations, under:
>> any Contract to which it is a party or by which any of its
undertakings, property or assets is bound or affected;
>> if applicable, any provision of its Constating Documents or
resolutions of its board of directors (or any committee
thereof) or shareholders;
>> any Approval issued to it, held by it, for its benefit or
necessary to the ownership of its Vendor's Shares; or
>> any Applicable Law;
b) the creation or imposition of any Encumbrance over any of its
Vendor's Shares; or
c) the requirement of any Approval from any Person, except the
Creditors.
(8) Litigation. There are no Claims (whether or not purportedly on its
behalf) pending or outstanding or threatened against any of the
Vendors which could affect its Vendor's Shares or its ability to
perform its obligations under this Agreement.
(9) Residence. Each of the Vendors is a resident of Canada for purposes of
the Tax Act.
(10) Validity of Reorganization. Any and all documents or transactions in
connection with the Reorganization have been duly executed, delivered
or performed by each of B.P. Water, Bi-Eau Pure, Sagard and SDLT and,
more particularly, (i) have been duly authorized by all necessary
corporate action of each such entity, (ii) do not and will not violate
or conflict with or result in the breach of any provision of the
Constating Documents of any such entity, (iii) do not and will not
(whether after the giving of notice or lapse of time or both) violate
or conflict with any provision of, or result in the modification,
cancellation, termination or acceleration of, any obligation under, or
result in the imposition or creation of any Encumbrances upon any such
entity or its assets or business operations pursuant to any agreement
or contract by which any such entity or its assets or business
operations are bound or (iv) do not and will not violate or conflict
with any Applicable Law to which any such entity is subject, or by
which any of the assets or business operations of such entity may be
bound or affected.
21
(11) Organization and Status of Corporation. The Corporation has full
requisite power and authority (corporate or otherwise) to execute,
deliver and perform all the instruments and documents contemplated
hereby to be executed and delivered by the Corporation, to perform its
obligations hereunder and thereunder, and to consummate the
Transactions contemplated hereby and thereby. The Corporation has
taken all necessary action to authorize the execution, delivery and
performance of this Agreement and the other instruments and documents
contemplated hereby to be executed and delivered by the Corporation.
The execution, delivery and performance by the Vendors of this
Agreement and the other instruments and documents contemplated hereby
to be executed and delivered by the Corporation, and the consummation
by the Corporation and the Vendors of the Transactions contemplated
hereby and thereby do not and will not (i) violate or conflict with or
result in the breach of any provision of the Constating Documents of
the Corporation, (ii) (whether after the giving of notice or lapse of
time or both) violate or conflict with any provision of, or result in
the modification, cancellation, termination or acceleration of, any
obligation under, or result in the imposition or creation of any
Encumbrances upon the Corporation or its assets pursuant to any
agreement or contract by which the Corporation or its Assets are
bound, with such exceptions as do not individually or in the aggregate
have a Material Adverse Effect, or (iii) violate or conflict with any
Applicable Law to which the Corporation is subject, or by which the
Business or any of the Assets may be bound or affected, with such
exceptions as do not individually or in the aggregate have a Material
Adverse Effect. This Agreement has been, and the other instruments and
documents contemplated hereby to be executed and delivered by the
Corporation at the Closing will, at the Closing, have been, duly
executed and delivered by the Corporation, and constitute (or will
constitute at the Closing, as applicable) legal, valid and binding
obligations of the Corporation enforceable against the Corporation in
accordance with their respective terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting the rights and
remedies of creditors generally and to general principles of equity
(regardless of whether in equity or at law).
The Corporation (i) is a corporation duly incorporated, validly
existing and in good standing under the Laws of Canada, (ii) has all
requisite corporate power and authority to own and operate its Assets
and conduct the Business as they are now being operated and conducted,
(iii) is in good standing and is duly qualified to transact business
in the Province of Quebec and in any other jurisdiction in which the
Corporation's ownership or use of its Assets or the conduct of the
Business requires it to be so qualified, with such exceptions as do
not individually or in the aggregate have a Material Adverse Effect.
The Corporation has previously delivered or made available to the
Purchaser true and correct copies of the Certificate of Amalgamation
and the by-laws of the Corporation and all amendments thereto. The
Corporation has no subsidiaries or any investments in, or joint
venture arrangements with, any other Person.
22
(12) Capitalization. The Purchased Shares listed on Schedule 1.1(49)
represent all of the issued and outstanding shares in the capital of
the Corporation. The Purchased Shares are duly authorized, validly
issued, fully paid and non-assessable. There are no options, warrants,
commitments or other agreements outstanding which could result in the
issue of, or accord to any Person the right to call for the issue of,
any shares in the capital of the Corporation, nor are there any
securities or obligations which are convertible into or exchangeable
for any shares in the capital of the Corporation.
(13) Compliance with Applicable Laws, Permits and Consents. The Corporation
is in compliance with all Applicable Laws, except for such
non-compliance as would not individually or in the aggregate
reasonably be likely to have a Material Adverse Effect.
The Corporation owns, or has full rights under, all franchises,
licenses, permits, consents, approvals and authorizations of any
Governmental Authority which are necessary for the conduct of the
Business as currently conducted, all of which are listed on Schedule
4.1(13) hereto. Each of the foregoing is in full force and effect, and
the Corporation is in compliance with all of its obligations with
respect thereto, and no event has occurred which permits, or upon the
giving of notice or lapse of time or otherwise would permit,
revocation or early termination of any of the foregoing, with such
exceptions as do not individually or in the aggregate have a Material
Adverse Effect.
Except as set forth in Schedule 4.1(13) hereto, no filing, consent,
waiver, approval or authorization of any Governmental Authority or of
any third party is required to be made or obtained on the part of the
Corporation in connection with the execution, delivery and performance
by the Corporation of this Agreement or the consummation by the
Corporation of the Transactions contemplated hereby.
(14) Assets of the Corporation. Schedule 4.1(14) hereto contains
descriptions of i) all vending machine equipment, including serial
numbers; and ii) all items of tangible personal property of every kind
or description owned or leased by the Corporation having a current net
book value in excess of $5,000.
(15) Title to Assets. The Corporation has good title to, or holds by valid
and existing leases or licenses for, all of its Assets free and clear
of all Encumbrances, except for the Permitted Encumbrances. The
Corporation's tangible assets are in good operating condition and
repair, reasonable wear and tear excepted. Such tangible assets are
sufficient to conduct the Business as now conducted.
(16) Immoveable Property. Schedule 4.1(16) attached hereto is a true and
complete list of all the immoveable property owed or leased by the
Corporation and sets forth the legal descriptions thereof. There are
no agreements, options, contracts or commitments to sell, transfer or
otherwise dispose of the Immoveable Property or which would restrict
the ability of the Corporation to transfer the Immoveable Property.
23
The Corporation is the registered and beneficial owner of, and has
good and marketable title to the Immoveable Property, free and clear
of any Encumbrances except for Permitted Encumbrances and for the
rights of usage, rights of usufruct, zoning restrictions, servitudes,
and other restrictions that run with the land and minor title defects
(if any) which do not, in the aggregate, materially adversely affect
the validity of title to or the value or marketability of the
Immoveable Property or materially adversely affect the use of the
Immoveable Property as such property is presently used by the
Corporation in connection with the Business.
No part of the Immoveable Property encroaches on any property owned by
others. The Immoveable Property, the current uses thereof and the
conduct of the Business comply with all federal, provincial and
municipal regulations, statutes, enactments, laws and by-laws
including, without limitation, those dealing with zoning, parking,
access, loading facilities, landscaped areas, building construction,
fire, public health and safety. No part of the Immoveable Property has
been taken or expropriated by any federal, provincial, municipal or
other competent authority nor has any notice or proceeding in respect
thereof been given or commenced.
The Corporation has not been required by any Governmental Authority to
(i) alter the Immoveable Property in a material way in order to be in
compliance with Environmental Laws or (ii) perform any environmental
closure, decommissioning, rehabilitation, restoration or post-remedial
investigations, on, about or in connection with any real property.
There are no leases, subleases, licenses, concessions or other
agreements, written or oral, granting to any Person the right of use
or occupancy of any portion of the Immoveable Property.
There are no major repairs required to the structure or building
systems of the Immoveable Property and the electrical, mechanical,
plumbing, heating, air conditioning, ventilating, security and other
systems serving the building comprising the Immoveable Property are in
good working order.
(17) Intellectual Property. Schedule 4.1(17) hereto contains a true,
accurate and complete list of all the Intellectual Property which is
now owned, used or held for use by the Corporation. The Corporation
has sole and exclusive beneficial and record ownership and legal title
of all Intellectual Property set forth on Schedule 4.1(17) as being
owned by the Corporation, free and clear of Encumbrances (including
any rights or claims of present or former employees, consultants,
officers and directors of the Corporation or any other Person), except
Permitted Encumbrances, and of any obligations to pay royalties or
other remuneration to any Person.
24
(18) Outstanding IP Licenses. Schedule 4.1(18) hereto further sets forth a
true, accurate and complete list of all Outstanding IP Licenses,
identifying the other parties thereto and the subject matter and date
thereof, any royalty or other payment obligations, the term thereof,
and any exclusivity obligations. No Outstanding IP License requires
any payment of any nature, cash or non-cash, or approval from, any
past or present officer, director, shareholder or Affiliate of the
Corporation.
(19) Title to Intellectual Property. Except as set forth in Schedule
4.1(19) hereto, or as do not individually or in the aggregate have a
Material Adverse Effect, (i) the Corporation has sufficient title,
ownership or IP Licenses of Intellectual Property necessary for its
Business as now conducted without any conflict with or infringement of
the rights of others, and (ii) such rights will not be adversely
affected by the execution and delivery of this Agreement or the
consummation of the Transactions contemplated hereby.
(20) Infringement. Except as set forth in Schedule 4.1(20) hereto, or as do
not individually or in the aggregate have a Material Adverse Effect,
(i) the Corporation has not been nor is now interfering with,
infringing upon, misappropriating, or otherwise in conflict with or
violating any intellectual property rights of other Persons, (ii) the
Corporation has not received any communications alleging that the
Corporation has violated or, by conducting its Business, would violate
any of the intellectual property rights of any other Person and (iii)
to the Knowledge of the Vendors, there is no basis for the making of
any such allegation. There is not pending, nor to the Knowledge of the
Vendors, has there been threatened, any Claim to contest, oppose,
cancel or otherwise challenge the validity, ownership or
enforceability of any of the Corporation's Intellectual Property. To
the Knowledge of the Vendors, no Person is infringing any of the
Corporation's Intellectual Property, with such exceptions as do not
individually or in the aggregate have a Material Adverse Effect.
(21) Domain Names. Schedule 4.1(21) hereto sets forth a complete list of
all Domain Names now used by the Corporation. All such Domain Names
are currently registered and in good standing, and the Corporation is
shown on the records of the registrar thereof as the sole owner
thereof. The Corporation has not received notice or communication
stating that any Person is challenging the right of the Corporation to
use any such Domain Name.
(22) Software. All Software which has been used and which is now being used
by the Corporation has and is being used in compliance with all
applicable IP License requirements, with such exceptions as do not
individually or in the aggregate have a Material Adverse Effect.
(23) Employees. Schedule 4.1(23) hereto sets forth a complete and correct
list of the name, job title, base salary or wage rate and bonus
entitlement of each of the Corporation's current employees and whether
or not each such employee is actively at work and, if not, the reason
that such employee is not actively at work.
25
No employees are or ever have been represented by a union or other
labor organization or association, and to the Knowledge of the
Vendors, no such organizing efforts are now being conducted with
respect to the employees. The Corporation has not, at any time during
the preceding three years, had a strike, lock-out, work stoppage or
work slowdown, nor, to the Knowledge of the Vendors, is any such
action threatened. The Corporation is not involved in nor, to the
Knowledge of the Vendors, threatened with, any labor dispute,
arbitration, lawsuit or administrative proceeding relating to labor
matters involving the employees.
(24) Charter of the French Language. The Corporation is in compliance with
the Charter of the French Language.
(25) Benefit Plans. The Corporation does not sponsor or maintain, nor has
it ever sponsored or maintained, any benefit or pension plan. Neither
Bi-Eau Pure, B.P. Water, SDLT nor Sagard has ever sponsored or
maintained any benefit or pension plan.
(26) No Finder's Fees. None of the Vendors nor, to the knowledge of the
Vendors, neither the Corporation , Bi-Eau Pure, B.P. Water, SDLT nor
Sagard, has taken any action that would cause the Purchaser or the
Corporation to become liable to any Claim for a brokerage commissions,
finder's fee or other similar arrangement.
(27) Environmental Matters. Except for such exceptions as would not
individually or in the aggregate have a Material Adverse Effect, (a)
the Corporation has complied with and is currently in compliance with
the provisions of all applicable Environmental Laws; (b) the
Corporation has not released any Hazardous Materials into the
environment at, on or from any real property owned, used or leased by
the Corporation in violation of any Environmental Laws; (c) there are
no acts or omissions by the Corporation that are reasonably likely to
give rise to Losses under Environmental Laws; (d) there are no orders
or directions relating to environmental matters requiring any work,
repairs, construction or capital expenditures with respect to the
Business or any property of the Corporation, nor has the Corporation
received notice of any of the same; and (e) the Vendors have delivered
to the Purchaser true and complete copies of all environmental audits,
evaluations, assessments, studies or tests relating to the Corporation
of which they are aware.
Except for such exceptions as would not individually or in the
aggregate have a Material Adverse Effect, (a) each of Bi-Eau Pure,
B.P. Water, SDLT and Sagard has complied with the provisions of all
applicable Environmental Laws; (b) each of Bi-Eau Pure, B.P. Water,
SDLT and Sagard has not released any Hazardous Materials into the
environment at, on or from any real property owned, used or leased by
them in violation of any Environmental Laws; and (c) there are no acts
or omissions by any of Bi-Eau Pure, B.P. Water, SDLT or Sagard that
are reasonably likely to give rise to Losses under Environmental Laws.
26
(28) Financial Statements. Attached hereto as Schedule 4.1(28) are true and
complete copies of (i) the reviewed annual financial statements of
Bi-Eau Pure as of January 31st, 2004 and January 31st, 2005, and the
related reviewed statements of income and cash flows for Bi-Eau Pure
for the fiscal years then ended (the "Base Financial Statements"), and
(ii) the internal unaudited balance sheet of Bi-Eau Pure as of July
31st, 2005, and the related unaudited statement of income and cash
flows for Bi-Eau Pure for the interim period from February 1st, 2005
to July 31st, 2005 (the "Interim Financial Statements"). The Base
Financial Statements and the Interim Financial Statements are
collectively referred to as the "Financial Statements". Also attached
hereto as Schedule 4.1 (28) are true and complete copies of i) the
internal annual financial statements of SDLT as of August 31, 2005,
ii) the internal annual financial statements of Sagard as of August
31, 2005, and iii) the internal annual financial statements of B.P.
Water as of August 31, 2005;
The Financial Statements are in accordance with the books and records
of Bi-Eau Pure in all material respects. The Financial Statements have
been prepared in accordance with GAAP and present fairly in all
material respects, in accordance with GAAP, the financial position and
results of operations of Bi-Eau Pure as of the dates and for the
periods indicated.
The above-mentioned financial statements of SDLT, Sagard and B.P.
Water are each in accordance with their respective books and records
in all material respects. These financial statements present fairly in
all material respect the financial position and results of operations
of each of the above-mentioned entities as of the dates and for the
periods indicated.
(29) Absence of Certain Changes. Except as disclosed in Schedule 4.1(29)
attached hereto, since January 31st, 2005, the Corporation and Bi-Eau
Pure have carried on the Business only in the Ordinary Course and with
respect to each of Bi-Eau Pure, B.P. Water, Sagard, SDLT and the
Corporation, there has been no:
a) event or occurrence that individually or in the aggregate has
caused or is reasonably likely to cause a Material Adverse
Effect;
b) physical damage, destruction or loss in an amount exceeding
$10,000 in the aggregate affecting the Corporation's assets which
is not covered by insurance or remedied within thirty (30) days;
c) increase in compensation payable or to become payable to any
employee, independent contractor, consultant or director of the
Corporation, or any bonus payment made or promised to any
employee, independent contractor, consultant or director of the
Corporation, or any material change in personnel policies,
insurance benefits or other compensation arrangements affecting
the employees, independent contractors, consultants or directors
of the Corporation (other than increases in wages and salaries or
bonus payments made in the Ordinary Course);
27
d) waiver of any rights by the Corporation under any Contract which
waiver could have a Material Adverse Effect on the Corporation;
e) hypothec, pledge or security interest (other than Permitted
Encumbrances) of any of the Assets (except with respect to the
refinancing of the debts owed to the Creditors) nor any
additional borrowing secured by the Immoveable Property;
f) sale or transfer of the Assets (including Intellectual Property)
except, in each case, in the Ordinary Course;
g) change in any method of accounting or accounting practice or tax
calculating or tax reporting methods or practice except as
required by GAAP and Applicable Law as in effect from time to
time;
h) entrance into any material transaction other than in the Ordinary
Course;
i) termination of any material agreement or relationship with any
customer or any material change in the terms thereof;
j) capital expenditure (or commitment therefore) by the Corporation
in excess of $5,000 per capital improvement or item;
k) labor union organizing activity, any actual or threatened
employee strikes, work stoppages, slow-downs or other labor
disputes or disturbances or any adverse change in relations with
employees;
l) material tax election or change in tax accounting by the
Corporation, except with respect to the Reorganization of the
Corporation and Bi-Eau Pure for the purpose of the Transactions
contemplated herein and which had been disclosed to the
Purchaser;
m) declaration or payment of any dividend or other distribution by
the Corporation in respect of any of its shares or the redemption
by the Corporation of any of its shares, except with respect to
any payment of dividend, distribution, purchase, issuance or
redemption of shares relating to the Reorganization for the
purpose of the Transactions contemplated herein and which had
been disclosed to the Purchaser; or
n) authorization, approval, agreement or commitment to do any of the
foregoing.
(30) Tax Matters. Each of Bi-Eau Pure, B.P. Water, SDLT, Sagard and the
Corporation has correctly computed all Taxes owing by it, prepared and
duly and timely filed all federal, state, provincial, municipal, local
and foreign returns, estimates, information statements, elections,
designations, reports and any other filings related to Taxes ("Tax
Returns") required to be filed by it, has timely paid all Taxes which
are or may become due and payable on or prior to the date hereof and
has made adequate provision for Taxes in its respective annual
financial statements. Each of Bi-Eau Pure, B.P. Water, SDLT, Sagard
and the Corporation has made adequate and timely instalments of Taxes
required to be made. Except as disclosed in Schedule 4.1(30), there
are no circumstances which exist and would result in, or which have
existed and resulted in Section 80 of the Tax Act applying to the
Corporation.
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(31) Tax Returns. All Tax Returns of each of Bi-Eau Pure, B.P. Water, SDLT,
Sagard and the Corporation have been assessed and there are no
outstanding waivers of any limitation periods or agreements providing
for an extension of time for the filing of any Tax Return or the
payment of any Tax by each of Bi-Eau Pure, B.P. Water, SDLT, Sagard
and the Corporation or any outstanding objections to any assessment or
reassessment of Taxes. Any proposed deficiencies have been paid and
settled. There are no liens for Taxes on the Assets.
(32) Payment of Taxes. Each of Bi-Eau Pure, B.P. Water, SDLT and Sagard and
the Corporation has collected from each receipt from any of the past
and present customers (or other Persons paying amounts to each of
Bi-Eau Pure, B.P. Water, SDLT, Sagard and the Corporation) the amount
of all Taxes (including goods and services tax and provincial sales
taxes) required to be collected and has paid and remitted such Taxes
when due, in the form required under Applicable Laws or made adequate
provision for the payment of such amounts to the proper receiving
authorities.
(33) Tax Liabilities. All provisions for Tax liabilities of each of Bi-Eau
Pure, B.P. Water, SDLT, Sagard and the Corporation in the financial
statements set forth in Schedule 4.1(28) have been made in accordance
with GAAP consistently applied, and all liabilities for Taxes of each
of Bi-Eau Pure, B.P. Water, SDLT, Sagard and the Corporation
attributable to periods prior to or ending on the date hereof have
been adequately provided for on its respective financial statements
set forth in Schedule 4.1(28). Each of Bi-Eau Pure, B.P. Water, SDLT,
Sagard and the Corporation has no liability for Taxes of any Person
other than itself.
(34) Insurance. Schedule 4.1(34) hereto lists all insurance policies owned
or held by the Corporation or its predecessors. Such policies afford
coverage to the Corporation and its employees, the Assets and the
Business in amounts and against all risks normally insured against by
Persons possessing similar assets or operating similar businesses in
similar locations. All such policies are in full force and effect (and
will be maintained in full force and effect through the Closing Date),
all premiums with respect thereto have been paid to the extent due,
and no notice of cancellation or termination has been received with
respect to any such policy.
(35) Health and Safety Matters. The Corporation is in compliance with the
requirements of the Occupational Health and Safety Act, R.S.Q.,
chapter S-2.1 and the regulations promulgated thereunder, except for
such non-compliance as would not individually or in the aggregate have
a Material Adverse Effect. The Corporation or its predecessors has not
received any citation from the Quebec Worker's Compensation Board or
29
any comparable administration of any province or local jurisdiction (a
"Board") or any Board inspector setting forth any respect in which the
facilities or operations of the Corporation are not in compliance with
Occupational Health and Safety Act, or the regulations under such act,
which non-compliance has not been corrected or remedied to the
satisfaction of such Board inspector. Schedule 4.1(35) hereto sets
forth a list of all citations heretofore issued to Bi-Eau Pure under
Occupational Health and Safety Act and correspondence from and to such
Board and any Board inspectors during the past five years.
(36) Undisclosed Liabilities. Bi-Eau Pure has no liabilities or obligations
nor had any liabilities or obligations immediately prior the
Reorganization of any nature whatsoever (whether known or unknown,
accrued, absolute, contingent or otherwise) other than: (i)
liabilities and obligations fully reflected on the consolidated
balance sheet included in the Interim Financial Statements, (ii) trade
payables and similar current liabilities incurred in the Ordinary
Course between the date of the balance sheet included in the Interim
Financial Statements and the Closing, (iii) liabilities and
obligations arising in the Ordinary Course between the date of the
balance sheet included in the Interim Financial Statements and the
Closing, and (iv) liabilities and obligations otherwise disclosed
herein.
(37) Each of SDLT and Sagard had no liabilities or obligations immediately
prior to the Reorganization. B.P. Water had no liabilities or
obligations immediately prior to the Reorganization other than the
debts owed to the Caisse Populaire Xxxxxxxxxx de l'Ouest de Longueuil,
the Banque Laurentienne du Canada and Investissement Quebec, the
preferred shares held by its then shareholders and any accrued yet
unpaid tax liabilities since February 1, 2005 up until the
Reorganization.
(38) Illegal Practices. Neither the Corporation, Bi-Eau Pure, SDLT, Sagard
and B.P. Water nor any shareholder, officer, director, employee, agent
or other Person acting on behalf of the Corporation has given or
agreed to give any gift or similar benefit of more than nominal value
to any customer, supplier, government employee or official or any
other Person who is or may be in a position to help or hinder the
Corporation in connection with any actual or proposed transaction,
which gift or similar benefit: (i) is not reflected in the Base
Financial Statements, (ii) constituted a violation of law, a violation
of a code of conduct or ethics adopted by the Corporation or a
violation of a code of conduct or ethics with which the Corporation
has agreed to comply, (iii) if not given in the past, might have
materially and adversely affected the Business or the Corporation or
which, if not continued in the future, might materially and adversely
affect the Business, or the Corporation, or (iv) is likely to have a
Material Adverse Effect on the Corporation or the Business.
(39) Material Contracts and Other Contracts. Except as set out in Schedule
4.1(39), the Corporation is not a party to or bound by:
a) any distributor, sales, advertising, agency or manufacturer's
representative or similar Contract;
30
b) any continuing Contract for the purchase of materials, supplies,
equipment or services which involves payment under that Contract
of more than $5,000;
c) any employment or consulting contract or any other written
Contract with any officer, employee or consultant other than oral
Contracts of indefinite hire terminable by the Corporation
without cause on reasonable notice;
d) any hypothec, trust indenture, mortgage, promissory note,
debenture, loan agreement, guarantee or other Contract for the
borrowing of money or a leasing transaction;
e) any agreement of guarantee, indemnification or assumption or any
other similar commitment with respect to, the liabilities,
obligations, indebtedness, or commitments (whether accrued,
absolute, contingent or otherwise) or indebtedness of any other
Person (except for cheques endorsed for collection);
f) any Contract for capital expenditures in excess of $5,000 in the
aggregate;
g) any Contract for the sale of any of the Assets or any part of the
Business, other than sales to customers in the Ordinary Course;
h) any confidentiality or non-disclosure Contract (whether the
Corporation is a beneficiary or obligor thereunder) relating to
any proprietary or confidential information or any
non-competition or similar Contract;
i) any Contract to which the Corporation is a party or by which the
Corporation or any of the Assets are bound or attached made in
the Ordinary Course which involves or may reasonably involve the
payment to or by the Corporation in excess of $5,000 over the
term of the Contract (a "Material Contract");
j) any Contract entered into by the Corporation or its predecessors
other than in the Ordinary Course.
True, accurate and complete copies of all Contracts set out in
Schedule 4.1(39), or where those Contracts are oral, true, accurate
and complete summaries of their terms, have been provided to the
Purchaser.
(40) No Default Under Contracts. The Corporation or its predecessors has
performed all of the obligations required to be performed by it and is
entitled to all benefits under, and is not in default or alleged to be
in default in respect of, any Contract relating to the Business or the
Assets (including the Contracts referred to in any Schedule to this
Agreement), to which it is a party or by which it is bound or
affected. All such Contracts are in good standing and in full force
and effect, and no event, condition or occurrence exists that, after
notice or lapse of time or both, would constitute a default under any
such Contract. There is no dispute between Bi-Eau Pure, the
Corporation or its predecessors on the one hand and any other party on
31
the other hand under any such Contract. Except as disclosed in the
Schedules to this Agreement, none of such Contracts contain terms
under which the execution or performance of this Agreement would give
any other contracting party the right to terminate or adversely change
the terms of that Contract or otherwise require the consent of any
other Person. None of those Contracts have been assigned, or if
applicable subleased, in whole or in part.
(41) Corporate Records. The minute books of each of Bi-Eau Pure, B.P.
Water, SDLT, Sagard and the Corporation contain true, accurate and
complete records of all of its Constating Documents and of every
meeting, resolution and corporate action taken by the shareholders and
the board of directors. Every meeting reflected therein was properly
called and held, and every resolution set forth therein was properly
passed. No meeting of shareholders or the board of directors has been
held for which minutes have not been prepared and are not contained in
those minute books. All corporate proceedings reflected in the minute
books of each of Bi-Eau Pure, B.P. Water, SDLT, Sagard and the
Corporation have been conducted or taken in compliance with all
Applicable Laws. The share certificate book, register of shareholders,
register of directors and officers, securities register and register
of transfer of each of Bi-Eau Pure, B.P. Water, SDLT, Sagard and the
Corporation are true, accurate and complete in all material respects.
(42) Litigation. Except as set forth in Schedule 4.1(42), there are no
Claims (whether or not purportedly on behalf of the Corporation)
pending or, to the Knowledge of the Vendors, threatened against or
affecting, Bi-Eau Pure, the Corporation or its predecessors or the
Assets. To the Knowledge of the Vendors, there is not any factual or
legal basis on which any such Claim might be commenced with any
reasonable likelihood of success.
(43) Customers. Schedule 4.1(43) hereto sets forth a list of the current
customers of the Corporation.
(44) Suppliers. Schedule 4.1(44) hereto sets forth a list of the current
top ten (10) suppliers of the Corporation. To the Knowledge of the
Corporation, no event, occurrence or fact has occurred which would
lead it to believe that any of such suppliers will not continue to
supply the current level and type of goods currently being provided to
Bi-Eau Pure on similar terms and conditions.
(45) Transactions with Affiliates. Schedule 4.1(45) hereto sets forth a
complete list of all contracts, agreements, leases, arrangements,
understandings or commitments to which any shareholder of the
Corporation or any Affiliate, on the one hand, and the Corporation and
any of its predecessors, on the other hand, is a party.
(46) Full Disclosure. The Vendors are not aware of, and have no Knowledge
of, any facts pertaining to the Corporation or the Business which
could reasonably be expected to have a Material Adverse Effect and
which have not been disclosed in this Agreement, the Schedules hereto
or the Financial Statements.
32
4.2 Representations and Warranties of the Purchaser
The Purchaser represents and warrants to each Vendor as follows as of the
date of this Agreement and as of the Closing Date and acknowledges that
each Vendor is relying on these representations and warranties in
connection with the sale by that Vendor of its Vendor's Shares:
(1) Organization and Corporate Power. The Purchaser is duly constituted
and organized under the laws of the State of Delaware (USA), and is
validly subsisting, under the laws of its jurisdiction of
incorporation and is up-to-date in the filing of all corporate and
similar returns under the laws of that jurisdiction. The Purchaser has
all necessary corporate power and authority to acquire the Purchased
Shares, to enter into this Agreement and to perform its obligations
hereunder.
(2) Authorization. All necessary corporate action has been taken by or on
the part of the Purchaser to authorize its execution and delivery of
this Agreement and the contracts, agreements and instruments required
by this Agreement to be delivered by it and the performance of its
obligations hereunder and thereunder.
(3) Enforceability. This Agreement has been duly executed and delivered by
the Purchaser and (assuming due execution and delivery by the other
Parties) is a legal, valid and binding obligation of the Purchaser
enforceable against it in accordance with its terms, except as that
enforcement may be limited by bankruptcy, insolvency and other laws
affecting the rights of creditors generally and except that equitable
remedies may be granted only in the discretion of a court of competent
jurisdiction. Each of the contracts, agreements and instruments
required by this Agreement to be delivered by the Purchaser will at
the Closing Date have been duly executed and delivered by it and
(assuming due execution and delivery by the other parties thereto)
will be enforceable against it in accordance with its terms, except as
that enforcement may be limited by bankruptcy, insolvency and other
laws affecting the rights of creditors generally and except that
equitable remedies may be granted only in the discretion of a court of
competent jurisdiction.
(4) Execution of the Agreement. The execution, delivery and performance by
the Purchaser of this Agreement, and the other documents contemplated
by this Agreement to which the Purchaser is a party, and the
consummation by the Purchaser of the Transactions contemplated hereby
and thereby, do not and will not (i) violate, conflict with or result
in the breach of any provision of the Constating Documents of the
Purchaser or (ii) violate or conflict with any law applicable to the
Purchaser or any other restriction of any kind or character to which
the Purchaser is subject, except as would not individually or in the
aggregate have a Material Adverse Effect on the ability of the
Purchaser to perform its obligations under this Agreement.
(5) Consents. No filing, consent, waiver, approval or authorization of any
Governmental Authority or of any third party on the part of the
Purchaser is required to be obtained or made by the Purchaser in
connection with the execution, delivery and performance by the
33
Purchaser of this Agreement or the other documents contemplated by
this Agreement to which the Purchaser is a party or the consummation
by the Purchaser of any of the Transactions contemplated hereby or
thereby, other than those filings required by the Securities Exchange
Act of 1934 (including any Form 8-K) and such other filings, consents,
waivers, approvals or authorizations as do not individually or in the
aggregate have a Material Adverse Effect on the ability of the
Purchaser to perform its obligations under this Agreement.
(6) No Finder's Fees. The Purchaser has not taken any action that would
cause any Vendor to become liable to any Claim for a brokerage
commission, finder's fee or other similar arrangement.
4.3 Survival of Representations, Warranties and Covenants of the Vendors
(1) The representations and warranties of the Vendors contained in this
Agreement and in any contract, agreement, instrument, certificate or
other document executed or delivered pursuant to this Agreement, shall
survive Closing and shall continue for the benefit of the Purchaser
for the applicable limitation period notwithstanding the Closing or
any investigation made by or on behalf of the Purchaser, except that:
a) the representations and warranties set out in Sections 4.1(1),
4.1(2), 4.1(3), 4.1(4), 4.1(5), 4.1(9), 4.1(11) (insofar as it
relates to the due incorporation and organization and the valid
existence and corporate power of the Corporation) and 4.1(12)
shall survive and continue in full force and effect without
limitation of time;
b) the representations and warranties set out in Sections 4.1(30),
4.1(31), 4.1(32) and 4.1(33) shall survive Closing and continue
in full force and effect until, but not beyond, the 90th day
following the expiration of the period, if any, during which an
assessment, reassessment or other form of recognized document
assessing liability for Taxes under applicable Tax legislation in
respect of any taxation year to which those representations and
warranties extend could be issued under that Tax legislation to
the Corporation, provided the Corporation did not file any waiver
or other document extending that period; and
c) the remainder of the representations and warranties set out in
Section 4.1 shall survive Closing and continue in full force and
effect until the 3rd anniversary of the Closing Date.
(2) The covenants and other obligations of the Vendors contained in this
Agreement and in any contract, agreement, instrument, certificate or
other document executed or delivered pursuant to this Agreement, to
the extent that they have not been fully performed at or prior to the
Closing, shall survive Closing and shall continue for the benefit of
the Purchaser for the applicable limitation period imposed by
Applicable Law notwithstanding Closing.
34
(3) Notwithstanding Sections 4.3(1), a Claim for any breach of any of the
representations and warranties contained in this Agreement or in any
contract, agreement, instrument, certificate or other document
executed or delivered pursuant hereto involving fraud or fraudulent
misrepresentations may be made at any time following the Closing Date,
subject only to applicable limitation periods imposed by Applicable
Law.
4.4 Survival of the Representations, Warranties and Covenants of the Purchaser
(1) The representations and warranties of the Purchaser contained in this
Agreement and in any contract, agreement, instrument, certificate or
other document executed or delivered pursuant to this Agreement, shall
survive Closing and shall continue for the benefit of the Vendors for
the applicable limitation period notwithstanding the Closing or any
investigation made by or on behalf of the Vendors, except that:
a) the representations and warranties set out in Sections 4.2(1),
4.2(2), 4.2(3) and 4.2(4) shall survive and continue in full
force and effect without limitation of time; and
b) the remainder of the representations and warranties set out in
Section 4.2 shall survive Closing and continue in full force and
effect until the 3rd anniversary of the Closing Date.
(2) The covenants and other obligations of the Purchaser contained in this
Agreement and in any contract, agreement, instrument, certificate or
other document executed or delivered pursuant to this Agreement, to
the extent that they have not been fully performed at or prior to the
Closing Date, shall survive Closing and shall continue for the benefit
of the Vendors for the applicable limitation period imposed by
Applicable Law notwithstanding Closing.
(3) Notwithstanding Section 4.4(1), a Claim for any breach of any of the
representations and warranties contained in this Agreement or in any
contract, agreement, instrument, certificate or other document
executed or delivered pursuant hereto involving fraud or fraudulent
misrepresentations may be made at any time following the Closing Date,
subject only to applicable limitation periods imposed by Applicable
Law.
ARTICLE 5
INDEMNIFICATION
5.1 Indemnification by the Vendors
(1) Subject to this Article 5, the Vendors shall solidarily indemnify and
save harmless the Purchaser from any and all Losses suffered or
incurred by the Purchaser or the Corporation as a result of or arising
directly or indirectly out of or in connection with:
a) any inaccuracy of or any breach by either of the Vendors of, any
representation or warranty of either of the Vendors contained in
this Agreement or in any contract, agreement, instrument,
certificate or other document delivered pursuant to this
35
Agreement (except that the Vendors shall not be required to
indemnify or save harmless the Purchaser or the Corporation in
respect of any inaccuracy or breach of any representation or
warranty unless the Purchaser shall have provided notice to the
Vendors in accordance with Section 5.4 on or prior to the
expiration of the applicable time period related to that
representation and warranty set out in Section 4.3); and
b) any breach or non-performance by either of the Vendors of any
covenant or other obligation to be performed by it that is
contained in this Agreement or in any contract, agreement,
instrument, certificate or other document delivered pursuant to
this Agreement;
c) any liability or obligation of any nature whatsoever (whether
known or unknown, accrued, or absolute, contingent or otherwise)
of Sagard or SDLT;
d) the Reorganization, including, without limitation, any Tax
consequence arising therefrom.
5.2 Indemnification by the Purchaser
(1) Subject to this Article 5, the Purchaser shall indemnify and save
harmless the Vendors from any and all Losses suffered or incurred by
the Vendors as a result of or arising directly or indirectly out of or
in connection with:
a) any inaccuracy of or any breach by the Purchaser of, any
representation or warranty of the Purchaser contained in this
Agreement or in any contract, agreement, instrument, certificate
or other document delivered pursuant to this Agreement (except
that the Purchaser shall not be required to indemnify or save
harmless the Vendors in respect of any inaccuracy or breach of
any representation or warranty unless the Vendors shall have
provided notice to the Purchaser in accordance with Section 5.4
on or prior to the expiration of the time period set out in
Section 4.4) and
b) any breach or non-performance by the Purchaser of any covenant or
other obligation to be performed by it that is contained in this
Agreement or in any contract, agreement, instrument, certificate
or other document delivered pursuant to this Agreement.
5.3 Obligation to Reimburse
The Party providing indemnification under this Agreement (the "Indemnifying
Party") shall reimburse to the Party being indemnified under this Agreement
(the "Indemnified Party") the amount of any Losses suffered or incurred by
the Indemnified Party, as of the date that the Indemnified Party incurs any
such Losses, together with interest thereon from that date until payment in
full, at the rate per annum equal to the prime lending rate of the Royal
Bank of Canada from time to time plus three percent (3%), that payment
being made without prejudice to the Indemnifying Party's right to contest
the basis of the Indemnified Party's Claim for indemnification.
36
5.4 Notice of Claim
(1) Promptly on becoming aware of any circumstances, which have given or
could give rise to a Claim of indemnification under this Article 5,
the Party shall notify the other Parties of those circumstances. That
notice shall specify whether the Losses arise as a result of a Claim
by a Person against the Indemnified Party (a "Third Party Claim") or
whether the Losses do not so arise (a "Direct Claim"), and shall also
specify with reasonable particularity (to the extent the information
is available) the factual basis for the Claim and the amount of the
Losses, if known.
(2) If through the fault of the Indemnified Party, the Indemnifying Party
does not receive notice of any Claim in time to contest effectively
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 that notice on a timely basis.
5.5 Direct Claims
With respect to any Direct Claim, following receipt of notice from the
Indemnified Party of the Direct Claim, the Indemnifying Party shall have
thirty (30) days to make such investigation of the Direct Claim as is
considered necessary or desirable. For the purpose of that investigation,
the Indemnified Party shall make available to the Indemnifying Party the
information relied on by the Indemnified Party to substantiate the Direct
Claim, together with such information as the Indemnifying Party may
reasonably request. If the Parties agree at or prior to the expiry of this
thirty (30) day period (or agree to any extension of this period) to the
validity and amount of that Direct Claim, the Indemnifying Party shall
immediately pay to the Indemnified Party the full amount as agreed to by
the Parties of the Direct Claim. For clarity, the Purchaser shall be deemed
to have incurred or suffered Losses as of and from the Closing Date as a
consequence of any reduction in the value of the Purchased Shares resulting
from an inaccuracy or breach of any representation or warranty by the
Vendors under this Agreement.
5.6 Third Party Claims
(1) With respect to any Third Party Claim, the Indemnifying Party shall be
entitled (but not required), at its expense, to participate in or
assume the conduct of the negotiations, settlement or defence of the
Third Party Claim and, in that event, the Indemnifying Party shall
reimburse the Indemnified Party for all of the Indemnified Party's
out-of-pocket expenses as a result of that participation or
assumption.
(2) If the Indemnifying Party elects to assume the conduct of the
negotiations, settlement or defence of the Third Party Claim, the
Indemnifying Party shall be entitled to retain counsel on behalf of
37
the Indemnified Party who is acceptable to the Indemnified Party,
acting reasonably, to represent the Indemnified Party of that Third
Party Claim. In any Third Party Claim for which the Indemnifying Party
elects to assume that conduct, the Indemnified Party shall have the
right to participate in the negotiation, settlement or defence of that
Third Party Claim and to retain separate counsel to act on its behalf
but the fees and disbursements of that counsel shall be at the expense
of the Indemnified Party unless:
a) the Indemnified Party determines, acting reasonably, that actual
or potential of conflicts of interests exists which makes
representation chosen by the Indemnifying Party not advisable
(such as where the named parties to that Third Party Claim
include both the Indemnifying Party and the Indemnified Party,
and the defences available to the Indemnified Party are different
or in addition to those available to the Indemnifying Party); or
b) the Indemnifying Party has authorized the retention of that
counsel.
(3) If the Indemnifying Party, having elected to assume that conduct,
thereafter fails to defend the Third Party Claim within a reasonable
time, the Indemnified Party shall be entitled to assume that conduct,
and the Indemnifying Party shall be bound by the results obtained by
the Indemnified Party with respect to that 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 proceedings, the Indemnified
Party shall provide prior written notice of that payment to the
Indemnifying Party. Thereafter, the Indemnifying Party shall deposit
in trust an amount equal to the payment made by the Indemnified Party.
The said amount shall be held in trust by a person chosen by the
parties until the Third Party Claim is settled or a ruling is issued.
5.7 Settlement of Third Party Claims
If the Indemnifying Party fails to assume conduct 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 conduct 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
cannot be unreasonably withheld or delayed, except that the liability of
the Indemnifying Party shall be limited to the proposed amount if any such
consent is not obtained for any reason and the Indemnified Party shall
indemnify and save harmless the Indemnifying Party from and against any
Losses resulting from or arising out of the failure of the Indemnified
Party to consent to that settlement.
38
5.8 Co-Operation
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 to that Third Party Claim (including
supplying copies of all relevant documentation promptly as it becomes
available). Where the defence of a Third Party Claim is being undertaken
and conducted by the Indemnifying Party, the Indemnified Party shall use
all reasonable efforts to make available to the Indemnifying Party, at the
request and expense of the Indemnifying Party, those employees of the
Indemnified Party whose assistance, testimony or presence is reasonably
necessary to assist the Indemnifying Party in evaluating and defending that
Third Party Claim.
5.9 Gross-up
If an Indemnified Party is subject to Tax in respect of the receipt of an
amount pursuant to this Article 5, after taking into account any offsetting
deduction or tax credit available in respect of the applicable Losses, then
the amount payable by the Indemnifying Party shall be increased by an
amount (the "Increased Amount") such that the Indemnified Party shall be in
the same position after paying Tax on the amount received hereunder,
including any Taxes payable on the Increased Amount, as the Indemnified
Party would have been in had the Losses giving rise to such payment not
arisen and had such amount not been payable.
5.10 Franchise
The Vendors shall not be liable to the Purchaser and to indemnify the
latter in respect of any losses related to or arising out with any
misrepresentation or breach of any warranty whatsoever, unless the
aggregate amount of all Losses incurred by the Purchaser during the period
of warranty exceeds $20,000.00 (the "Aggregate minimum"). In addition, the
Vendors shall not be liable to the Purchaser and to indemnify the latter in
respect of any loss related to or arising out with any misrepresentation or
breach of any warranty whatsoever unless such loss exceeds $2,000.00 (the
"Individual Minimum"). However, if the aggregate amount of all the Losses
incurred by the Purchaser during the period of warranty equals or exceeds
an amount of $20,000.00, the Vendors shall be liable to and shall indemnify
the Purchaser for the aggregate amount of all Losses, including the
Aggregate minimum and the Individual minimum. The aggregate amount of all
such indemnifiable losses shall be limited to the Purchase Price.
5.11 Set off
Each of the Vendors acknowledges and accepts that the Purchaser shall be
entitled to set off the amount of any Claim of the Purchaser against any of
them pursuant to this Article 5 against any amount owing by the Purchaser
to the Vendors, including pursuant to Article 2.
39
ARTICLE 6
COVENANTS OF THE PARTIES
6.1 Public Announcements
No Party shall make any public statement or issue any press release
concerning the Transactions except as agreed by the Parties acting
reasonably or as may be necessary, in the opinion of counsel to the Party
making that disclosure, to comply with the requirements of all Applicable
Law. If any public statement or release is so required, the Party making
the disclosure shall consult with the other Parties before making that
statement or release, and the Parties shall use all reasonable efforts,
acting in good faith, to agree on a text for the statement or release that
is satisfactory to the Parties.
6.2 Expenses
Unless specified otherwise in this Agreement, each Party shall pay all
expenses (including Taxes imposed on those expenses) it incurs in the
authorization, negotiation, preparation, execution and performance of this
Agreement and the Transactions, including all fees and expenses of its
legal counsel, bankers, investment bankers, brokers, accountants or other
representatives or consultants. The fees and expenses in connection with
the preparation of the Closing Financial Statements shall be borne by the
Corporation.
6.3 Assumed Liabilities
The Purchaser shall be liable to pay to Pure Water Technologies Inc., on
the Closing Date, the following amounts: i) the cost related to the return
of four (4) water distributor equipments for an aggregate amount of
$13,129.02; ii) the reimbursement of the paid deposit for an aggregate
amount of $17,460. The Vendors shall be liable to pay to Pure Water
Technologies Inc. all the expenses accrued yet unpaid of Pure Water
Technologies Inc. relating to the sale, promotion and distribution of the
Corporation's products and services as more fully described in Schedule 6.3
attached hereto. The Purchaser shall be liable to pay no later than the
Closing Date any and all debts owed to the Creditors.
6.4 Due Diligence Review
The Purchaser has conducted its due diligence review of Bi-Eau Pure and
Bi-Eau Pure has made available its personnel, books and records. Purchaser
acknowledges that, exclusive of fraud, any remedies are limited to the
Indemnification provided herein under Article 5.
6.5 Release of Suretyship (Guarantee)
The Purchaser undertakes to obtain, no later than the Closing Date, the
full and final release of each of the Vendors for any suretyship, guarantee
or collateral security such Vendor may have granted in respect of any
obligation of the Corporation or any of its predecessors to any third party
(including the Creditors). The Purchaser shall indemnify and hold harmless
each of the Vendors of any claim or damages which may arise from any
execution of any such suretyship, guarantee or collateral security relating
to any obligation of the Corporation whether past, present or future.
40
6.6 Termination of the Consulting Agreement signed by Xx. Xxxxxxx Xxxx
The Consulting Agreement entered into between Bi-Eau Pure and Xx. Xxxxxxx
Xxxx, dated January 1st, 2001 and the Assignment of Rights Agreement
entered into between Xx. Xxxxxxx Xxxx, Xxx. Xxxxxxxxxx Xxxx and Bi-Eau Pure
dated January 11, 2001, shall be terminated on the Closing Date, in
consideration of a joint payment to Xx. Xxxxxxx Xxxx and Xxx. Xxxxxxxxxx
Xxxx of an aggregate amount of $200,000 (the "Settlement") in settlement of
the cancellation of such rights and interests held by Xx. Xxxxxxx Xxxx and
Xxx. Xxxxxxxxxx Xxxx in the said Consulting Agreement and all accrued yet
unpaid royalties owed under the said Consulting Agreement, which amount to
$215,762.37 as at the date hereof.
The said amount of $200,000 shall be paid as follows:
>> To Xx. Xxxxxxx Xxxx:
a) payment at Closing of $10,000 cash and $40,000 deposited with
Xxxxxxxx Xxxxx in trust to the benefit of Xx. Xxxxxxx Xxxx to be
disbursed on January 1, 2006 at no cost to the Purchaser;
b) payment on January 1st, 2007: $25,000 ("First Instalment");
c) payment on January 1st, 2008: $25,000 ("Second Instalment").
>> To Xxx. Xxxxxxxxxx Xxxx:
a) payment at Closing of $10,000 cash and $40,000 deposited with
Xxxxxxxx Xxxxx in trust to the benefit of Xxx. Xxxxxxxxxx Xxxx to
be disbursed on January 1, 2006 at no cost to the Purchaser;
b) payment on January 1st, 2007: $25,000 ("First Instalment");
c) payment on January 1st, 2008: $25,000 ("Second Instalment").
The Purchaser shall be exclusively liable for the payment of the Settlement
to Xx. Xxxxxxx Xxxx and Xxx. Xxxxxxxxxx Xxxx upon receipt from each of Xx.
Xxxxxxx Xxxx and Xxx. Xxxxxxxxxx Xxxx of a full and final release and
acquittance in favour of the Purchaser and the Corporation of all rights
and obligations existing under the Consulting Agreement and Assignment of
Rights Agreement as at the Closing Date, the whole subject to the payment
of the Settlement by the Purchaser to Xx. Xxxxxxx Xxxx and Xxx. Xxxxxxxxxx
Xxxx.
The payment of the First Instalment and the Second Instalment shall be
secured by four irrevocable standby letters of credit of $25,000 each
issued as at or prior to Closing, at the Corporation's cost, to the benefit
41
of Xx. Xxxxxxx Xxxx and Xxx. Xxxxxxxxxx Xxxx and payable subject to the
terms herein-above mentioned. The first two letters of credit shall be
cancelled promptly after the payment of the First Instalment and the last
two letters of credit shall be cancelled promptly after the payment of the
Second Instalment.
ARTICLE 7
GENERAL
7.1 No Third Party Beneficiary
This Agreement is solely for the benefit of the Parties and no third
parties shall accrue any benefit, Claim or right of any kind pursuant to,
under, by or through this Agreement.
7.2 Entire Agreement
This Agreement together with the other agreements to be entered into as
contemplated by this Agreement (the "Other Agreements") constitute the
entire agreement between the Parties pertaining to the subject matter of
this Agreement and the Other Agreements and supersede all prior
correspondence, agreements, negotiations, discussions and understandings,
written or oral. Except as specifically set out in this Agreement or the
Other Agreements, there are no representations, warranties, conditions or
other agreements or acknowledgements, whether direct or collateral, express
or implied, written or oral, statutory or otherwise, that form part of or
affect this Agreement or the Other Agreements or which induced any party to
enter into this Agreement or the Other Agreements. No reliance is placed on
any representation, warranty, opinion, advice or assertion of fact made
either prior to, concurrently with, or after entering into, this Agreement
or any Other Agreement, or any amendment or supplement thereto, by any
party to this Agreement or any Other Agreement or its Representatives, to
any other Party or its Representatives, except to the extent the
representation, warranty, opinion, advice or assertion of fact has been
reduced to writing and included as a term in this Agreement or that Other
Agreement, and none of the parties to this Agreement or any other Agreement
has been induced to enter into this Agreement or any Other Agreement or any
amendment or supplement by reason of any such representation, warranty,
opinion, advice or assertion of fact. There shall be no liability, either
extra-contractual or contractual, assessed in relation to the
representation, warranty, opinion, advice or assertion of fact, except as
contemplated in this Section.
7.3 Non-Merger
Except where specifically provided, all provisions of this Agreement shall
survive the execution, delivery and performance of this Agreement and
Closing.
7.4 Time of Essence
Time is of the essence of this Agreement.
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7.5 Amendment
This Agreement may be supplemented, amended, restated or replaced only by a
written agreement signed by each Party.
7.6 Waiver of Rights
Any waiver of, or consent to depart from, the requirements of any provision
of this Agreement shall be effective only if it is in writing and signed by
the Party giving it, and only in the specific instance and for the specific
purpose for which it has been given. No failure on the part of any Party to
exercise, and no delay in exercising, any right under this Agreement shall
operate as a waiver of that right. No single or partial exercise of any
such right shall preclude any other or further exercise of that right or
the exercise of any other right.
7.7 Jurisdiction
Each Party irrevocably and unconditionally submits to the exclusive
jurisdiction of the courts of the Province of Quebec in the judicial
district of Montreal, except with respect to the terms of the arbitration
provided in Section 2.5 of this Agreement.
7.8 Governing Law
This Agreement and any dispute arising from or in relation to this
Agreement shall be governed by, and interpreted and enforced in accordance
with, the law of the Province of Quebec and the laws of Canada applicable
in that province.
7.9 Notices
(1) Any notice, demand or other communication (in this Section 7.9, a
"notice") required or permitted to be given or made under this
Agreement must be in writing and is sufficiently given or made if:
a) delivered in person and left with a receptionist or other
responsible employee of the relevant Party at the applicable
address set forth below;
b) sent by prepaid courier service or (except in the case of actual
or apprehended disruption of postal service) mail; or
c) sent by facsimile transmission, with confirmation of transmission
by the transmitting equipment (a "Transmission");
d) in the case of a notice to the Vendors, addressed to them at:
Gestion Xxxxx Xxxxxx Inc.
0000 Xxxx-Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxx, Xxxxxx, X0X 0X0
Attention: Xxxxx Xxxxxx
43
Rustico Capital Inc.
0000 Xxxxxx-Xxxxxxxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxx, Xxxxxx, X0X 0X0
Attention: Xxxx Xxxx
0000-0000 Xxxxxx Inc.
0000 Xxxxxxxxx Xxxxxx
Xx-Xxxx-xxx-Xxxxxxxxx, Xxxxxx, Xxxxxx, X0X 0X0
Attention: Xxxxxx Xxxxx
Xxxx Xxxxxxx
0000 Xxxxxxx Xxxxxx, Xxxxx #000
Xxxxxxxxxxxx, Xxxxxx, Xxxxxx, X0X 0X0
Xxxxxxx Xxxx
000 Xxxxxx Xxxxx Xxxxxx
Xxxxxx-Xxxxx, Xxxxxx, Xxxxxx, X0X 0X0
Xxxx Xxxxxx
000 Xx-Xxxxxxxxx Xxxxxx, xxx. 00
Xxxxxxxxx, Xxxxxx, Xxxxxx, X0X 0X0
with a copy to:
Xxxxxxxx Xxxxx
0 Xxxxx Xxxxx-Xxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx, Xxxxxx, X0X 0X0
Attention: Xxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
and in the case of a notice to the Purchaser, addressed to it at:
Glacier Water Services Inc.
0000 Xxxx Xxxxxx Xxxxx
Xxxxx, Xxxxxxxxxx, 00000
Xxxxxx Xxxxxx of America
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
44
with a copy to:
Xxxxxxxxx Xxxxx Xxxxxxx Xxxxxxx Xxxxxx & Evall LLP
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx, 00000
Xxxxxx Xxxxxx of America
Attention: Xxxxxx X. Xxxx
Facsimile No.: (000) 000-0000
(2) Any notice sent in accordance with this Section 7.9 shall be deemed to
have been received:
a) if delivered prior to or during normal business hours on a
Business Day, on the date of delivery;
b) if sent by mail, on the 5th Business Day in the place where the
notice is received after mailing, or, in the case of disruption
of postal service, on the fifth Business Day after cessation of
that disruption;
c) if sent by facsimile during normal business hours on a Business
Day in the place where the Transmission is received, on the same
day that it was received by Transmission, on production of a
Transmission report from the machine from which the facsimile was
sent which indicates that the facsimile was sent in its entirety
to the relevant facsimile number of the recipient; or
d) if sent in any other manner, actual receipt;
except that any notice delivered in person or sent by Transmission not
on a Business Day or after normal business hours on a Business Day, in
each case in the place where the notice is received, shall be deemed
to have been received on the next Business Day in the place where the
notice is received.
(3) Any Party may change its address for notice by giving notice to the
other Parties.
7.10 Assignment
No Party may assign or transfer, whether absolutely, by way of security or
otherwise, all or any part of its rights or obligations under this
Agreement to any Person, except that Purchaser may assign any or all of its
rights hereunder to any of its Affiliates, but no such assignment shall
relieve Purchaser of any obligation hereunder.
7.11 Further Assurances
Each Party shall promptly do, execute, deliver or cause to be done,
executed or delivered all further acts, documents and matters in connection
with this Agreement that any other Party may reasonably require, for the
purposes of giving effect to this Agreement.
45
7.12 Severability
If, in any jurisdiction, any provision of this Agreement or its application
to any Party or circumstance is restricted, prohibited or unenforceable,
that provision shall, as to that jurisdiction, be ineffective only to the
extent of that restriction, prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, without affecting
the validity or enforceability of that provision in any other jurisdiction
and, if applicable, without affecting its application to the other Parties
or circumstances.
7.13 Successors and Assigns
This Agreement shall be binding on, and shall enure to the benefit of, the
Parties and their respective successors and permitted assigns.
7.14 Counterparts
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which taken together shall
constitute one agreement.
7.15 Effective Date
Notwithstanding the date of execution of this Agreement, the Parties agree
that this Agreement is deemed to take effect as of October 3rd, 2005.
7.16 Language
The Parties have agreed that this Agreement and all contracts, documents or
notices relating to this Agreement be drawn in the English language. Les
Parties ont convenu que cette convention et tout contrat, document ou avis
y afferent soient rediges en langue anglaise.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
46
IN WITNESS WHEREOF, the Parties have duly executed this Agreement.
Gestion Xxxxxx: Rustico:
Gestion Xxxxx Xxxxxx Inc. Rustico Capital Inc.
By: By:
---------------------------- ----------------------------
Xxxxx Xxxxxx Xxxx Xxxx
9089: Xxxxxx:
0000-0000 Xxxxxx Inc.
--------------------------------
By: Xxxx Xxxxx
----------------------------
Xxxxxx Xxxxx
Xxxxxxx: Xxxx:
-------------------------------- --------------------------------
Xxxx Xxxxxxx Xxxxxxx Xxxx
Purchaser:
Glacier Water Services Inc.
By:
----------------------------
47
