WOLVERINE TUBE CANADA LIMITED PARTNERSHIP, by its general partner, 3072453 NOVA SCOTIA COMPANY and WOLVERINE TUBE, INC. as Vendors and 2172945 ONTARIO LIMITED and BLACK ICE CAPITAL CORP. as Purchasers and COPPER INVESTMENTS HOLDING INC. SHARE AND...
by
its general partner, 3072453 NOVA SCOTIA COMPANY
and
WOLVERINE
TUBE, INC.
as
Vendors
and
2172945
ONTARIO LIMITED
and
BLACK
ICE CAPITAL CORP.
as
Purchasers
and
COPPER
INVESTMENTS HOLDING INC.
July
8, 2008
Table
of Contents
| Article 1 INTERPRETATION |
1
|
||
|
1.1
|
Defined
Terms.
|
1
|
|
|
1.2
|
Gender
and Number.
|
7
|
|
|
1.3
|
Headings,
etc.
|
7
|
|
|
1.4
|
Currency.
|
7
|
|
|
1.5
|
Certain
Phrases, etc.
|
7
|
|
|
1.6
|
Knowledge.
|
8
|
|
|
1.7
|
Accounting
Terms.
|
8
|
|
|
1.8
|
Schedules
and Disclosure Letter.
|
8
|
|
|
1.9
|
References
to Persons and Agreements.
|
8
|
|
|
1.10
|
9
|
||
|
1.11
|
Non-Business
Days.
|
9
|
|
| Article 2 PURCHASED SHARES, PURCHASED ASSETS AND PURCHASE PRICE |
9
|
||
|
2.1
|
Purchased
Shares.
|
9
|
|
|
2.2
|
Purchased
Assets
|
9
|
|
|
2.3
|
Purchase
Price.
|
9
|
|
|
2.4
|
Payment
of the Purchase Price.
|
9
|
|
|
2.5
|
Escrow
Amount.
|
10
|
|
|
2.6
|
Adjustments.
|
10
|
|
|
2.7
|
Determination
of Adjustments.
|
11
|
|
|
2.8
|
Payment
of Adjustments.
|
12
|
|
| Article 3 REPRESENTATIONS AND WARRANTIES OF THE VENDOR AND WOLVERINE |
13
|
||
|
3.1
|
Representations
and Warranties of the Vendor.
|
13
|
|
|
3.2
|
Representations
and Warranties of Wolverine.
|
22
|
|
i
Table
of Contents
| Article 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND BLACK ICE |
23
|
||
|
4.1
|
Representations
and Warranties of the Purchaser.
|
23
|
|
|
4.2
|
Representations
and Warranties of Black Ice
|
25
|
|
| Article 5 COVENANTS OF THE PARTIES |
26
|
||
|
5.1
|
Conduct
of Business Prior to Closing.
|
26
|
|
|
5.2
|
Access
for Due Diligence.
|
27
|
|
|
5.3
|
Confidentiality.
|
27
|
|
|
5.4
|
Actions
to Satisfy Closing Conditions.
|
27
|
|
|
5.5
|
Request
for Consents.
|
27
|
|
|
5.6
|
Filings
and Authorizations.
|
28
|
|
|
5.7
|
Risk
of Loss.
|
28
|
|
|
5.8
|
Environmental
Investigations.
|
28
|
|
|
5.9
|
Privacy.
|
29
|
|
| Article 6 CONDITIONS OF CLOSING |
30
|
||
|
6.1
|
Conditions
for the Benefit of the Purchaser.
|
30
|
|
|
6.2
|
Conditions
for the Benefit of the Vendor.
|
31
|
|
| Article 7 CLOSING |
33
|
||
|
7.1
|
Date,
Time and Place of Closing.
|
33
|
|
|
7.2
|
Closing
Procedures.
|
33
|
|
| Article 8 TERMINATION |
33
|
||
|
8.1
|
Termination
Rights.
|
33
|
|
|
8.2
|
Effect
of Termination.
|
33
|
|
| Article 9 INDEMNIFICATION |
34
|
||
|
9.1
|
Survival.
|
34
|
|
ii
Table
of Contents
|
9.2
|
Indemnification
in Favour of CIH.
|
35
|
|
|
9.3
|
Indemnification
in Favour of the Vendor.
|
35
|
|
|
9.4
|
General
Limitations.
|
36
|
|
|
9.5
|
Monetary
Limitations.
|
38
|
|
|
9.6
|
Notification.
|
39
|
|
|
9.7
|
Procedure
for Third Party Claims.
|
39
|
|
|
9.8
|
Exclusion
of Other Remedies.
|
41
|
|
|
9.9
|
One
Recovery.
|
41
|
|
|
9.10
|
Duty
to Mitigate.
|
41
|
|
|
9.11
|
Adjustment
to Purchase Price.
|
41
|
|
|
9.12
|
Indemnification
by Wolverine Tube, Inc.
|
42
|
|
| Article 10 POST-CLOSING COVENANTS |
42
|
||
|
10.1
|
Creation
of Amalgamated Corporation.
|
42
|
|
|
10.2
|
Pre-Closing
Tax Returns
|
42
|
|
|
10.3
|
Access
to Books and Records
|
43
|
|
|
10.4
|
Director
and Officer Indemnification.
|
43
|
|
|
10.5
|
Further
Assurances, Accounts Receivable.
|
44
|
|
|
10.6
|
Non-Competition
- CIH and Affiliates.
|
44
|
|
|
10.7
|
Copper
Rod and Bar Products.
|
45
|
|
|
10.8
|
Non
Competition - Vendor and Affiliates.
|
45
|
|
|
10.9
|
Montreal
Facility.
|
46
|
|
|
10.10
|
Portfolio
Exemption.
|
47
|
|
|
10.11
|
Existing
Contracts or Quotes.
|
47
|
|
| Article 11 MISCELLANEOUS |
47
|
||
|
11.1
|
Notices.
|
47
|
|
iii
Table
of Contents
|
11.2
|
Time
of the Essence.
|
48
|
|
|
11.3
|
Brokers.
|
49
|
|
|
11.4
|
Announcements.
|
49
|
|
|
11.5
|
Third
Party Beneficiaries.
|
49
|
|
|
11.6
|
Expenses.
|
49
|
|
|
11.7
|
Amendments.
|
49
|
|
|
11.8
|
Waiver.
|
49
|
|
|
11.9
|
Non-Merger.
|
50
|
|
|
11.10
|
Entire
Agreement.
|
50
|
|
|
11.11
|
Successors
and Assigns.
|
50
|
|
|
11.12
|
Invalid
Provisions.
|
50
|
|
|
11.13
|
Governing
Law.
|
51
|
|
|
11.14
|
Counterparts.
|
51
|
iv
Share
and
Asset Purchase Agreement dated July 8, 2008 between Wolverine Tube Canada
Limited Partnership, by its general partner, 3072453 Nova Scotia Company (the
"Vendor"),
Wolverine Tube, Inc. ("Wolverine"),
2172945 Ontario Limited (the "Purchaser"),
Black
Ice Capital Corp. ("Black
Ice")
and
Copper Investments Holding Inc. ("CIH").
ARTICLE 1
INTERPRETATION
1.1 Defined
Terms. Schedule
1.1
As
used
in this Agreement, the following terms have the following meanings:
"Amalco"
has the
meaning specified in Section 10.1.
"Amalgamation
Agreement"
means
the amalgamation agreement to be entered into between the Purchaser and the
Corporation on the Closing Date.
"Auditor"
means
Ernst & Young LLP, the auditor of the Corporation.
"Authorization"
means,
with respect to any Person, any order, permit, approval, consent, waiver,
licence or similar authorization of any Governmental Entity having jurisdiction
over the Person.
"Black
Ice"
means
Black Ice Capital Corp., an Ontario corporation.
"Business"
means
the copper tube mill operation currently carried on by the
Corporation.
"Business
Day"
means
any day of the year, other than a Saturday, Sunday or any day on which major
banks are closed for business in Toronto, Ontario or Huntsville,
Alabama.
"Canadian
GAAP"
means
accounting principles generally accepted in Canada as recommended in the
Handbook of the Canadian Institute of Chartered Accountants, at the relevant
time applied on a consistent basis.
1
"CIH"
means
Copper Investments Holding Inc.
"CIH
Non-Compete Termination Date"
means
the fifth anniversary of the date of this Agreement.
"Closing"
means
the completion of the transaction of purchase and sale contemplated in this
Agreement.
"Closing
Date"
means
the date hereof or such later date as the Parties may mutually agree in
writing.
"Confidential
Information Memorandum"
means
the Wolverine Tube, Inc., Xxxxxx, Xxxxxxx, Xxxxxx Operations confidential
information memorandum dated summer 2007, provided to Royal Capital Management
Corp. by Lincoln International LLC.
"Confidentiality
Agreement"
means
the confidentiality agreement dated June 2007 between Royal Capital Management
Corp. and the Corporation.
"Corporation"
means
Wolverine Tube (Canada) Inc.
"Damages"
means
any actual losses, liabilities, damages or out-of-pocket expenses (including
reasonable legal fees and expenses, but excluding loss of profits and special,
indirect, consequential, punitive or aggravated damages) whether resulting
from
an action, suit, proceeding, arbitration, claim, demand or investigation that
is
instituted or asserted by a third party, including a Governmental Entity, or
a
cause, matter, thing, act, omission or state of facts not involving a third
party.
"Direct
Claim"
means
any cause, matter, thing, act, omission or state of facts not involving a Third
Party Claim which entitles an Indemnified Person to make a claim for
indemnification under this Agreement.
"Disclosure
Letter"
means
the disclosure letter dated the date of this Agreement and delivered by the
Vendor to the Purchaser with this Agreement.
"Draft
Adjustment"
has the
meaning specified in Section 2.7(a).
"Effective
Date"
means
May 25, 2008.
"Effective
Date Balance Sheet"
means
the internally prepared statement of net asset position attached as an Exhibit
to the Disclosure Letter.
"Employee
Plans"
means
all the employee benefit, fringe benefit, supplemental unemployment benefit,
bonus, incentive, profit sharing, termination, change of control, pension,
retirement, health, welfare, medical, dental, disability, life insurance and
similar plans, programmes, arrangements or practices relating to the current
or
former officers or employees of the Corporation maintained, sponsored or funded
by the Corporation, whether written or oral, funded or unfunded, insured or
self-insured, registered or unregistered, all of which are set out in Section
3.1(bb)
of the
Disclosure Letter.
2
"Escrow
Agreement"
has the
meaning specified in Section 2.5.
"Escrow
Fund"
has the
meaning specified in Section 2.4(c).
"Escrow
Release Notice"
has the
meaning specified in the Escrow Agreement.
"Environmental
Actions"
means
any claim, action, cause of action or investigation by any Person alleging
liability based on (i) any violation of any Environmental Laws, or (ii) any
obligation or liability arising under any Environmental Laws.
"Environmental
Claims"
has the
meaning specified in Section 9.4(d).
"Environmental
Laws"
means
all applicable Laws and agreements with Governmental Entities and all other
statutory requirements relating to public health or the protection of the
environment and all Authorizations issued pursuant to such Laws, agreements
or
statutory requirements.
"General
Partner"
means
3072453 Nova Scotia Company.
"Governmental
Entity"
means
(i) any international, multinational, national, federal, provincial, state,
municipal, local or other government, (ii) any subdivision, department, court,
commission, board, bureau, agency or authority of any government, or (iii)
any
quasi-governmental or private body exercising any regulatory, rule-making,
expropriation, taxing or other governmental or quasi-governmental authority,
including any applicable stock exchange or other securities
marketplace.
"Indemnified
Person"
means a
Person with indemnification rights or benefits under 9.2
or
Section 9.3,
or
otherwise under this Agreement.
"Indemnifying
Party"
means a
Party against which a claim may be made for indemnification under this
Agreement, including pursuant to Article 9.
"Intellectual
Property"
means
domestic and foreign intellectual property rights, including: (i) patents,
applications for patents and reissues, divisions, continuations, renewals,
extensions and continuations-in-part of patents or patent applications; (ii)
copyrights, copyright registrations and applications for copyright registration;
(iii) designs, design registrations and design registration applications, and
(iv) trade names, business names, corporate names, domain names, website names
and world wide web addresses, common law trade-marks, trade-xxxx registrations,
trade-xxxx applications, trade dress and logos, and the goodwill associated
with
any of the items in (i), (ii), (iii) or (iv) of this definition.
3
"Interim
Balance Sheet Date"
means
April 27, 2008.
"Interim
Financial Statements"
means
the unaudited financial statements of the Corporation as at the Interim Balance
Sheet Date, consisting of a balance sheet and the accompanying unaudited
statement of income of the Corporation for the period then ended.
"Interim
Period"
means
the period between the close of business on the Effective Date and the
commencement of business on the Closing Date.
"June
Balance Sheet"
means a
statement of the net asset position for the Corporation prepared as of the
close
of business on June 29, 2008 on the basis consistent with basis on which the
Effective Date Balance Sheet was prepared and each of the line items of which
will be prepared in accordance with U.S. GAAP except that: (i) on the Effective
Date Balance Sheet, cash and accounts payable were adjusted to reflect the
fact
that cash was used to pay certain intercompany accounts as of May 25, 2008
whereas cash will be shown on the June Balance Sheet; (ii) payables owing to
affiliates of the Corporation which were incurred by the Corporation between
June 24 and the close of business on June 29 in the ordinary course of business
will be reflected on the June Balance Sheet as trade payables; (iii) both the
Effective Date Balance Sheet and the June Balance Sheet will include accounts
receivable transferred to the Corporation pursuant to the Reassignment
Agreement; and (iv) the Corporation’s liability for post-retirement benefits
will be deemed to be $8,000,000 on both the Effective Date Balance Sheet and
the
June Balance Sheet.;
"Laws"
means
any and all (i) laws, constitutions, treaties, statutes, codes, ordinances,
orders, decrees, rules, regulations, by-laws and (ii) judgments, orders, writs,
injunctions, decisions, awards and directives of any Governmental
Entity.
"Lien"
means
any mortgage, charge, pledge, hypothec, security interest, assignment, lien
(statutory or otherwise), easement, title retention agreement or arrangement,
conditional sale, deemed or statutory trust, restrictive covenant or other
encumbrance of any nature which, in substance, secures payment or performance
of
an obligation.
"Loan
Agreement"
means
the credit agreement dated the date hereof between the Purchaser, as borrower,
and CIT Business Credit Canada Inc., as agent.
"Material
Adverse Effect"
means
any effect that, when considered either individually or in the aggregate, is
material and adverse to the financial condition of the Parent or the
Corporation; except to the extent that the material adverse effect results
from
or is caused by (i) worldwide, national or local conditions or
circumstances whether they are economic, political, regulatory or otherwise,
including war, military action, armed hostilities, acts of terrorism,
emergencies, crises and natural disasters, (ii) the announcement of this
Agreement and the transactions contemplated by it, (iii) any act or
omission of the Vendor, the Parent or the Corporation prior to the Closing
Date
taken with the prior written consent or at the request of the Purchaser,
(iv) general economic, regulatory or political conditions or changes,
(v) changes in the law or Canadian GAAP, (vi) compliance with the
terms of this Agreement, (vii) any matter or event of which the Purchaser
has been notified in writing as of the date hereof, or (viii) any matter
set forth in the Schedules attached hereto or in the Disclosure
Letter.
4
"Material
Contract"
has the
meaning specified in Section 3.1(t).
"Montreal
Facility"
means
the land and plant located at 00000 Xxxxxxxxxx Xxxxxx Xxxx, Xxxxxxxx,
Québec.
"Net
Asset Value"
as of
the close of business on June 29, 2008, means the amount by which the assets
of
the Corporation exceed the liabilities of the Corporation all of which shall
be
calculated based on the June Balance Sheet.
"Net
Asset Value Adjustment"
has the
meaning set out in section 2.6(d) hereof.
"Non-Owned
Assets"
has the
meaning specified in Section 3.1(p).
"Notice"
has the
meaning specified in Section 11.1.
"Parent"
means
3072996 Nova Scotia Company.
"Parent's
Business"
means
the business of holding shares of the Corporation.
"Parties"
means
the Vendor, Wolverine, the Purchaser, Black Ice, CIH and any other Person who
becomes a party to this Agreement.
"Permitted
Liens"
means
(i) Liens for Taxes not yet due and delinquent, (ii) easements, encroachments
and other minor imperfections of title which do not, individually or in the
aggregate, materially detract from the value of or impair the use or
marketability of any real property, (iii) Liens listed and described in Section
1.1
of the
Disclosure Letter, (iv) mechanics', carriers', workers', repairers' and similar
statutory liens arising or incurred in the ordinary course of business for
amounts which are not delinquent or which are not, individually or in the
aggregate, significant and which are being contested in good faith by
appropriate proceedings, (v) zoning, entitlement, building and other land use
regulations imposed by Governmental Entities having jurisdiction over real
property which are not violated by the current use and operation of the real
property, (vi) liens arising under workers' compensation, employment or
unemployment insurance, social insurance or social security, retirement and
similar legislation, and (vii) liens on goods in transit incurred pursuant
to
documentary letters of credit.
"Person"
means a
natural person, partnership, limited partnership, limited liability partnership,
corporation, limited liability corporation, unlimited liability company, joint
stock company, trust, unincorporated association, joint venture or other entity
or Governmental Entity, and pronouns have a similarly extended
meaning.
5
"Prime
Rate"
means
an annual rate of interest equal to the annual rate of interest announced from
time to time by the main branch of the Canadian Imperial Bank of Commerce in
Toronto, Ontario as its "prime rate" and as a reference rate then in effect
for
determining interest rates on Canadian dollar commercial loans.
"Purchase
Price"
has the
meaning specified in Section 2.3.
"Purchased
Assets"
means
(i) the Shawnee Payable and (ii) the Wolverine Owned Receivables.
"Purchased
Shares"
has the
meaning specified in Section 2.1.
"Purchaser"
means
2172945 Ontario Limited.
"Reassignment
Agreement"
means
the agreement dated as of May 25, 2008 among DEJ 98 Finance, LLC, the
Corporation, The CIT Group Business Credit, Inc. and Wachovia Bank, National
Association relating to the Corporation's accounts receivable.
"Sales
Agency Agreement"
means
the agreement dated the date hereof pursuant to which the Corporation appoints
Wolverine its exclusive representative in the United States and Mexico for
the
sale of certain of Amalco's products to certain customers.
"Shawnee Payable"
means
the amount of US$1,777,042.88 owing by the Corporation to Wolverine for copper
inventory.
"Tax
Act"
means
the Income
Tax Act
(Canada)
and the regulations thereunder.
"Tax
Assessment Period"
has the
meaning specified in Section 9.1(b).
"Tax
Benefit"
has the
meaning set out in Section 9.5(b).
"Tax
Returns"
means
any and all returns, reports, declarations and elections, filed or required
to
be filed in respect of Taxes.
"Taxes"
means
(i) any and all taxes, duties, fees, excises, premiums, assessments, imposts,
levies and other charges or assessments of any kind whatsoever imposed by any
Governmental Entity, and (ii) all interest, penalties, fines, additions to
tax
or other additional amounts imposed by any Governmental Entity on or in respect
of amounts of the type described in clause (i) above or this clause
(ii).
"Third
Party Claim"
means
any action, suit, proceeding, arbitration, claim or demand that is instituted
or
asserted by a third party, including a Governmental Entity, against an
Indemnified Person which entitles the Indemnified Person to make a claim for
indemnification under this Agreement.
6
"Trade-xxxx
Licence Agreement"
has the
meaning specified in Section 6.1(c)(v).
"Transitional
Services Agreement"
has the
meaning specified in Section 6.1(c)(iv).
"U.S.
GAAP"
means
accounting principles generally accepted in the United States as recommended
by
the Financial Accounting Standards Board, at the relevant time, applied on
a
consistent basis.
"Vendor"
means
Wolverine Tube Canada Limited Partnership, by its General Partner.
"Wolverine"
means
Wolverine Tube, Inc.
"Wolverine
Non-Compete Termination Date"
means
the fifth anniversary of the date of this Agreement.
"Wolverine
Owned Receivables"
has the
meaning specified in 5.1(b).
"WTC
Limited Partnership Agreement"
means
the limited partnership agreement dated December 24, 2002 between 3072452 Nova
Scotia Company, as general partner, and Wolverine Tube, Inc., as the initial
limited partner, relating to the formation of Wolverine Tube Canada Limited
Partnership, as amended by an extraordinary resolution of the partners dated
April 30, 2005.
1.2 Gender
and Number.
Any
reference in this Agreement to gender includes all genders. Words importing
the
singular number only include the plural and vice versa.
1.3 Headings,
etc.
The
provision of a Table of Contents, the division of this Agreement into Articles
and Sections and the insertion of headings are for convenient reference only
and
do not affect the interpretation of this Agreement.
1.4 Currency.
All
references in this Agreement to dollars or to $ are expressed in Canadian
currency unless otherwise specifically indicated.
1.5 Certain
Phrases, etc.
In
this
Agreement (i) the words "including", "includes" and "include" mean "including
(or includes or include) without limitation", and (ii) the phrase "the aggregate
of", "the total of", "the sum of", or a phrase of similar meaning means "the
aggregate (or total or sum), without duplication, of". Unless otherwise
specified, the words "Article" and "Section" followed by a number mean and
refer
to the specified Article or Section of this Agreement.
7
1.6 Knowledge.
Where
any
representation or warranty contained in this Agreement is qualified by reference
to the knowledge of the Vendor it refers to the actual knowledge of each of
the
Xxxx Xxxxxx, Xxx Xxxxxx and Xxx Xxxxxxxxxx (after such individual makes
reasonable inquiry of the Corporation's employees who report directly to such
individual), without personal liability on the part of any of such
individual.
1.7 Accounting
Terms.
All
accounting terms not specifically defined in this Agreement are to be
interpreted in accordance with U.S. GAAP.
1.8 Schedules
and Disclosure Letter.
|
(a)
|
The
schedules attached to this Agreement and the Disclosure Letter form
an
integral part of this Agreement for all purposes of
it.
|
|
(b)
|
The
purpose of the Disclosure Letter is to set out the qualifications,
exceptions and other information called for in this Agreement. The
Parties
acknowledge and agree that the Disclosure Letter and the information
and
disclosures contained in it do not constitute or imply, and will
not be
construed as:
|
|
(i)
|
any
representation, warranty, covenant or agreement which is not expressly
set
out in this Agreement;
|
|
(ii)
|
an
admission of any liability or obligation of the
Vendor;
|
|
(iii)
|
an
admission that the information is
material;
|
|
(iv)
|
a
standard of materiality, a standard for what is or is not in the
ordinary
course of business, or any other standard contrary to the standards
contained in the Agreement; or
|
|
(v)
|
an
expansion of the scope or effect of any of the representations, warranties
and covenants set out in the
Agreement.
|
|
(c)
|
Disclosure
of any information in the Disclosure Letter that is not strictly
required
under this Agreement has been made for informational purposes only
and
does not imply disclosure of all matters of a similar
nature.
|
|
(d)
|
The
Disclosure Letter itself is confidential information and is subject
to the
obligations of the parties pursuant to the Confidentiality
Agreement.
|
1.9 References
to Persons and Agreements.
Any
reference in this Agreement to a Person includes its successors and permitted
assigns. Except as otherwise provided in this Agreement, the term "Agreement"
and any reference to this Agreement or any other agreement or document includes,
and is a reference to, this Agreement or such other agreement or document as
it
may have been, or may from time to time be amended, restated, replaced,
supplemented or novated and includes all schedules to it.
8
1.10 Statutes.
Except
as
otherwise provided in this Agreement, any reference in this Agreement to a
statute refers to such statute and all rules and regulations made under it,
as
it or they may have been or may from time to time be amended or
re-enacted.
1.11 Non-Business
Days.
Whenever
payments are required to be made or an action is required to be taken on a
day
which is not a Business Day, such payment shall be required to be made or such
action shall be required to be taken on or not later than the next succeeding
Business Day.
ARTICLE 2
PURCHASED
SHARES,
PURCHASED ASSETS AND PURCHASE PRICE
2.1 Purchased
Shares.
Subject
to the terms and conditions of this Agreement, the Vendor agrees to sell, assign
and transfer to the Purchaser and the Purchaser agrees to purchase from the
Vendor on the Closing Date, 100 Class B common shares having a par value of
$1.00 each in the capital of the Parent, representing 100% of the issued and
outstanding shares of the Parent (the "Purchased
Shares").
2.2 Purchased
Assets
Subject
to the terms and conditions of this Agreement, Wolverine agrees to sell, assign
and transfer to Black Ice and Black Ice agrees to purchase from Wolverine on
the
Closing Date, the Purchased Assets.
2.3 Purchase
Price.
The
consideration payable for the Purchased Shares and the Purchased Assets is
the
sum of Forty-Four million ($44,000,000) dollars (the "Purchase
Price")
subject to adjustment in accordance with Section 2.7
hereof.
2.4 Payment
of the Purchase Price.
At
the
Closing, the Purchase Price, will be paid and satisfied as follows:
|
(a)
|
in
respect of the Wolverine Owned Receivables, the sum of $2,500,000
shall be
paid by Black Ice to Wolverine on Closing by bank draft or wire transfer
of immediately available funds;
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9
|
(b)
|
in
respect of the Shawnee Payable, the sum of U.S.$1,777,042.88 (or
the
Canadian equivalent if agreed upon by the parties) shall be paid
by Black
Ice to Wolverine on Closing by bank draft or wire transfer of immediately
available funds;
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|
(c)
|
the
sum of $500,000 (the "Escrow
Fund")
shall be paid by the Purchaser to Stikeman Elliott LLP in trust on
Closing
by wire transfer of immediately available funds to be held in accordance
with Section 2.5;
and
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|
(d)
|
the
sum of $39,202,519.12 being the balance of the Purchase Price, subject
to
the adjustments contemplated by subsections 2.6(a), 2.6(b) and 2.6(c),
shall be paid by the Purchaser to the Vendor on Closing by bank draft
or
wire transfer of immediately available
funds.
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2.5 Escrow
Amount.
On
Closing, Stikeman Elliott LLP will hold the amount set forth in Section
2.4(c)
in trust
for the Vendor and shall release same only in accordance with the provisions
of
the escrow agreement dated the date hereof among Stikeman Elliott LLP, the
Vendor, Wolverine, the Purchaser and CIH (the "Escrow
Agreement").
2.6 Adjustments.
The
Vendor and the Purchaser shall adjust the Purchase Price in accordance with
Section 2.7
for the
following items:
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(a)
|
The
Purchaser shall pay Wolverine all amounts advanced in cash by Wolverine
to
the Corporation during the Interim Period and for all fees and other
costs
paid by the Corporation on or prior to May 25, 2008 for third party
assessments incurred in connection with the Loan Agreement, which
fees and
costs are set out on Schedule
2.6(a).
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|
(b)
|
The
Purchaser and Wolverine shall adjust for the changes to the intercorporate
accounts during the Interim Period;
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|
(c)
|
The
Vendor shall pay the Purchaser an amount equal to the amount paid
by the
Corporation during the Interim Period in respect of (i) the Montreal
business and operations of the Corporation, (ii) the closure and
winding
up of such operations and (iii) all legal, accounting and other fees
incurred by the Corporation in connection with the transfer of assets
out
of the Corporation prior to the Closing Date, as more particularly
set out
in Schedule 2.6(c); and
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|
(d)
|
The
Vendor shall pay Amalco an amount equal to the amount, if any, by
which
$48,255,000 is greater than the Net Asset Value as calculated as
of the
close of business on June 29, 2008 (the "Net
Asset Value Adjustment").
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10
2.7 Determination
of Adjustments.
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(a)
|
On
the Closing Date the Vendor and the Purchaser shall mutually agree
upon
the adjustments set out in subsections 2.6(a), 2.6(b) and 2.6(c)
hereof
and the parties shall pay such adjustments on the Closing Date. The
agreement of the Vendor and the Purchaser on the Closing Date as
to the
adjustments set out in subsections 2.6(a), 2.6(b) and 2.6(c) hereof
shall
be final, conclusive and binding upon the Parties. Each Party releases
each other Party from all claims, actions, causes of action, suits,
proceedings and demands of every nature and kind relating to, arising
out
of, or involving the adjustments set out in subsections 2.6(a), 2.6(b)
or
2.6(c) or the agreement of the Vendor and the Purchaser with respect
thereto
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|
(b)
|
Within
45 days following the Closing Date (or such other date as is mutually
agreed to by the Vendor and the Purchaser in writing), CIH will prepare,
cause the Auditor to review, and will deliver to the Vendor a draft
of the
June Balance Sheet and the Net Asset Value Adjustment (the "Draft
Adjustment").
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|
(c)
|
The
Vendor will have 15 Business Days to review the draft June Balance
Sheet
and the Draft Adjustment following receipt of them and the Vendor
must
notify CIH in writing if it has any objections to the draft June
Balance
Sheet and the Draft Adjustment within such 15 Business Day period.
CIH
will, and will cause the Auditor to, (i) provide access to the Vendor
upon every reasonable request to the accounts, books and records
and
employees of the Corporation and all work papers of CIH, the Corporation
and the Auditor and (ii) cooperate with the Vendor for purposes of
reviewing the draft June Balance Sheet and the Draft Adjustment.
The
notice of objection must set out each item in dispute and the basis
for
such dispute.
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|
(d)
|
If
the Vendor sends a notice of objection in accordance with Section
2.7(c),
the Parties will meet within 3 Business Days of receipt by CIH of
such
notice and will negotiate in good faith to resolve the objections
set out
in the Vendor's notice of objection during the period from such meeting
until 20 Business Days after the date such notice of objection was
received by CIH. Failing resolution of any objection to the draft
June
Balance Sheet or the Draft Adjustment raised by the Vendor, the unresolved
objections will be submitted for determination to PricewaterhouseCoopers
LLP, or if such firm is unable to act, Xxxxx Xxxxxxxx LLP by the
Purchaser
or the Vendor within 3 Business Days after the expiry of such 20
Business
Day Period. The Vendor and the Purchaser shall act in good faith
and in a
commercially reasonable manner to settle the engagement letter with
such
firm of chartered accountants as quickly as possible. The Vendor
and the
Purchaser agree to request that such engagement letter provide that
such
firm shall render its determination within 30 days following submission
in
writing by the Vendor and the Purchaser of their respective cases.
The
Vendor and the Purchaser shall submit their respective cases in writing
to
such firm of chartered accountants within 15 Business Days after
the date
of such engagement letter. The determination of such firm of chartered
accountants will be final and binding upon the Parties and will not
be
subject to appeal, absent manifest error. Such firm of chartered
accountants are deemed to be acting as experts and not as
arbitrators.
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11
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(e)
|
If
the Vendor does not notify the Purchaser of any objection in accordance
with Section 2.7(c),
the Vendor is deemed to have accepted and approved the the Draft
Adjustment, and the Draft Adjustment will be final, conclusive and
binding
upon the Parties, and will not be subject to appeal, absent manifest
error. The Draft Adjustment will become the Net Asset Value Adjustment
on
the next Business Day following the end of such 15 Business Day
period.
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(f)
|
If
the Vendor sends a notice of objection within the 15 Business Day
period,
the Parties will revise the June Balance Sheet and the Draft Adjustment
to
reflect the final resolution or final determination of such objections
under Section 2.7(d)
within two Business Days following such final resolution or determination.
Such revised Draft Adjustment will be final, conclusive and binding
upon
the Parties, and will not be subject to appeal, absent manifest error.
The
Draft Adjustment will become the Net Asset Value Adjustment on the
third
Business Day following such final resolution or final
determination.
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(g)
|
CIH
and the Vendor will each bear their own fees and expenses and CIH
will
bear Amalco's fees and expenses, including the fees and expenses
of their
respective auditors, if any, in preparing or reviewing, as the case
may
be, the June Balance Sheet and the Draft Adjustment. In the case
of a
dispute and the retention of a firm of chartered accountants to determine
such dispute, the costs and expenses of such firm of chartered accountants
shall be borne equally by CIH and the Vendor. However, CIH and the
Vendor
will each bear their own costs in presenting their respective cases
to
such firm of chartered accountants.
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(h)
|
The
Parties agree that the procedure set forth in this Section 2.7
for resolving disputes with respect to the draft June Balance Sheet
and
the Draft Adjustment is the sole and exclusive method of resolving
such
disputes, absent manifest error, in the draft June Balance Sheet
and the
Draft Adjustment.
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2.8 Payment
of Adjustments.
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(a)
|
The
Purchase Price will be decreased, on a dollar-for-dollar basis ,
by the
amount of the Net Asset Value Adjustment as determined pursuant to
Section
2.7.
If there is no Net Asset Value Adjustment, there will be no increase
or
decrease in the Purchase Price and the Escrow Fund shall be released
to
the Vendor.
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|
(b)
|
If
there is Net Asset Value Adjustment, Stikeman Elliott LLP shall in
accordance with the terms of the Escrow Agreement, pay all of the
said
adjustment (up to a maximum of $500,000) to the Purchaser and the
Vendor
shall pay the balance, if any, of such adjustment to the Purchaser.
All
such payments shall be paid by wire transfer of immediately available
funds within two (2) Business Days following the receipt by Stikeman
Elliott LLP of the Escrow Release Notice in accordance with the Escrow
Agreement. The balance, if any, of the Escrow Fund held by Stikeman
Elliott LLP after payment of the Net Asset Value Adjustment as herein
set
out, shall be released to the Vendor following receipt of the Escrow
Release Notice in accordance with the Escrow
Agreement.
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12
|
(c)
|
The
Vendor shall, concurrently with the payment of the Net Asset Value
Adjustment, pay the Purchaser, interest on the amount payable, for
the
period from and after the Effective Date to and including the date
of
payment, at the Prime Rate from time to time in effect, without
compounding, and net of any interest paid to the Purchaser on the
Escrow
Fund pursuant to the Escrow
Agreement..
|
ARTICLE 3
REPRESENTATIONS
AND WARRANTIES OF THE VENDOR
AND WOLVERINE
3.1 Representations
and Warranties of the Vendor.
The
Vendor represents and warrants as follows to the Purchaser and acknowledges
that
the Purchaser is relying upon the representations and warranties in connection
with its purchase of the Purchased Shares:
Corporate
Matters
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(a)
|
Incorporation
and Qualification.
The Parent, the Corporation and the General Partner are each corporations
or other corporate bodies incorporated and existing under the Laws
of
their jurisdictions of incorporation and each has the corporate power
to
own and operate its property, carry on its business and enter into
and
perform its obligations (if any) under this Agreement.
Wolverine Tube Canada Limited Partnership has been formed and is
existing
as a limited partnership under the laws of the Province of New
Brunswick.
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|
(b)
|
Corporate
and Partnership Authorization.
The execution and delivery of, and performance of this Agreement
by the
General Partner on behalf of Wolverine Tube Canada Limited Partnership
have been authorized by all necessary corporate action on the part
of the
General Partner and by all action required pursuant to the WTC Limited
Partnership Agreement.
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|
(c)
|
No
Conflict.
Except as disclosed in Section 3.1(c)
of
the Disclosure Letter, the execution and delivery of, and performance
by
the General Partner on behalf of Wolverine Tube Canada Limited Partnership
of, the transaction of purchase and sale contemplated by this
Agreement:
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13
|
(i)
|
do
not constitute or result in a violation or breach of, or conflict
with, or
allow any Person to exercise any rights under, any of the terms or
provisions of the General Partner's, the Parent's or the Corporation's
constating documents or under the WTC Limited Partnership
Agreement;
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|
(ii)
|
do
not result in a breach of, or cause the termination or revocation
of, any
Authorization held by the General Partner on behalf of Wolverine
Tube
Canada Limited Partnership, the Parent or the Corporation that is
necessary to the ownership of the Purchased Shares or the operation
of the
Parent's Business or the Business, which would reasonably be expected
to
have a Material Adverse Effect; and
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|
(iii)
|
do
not result in the violation of any Law which would reasonably be
expected
to have a Material Adverse Effect.
|
|
(d)
|
Required
Authorizations.
Except as disclosed in Section 3.1(d)
of
the Disclosure Letter, no filing with, notice to, or Authorization
of, any
Governmental Entity is required on the part of the General Partner
on
behalf of Wolverine Tube Canada Limited Partnership as a condition
to the
lawful completion of the transactions contemplated by this Agreement
where
the failure to make the filing, give the notice or obtain the
Authorization would reasonably be expected to have a Material Adverse
Effect.
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|
(e)
|
Third
Party Consents.
Except as disclosed in Section 3.1(e)
of
the Disclosure Letter, there is no requirement to obtain any consent,
approval or waiver of a party under any contract, license, lease
or
instrument that the Parent or the Corporation is a party to, to the
completion of the transactions contemplated by this Agreement where
the
failure to obtain such consent would reasonably be expected to have
a
Material Adverse Effect.
|
|
(f)
|
Execution
and Binding Obligation.
This Agreement has been duly executed and delivered by the General
Partner
on behalf of Wolverine Tube Canada Limited Partnership, and constitutes
legal, valid and binding agreements of it enforceable against it
and
Wolverine Tube Canada Limited Partnership in accordance with its
terms,
subject to any limitation under applicable laws relating to (i)
bankruptcy, winding-up, insolvency, arrangement, fraudulent preference
and
conveyance, assignment and preference and other laws of general
application affecting the enforcement of creditors' rights, and (ii)
the
discretion that a court may exercise in the granting of equitable
remedies
such as specific performance and
injunction.
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|
(g)
|
Authorized
and Issued Capital.
The authorized capital of the Corporation consists of an unlimited
number
of non-cumulative redeemable voting preference shares and an unlimited
number of common
shares, of which at this date, 26,880 non-cumulative
redeemable voting preference shares and 50,000 common shares are
issued
and are outstanding as fully paid and non-assessable. The authorized
capital of the Parent consists of $1,100,000 divided into 100,000,000
common shares having a par value of $0.01 each and 100,000 Class
B common
shares having a par value of $1.00 each and 1,000,000,000 common
shares
without nominal or par value of which (i) at this date, 100 Class B
common shares having a par value of $1.00 each are issued and are
outstanding as fully paid; and (ii) at the Closing Date, 100 Class B
common shares having a par value of $1.00 each will be issued and
outstanding as fully paid. The Parent and the Corporation are not
reporting issuers (as such term is defined in the Securities
Act
(Ontario) and there is no published market for the Purchased
Shares.
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14
|
(h)
|
No
Other Agreements to Purchase.
Except for the Purchaser's right under this Agreement, no Person
has any
contractual right or privilege for (i) the purchase or acquisition
from
the Vendor of any of the Purchased Shares or for the purchase or
acquisition from the Parent of any of the issued and outstanding
shares in
the capital of the Corporation, or (ii) the purchase, subscription,
allotment or issuance of any of the unissued shares or other equity
securities of the Parent or the
Corporation.
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|
(i)
|
Title
to Purchased Shares.
The Purchased Shares are owned by the General Partner on behalf of
Wolverine Tube Canada Limited Partnership as the registered and beneficial
owner, with good title, free and clear of all Liens other than those
restrictions on transfer contained in the articles of association
of the
Parent. Upon
completion of the transaction contemplated by this Agreement, the
Purchaser will have good and valid title to Purchased Shares, free
and
clear of all Liens other than (i) those restrictions on transfer
contained
in the articles of association of the Parent, and (ii) Liens granted
by
the Purchaser. All of the issued and outstanding shares in the capital
of
the Corporation are owned at this date, and will be owned at the
Closing
Date, by the Parent as the registered and beneficial owner, with
good
title, free and clear of all Liens other than those restrictions
on
transfer, if any, contained in the articles of the
Corporation.
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|
(j)
|
Residence
of the Vendor. Each
of the General Partner and the other partner(s) of the Wolverine
Tube
Canada Limited Partnership is not a non-resident of Canada within
the
meaning the Tax Act.
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|
(k)
|
Corporate
Records.
Each of the Parent's and the Corporation's corporate records are
complete
and accurate and include its constating documents, minutes of meetings
and
resolutions of shareholders and directors, and the securities register,
register of transfers and register of
directors.
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|
(l)
|
Ordinary
Course.
Subject to Section 5.1(b),
except as disclosed in Section 3.1(l)
of
the Disclosure Letter, since the Interim Balance Sheet Date, (i)
the
Parent's Business and the Business have been carried on in the ordinary
course of normal day-to-day operations of the Parent and the Corporation,
respectively, consistent with past practices, and (ii) no dividends
or
other similar distributions have been made to the Parent or
Wolverine.
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15
|
(m)
|
Compliance
with Laws.
The Corporation is conducting the Business in material compliance
with all
applicable Laws. The Parent is conducting the Parent's Business in
material compliance with all applicable Laws. For the Purposes of
this
representation and warranty "Laws" shall not include any Environmental
Laws.
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|
(n)
|
Authorizations.
The Parent and the Corporation are qualified, licensed or registered
to
carry on business in the jurisdictions listed in Section 3.1(n)
of
the Disclosure Letter under their respective names. Each of the Parent
and
the Corporation has all Authorizations which are necessary for it
to
conduct the Parent's Business or the Business (as the case may be)
as
presently conducted, except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect. Such
Authorizations are listed in Section 3.1(n)
of
the Disclosure Letter and are each valid, subsisting and in good
standing
and there are no outstanding defaults or breaches under them on the
part
of the Parent or the Corporation which would reasonably be expected
to
have a Material Adverse Effect.
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|
(o)
|
Subsidiaries.
The Corporation has no subsidiaries and holds no shares or other
ownership, equity or proprietary interests in any Person.
The Parent has no subsidiaries and holds no shares or other ownership,
equity or proprietary interests in any Person except the
Corporation.
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|
(p)
|
The
Assets Generally.
Except as disclosed in Section 3.1(p)
of
the Disclosure Letter, (i) no Person (other than the Corporation)
owns any assets that are material to the Business except for the
personal
property leased by the Corporation and Intellectual Property and
computer
software and programs licensed to the Corporation set out in Section
3.1(p)
of
the Disclosure Letter (collectively, the "Non-Owned
Assets"),
and (ii) except for the Non-Owned Assets, all of the assets that are
material to the Business and are currently used in the Business and
are
located on the lands and premises listed in Section 3.1(s)
of
the Disclosure Letter, are owned by the Corporation free and clear
of all
Liens, except for Permitted Liens.
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|
(q)
|
No
Options, etc. to Purchase Assets.
Except as disclosed in Section 3.1(q)
of
the Disclosure Letter, since the Interim Balance Sheet Date, the
Corporation has not sold or otherwise disposed of any assets that
are
material to the Business except in the ordinary course of the Business.
Except as disclosed in Section 3.1(q)
of
the Disclosure Letter, no Person has any contractual right or privilege
for the purchase or other acquisition from the Corporation of any
assets
that are material to the Business except in the ordinary course of
the
Business.
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16
|
(r)
|
Condition
of Tangible Assets.
The tangible assets of the Business are in good operating condition
subject to normal wear and tear and normal maintenance
requirements.
|
|
(s)
|
Real
Property.
Neither the Parent nor the Corporation is the owner of, or subject
to any
agreement or option to own, any real property or any interest in
any real
property used in the Parent's Business or in the Business, other
than the
lands and premises listed in Section 3.1(s)
of
the Disclosure Letter. Neither the Parent nor the Corporation is
a party
to, or under any agreement to become a party to, any lease with respect
to
real property used in the Parent's Business or in the
Business.
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|
(t)
|
Material
Contracts.
All contracts, licenses, leases and instruments to which the Corporation
is a party or is bound by that relate solely to the Business, that
(i) provide for the expenditure of $100,000 or more during any twelve
month period or (ii) have a term of 1 year or more and cannot be
cancelled on notice of 90 days or less (the "Material
Contracts"),
are listed in Section 3.1(t)
or
another part of the Disclosure Letter. Each of the Material Contracts
is
in full force and effect and is unamended and there are no outstanding
defaults or breaches under any of the Material Contracts on the part
of
the Corporation which would reasonably be expected to have a Material
Adverse Effect.
Except as listed in
Section 3.1(t)
or
another part of the Disclosure Letter, the Parent is not a party
to or
bound by any contracts, licenses, leases or instruments that
(i) provide for the expenditure of $100,000 or more during any
twelve-month period, or (ii) have a term of 1 year or more and cannot
be cancelled on notice of 90 days or
less.
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|
(u)
|
Accounts
Receivable.
All accounts receivable, notes receivable and other debts due or
accruing
due to the Corporation have arisen from bona fide transactions in
the
ordinary course.
|
|
(v)
|
Intellectual
Property.
|
|
(i)
|
To
the knowledge of the Vendor, the operation of the Parent's Business
and
the operation of the Business do not infringe upon the Intellectual
Property rights of any Person which infringement would reasonably
be
expected to have a Material Adverse
Effect.
|
|
(ii)
|
To
the knowledge of the Vendor, no Person is currently infringing any
of the
Intellectual Property owned by or licensed to the Parent or the
Corporation which infringement would reasonably be expected to have
a
Material Adverse Effect.
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17
|
(w)
|
Software.
Section 3.1(w)
of
the Disclosure Letter lists all computer software and programs owned
by or
licensed to the Corporation that are used solely in connection with
the
Business, and all contracts, licenses and leases in respect of such
software and all computer software and programs that are owned by
or
licensed to any Affiliate of the Vendor that are used in the Business.
Such contracts, licenses and leases are in full force and effect
and are
unamended and there are no outstanding defaults or breaches under
any of
them on the part of the Corporation which would reasonably be expected
to
have a Material Adverse Effect.
The Parent does not own or license any computer software or
programs.
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Financial
Matters
|
(x)
|
Financial
Statements.
The Financial Statements and the Interim Financial Statements have
been
prepared in accordance with U.S. GAAP applied on a basis consistent
with
the preceding period subject to the exceptions set forth in Section
3.1(x)
of
the Disclosure Letter and each presents fairly in all material
respects:
|
|
(i)
|
the
financial position of the Corporation as at the respective dates
of the
relevant statements; and
|
|
(ii)
|
the
results of the Corporation's operations for the period covered by
the
Financial Statements or Interim Financial Statements, as the case
may
be.
|
Copies
of
the Financial Statements, and the Interim Financial Statements are attached
to
the Disclosure Letter.
Since
the
date of the Effective Date Balance Sheet, no cash has been paid and no other
distribution has been made by the Corporation to any affiliates of the
Corporation except (i) the adjustments made to reduce the intercorporate payable
of the Corporation which existed on May 25, 2008 and have been reflected on
the
Effective Date Balance sheet as a reduction to cash and intercompany accounts
payable, (ii) distributions arising from the proposed transaction steps outlined
in Schedule 2.6 (c) hereof, (iii) the amount owing by the Corporation to
Wolverine Joining Technologies Canada (approximately $1,275,000) was repaid;
and
(iv) some or all of the cash advanced by Wolverine to the Corporation during
the
Interim Period was repaid.
|
(y)
|
No
Liabilities.
The Corporation has no liabilities of the type required to be reflected
as
liabilities on a balance sheet prepared in accordance with U.S. GAAP,
except for (i) liabilities reflected or reserved against in the Financial
Statements or the Interim Financial Statements, (ii) liabilities
that
would not reasonably be expected to have a Material Adverse Effect,
and
(iii) current liabilities incurred since the Interim Balance Sheet
Date
which liabilities were incurred in the ordinary course of the Business.
Following the completion of all the proposed transaction steps outlined
in
Schedule 2.6(c) the Parent will have no liabilities and its sole
assets
shall consist of cash and the shares of the the Corporation.
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18
|
(z)
|
Environmental
Matters.
|
|
(i)
|
Except
as set forth in Section 3.1(z)
of
the Disclosure Letter, to the knowledge of the Vendor, there are
no
contaminants located in the ground or in the ground water under any
of the
owned properties listed in Section 3.1(s)
of
the Disclosure Letter.
|
|
(ii)
|
Except
as set forth in Section 3.1(z)
of
the Disclosure Letter, there are no Environmental Actions relating
to the
Corporation pending or, to the knowledge of the Vendor, threatened
in
writing against the Corporation.
|
|
(iii)
|
Except
as set forth in Section 3.1(z)
of
the Disclosure Letter, since January 1, 2002, the Corporation has
not been
required by any Governmental Entity to (i) alter any of the owned
properties listed in Section 3.1(s)
of
the Disclosure Letter 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.
|
|
(iv)
|
Section
3.1(z)
of
the Disclosure Letter lists all third party consultant reports prepared
or
obtained at the request of the Corporation since January 1, 2002
that
assess compliance by the Business with Environmental Laws. Copies
of all
such reports have been provided to the
Purchaser.
|
|
(aa)
|
Employees.
|
|
(i)
|
Save
and except as set out in Section 3.1(aa)
of
the Disclosure Letter, the Corporation has not and is not engaged
in any
unfair labour practice and no unfair labour practice complaint is
pending,
or, to the knowledge of the Vendor, threatened against the
Corporation.
|
|
(ii)
|
There
are no collective agreements in force with respect to employees of
the
Business; no Person holds bargaining rights with respect to any of
the
employees of the Corporation; to the knowledge of the Vendor, no
Person
has applied to be certified as the bargaining agent of any employees
of
the Business; and to the knowledge of the Vendor, no trade union
has
applied to have the Corporation declared a related employer pursuant
to
the Labour
Relations Act
(Ontario).
|
19
|
(iii)
|
Except
as disclosed in Section 3.1(aa)
of
the Disclosure Letter, the Corporation does not have any agreement
as to
length of notice or severance payment required to terminate any employee,
other than such as results by Law from the employment of an employee
without an agreement as to notice or severance, or any agreement
prohibiting the termination of any Employee
Plan.
|
|
(iv)
|
The
Parent does not have any employees.
|
|
(bb)
|
Employee
Plans.
|
|
(i)
|
Section
3.1(bb)
of
the Disclosure Letter lists all material Employee Plans. The Parent
does
not have any Employee Plans (which term, for purposes of this sentence,
shall be deemed to refer to "the Parent" rather than "the Corporation"
in
the 5th
and 6th
lines of the definition of "Employee
Plans").
|
|
(ii)
|
The
Corporation does not sponsor or participate in a defined benefit
pension
plan.
|
|
(iii)
|
All
Employee Plans have been established, registered, and administered
in
compliance with all applicable Laws except where failure to do so
would
not reasonably be expected to have a Material Adverse
Effect.
|
|
(iv)
|
The
Corporation has made all contributions and paid all premiums in respect
of
each Employee Plan in a timely fashion in accordance with the terms
of
each Employee Plan and applicable Laws except where failure to do
so would
not reasonably be expected to have a Material Adverse
Effect.
|
|
(cc)
|
Insurance.
Section 3.1(cc)
of
the Disclosure Letter lists the insurance policies which are maintained
by
the Corporation with respect to the Business setting out, in respect
of
each policy, the type of policy, the name of insurer, the coverage
allowance, the expiration date, the annual premium and any pending
material claims. The Corporation is not in default with respect to
the
payment of any premiums under such insurance policies and has not
failed
to give any notice or to present any material claim under such insurance
policy in a due and timely fashion in any instance where such failure
which would reasonably be expected to have a Material Adverse
Effect.
|
|
(dd)
|
Litigation.
Except as described in Section 3.1(dd)
of
the Disclosure Letter, as of the date of this Agreement there are
no
actions, suits, appeals, claims, applications, orders, investigations,
proceedings, grievances, arbitrations or alternative dispute resolution
processes in progress, pending, or, to the knowledge of the Vendor,
threatened against the Corporation, the Parent, the Business, the
Parent's
Business or any of the Corporation's or the Parent's assets, which
would
reasonably be expected to have a Material Adverse Effect or which
prohibits, restricts or seeks to enjoin the transactions contemplated
by
this Agreement.
|
20
|
(ee)
|
Customers
and Suppliers.
Section 3.1(ee)
of
the Disclosure Letter lists the ten largest customers and the ten
largest
suppliers of the Corporation by dollar amount as at December 31,
2007.
|
|
(ff)
|
Taxes.
|
|
(i)
|
All
Taxes that are due and payable by the Corporation or the Parent have
been
fully paid within the time required by applicable Law, except for
the
Taxes owing as a result of the proposed adjustments set out in the
letter
dated March 26, 2006 from Canada Revenue Agency to the Corporation.
A copy
of such balance sheet has been provided to the Purchaser. The Corporation
and the Parent have made full and adequate provision in the Interim
Financial Statements or in the Parent's interim financial statements
(respectively) for all Taxes which are not yet due and payable but
which
relate to periods ending on or before the date thereof. All Tax Returns
have been filed in a timely manner and no demand has been made to
file a
return in any jurisdiction.
|
|
(ii)
|
There
are no outstanding agreements or waivers extending the statutory
period
providing for an extension of time with respect to the assessment
or
reassessment of Taxes or the filing of any Tax Return by, or any
payment
of Taxes by the Corporation or the
Parent.
|
|
(iii)
|
To
the knowledge of the Vendor, there are no claims, actions, suits,
proceedings or investigations or other actions pending or threatened
in
writing against the Corporation or the Parent relating to
Taxes.
|
|
(iv)
|
Each
of the Corporation and the Parent has withheld and collected all
amounts
required by applicable Law to be withheld or collected by it on account
of
Taxes and has remitted all such amounts to the appropriate Governmental
Entity within the time prescribed under applicable
Law.
|
|
(v)
|
The
Corporation is a registrant for the purposes of the tax imposed under
Part
IX of the Excise
Tax Act
(Canada).
|
|
(gg)
|
Residency.
Neither the general partner nor any limited partner of the Vendor
is a
non-resident of Canada within the meaning of the Tax
Act.
|
21
3.2 Representations
and Warranties of Wolverine.
Wolverine
represents and warrants as follows to Black Ice and acknowledges that Black
Ice
is relying upon the representations and warranties in connection with its
purchase of the Purchased Assets:
Corporate
Matters
|
(a)
|
Incorporation
and Qualification.
It
is a corporation incorporated and existing under the Laws of its
jurisdiction of incorporation and has the corporate power to own
and
operate its property, carry on its business and enter into and perform
its
obligations (if any) under this
Agreement.
|
|
(b)
|
Corporate
Authorization.
The execution and delivery of, and performance of this Agreement
by
Wolverine has been authorized by all necessary corporate
action.
|
|
(c)
|
No
Conflict.
Except as disclosed in Section 3.2(c)
of
the Disclosure Letter, the execution and delivery of, and performance
by
Wolverine of, the transaction of purchase and sale contemplated by
this
Agreement:
|
|
(i)
|
do
not constitute or result in a violation or breach of, or conflict
with, or
allow any Person to exercise any rights under, any of the terms or
provisions of Wolverine's constating
documents;
|
|
(ii)
|
do
not constitute a breach of any material contract of Wolverine;
and
|
|
(iii)
|
do
not result in the violation of any Law which would reasonably be
expected
to have a Material Adverse Effect.
|
|
(d)
|
Required
Authorizations.
Except as disclosed in Section 3.2(d)
of
the Disclosure Letter, no filing with, notice to, or Authorization
of, any
Governmental Entity is required on as a condition to the lawful completion
of the transactions contemplated by this Agreement where the failure
to
make the filing, give the notice or obtain the Authorization would
reasonably be expected to have a Material Adverse
Effect.
|
|
(e)
|
Third
Party Consents.
Except as disclosed in Section 3.2(e)
of
the Disclosure Letter, there is no requirement to obtain any consent,
approval or waiver of a party under any contract, license, lease
or
instrument that Wolverine is a party to, to the completion of the
transactions contemplated by this Agreement where the failure to
obtain
such consent would reasonably be expected to have a Material Adverse
Effect.
|
|
(f)
|
Execution
and Binding Obligation.
This Agreement has been duly executed and delivered by Wolverine,
and
constitutes legal, valid and binding agreements of it enforceable
against
it in accordance with its terms, subject to any limitation under
applicable laws relating to (i) bankruptcy, winding-up, insolvency,
arrangement, fraudulent preference and conveyance, assignment and
preference and other laws of general application affecting the enforcement
of creditors' rights, and (ii) the discretion that a court may exercise
in
the granting of equitable remedies such as specific performance and
injunction.
|
22
|
(g)
|
Title
to Purchased Assets.
The Purchased Assets are owned by Wolverine as the registered and
beneficial owner, with good title, free and clear of all Liens. Upon
completion of the transaction contemplated by this Agreement, the
Purchaser will have good and valid title to Purchased Assets, free
and
clear of all Liens other than Liens granted by the
Purchaser.
|
|
(h)
|
Purchased
Assets.
The Purchased Assets are not "taxable Canadian property" within the
meaning of the Tax Act.
|
ARTICLE 4
REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
AND BLACK ICE
4.1 Representations
and Warranties of the Purchaser.
The
Purchaser represents and warrants as follows to the Vendor and acknowledges
and
confirms that the Vendor is relying on such representations and warranties
in
connection with the sale of the Purchased Shares:
|
(a)
|
Incorporation
and Corporate Power. The
Purchaser is a corporation incorporated and existing under the laws
of its
jurisdiction of incorporation and it has the corporate power to enter
into
and perform its obligations under this
Agreement.
|
|
(b)
|
Corporate
Authorization.
The execution and delivery of and performance by the Purchaser of
this
Agreement have been, or will be at or prior to Closing, authorized
by all
necessary corporate action on the part of the
Purchaser.
|
|
(c)
|
No
Conflict.
The execution and delivery of and performance by the Purchaser of
this
Agreement:
|
|
(i)
|
do
not constitute or result in a violation or breach of, or conflict
with, or
allow any Person to exercise any rights under, any of the terms or
provisions of its constating documents or
by-laws;
|
|
(ii)
|
do
not constitute or result in a breach or violation of, or conflict
with or
allow any Person to exercise any rights under, any contract, license,
lease or instrument to which it is a party;
and
|
|
(iii)
|
do
not result in the violation of any
Law.
|
23
|
(d)
|
Required
Authorizations.
No
filing with, notice to or Authorization of, any Governmental Entity
is
required on the part of the Purchaser as a condition to the lawful
completion of the transactions contemplated by this
Agreement.
|
|
(e)
|
Execution
and Binding Obligation.
This Agreement has been duly executed and delivered by the Purchaser
and
constitutes legal, valid and binding agreements of the Purchaser,
enforceable against it in accordance with its terms, subject only
to any
limitation under applicable Laws relating to (i) bankruptcy, winding-up
insolvency, arrangement, fraudulent preference and conveyance, assignment
and preference and other similar Laws of general application affecting
creditors' rights, and (ii) the discretion that a court may exercise
in
the granting of equitable remedies including specific performance
and
injunction.
|
|
(f)
|
Litigation.
There are no actions, suits, appeals, claims, applications,
investigations, orders, proceedings, grievances, arbitrations or
alternative dispute resolution processes in progress, pending, or
to the
Purchaser's knowledge, threatened against the Purchaser, or which
prohibits, restricts or seeks to enjoin the transactions contemplated
by
this Agreement.
|
|
(g)
|
Brokers.
No
broker, agent or other intermediary is entitled to any fee, commission
or
other remuneration in connection with the transactions contemplated
by
this Agreement based upon arrangements made by or on behalf of the
Purchaser.
|
|
(h)
|
Due
Diligence by Purchaser.
The Purchaser acknowledges that it has conducted to its satisfaction
an
independent investigation of the business, operations, assets, liabilities
and financial condition of the Corporation and, in making the
determination to proceed with the transactions contemplated by this
Agreement, has relied solely on the results of its own independent
investigation and the representations and warranties in Article 3.
In connection with the Purchaser's investigation of the Corporation,
it
has received the Confidential Information Memorandum (from Black
Ice) and
other information
related to the Corporation including projections and other forecasts
(including forecast income statements and forecast capital expenditures)
and business plan information. The Purchaser acknowledges that
(i) there are uncertainties inherent in attempting to make such
projections and forecasts and, accordingly, is not relying on any
projections or forecasts, (ii) the Purchaser is familiar with such
uncertainties and is taking full responsibility for making its own
evaluation of the Corporation, including the adequacy and accuracy
of all
such projections and forecasts, (iii) the Purchaser has no claim
under this Agreement against anyone with respect to the accuracy
of such
projections and forecasts, and (iv) the Vendor has made no
representation or warranty with respect to any projections and forecasts.
The representations and warranties by the Vendor in Article 3
constitute the sole and exclusive representations and warranties
of the
Vendor to the Purchaser in connection with the transactions contemplated
by this Agreement, and the Purchaser understands, acknowledges and
agrees
that all other representations and warranties of any kind or nature
expressed or implied (including any in the Confidential Information
Memorandum or other information related to the Corporation received
by the
Purchaser and including any relating to the future or historical
financial
condition, results of operations, assets or liabilities of the Corporation
or the quality, quantity or condition of the Corporation's assets)
are
superceded and replaced by the representations and warranties by
the
Vendor in Article 3
and the Vendor does not make or provide, and the Purchaser hereby
waives,
any warranty, representation or condition, express or implied, as
to the
quality, merchantability, fitness for a particular purpose, conformity
to
samples, or condition of the Corporation's assets or any part
thereto.
|
24
|
(i)
|
Breach,
Non-Performance and Non-Compliance.
The Purchaser has not formulated the opinion that any of the
representations and warranties in Article 3
are incorrect in any material respect. The Purchaser is not aware
of any
matter or event that has or would be reasonably expected to have
a
Material Adverse Effect.
|
|
(j)
|
Affiliates.
At
the time of Closing the Purchaser will have no affiliates within
the
meaning of Section 2(2) of the Competition
Act
(Canada) except Crescera Management Ltd. The value of the assets
of such
affiliate and the gross revenues from sales in, from, or into Canada
of
such affiliate (in all cases, determined in a manner consistent with
the
manner prescribed for the purposes of Part IX of the Competition
Act (Canada))
are less than $5,000,000 and $1,000,000,
respectively.
|
4.2 Representations
and Warranties of Black Ice
Black
Ice
represents and warrants as follows to Wolverine and acknowledges and confirms
that Wolverine is relying on such representations and warranties in connection
with the sale of the Purchased Assets:
|
(a)
|
Incorporation
and Corporate Power. Black
Ice is a corporation incorporated and existing under the laws of
its
jurisdiction of incorporation and it has the corporate power to enter
into
and perform its obligations under this
Agreement.
|
|
(b)
|
Corporate
Authorization.
The execution and delivery of and performance by Black Ice of this
Agreement have been, or will be at or prior to Closing, authorized
by all
necessary corporate action on the part of Black
Ice.
|
|
(c)
|
No
Conflict.
The execution and delivery of and performance by Black Ice of this
Agreement:
|
25
|
(i)
|
do
not constitute or result in a violation or breach of, or conflict
with, or
allow any Person to exercise any rights under, any of the terms or
provisions of its constating documents or
by-laws;
|
|
(ii)
|
do
not constitute or result in a breach or violation of, or conflict
with or
allow any Person to exercise any rights under, any contract, license,
lease or instrument to which it is a party;
and
|
|
(iii)
|
do
not result in the violation of any Law which would reasonably be
expected
to have a material adverse effect on the financial condition of Black
Ice.
|
|
(d)
|
Required
Authorizations.
No
filing with, notice to or Authorization of, any Governmental Entity
is
required on the part of Black Ice as a condition to the lawful completion
of the transactions contemplated by this
Agreement.
|
|
(e)
|
Execution
and Binding Obligation.
This Agreement has been duly executed and delivered by Black Ice
and
constitutes legal, valid and binding agreements of Black Ice, enforceable
against it in accordance with its terms, subject only to any limitation
under applicable Laws relating to (i) bankruptcy, winding-up insolvency,
arrangement, fraudulent preference and conveyance, assignment and
preference and other similar Laws of general application affecting
creditors' rights, and (ii) the discretion that a court may exercise
in
the granting of equitable remedies including specific performance
and
injunction.
|
ARTICLE 5
COVENANTS
OF THE PARTIES
5.1 Conduct
of Business Prior to Closing.
|
(a)
|
Except
as otherwise contemplated by this Agreement or the Disclosure Letter,
until the Closing, the Vendor will use its commercially reasonable
efforts
to cause each of the Parent and the Corporation to conduct the Parent's
Business or the Business (as the case may be) in the ordinary course
of
normal day-to-day operations of the Parent or the Corporation (as
the case
may be) consistent with past practices.
|
|
(b)
|
Prior
to Closing, the Vendor will cause the Corporation's accounts receivable
to
be transferred to the Corporation in accordance with the terms of
the
Reassignment Agreement; provided, however, that accounts receivable
in an
aggregate amount of $2,500,000, selected by Wolverine and the Purchaser
and listed in
Schedule
5.1(b) (the
"Wolverine
Owned Receivables"),
shall not be transferred to the
Corporation.
|
26
5.2 Access
for Due Diligence.
Subject
to applicable Law, until the Closing Date, the Vendor will, and will cause
the
Corporation to, upon reasonable notice, permit the Purchaser, its legal counsel,
accountants and other representatives, to have reasonable access during normal
business hours to the premises, assets, contracts, books and records and senior
personnel of the Corporation and to the books and records of the Parent. The
Purchaser may not conduct any invasive environmental testing or assessments
without the prior written consent of the Vendor and any applicable landlord,
which consent by the Vendor will not be unreasonably withheld and will be given
if required by any Governmental Entity or any lender or potential lender to
the
Purchaser in connection with any financing or proposed financing of the
transactions contemplated by this Agreement. The Vendor, the Parent and the
Corporation are not required to disclose any information to the Purchaser where
such disclosure is prohibited by applicable Law. The Purchaser shall not contact
any employee, supplier or customer of the Corporation except with the prior
written consent of the Vendor and the Corporation, which consent may be given
or
withheld in the unfettered discretion of the Vendor and the
Corporation.
5.3 Confidentiality.
Each
of
CIH, the Purchaser and Black Ice agrees to comply with all of the obligations
of
Royal Capital Management Corp. under the Confidentiality Agreement as if it
were
a party thereto. Upon Closing, the Parties agree that they will not be bound
by
the terms of the Confidentiality Agreement. If the Closing does not occur,
the
Parties agree the Confidentiality Agreement will remain in effect in accordance
with and subject to its terms and each of CIH, the Purchaser and Black Ice
will
continue to comply with all of the obligations of Royal Capital Management
Corp.
under the Confidentiality Agreement.
5.4 Actions
to Satisfy Closing Conditions.
Subject
to this Article 5,
the
Vendor will use its commercially reasonable efforts to ensure compliance with
all of the conditions set forth in Section 6.1
and the
Purchaser will use its commercially reasonable efforts to ensure compliance
with
all of the conditions set forth in Section 6.2.
5.5 Request
for Consents.
The
Vendor will use its commercially reasonable efforts to obtain, or cause to
be
obtained, prior to Closing, the consents, approvals and waivers described in
Section 3.1(e)
of the
Disclosure Letter. Despite the previous sentence, the Vendor is under no
obligation to pay any money, incur any obligations, commence any legal
proceedings, or offer or grant any accommodation (financial or otherwise) to
any
third party in order to obtain such consents. The Purchaser will co-operate
in
obtaining such consents, approvals and waivers including providing information
related to the Purchaser as is reasonably requested by a third party in order
to
grant its consent.
27
5.6 Filings
and Authorizations.
Each
of
the Vendor and the Purchaser, as promptly as practicable after the execution
of
this Agreement, will use its commercially reasonable efforts to make all filings
with, give all notices to, and obtain all Authorizations from, Governmental
Entities that are necessary for the lawful completion of the transactions
contemplated by this Agreement.
5.7 Risk
of Loss.
If,
prior
to Closing, all or any part of the Corporation's assets are destroyed or damaged
by fire or any other casualty or are appropriated, expropriated or seized by
any
Governmental Entity: (i) if the value of the assets destroyed, damaged,
appropriated, expropriated or seized does not exceed $500,000, the
representations and warranties of the Vendor that are not true and correct
as of
the Closing Date solely as a result of such destruction, damage, appropriation,
expropriation or seizure will be deemed to be true and correct as of the Closing
Date for all purposes of this Agreement; and the Purchaser will complete the
transactions contemplated by this Agreement without reduction of the Purchase
Price and all proceeds of any insurance or compensation relating to such
destruction, damage, appropriation, expropriation or seizure (other than any
such proceeds relating to business interruption or loss of profits for the
period prior to Closing) will be payable to the Corporation and any right and
claim of the Vendor to any such amounts not paid by the Closing Date will be
assigned to (or held in trust for) the Corporation, and (ii) if the value
of the assets destroyed, damaged, appropriated, expropriated or seized exceeds
$500,000 (a "material loss"), the Purchaser, within a period not to exceed
ten
(10) days after disclosure to the Purchaser by the Vendor of such material
loss
and in any event prior to Closing, at its option may either terminate this
Agreement by notice in writing to the Vendor, in which case, subject to Section
8.2(b),
this
Agreement shall be terminated as of the date the Vendor receives such notice,
or
complete the transactions contemplated by this Agreement without reduction
of
the Purchase Price and all proceeds of any insurance or compensation relating
to
such destruction, damage, appropriation, expropriation or seizure (other than
any such proceeds relating to business interruption or loss of profits for
the
period prior to Closing) will be payable to the Corporation and any right and
claim of the Vendor to any such amounts not paid by the Closing Date will be
assigned to (or held in trust for) the Corporation.
5.8 Environmental
Investigations.
The
Purchaser agrees that, during the Interim Period, the Vendor is not required
to
investigate, remedy or take any other action, including any testing, sampling,
operation, maintenance or monitoring activities except for the minimum actions
required under applicable Environmental Laws to permit the use of the owned
properties listed in Section 3.1(s)
of the
Disclosure Letter in accordance with Environmental Laws and in a manner
consistent with their current use.
28
5.9 Privacy.
|
(a)
|
In
addition to any other obligation of the Purchaser with respect to
confidential information, the Purchaser agrees that it shall be solely
responsible for its own compliance with all applicable privacy laws,
which
laws shall include the Personal
Information Protection and Electronic Documents Act
(Canada), and any similar law that governs the collection, use,
disclosure, retention, destruction and/or storage of any personal
information regarding employees that is disclosed to or otherwise
acquired
by Purchaser in connection with this
Agreement.
|
|
(b)
|
Prior
to Closing, the Purchaser shall limit, and shall cause its employees
and
agents to limit, all collection, use, retention and disclosure of
all
personal information transferred to it, if any, solely for purposes
related to the transactions contemplated hereby, including the
determination of whether to proceed with such transactions, or that,
if
Closing occurs, will be required to carry on with the Business
thereafter.
|
|
(c)
|
Prior
to Closing, the Purchaser shall use appropriate security measures
to
safeguard all personal information transferred to it, and to protect
it
against accidental or unauthorized access, use, copying, alteration,
deletion, destruction, dissemination or disclosure. Prior to Closing,
access to personal information transferred to the Purchaser shall
be
restricted to those Persons under obligations of confidentiality
to
Purchaser who require access to the personal information for the
purposes
of this Agreement.
|
|
(d)
|
If
Closing occurs, the Purchaser shall limit and shall cause its employees
and agents to limit the use and disclosure of the personal information
transferred to it, if any, to those purposes for which the personal
information was initially collected, unless otherwise permitted by
law. If
Closing does not occur, the Purchaser covenants and agrees that it
will
immediately and securely destroy all personal information transferred
to
it, including any information that is based upon personal information
in
its custody or control, including in the custody or control of its
employees, agents or affiliates.
|
|
(e)
|
The
Purchaser will indemnify and hold harmless the Vendor and its directors,
officers, employees, agents and representatives from, and will pay
for,
all losses, liabilities, damages, expenses and costs imposed or asserted
against any of them as a consequence of the Purchaser failing to
fulfill
all of its obligations under this Section 5.9.
This indemnity is not subject to any of the limitations set out in
Article 9.
|
29
ARTICLE 6
CONDITIONS
OF CLOSING
6.1 Conditions
for the Benefit of the Purchaser.
The
purchase and sale of the Purchased Shares and Purchased Assets is subject to
the
following conditions being satisfied at or prior to Closing, which conditions
are for the exclusive benefit of the Purchaser and may be waived, in whole
or in
part, by the Purchaser in its sole discretion:
|
(a)
|
Truth
of Representations and Warranties.
Except as contemplated or permitted by this Agreement, the representations
and warranties of the Vendor and Wolverine contained in this Agreement
must be true and correct in all material respects as of the Closing
Date
with the same force and effect as if such representations and warranties
were made on and as of such date. However, (i) if a representation
and
warranty is qualified by materiality or Material Adverse Effect,
it must
be true and correct in all respects and (ii) if a representation
and
warranty speaks only as of a specific date it only needs to be true
and
correct as of that date. The Purchaser must receive a certificate
of a
senior officer of the Vendor and Wolverine (without personal liability)
as
to the matters in this paragraph.
|
|
(b)
|
Performance
of Covenants.
The Vendor must have fulfilled, or complied with, in all material
respects, all covenants contained in this Agreement to be fulfilled
or
complied with by it at or prior to the Closing and the Purchaser
must
receive a certificate of a senior officer of the Vendor (without
personal
liability) to that effect.
|
|
(c)
|
Deliveries.
The Purchaser must have received the
following:
|
|
(i)
|
share
certificates representing the Purchased Shares duly endorsed in blank
for
transfer, or accompanied by irrevocable security transfer powers
of
attorney duly executed in blank, in either case by the holders of
record;
|
|
(ii)
|
certified
copies of (A) the charter documents and by-laws of the Vendor and the
Corporation, (B) the resolutions of the board of directors of the
Vendor approving the execution, delivery and performance of this
Agreement, (C) the resolutions of the board of directors of the
Corporation approving the transfer of the Purchased Shares to the
Purchaser, and (D) a list of the directors and officers of the Vendor
authorized to sign this Agreement together with their specimen
signatures;
|
|
(iii)
|
a
certificate of status with respect to the Vendor and the Corporation
issued by appropriate government officials of their respective
jurisdictions of incorporation;
|
30
|
(iv)
|
transitional
services agreement (in a form acceptable to the Purchaser, acting
reasonably) executed by the Corporation and Wolverine (the "Transitional
Services Agreement");
|
|
(v)
|
a
trade-xxxx licence agreement (in form acceptable to the Purchaser,
acting
reasonably), executed by Wolverine and the Corporation (the "Trade-xxxx
Licence Agreement");
|
|
(vi)
|
the
Sales Agency Agreement (in form acceptable to the Purchaser acting
reasonably), executed by Wolverine and the
Corporation;
|
|
(vii)
|
the
minute books of the Parent and the
Corporation;
|
|
(viii)
|
the
Escrow Agreement executed by the Vendor, Wolverine and Stikeman Elliott
LLP;
|
|
(ix)
|
the
Loan Agreement;
|
|
(x)
|
an
assignment or xxxx of sale, in a form acceptable to Black Ice, and
in
favour of Black Ice, with respect to the Purchased Assets;
and
|
|
(xi)
|
an
opinion from Vendor's counsel that the Vendor has the capacity to enter
into this Agreement and that this Agreement has been executed and
delivered by Vendor.
|
|
(d)
|
No
Legal Action.
No
injunction, that remains in effect, shall have been obtained by any
Person
(other than the Purchaser) in any jurisdiction, to enjoin, restrict
or
prohibit any of the transactions contemplated by this
Agreement.
|
|
(e)
|
Pre-Closing
Steps.
All proposed transaction steps outlined in Schedule 2.6(c) have been
completed at the sole expense of Wolverine to the satisfaction of
the
Purchaser, acting reasonably and all conveyance documents in connection
therewith have been provided to the
Purchaser.
|
6.2 Conditions
for the Benefit of the Vendor.
The
purchase and sale of the Purchased Shares and Purchased Assets is subject to
the
following conditions being satisfied at or prior to Closing, which conditions
are for the exclusive benefit of the Vendor and may be waived, in whole or
in
part, by the Vendor in its sole discretion:
|
(a)
|
Truth
of Representations and Warranties.
The representations and warranties of the Purchaser and Black Ice
contained in this Agreement must be true and correct in all material
respects as of the Closing Date with the same force and effect as
if such
representations and warranties had been made on and as of such date.
However, if a representation and warranty is qualified by materiality
or
material adverse effect, it must be true and correct in all respects.
The
Vendor must receive a certificate of a senior officer of the Purchaser
and
Black Ice (without personal liability) as to the matters in this
paragraph.
|
31
|
(b)
|
Performance
of Covenants.
The Purchaser must have fulfilled or complied with, in all material
respects, all covenants contained in this Agreement to be fulfilled
or
complied with by it at or prior to Closing and the Vendor must receive
a
certificate of a senior officer of the Purchaser (without personal
liability) to that effect.
|
|
(c)
|
Authorizations.
The Authorizations listed in Section 4.1(d)
above, must have been made, given or
obtained.
|
|
(d)
|
Deliveries.
The Vendor must have received the
following:
|
|
(i)
|
certified
copies of (A) the charter documents and extracts from the by-laws
of the
Purchaser relating to the execution of documents, (B) all resolutions
of
the shareholder(s) (if applicable) and the board of directors of
the
Purchaser approving the execution, delivery and performance of this
Agreement, and (C) a list of its officers and directors authorized
to sign
this Agreement together with their specimen
signatures;
|
|
(ii)
|
a
certificate of status, compliance, good standing or like certificate
with
respect to the Purchaser issued by appropriate government official
of the
jurisdiction of its incorporation;
|
|
(iii)
|
an
opinion from Purchaser's counsel that each of the Purchaser and CIH
has
the capacity to enter into this Agreement and that this Agreement
has been
duly executed and delivered by each of Purchaser and
CIH;
|
|
(iv)
|
the
Sales Agency Agreement (in a form acceptable to the Vendor, acting
reasonably) executed by Wolverine Tube, Inc. and the Corporation;
and
|
|
(v)
|
the
Escrow Agreement executed by the Purchaser, CIH and Stikeman Elliott
LLP.
|
|
(e)
|
No
Legal Action.
No
injunction, that remains in effect, shall have been obtained by any
Person
(other than the Vendor, the Purchaser or the Corporation) in any
jurisdiction, to enjoin, restrict or prohibit any of the transactions
contemplated by this Agreement.
|
|
(f)
|
Pre-Closing
Steps.
All proposed transaction steps outlined in Schedule 2.6(c) have been
completed to the satisfaction of the Vendor, acting
reasonably.
|
32
ARTICLE 7
CLOSING
7.1 Date,
Time and Place of Closing.
The
completion of the transaction of purchase and sale contemplated by this
Agreement will take place at the offices of Fogler, Xxxxxxxx LLP, 00 Xxxxxxxxxx
Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx, at 10:00
a.m. (Toronto time) on the Closing Date or at such other place, on such other
date and at such other time as the Vendor and the Purchaser may agree to in
writing.
7.2 Closing
Procedures.
Subject
to satisfaction or waiver by the relevant Party of the conditions of closing,
at
the Closing, the Vendor will deliver actual possession of the Purchased Shares
to the Purchaser and Wolverine will deliver the assignment or xxxx of sale
for
the Purchased Assets to Black Ice and upon such delivery the Purchaser and
Black
Ice, as applicable, will pay or satisfy the Purchase Price in accordance with
Section 2.4.
ARTICLE 8
TERMINATION
8.1 Termination
Rights.
This
Agreement may, by notice in writing given at or prior to the Closing, be
terminated:
|
(a)
|
by
mutual consent of the Vendor and the
Purchaser;
|
33
|
(b)
|
by
the Purchaser if any of the conditions in Section 6.1
have not been satisfied as at the Closing Date and the Purchaser
has not
waived such condition at or prior to
Closing;
|
|
(c)
|
by
the Vendor if any of the conditions in Section 6.2
have not been satisfied as at the Closing Date and the Vendor has
not
waived such condition at or prior to Closing;
or
|
|
(d)
|
by
either Party if the Closing has not occurred on or before July 31,
2008 or
on or before such later date as the Parties agree to in writing,
provided
that a Party may not terminate this Agreement under this Section
8.1(d)
if
it has failed to perform any one or more of its obligations or covenants
under this Agreement to be performed at or prior to Closing and the
Closing has not occurred because of such
failure.
|
8.2 Effect
of Termination.
|
(a)
|
If
a Party waives compliance with any of the conditions, obligations
or
covenants contained in this Agreement, the waiver will be without
prejudice to any of its rights of termination in the event of
non-fulfillment, non-observance or non-performance of any other condition,
obligation or covenant in whole or in
part.
|
|
(b)
|
If
this Agreement is terminated, the Parties are released from all of
their
obligations under this Agreement, except
that:
|
|
(i)
|
each
Party's obligations under Section 5.3,
Section 5.9,
Section 11.3,
Section 11.4
and Section 11.6
will survive; and
|
|
(ii)
|
if
this Agreement is terminated by a Party because of a material breach
of
this Agreement by the other Party, the terminating Party's right
to pursue
all legal remedies will survive such termination unimpaired and,
for
certainty, will not be subject to any of the limitations set out
in
Article 9.
|
ARTICLE 9
INDEMNIFICATION
9.1 Survival.
The
representations and warranties contained in this Agreement and the certificates
delivered pursuant to Section 6.1(a)
and
Section 6.1(b)
survive
the Closing and continue in full force and effect for a period of 18 months
after the Closing Date, except that
|
(a)
|
the
representations and warranties set out in Section 3.1(a),
Section 3.1(f),
Section 3.2(a),
Section 3.2(f),
Section 4.1(a),
Section 4.1(e),
Section 4.2(a)
and Section 4.2(e)
and the corresponding representations and warranties set out in the
certificates delivered pursuant to Section 6.1(a)
and Section 6.2(a)
survive and continue in full force and effect without limitation
of
time;
|
|
(b)
|
the
representations and warranties set out in Section 3.1(ff)
will survive and continue in full force and effect until the expiration
of
the period (the "Tax
Assessment Period")
during which any tax assessment or reassessment or similar document
may be
issued by a Governmental Entity under any applicable legislation
in
respect of any taxation period to which such representations and
warranties extend. The Tax Assessment Period shall be determined
without
regard to any consent, waiver, agreement or other document made or
filed
after the Closing Date that extends the period during which a Governmental
Entity may issue an assessment, reassessment or similar document;
and
|
|
(c)
|
any
representation and warranty involving fraud or fraudulent
misrepresentation by the Party giving that representation and warranty
will survive and continue in full force and effect without limitation
of
time.
|
34
9.2 Indemnification
in Favour of CIH.
Subject
to Section 9.4,
following Closing the Vendor will indemnify and save each of CIH, Amalco and
Black Ice harmless
of and from, and will pay for, any Damages suffered by, imposed upon or asserted
against it as a result of, in respect of, connected with, or arising out of,
under, or pursuant to:
|
(a)
|
any
breach or inaccuracy of any representation or warranty in Sections
3.1
and 3.2
or
the certificate to be delivered pursuant to Section 6.1(a)
for which a notice of claim under Section 9.6
has been provided to the Vendor within the applicable time period
specified in Section 9.1;
|
|
(b)
|
any
failure of the Vendor or Wolverine to perform or fulfill any of its
covenants or obligations under this
Agreement;
|
|
(c)
|
any
Environmental Claims relating to any place of business that was at
any
time owned or leased by the Parent or the Corporation other than
the lands
and premises listed in Section 3.1(s)
of
the Disclosure Letter, including any such place of business in Montreal,
Quebec or Fergus, Ontario;
|
|
(d)
|
any
Taxes that are or become due and payable by the Parent or the Corporation
with respect to any periods ending prior to the Effective
Date;
|
|
(e)
|
any
product liability or warranty claims with respect to products manufactured
by the Corporation at any facility other than the Corporation's existing
facility located in London,
Ontario;
|
|
(f)
|
any
obligations to former employees of the Corporation whose primary
workplace
was at the Corporation's facilities located in Montreal, Quebec or
Fergus,
Ontario;
|
|
(g)
|
all
other obligations of the Corporation arising solely from the operations
of
the business of the Corporation in Montreal, Quebec and Fergus,
Ontario;
and
|
|
(h)
|
all
obligations of the Corporation under the Reassignment Agreement or
the
Canadian Sale Agreement (as defined in the Reassignment
Agreement).
|
9.3 Indemnification
in Favour of the Vendor.
Subject
to Section 9.4,
following Closing CIH will indemnify and save each of the Vendor and Wolverine
harmless of and from, and will pay for, any Damages suffered by, imposed upon
or
asserted against it as a result of, in respect of, connected with, or arising
out of, under or pursuant to:
|
(a)
|
any
breach or inaccuracy of any representation or warranty in Section
4.1
and Section 4.2
or
the certificate to be delivered pursuant to Section 6.2(a),
for which a notice of claim under Section 9.6
has been provided to CIH within the applicable period specified in
Section
9.1;
and
|
|
(b)
|
any
failure of the Purchaser, CIH or Black Ice to perform or fulfill
any of
its covenants or obligations under this Agreement.
|
35
9.4 General
Limitations.
|
(a)
|
A
Party has no obligation or liability for indemnification or otherwise
with
respect to any representation or warranty made by such Party (or,
if such
Party is CIH, by the Purchaser) in this Agreement, or the certificates
delivered pursuant to Section 6.1(a)
and Section 6.2(a),
after the end of the applicable time period specified in Section
9.1,
except for claims specified in Section 9.2(c),
Section 9.2(d),
Section 9.2(e),
Section 9.2(f),
Section 9.2(g)
and Section 9.2(h)
(which obligation or liability for indemnification shall not expire),
and
except for claims relating to the representations and warranties
that the
Party has been notified of prior to the end of the applicable time
period.
|
|
(b)
|
A
Party has no obligation or liability for indemnification or otherwise
with
respect to any breach or inaccuracy of any of its representations
or
warranties in this Agreement (or, if the Party is CIH, for any of
the
representations or warranties of the Purchaser in this Agreement),
or the
certificates delivered pursuant to Section 6.1(a)
or
Section 6.2(a),
or any failure to perform or fulfill any of its covenants or obligations
in this Agreement (or, if the Party is CIH, for the Purchaser's failure
to
perform or fulfill any of its covenants or obligations in this Agreement),
to the extent the breach, inaccuracy or failure was a result of,
connected
with, or arose out of, under or pursuant to the negligence or wilful
misconduct of the Person (or the Purchaser, as the case may be) making
the
claim or any breach or inaccuracy of any representation or warranty
of
such Person (or the Purchaser, as the case may be) in this Agreement
or
the failure of such Person (or the Purchaser, as the case may be)
to
perform or fulfill any of its covenants or obligations in this
Agreement.
|
|
(c)
|
The
Vendor has no liability for, or obligation with respect to, any special,
indirect, consequential, punitive or aggravated damages, including
damages
for lost profit, damages based on multiples of earnings, EBITDA,
cash flow
or other metrics or projections, it being understood that Third Party
Claims will not be considered claims for special, indirect, consequential,
punitive or aggravated damages even if such Third Party Claim itself
is a
claim for special, indirect, consequential, punitive or aggravated
damages.
|
|
(d)
|
The
Vendor has no liability or obligation with respect to any claims
for
indemnification or otherwise for environmental matters (including
matters
relating to public health or the protection of the environment or
regulated or arising out of Environmental Laws) (the "Environmental
Claims")
except for claims for indemnification pursuant to Section 9.2
in
respect of any Damages suffered by, imposed upon or asserted against
CIH
or Amalco as a result of, in respect of, connected with, or arising
out
of, under, or pursuant to any breach or inaccuracy of any representation
or warranty in Section 3.1(z).
Without limitation, the Vendor has no liability with respect to any
Environmental Claims: (i) in response to a claim asserted by a
Governmental Entity or other third party, for any Damages resulting
from
remediation or other actions that are not required by the Governmental
Entity or third party; (ii) for any Damages which relate to matters,
facts
and circumstances occurring after the Closing, including any change
in the
use of the owned properties listed in Section 3.1(s)
of
the Disclosure Letter; (iii) for any Damages which result from CIH
or
Amalco, after Closing, conducting invasive investigations, sampling
or
monitoring of the owned properties listed in Section 3.1(s)
of
the Disclosure Letter except for such investigations, samplings or
monitoring required by Amalco's lenders or potential lenders or by
any
Governmental Entity (and, for clarity, with respect to such required
investigations, samplings or monitoring, only if the Damages are
in
respect of, connected with, or arising out of, under, or pursuant
to any
breach or inaccuracy of any representation or warranty in Section
3.1(z));
or (iv) for any Damages, to the extent that they were caused or
exacerbated by CIH or Amalco.
|
36
|
(e)
|
The
amount of any Damages subject to indemnification hereunder or of
any claim
therefor shall be calculated net of (i) any Tax Benefit enuring to
CIH, the Corporation, Amalco or any of their Affiliates on account
of such
Damages and (ii) any insurance proceeds (net of direct collection
expenses) received or receivable by CIH, the Corporation, Amalco
or any of
their Affiliates on account of such Damages. If CIH or any of its
Affiliates (including the Parent, the Corporation and/or Amalco)
receives
a Tax Benefit after an indemnification payment is made, CIH shall
promptly
pay to the Vendor the amount of such Tax Benefit at such time or
times as
and to the extent that such Tax Benefit is realized. For purposes
hereof,
"Tax
Benefit"
means any refund of Taxes paid or reduction in the amount of Taxes
which
otherwise would have been paid, in each case computed at the highest
marginal rates payable by the Corporation or Amalco, as the case
may be,
if taxes were payable by the Corporation or Amalco, as the case may
be.
|
|
(f)
|
CIH
shall, and shall cause the Corporation, Amalco and their Affiliates
to,
seek full recovery under all insurance policies covering any Damages
to
the same extent as it would if such Damages were not subject to
indemnification hereunder. In the event that an insurance recovery
is made
by CIH or any of its Affiliates (including the Parent, the Corporation
and/or Amalco) with respect to any Damages for which CIH has been
indemnified hereunder, then a refund equal to the aggregate amount
of the
recovery (net of all direct collection expenses) shall be made promptly
to
the Vendor.
|
|
(g)
|
Notwithstanding
anything to the contrary contained in this Article 9,
there shall be no recovery for any Damages by CIH or Amalco under
this
Article 9,
and the Damages shall not be included in meeting the stated monetary
limitations under Section 9.5,
to the extent the Damages arise or the amount thereof are increased
as a
result of any voluntary act or omission on the part of CIH, the
Corporation or Amalco after Closing other than any such voluntary
act or
omission required in order to comply with any
Law.
|
In
addition, notwithstanding anything to the contrary contained in this
Article 9,
there
shall be no recovery for any Damages by CIH or Amalco under Section 9.2(a)
or
Section 9.2(b)
for any
item or claim to the extent CIH or Amalco has recovered Damages relating to
such
item or claim under Section 9.2(c),
Section
9.2(d),
Section
9.2(e),
Section
9.2(f),
Section
9.2(g)
or
Section 9.2(h).
Any
Damages recovered under Section 9.2(c),
Section
9.2(d),
Section
9.2(e),
Section
9.2(f),
Section
9.2(g)
or
Section 9.2(h)
shall
not be included in meeting any stated monetary limitations under Section
9.5.
37
|
(h)
|
The
parties acknowledge and agree that any Damages for which the Vendor
may be
liable to indemnify CIH or Amalco pursuant to Section 9.2(a)
in
respect of any breach or inaccuracy of any representation or warranty
in
Section 3.1(ff)
or
pursuant to Section 9.2(d)
shall be determined on the basis that the aggregate of $1,000,000
of
non-capital or capital losses of the Corporation for taxation years
ending
on or prior to the Closing Date that have not been deducted by the
Corporation in computing its taxable income for any taxation year
ending
on or prior to the Closing Date will be applied to the maximum extent
possible to reduce any Taxes assessed or reassessed against the
Corporation or Amalco for such taxation
years.
|
9.5 Monetary
Limitations.
|
(a)
|
The
Vendor has no liability or obligation with respect to any single
claim for
indemnification or otherwise with respect to the matters described
in
Section 9.2(a)
or
Section 9.2(b)
unless the amount of the Damages with respect to such claim is greater
than $50,000.
|
|
(b)
|
The
Vendor has no obligation to make any payment for Damages for
indemnification or otherwise with respect to the matters described
in
Section 9.2(a)
or
Section 9.2(b)
until the total of all Damages with respect to such matters exceeds
one
percent (1.0%) of the $32,500,000, and then only for the amount by
which
such Damages exceed one percent (1.0%) of the $32,500,000, up to
a maximum
of $3,500,000.
|
|
(c)
|
The
Vendor's aggregate liability and obligation with respect to all claims
under or in respect of this Agreement, for indemnification or otherwise
(except for claims for indemnification or otherwise with respect
to the
matters described in Section 9.2(c),
Section 9.2(d),
Section 9.2(e),
Section 9.2(f),
Section 9.2(g)
and Section 9.2(h))
shall not exceed $3,500,000 and the Vendor has no obligation to make
any
payment for Damages for indemnification or otherwise with respect
to the
matters described in 9.2(a)
or
Section 9.2(b)
once the total of all Damages with respect to such matters exceeds
$3,500,000.
|
38
9.6 Notification.
|
(a)
|
If
a Third Party Claim is instituted or asserted against an Indemnified
Person, the Indemnified Person will promptly notify the Indemnifying
Party
in writing of the Third Party Claim. The notice must specify in reasonable
detail, the identity of the Person making the Third Party Claim and,
to
the extent known, the nature of the Damages and the estimated amount
needed to investigate, defend, remedy or address the Third Party
Claim.
|
|
(b)
|
If
an Indemnified Person becomes aware of a Direct Claim, the Indemnified
Person will promptly notify the Indemnifying Party in writing of
the
Direct Claim.
|
|
(c)
|
Upon
receipt of such notice, the provisions of Section 9.7
will apply to any Third Party
Claim.
|
9.7 Procedure
for Third Party Claims.
|
(a)
|
Upon
receiving notice of a Third Party Claim, the Indemnifying Party may
participate in the investigation and defence of the Third Party Claim
and
may also elect to assume the investigation and defence of the Third
Party
Claim.
|
|
(b)
|
In
order to assume the investigation and defence of a Third Party Claim,
the
Indemnifying Party must give the Indemnified Person written notice
of its
election within 30 days of Indemnifying Party's receipt of notice
of the
Third Party Claim.
|
|
(c)
|
If
the Indemnifying Party assumes the investigation and defence of a
Third
Party Claim:
|
|
(i)
|
the
Indemnifying Party will pay for all reasonable costs and expenses
of the
investigation and defence of the Third Party Claim except that the
Indemnifying Party will not, so long as it diligently conducts such
defence, be liable to the Indemnified Person for any fees of other
counsel
or any other expenses with respect to the defence of the Third Party
Claim, incurred by the Indemnified Person after the date the Indemnifying
Party validly exercised its right to assume the investigation and
defence
of the Third Party Claim; and
|
|
(ii)
|
the
Indemnifying Party will reimburse the Indemnified Person for all
reasonable costs and expenses incurred by the Indemnified Person
in
connection with the investigation and defence of the Third Party
Claim
prior to the date the Indemnifying Party validly exercised its right
to
assume the investigation and defence of the Third Party
Claim.
|
|
(d)
|
If
the Indemnified Person undertakes the defence of the Third Party
Claim,
the Indemnifying Party will not be bound by any determination of
the Third
Party Claim or any compromise or settlement of the Third Party Claim
effected without the consent of the Indemnifying Party (which consent
may
not be unreasonably withheld, conditioned or
delayed).
|
39
|
(e)
|
The
Indemnifying Party will not be permitted to compromise and settle
or to
cause a compromise and settlement of a Third Party Claim without
the prior
written consent of the Indemnified Person, which consent may not
be
unreasonably withheld, conditioned or delayed,
unless:
|
|
(i)
|
the
terms of the compromise and settlement require only the payment of
money
for which the Indemnified Person is entitled to full indemnification
under
this Agreement and the Indemnifying Party has, to the satisfaction
of the
Indemnified Person, acting reasonably, demonstrated its ability to
make
such payment; and
|
|
(ii)
|
the
Indemnified Person is not required to admit any wrongdoing, take
or
refrain from taking any action, acknowledge any rights of the Person
making the Third Party Claim or waive any rights that the Indemnified
Person may have against the Person making the Third Party
Claim.
|
|
(f)
|
The
Indemnified Person and the Indemnifying Party agree to keep the other
fully informed of the status of any Third Party Claim and any related
proceedings; provided that failure to do so shall not invalidate
any claim
to indemnification made hereunder. If the Indemnifying Party assumes
the
investigation and defence of a Third Party Claim, the Indemnified
Person
will, at the request and expense of the Indemnifying Party, use its
reasonable efforts to make available to the Indemnifying Party, on
a
timely basis, those employees whose assistance, testimony or presence
is
necessary to assist the Indemnifying Party in investigating and defending
the Third Party Claim. The Indemnified Person shall, at the request
and
expense of the Indemnifying Party, make available to the Indemnifying
Party, or its representatives, on a timely basis all documents, records
and other materials in the possession, control or power of the Indemnified
Person, reasonably required by the Indemnifying Party for its use
solely
in defending any Third Party Claim which it has elected to assume
the
investigation and defence of. The Indemnified Person shall cooperate
on a
timely basis with the Indemnifying Party in the defence of any Third
Party
Claim.
|
|
(g)
|
No
claim shall be brought or maintained by CIH, the Purchaser, the Parent,
the Corporation, Amalco or their successors or permitted assigns
against
any partner, officer, director, employee (present or former) of the
Parent, the Corporation or the Vendor or any Affiliate of the Parent,
the
Corporation or the Vendor, and no recourse shall be brought or granted
against any of them, by virtue of or based upon any alleged
misrepresentation or inaccuracy in or breach of any of the
representations, warranties or covenants of the Vendor set forth
in this
Agreement or any exhibit or schedule hereto or in the Disclosure
Letter or
any certificate delivered
hereunder.
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40
9.8 Exclusion
of Other Remedies.
Except
as
provided in this Section 9.8
and
except in the case of fraud, the indemnities provided in Section 9.2
and
Section 9.3
constitute the only remedy of CIH or the Vendor, respectively, against a Party
in the event of any breach of a representation, warranty, covenant or agreement
of such Party (or, if such Party is CIH, any breach of a representation,
warranty, covenant or agreement of the Purchaser) contained in this Agreement.
The Parties may exercise their rights of termination in Section 8.1
and
their rights of indemnity in Section 5.9,
Section
10.4
and
Section 11.3.
The
Parties acknowledge that the failure to comply with a covenant or obligation
contained in this Agreement may give rise to irreparable injury to a Party
inadequately compensable in damages. Accordingly, a Party may seek to enforce
the performance of this Agreement by injunction or specific performance upon
application to a court of competent jurisdiction without proof of actual damage
(and without requirement of posting a bond or other security). Each of CIH,
the
Purchaser and the Vendor expressly waives and renounces any other remedies
whatsoever, whether at law or in equity, which it would otherwise be entitled
to
as against any other Party.
9.9 One
Recovery.
An
Indemnified Person is not entitled to double recovery for any claims even though
they may have resulted from the breach or inaccuracy of, or failure to perform,
more than one of the representations, warranties, covenants and obligations
of
the Indemnifying Party in this Agreement.
9.10 Duty
to Mitigate.
Nothing
in this Agreement in any way restricts or limits the general obligation at
Law
of an Indemnified Person to make all commercially reasonable efforts to mitigate
any loss which it may suffer or incur by reason of the breach, inaccuracy or
failure to perform of any representation, warranty, covenant or obligation
of
the Indemnifying Party under this Agreement. If any claim for indemnification
can be reduced by any recovery, settlement or otherwise under or pursuant to
any
insurance coverage, or pursuant to any claim, recovery, settlement or payment
by
or against any other Person, the Indemnified Person shall take all commercially
reasonable steps to enforce such recovery, settlement or payment and the amount
of any Damages of the Indemnified Person will be reduced by the amount actually
received by the Indemnified Person as a result thereof.
9.11 Adjustment
to Purchase Price.
Any
payment made by the Vendor to CIH under this Article 9
is a
dollar-for-dollar decrease in the Purchase Price.
41
9.12 Indemnification
by Wolverine Tube, Inc.
Wolverine
agrees that it shall be jointly and severally liable with the Vendor with
respect to the Vendor's obligations to indemnify CIH and Amalco under this
Article 9.
ARTICLE 10
POST-CLOSING
COVENANTS
10.1 Creation
of Amalgamated Corporation. Schedule
On
the
Closing Date, immediately following Closing, the Purchaser agrees that it will,
and CIH agrees that it will cause the Purchaser to, (i) commence a
winding-up of the Parent, convey all of the assets of the Parent to the
Purchaser and assume all of the liabilities of the Parent, and
(ii) immediately thereafter, amalgamate with the Corporation to form an
amalgamated corporation ("Amalco"),
pursuant to the Amalgamation Agreement and articles of amalgamation in the
form
attached at Schedule 10.1.
10.2 Pre-Closing
Tax Returns
|
(a)
|
Vendor
shall prepare, at its own expense and in a manner consistent with
past
practice (unless otherwise required by Law) all Tax Returns required
to be
filed by Parent and the Corporation after the Closing Date for any
period
ending on or prior to the Closing Date (the "Pre-Closing
Tax Returns").
CIH shall, and shall cause Parent, the Corporation and Amalco to,
provide
all assistance reasonably required by the Vendor in preparing and
filing
such Tax Returns.
|
|
(b)
|
Vendor
shall deliver any such Pre-Closing Tax Return to CIH for its review
as
soon as possible but in any event at least 45 days prior to the date
on
which such Pre-Closing Tax Return is required to be filed. Unless
CIH
objects in good faith to any item of the draft Pre-Closing Tax Return
and
delivers notice of such objection, specifying the items in dispute,
to the
Vendor within ten (10) days of receiving the draft Pre-Closing Tax
Return
in accordance with Section 10.2(c),
the Pre-Closing Tax Return shall be
filed.
|
|
(c)
|
In
the event that CIH objects in good faith to any item of the draft
Pre-Closing Tax Return, CIH shall so advise the Vendor by delivery
to the
Vendor of a notice within ten (10) days after the delivery by the
Vendor
to CIH of the draft Pre-Closing Tax Return. CIH and Vendor, each
acting
reasonably and in good faith, shall diligently work to resolve all
items
in dispute set out in such notice at least two (2) Business Days
prior to
the date such Pre-Closing Tax Return is required to be filed. If
CIH and
Vendor resolve such items, such Pre-Closing Tax Return, revised to
reflect
such resolution, shall be filed. If CIH and Vendor do not resolve
such
items at least two (2) Business Days prior to the date such Pre-Closing
Tax Return is required to be filed, the Pre-Closing Tax Return shall
be
finalized by the Auditor whose determination shall be final and binding
on
the Parties. In the event the Auditor is unable to make its determination
prior to the date such Pre-Closing Tax Return is required to be filed,
the
form prepared by the Vendor shall be filed and as soon as practicable
following the determination by the Auditor an amended Pre-Closing
Tax
Return will be filed.
|
42
|
(d)
|
CIH
shall cause Parent or the Corporation, as the case may be, to execute
and
file the Pre-Closing Tax Return referred to in Section 10.2(b)
or
Section 10.2(c).
|
|
(e)
|
The
parties agree that, notwithstanding anything to the contrary contained
herein, the provisions in this Section 10.2
do
not apply to the Tax Returns for the Parent or the Corporation for
the
year ended December 31, 2007, which were filed on or before June
30, 2008.
|
10.3 Access
to Books and Records
For
a
period of six years from the Closing Date or for such longer period as may
be
required by Law, CIH will cause the Corporation and/or Amalco to retain all
original books and records relating to the Corporation existing on the Closing
Date. So long as any such books and records are retained by the Corporation
and/or Amalco pursuant to this Agreement, the Vendor has the right to inspect
and to make copies (at its own expense) of them at any time upon reasonable
request for any proper purpose and without undue interference to the business
operations of the Corporation and/or Amalco and CIH shall cause the Corporation
and/or Amalco to provide the Vendor with access to and copies of such books
and
records in accordance with the foregoing.
10.4 Director
and Officer Indemnification.
For
a
period of 5 years after the Closing Date, CIH shall not, and shall not permit
the Corporation, Amalco or any successor, by amalgamation or otherwise, or
permitted assigns, to amend, repeal or modify any provision in the Corporation's
or Amalco's articles of incorporation or by-laws relating to the exculpation
or
indemnification of any current or former officer or director (unless required
by
law), it being the intent of the Parties that the officers and directors of
the
Corporation and of Amalco continue to be entitled to such exculpation and
indemnification to the full extent of the law. If the Corporation, Amalco or
any
successor or assign (i) consolidates or amalgamates with or merges into any
other Person, or (ii) transfers all or substantially all of its properties
and assets to any Person, then, and in each such case, proper provisions shall
be made so that the successors and assigns of the Corporation assume all of
the
obligations set forth in this Section 10.4.
This
Section 10.4
is
intended for the benefit of, and is enforceable by, each current and former
officer and director of the Corporation and his or her heirs, executors and
representatives, and are in addition to, and not in substitution for, any other
rights to indemnification or contribution that any such Person may have had
by
contract or otherwise.
43
10.5 Further
Assurances, Accounts Receivable.
|
(a)
|
From
time to time after the Closing Date, each Party will, at the request
of
the other Party, execute and deliver such additional conveyances,
transfers and other assurances as may be reasonably required to
effectively transfer the Purchased Shares and the Purchased Assets
and to
carry out the terms of this
Agreement.
|
|
(b)
|
From
and after the Closing Date, the Vendor shall not, in any way interfere
with the collection of the Wolverine Owned Receivables, and Wolverine
shall, at the request of Black Ice or Amalco, use commercially reasonable
efforts to assist Black Ice with the collection of the Wolverine
Owned
Receivables, provided that Wolverine shall not be required to incur
any
third party costs in connection
therewith.
|
10.6 Non-Competition
- CIH and Affiliates.
|
(a)
|
Subject
to the Sales Agency Agreement and to Section 10.6(c),
from the date of this Agreement, CIH shall not, and CIH shall ensure
that
Amalco and any Affiliate of CIH shall not, in each case on its own
behalf
or on behalf of or in connection with any other Person, directly
or
indirectly, in any capacity whatsoever (including as principal, agent,
joint venturer, partner, shareholder or other equity holder, independent
contractor, licensor, licensee, franchiser, franchisee, distributor,
consultant, supplier or trustee or by and through any Person or
otherwise):
|
|
(i)
|
canvas
or solicit the business of (or procure or assist in canvassing or
soliciting the business of) (i) any Exclusive Customer any where
in the
world until the CIH Non-Compete Termination Date, or (ii) any Agency
Customer in the United States of America or in Mexico in respect
of any
Products until December 31, 2010;
|
|
(ii)
|
accept
(or procure or assist the acceptance of) (i) any business from any
Exclusive Customer any where in the world until the CIH Non-Compete
Termination Date, or (ii) any Agency Customer in the United States
of
America or in Mexico in respect of any Products until December 31,
2010;
|
|
(iii)
|
supply
(or procure or assist the supply of) (i) any goods or services to
any
Exclusive Customer any where in the world until CIH Non-Compete
Termination Date, or (ii) any Agency Customer in the United States
of
America or in Mexico in respect of any Products until December 31,
2010.
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44
|
(b)
|
Subject
to Section 10.8(b), Amalco is not subject to Section 10.6(a)
with respect to the sale of copper plumbing or refrigeration tube
to any
Exclusive Customer provided such copper plumbing or refrigeration
tube is
delivered to such customer in
Canada.
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|
(c)
|
For
purposes hereof, "Exclusive
Customer"
means any business or Person listed on Exhibit II
to
this Agreement, any successor thereof and any business or Person
to whom
such first-mentioned business or Person or any successor thereof
transfers
all or substantially all of its business which uses products manufactured
by Wolverine Tube, Inc., Amalco or their
Affiliates.
|
|
(d)
|
For
purposes hereof, "Agency
Customer"
means any business or Person listed on Exhibit III
to
this Agreement, any successor thereof and any business or Person
to whom
such first-mentioned business or Person or any successor thereof
transfers
all or substantially all of its business which uses products manufactured
by Wolverine Tube, Inc., Amalco or their Affiliates; provided that
Spinco
Metal Products, Inc. shall be deemed deleted from
Exhibit III
when the letter agreement dated May 12, 2008 (with an effective date
of
May 31, 2008) between Spinco Metal Products, Inc. and Wolverine Tube,
Inc.
expires and that X.X. XxXxxxxx or X.X. Xxxx shall be deemed deleted
from
Exhibit III
when such business or Person is, pursuant to the Sales Agency Agreement,
deemed deleted from Exhibit B to the Sales Agency
Agreement.
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|
(e)
|
For
purposes hereof, "Products"
means copper tube products manufactured or distributed by Amalco
at its
facility in Xxxxxx, Xxxxxxx, Xxxxxx other than copper plumbing and
refrigeration products manufactured or distributed by
Amalco.
|
10.7 Copper
Rod and Bar Products.
From
the
date of this Agreement until the seventh (7th)
anniversary of the Closing Date, CIH shall not, and CIH shall ensure that Amalco
and any Affiliate of CIH shall not, in each case on its own behalf or on behalf
of or in connection with any other Person, directly or indirectly, in any
capacity whatsoever (including as principal, agent, joint venturer, partner,
shareholder or other equity holder, independent contractor, licensor, licensee,
franchiser, franchisee, distributor, consultant, supplier or trustee or by
and
through any Person or otherwise), manufacture or sell any copper or copper
alloy
rod or bar products in Canada, the United States of America or
Mexico.
10.8 Non
Competition - Vendor and Affiliates.
|
(a)
|
Subject
to Section 10.8(b),
from the date of this Agreement until the Wolverine Non-Compete
Termination Date, the Vendor shall not, and the Vendor shall ensure
that
its Affiliates (other than Amalco or any of its Subsidiaries, if
Amalco
becomes an Affiliate of the Vendor) shall not, in each case on its
own
behalf or on behalf of or in connection with any other Person, directly
or
indirectly, in any capacity whatsoever (including as principal, agent,
joint venturer, partner, shareholder or other equity holder, independent
contractor, licensor, licensee, franchiser, franchisee, distributor,
consultant, supplier or trustee or by and through any Person or
otherwise):
|
45
|
(i)
|
canvas
or solicit the business of (or procure or assist in canvassing or
soliciting the business of) any Canadian Wholesale Customer in Canada
or
any Canadian Industrial Customer in
Canada;
|
|
(ii)
|
accept
(or procure or assist the acceptance of) any business from any Canadian
Wholesale Customer in Canada or any Canadian Industrial Customer
in
Canada;
|
|
(iii)
|
supply
(or procure or assist the supply of) any goods or services to any
Canadian
Wholesale Customer in Canada or any Canadian Industrial Customer
in
Canada.
|
|
(b)
|
If
any Exclusive Customer wishes to deal with only one of Amalco or
Wolverine
Tube, Inc., then with respect to such Exclusive Customer, Wolverine
Tube,
Inc. will not be subject to Section 10.8(a)
and Amalco will be subject to Section 10.6(a),
and all copper plumbing or refrigeration tube Wolverine Tube, Inc.
sells
to such Exclusive Customer for delivery anywhere in Canada will be
manufactured or distributed by Amalco and will be sold at prices
established from time to time by Amalco for such copper plumbing
or
refrigeration tube.
|
|
(c)
|
For
purposes hereof, "Canadian
Wholesale Customer"
means any business or Person who purchases copper plumbing or
refrigeration tube.
|
|
(d)
|
For
purposes hereof, "Canadian Industrial
Customer"
means any business or Person who purchases industrial tube, other
than any
such business or Person listed on Exhibit I
or
Exhibit II
and any successor thereof and any business or Person to whom a business
or
Person listed in Exhibit I
or
Exhibit II or
any successor thereof transfers all or substantially all of its business
which uses any product manufactured by Wolverine Tube, Inc. or any
of its
Affiliates.
|
10.9 Montreal
Facility.
If,
at
any time prior to the Wolverine Non-Compete Termination Date, the Vendor enters
into an agreement for the sale of the Montreal Facility, the Vendor agrees
that
such sale agreement will provide that the purchaser of the Montreal Facility
and
any successors or assigns shall not manufacture, distribute or sell any
plumbing, industrial or refrigeration copper tube products or copper or copper
alloy plumbing fittings at or from the Montreal Facility until on or after
the
seventh (7th)
anniversary of the Closing Date. In addition, such covenant will be provided
by
the purchaser of the Montreal Facility (and will bind its successors and
assigns) in favour of Amalco provided that Amalco provides a covenant in the
form of the covenant contained in Section 10.7
hereof
to the said purchaser of the Montreal Facility and any successors or assigns
of
the purchaser of the Montreal Facility.
46
10.10 Portfolio
Exemption.
Neither
CIH nor the Vendor shall be in default under Section 10.6,
Section
10.7
or
Section 10.8
(as
applicable) by virtue of its holding as a passive investor not more than five
percent (5%) (including equity interests held by any Persons acting jointly
or
in concert with it) of the issued and outstanding equity interests of a Person,
the equity interests of which are listed on a recognized stock exchange and
provided it has no other connection whatsoever with such Person.
10.11 Existing
Contracts or Quotes. Schedule
For
each
contract or quote listed in Schedule 10.11
(all of
which are contracts or quotes between Wolverine Tube, Inc. and customers),
from
and after Closing and until the termination or expiration of such contract
or
quote, CIH shall cause Amalco to supply such customers with the products
referred to in such contract or quote which are currently manufactured by the
Corporation, in the quantities, at the times and for the prices set out in
such
contract or quote. With respect to each such contract or quote, Amalco will
continue its current practice of billing such customers directly for such
products.
ARTICLE 11
MISCELLANEOUS
11.1 Notices.
Any
notice, direction or other communication (each a "Notice")
given
regarding the matters contemplated by this Agreement must be in writing, sent
by
personal delivery, courier or facsimile (but not by electronic mail) and
addressed:
|
(a)
|
to
the Vendor at:
|
|
c/o
Wolverine Tube, Inc.
|
|
000
Xxxxxxx Xxxxxx
|
|
Xxxxx
0000
|
|
Xxxxxxxxxx,
Xxxxxxx
|
|
XXX
00000
|
|
Attention:
|
President
|
|
Facsimile:
|
000-000-0000
|
with
a
copy to (which shall not constitute notice):
|
|
Stikeman
Elliott LLP
0000
Xxxxxxxx Xxxxx Xxxx,
000
Xxx Xxxxxx,
Xxxxxxx,
Xxxxxxx X0X 0X0
|
|
Attention:
|
Xxxxx
Xxxxxxx and Xxxxx Xxxxxx
|
| Facsimile: | 000-000-0000 |
47
|
(b)
|
to
the Purchaser or CIH at:
|
|
Black
Ice Capital Corp.
c/o
Royal Capital Management Corp.
0000
Xxxxx Xxxxxx
Xxxxx
000
Xxxxxxx,
Xxxxxxx
Xxxxxx
X0X 0X0
|
|
Attention:
|
Xxxx
Xxxxxxxx
|
|
Facsimile:
|
000-000-0000
|
with
a
copy to (which shall not constitute notice):
|
Fogler,
Xxxxxxxx LLP
95
Wellington Street West
Suite
0000
Xxxxxxx-Xxxxxxxx
Xxxxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
|
|
Attention:
|
Xxxxxxx
Xxxx
|
|
Facsimile:
|
416-941-8852
|
A
Notice
is deemed to be delivered and received (i) if sent by personal delivery or
same-day courier, on the date of delivery if it is a Business Day and the
delivery was made prior to 4:00 p.m. (local time in the place of receipt) and
otherwise on the next Business Day, (ii) if sent by overnight courier, on the
next Business Day, or (iii) if sent by facsimile, on the Business Day following
the date of confirmation of transmission by the originating facsimile. A Party
may change its address for service from time to time by providing a Notice
in
accordance with the foregoing. Any subsequent Notice must be sent to the Party
at its changed address. Any element of a Party's address that is not
specifically changed in a Notice will be assumed not to be changed. Sending
a
copy of a Notice to a Party's legal counsel as contemplated above is for
information purposes only and does not constitute delivery of the Notice to
that
Party. The failure to send a copy of a Notice to legal counsel does not
invalidate delivery of that Notice to a Party.
11.2 Time
of the Essence.
Time
is
of the essence in this Agreement.
48
11.3 Brokers.
The
Vendor shall indemnify and save harmless the Purchaser from and against any
and
all claims, losses and costs whatsoever for any fee, commission or other
remuneration payable or alleged to be payable to any broker, agent or other
intermediary who purports to act or have acted for the Vendor. CIH shall
indemnify and save harmless the Vendor from and against any and all claims,
losses and costs whatsoever for any fee, commission or other remuneration
payable or alleged to be payable to any broker, agent or other intermediary
who
purports to act or have acted for the Purchaser. These indemnities are not
subject to any of the limitations set out in Article 9.
11.4 Announcements.
No
press
release, public statement or announcement or other public disclosure with
respect to this Agreement or the transactions contemplated in this Agreement
may
be made except (i) with the prior written consent of the Vendor and the
Purchaser, which consent shall not be unreasonably withheld or delayed, or
(ii)
where required by Law or a Governmental Entity.
Except
as
otherwise provided in Section 10.4,
the
Parties intend that this Agreement will not benefit or create any right or
cause
of action in favour of any Person, other than the Parties. Except for the
directors and officers of the Corporation referred to in Section 10.4,
no
Person, other than the Parties, shall be entitled to rely on the provisions
of
this Agreement in any action, suit, proceeding, hearing or other forum. The
Parties reserve their right to vary or rescind the rights, granted by or under
this Agreement to any Person who is not a Party, at any time and in any way
whatsoever, without notice to or consent of that Person, including any director
or officer of the Corporation referred to in Section 10.4.
11.6 Expenses.
Each
Party will pay for its own costs and expenses incurred in connection with this
Agreement and the transactions contemplated by them. The fees and expenses
referred to in this Section are those which are incurred in connection with
the
negotiation, preparation, execution and performance of this Agreement, and
the
transactions contemplated by this Agreement, including the fees and expenses
of
legal counsel, investment advisers and accountants.
11.7 Amendments.
Subject
to Section 11.8,
this
Agreement may only be amended, supplemented or otherwise modified by written
agreement signed by the Vendor and the Purchaser.
11.8 Waiver.
No
waiver
of any of the provisions of this Agreement will constitute a waiver of any
other
provision (whether or not similar). No waiver will be binding unless executed
in
writing by the Party to be bound by the waiver. A Party's failure or delay
in
exercising any right under this Agreement will not operate as a waiver of that
right. A single or partial exercise of any right will not preclude a Party
from
any other or further exercise of that right or the exercise of any other
right.
49
11.9 Non-Merger.
Except
as
otherwise expressly provided in this Agreement, the covenants, representations
and warranties shall not merge on and shall survive the Closing.
11.10 Entire
Agreement.
This
Agreement, together with the Confidentiality Agreement, the Amalgamation
Agreement, the Transitional Services Agreement, the Sales Agency Agreement
and
the Trade-xxxx Licence Agreement, constitutes the entire agreement between
the
Parties with respect to the transactions contemplated by this Agreement and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties. There are no representations,
warranties, covenants, conditions or other agreements, express or implied,
collateral, statutory or otherwise, between the Parties in connection with
the
subject matter of this Agreement, except as specifically set forth in this
Agreement. The Purchaser has not relied and is not relying on any other
information (including any information in the Confidential Information
Memorandum), discussion or understanding in entering into and completing the
transactions contemplated by this Agreement.
11.11 Successors
and Assigns.
|
(a)
|
This
Agreement becomes effective only when executed by the Vendor, Wolverine,
the Purchaser, CIH and Black Ice. After that time, it is binding
on and
enures to the benefit of the Vendor, Wolverine, the Purchaser, CIH
and
Black Ice and their respective successors and permitted
assigns.
|
|
(b)
|
Subject
to Section 10.7
and Section 10.9,
neither this Agreement nor any of the rights or obligations under
this
Agreement are assignable or transferable by any Party without the
prior
written consent of the other
Parties.
|
11.12 Invalid
Provisions.
Each
of
the provisions contained in this Agreement is distinct and severable and a
declaration of invalidity or unenforceability of any such provision or part
thereof by a court of competent jurisdiction shall not affect the validity or
enforceability of any other provision hereof. To the extent permitted by
applicable Law, the Parties waive any provision of law which renders any
provision of this Agreement invalid or unenforceable in any respect. The Parties
shall engage in good faith negotiations to replace any provision which is
declared invalid or unenforceable with a valid and enforceable provision, the
economic effect of which comes as close as possible to that of the invalid
or
unenforceable provision which it replaces.
50
11.13 Governing
Law.
|
(a)
|
This
Agreement is governed by and interpreted and enforced in accordance
with
the laws of the Province of Ontario and the federal laws of Canada
applicable therein.
|
|
(b)
|
Each
Party irrevocably attorns and submits to the non-exclusive jurisdiction
of
the Ontario courts situated in the City of Toronto and waives objection
to
the venue of any proceeding in such court or that such court provides
an
inconvenient forum.
|
|
(c)
|
Each
of the Vendor, the Purchaser and CIH waives to the fullest extent
permitted by applicable law any right it may have to a trial by jury
with
respect to any action or liability directly or indirectly arising
out of,
under or in connection with this Agreement or the transactions
contemplated by this Agreement. Each of the Vendor, the Purchaser
and
CIH:
|
|
(i)
|
certifies
that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would
not, in
the event of any such action or liability, seek to enforce the foregoing
waiver, and
|
|
(ii)
|
acknowledges
that it has been induced to enter into this Agreement and the transactions
contemplated by this Agreement, as applicable, by, among other things,
the
mutual waivers and certifications in this Section 11.13(c).
|
11.14 Counterparts.
This
Agreement may be executed in any number of counterparts (including counterparts
by facsimile) and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
51
IN
WITNESS WHEREOF
the
Parties have executed this Share Purchase Agreement as of the ____ day of July,
2008.
|
WOLVERINE
TUBE CANADA LIMITED PARTNERSHIP, by
its general partner, 3072453
NOVA SCOTIA COMPANY
|
||
| |
|
|
| By: | /s/ | |
|
Authorized
Signing Officer
|
||
|
WOLVERINE
TUBE, INC.
|
||
| |
|
|
| By: | /s/ | |
|
Authorized
Signing Officer
|
||
|
2172945
ONTARIO
LIMITED
|
||
| |
|
|
| By: | /s/ | |
|
Authorized
Signing Officer
|
||
|
COPPER
INVESTMENTS HOLDING
INC.
|
||
| |
|
|
| By: | /s/ | |
|
Authorized
Signing
Officer
|
||
|
BLACK
ICE CAPITAL CORP.
|
||
| |
|
|
| By: | /s/ | |
|
Authorized
Signing Officer
|
||
SCHEDULE
2.6(A)
FEES
PAID BY THE CORPORATION PRIOR TO MAY 25, 2008
|
Xxxxxx
0
|
Metal
Appraisal
|
$
|
7,412
|
||||
|
Dovebid
|
Building
Appraisal
|
$
|
8,063
|
||||
|
Xxxxxxx
|
Real
Estate Appraisal
|
$
|
6,047
|
||||
|
WSP
Environmental
|
Environmental
Review
|
$
|
2,861
|
||||
|
Ernst
& Young
|
EBITDA
Bridge
|
$
|
40,000
|
||||
|
CIT
|
Loan
Fee
|
$
|
30,117
|
||||
|
Xxxxxxx
Comm
|
Loan
Fee
|
$
|
113
|
||||
|
Total
|
$
|
94,613
|
SCHEDULE
2.6(C)
PRE-CLOSING
STEPS
Please
see attached.
SCHEDULE
5.1(b)
EXCLUDED
ACCOUNTS RECEIVABLE AS OF CLOSING DATE
|
INVOICE AMOUNT
|
|||||||
|
CUSTOMER
|
CCN
|
INVOICE
#
|
CDN
$
|
US
$
|
|||
|
Alliance
International
|
2502
|
CD
674973
|
$272.34
|
||||
|
Xx.
Xxxxxx, XX
|
XX
000000
|
23,039.48
|
|||||
|
CL
690067
|
343.93
|
||||||
|
CL
690082
|
174,737.93
|
||||||
|
CL
690408
|
63,390.60
|
||||||
|
|
|||||||
|
TOTAL
|
|
$261,784.28
|
|||||
|
|
|||||||
|
Cello
Products Inc.
|
1069
|
LO
690505
|
54,029.80
|
||||
|
Xxxxxxxxx,
XX
|
XX
000000
|
16,070.15
|
|||||
|
LO
690507
|
54,763.59
|
||||||
|
|
|||||||
|
TOTAL
|
$124,863.54
|
||||||
|
|
|||||||
|
|
|||||||
|
Elkhart
Products Corp
|
5054
|
CL
907090
|
$1,264.88
|
||||
|
Elkhart,
IN
|
CL
907091
|
948.32
|
|||||
|
CL
907092
|
2,212.51
|
||||||
|
CL
907093
|
1,813.85
|
||||||
|
CL
907094
|
221.02
|
||||||
|
CL
907095
|
2,209.10
|
||||||
|
CL
907096
|
3,478.04
|
||||||
|
EC
907089
|
1,096.32
|
||||||
|
EC
907097
|
3,908.82
|
||||||
|
EC
907109
|
2,788.16
|
||||||
|
EC
688194
|
99,919.79
|
||||||
|
EC
688371
|
33,403.34
|
||||||
|
EC
688374
|
49,578.31
|
||||||
|
EC
688375
|
19,389.19
|
||||||
|
EC
688377
|
17,968.83
|
||||||
|
EC
688638
|
46,045.19
|
||||||
|
EC
688755
|
100,285.91
|
||||||
|
EC
689114
|
27,037.59
|
||||||
|
EC
689313
|
101,282.51
|
||||||
|
EC
689474
|
15,594.31
|
||||||
|
EC
689477
|
2,945.09
|
||||||
|
INVOICE AMOUNT
|
|||||||
|
CUSTOMER
|
CCN
|
INVOICE
#
|
CDN
$
|
US
$
|
|||
|
Elkhart
(cont'd)
|
|||||||
|
EC
689479
|
8,713.25
|
||||||
|
EC
689833
|
8,453.47
|
||||||
|
EC
689829
|
22,710.22
|
||||||
|
EC
689831
|
39,727.71
|
||||||
|
EC
689832
|
18,762.12
|
||||||
|
5054
|
EC
689871
|
12,499.23
|
|||||
|
EC
689872
|
14,481.13
|
||||||
|
EC
689873
|
4,952.65
|
||||||
|
EC
689874
|
8,429.22
|
||||||
|
EC
689876
|
4,895.95
|
||||||
|
EC
689877
|
4,826.35
|
||||||
|
EC
689941
|
14,889.23
|
||||||
|
EC
689983
|
1,224.56
|
||||||
|
EC
689984
|
9,510.78
|
||||||
|
EC
690028
|
4,840.37
|
||||||
|
EC
690029
|
5,363.71
|
||||||
|
LO
690036
|
12,759.46
|
||||||
|
EC
690130
|
12,125.87
|
||||||
|
EC
690131
|
5,718.80
|
||||||
|
EC
690132
|
10,763.04
|
||||||
|
EC
690133
|
3,306.65
|
||||||
|
EC
690174
|
5,338.52
|
||||||
|
EC
690175
|
3,278.83
|
||||||
|
EC
690176
|
4,250.50
|
||||||
|
EC
690240
|
13,502.60
|
||||||
|
EC
690241
|
20,440.75
|
||||||
|
EC
690243
|
8,954.65
|
||||||
|
EC
690244
|
1,397.64
|
||||||
|
EC
690246
|
7,141.13
|
||||||
|
EC
690148
|
5,183.73
|
||||||
|
EC
690239
|
15,994.42
|
||||||
|
EC
690242
|
10,751.25
|
||||||
|
EC
690245
|
21,770.28
|
||||||
|
EC
690247
|
10,131.48
|
||||||
|
EC
690249
|
7,237.60
|
||||||
|
EC
690250
|
11,437.31
|
||||||
|
EC
690251
|
13,832.23
|
||||||
|
EC
690292
|
4,596.61
|
||||||
|
EC
690293
|
9,799.22
|
||||||
|
EC
690294
|
15,478.65
|
|
|
INVOICE AMOUNT
|
||||||
|
CUSTOMER
|
CCN
|
INVOICE
#
|
CDN
$
|
US
$
|
|||
|
Elkhart
(cont'd)
|
EC
690297
|
8,440.07
|
|||||
|
EC
690355
|
2,677.81
|
||||||
|
EC
690356
|
5,006.21
|
||||||
|
EC
690357
|
3,836.66
|
||||||
|
EC
690360
|
2,662.46
|
||||||
|
EC
690361
|
4,800.22
|
||||||
|
EC
690362
|
2,232.54
|
||||||
|
EC
690416
|
4,004.54
|
||||||
|
EC
690498
|
26,830.88
|
||||||
|
EC
690499
|
8,755.82
|
||||||
|
EC
690500
|
2,470.89
|
||||||
|
EC
690501
|
3,721.95
|
||||||
|
0000
|
XX
000000
|
8,041.52
|
|||||
|
EC
690503
|
7,107.07
|
||||||
|
EC
690504
|
6,701.33
|
||||||
|
EC
690532
|
10,390.38
|
||||||
|
LO
690544
|
12,303.20
|
||||||
|
EC
690558
|
7,310.05
|
||||||
|
EC
690593
|
7,026.57
|
||||||
|
EC
690594
|
7,137.12
|
||||||
|
EC
690595
|
9,134.11
|
||||||
|
EC
690596
|
35,635.62
|
||||||
|
EC
690597
|
13,383.12
|
||||||
|
EC
690598
|
3,686.12
|
||||||
|
EC
690599
|
18,378.78
|
||||||
|
EC
690609
|
1,967.61
|
||||||
|
EC
690610
|
4,934.94
|
||||||
|
EC
690634
|
4,058.42
|
||||||
|
EC
690678
|
3,398.55
|
||||||
|
EC
690693
|
14,028.06
|
||||||
|
EC
690733
|
4,671.38
|
||||||
|
EC
690734
|
5,919.98
|
||||||
|
EC
690765
|
10,261.62
|
||||||
|
EC
690766
|
6,374.27
|
||||||
|
EC
690796
|
13,616.81
|
||||||
|
LO
690893
|
12,743.98
|
||||||
|
EC
690947
|
49,834.78
|
||||||
|
EC
690948
|
19,043.76
|
||||||
|
EC
690949
|
36,641.78
|
||||||
|
EC
690950
|
5,087.14
|
||||||
|
|
|||||||
|
TOTAL
|
$1,367,120.37
|
|
INVOICE AMOUNT
|
|||||||
|
CUSTOMER
|
CCN
|
INVOICE
#
|
CDN
$
|
US
$
|
|||
|
Wolseley
Canada, Inc.
|
CL
689506
|
$17,600.46
|
|||||
|
Xxxxx,
XX
|
Xx
000000
|
43,433.27
|
|||||
|
CL
689780
|
133,755.12
|
||||||
|
CL
689878
|
6,929.46
|
||||||
|
CL
689880
|
5,952.21
|
||||||
|
CL
689918
|
16,080.03
|
||||||
|
CL
689949
|
692.96
|
||||||
|
CL
689950
|
5,134.64
|
||||||
|
CL
689951
|
4,947.81
|
||||||
|
CL
689957
|
8,526.21
|
||||||
|
CL
689958
|
25,623.44
|
||||||
|
CL
689959
|
8,298.77
|
||||||
|
CL
689963
|
10,083.49
|
||||||
|
CL
689965
|
5,289.10
|
||||||
|
CL
689966
|
12,955.59
|
||||||
|
CL
690015
|
41,360.30
|
||||||
|
CL
690018
|
59,484.11
|
||||||
|
CL
690021
|
40,996.47
|
||||||
|
CL
690633
|
420.57
|
||||||
|
CL
690643
|
5,395.09
|
||||||
|
CL
690646
|
4,701.42
|
||||||
|
CL
690647
|
14,064.24
|
||||||
|
CL
690664
|
69,104.75
|
||||||
|
CL
690699
|
2,018.74
|
||||||
|
CL
690704
|
1,202.22
|
||||||
|
CL
690705
|
3,639.27
|
||||||
|
CL
690721
|
13,160.26
|
||||||
|
CL
690725
|
11,875.17
|
||||||
|
CL
690727
|
12,366.83
|
||||||
|
CL
690822
|
1,345.84
|
||||||
|
CL
690834
|
3,051.81
|
||||||
|
CL
690958
|
18,447.34
|
||||||
|
CL
690986
|
8,116.20
|
||||||
|
CL
691002
|
24,183.15
|
||||||
|
CL
691006
|
12,227.72
|
||||||
|
CL
690671
|
38,615.88
|
||||||
|
CL
690980
|
12,830.45
|
||||||
|
CL
690981
|
2,371.72
|
||||||
|
CL
69068
|
1,088.90
|
||||||
|
CL
690076
|
9,901.54
|
||||||
|
|
|||||||
|
TOTAL
|
|
$717,272.55
|
|
|
INVOICE AMOUNT
|
||||||
|
CUSTOMER
|
CCN
|
INVOICE
#
|
CDN
$
|
US
$
|
|||
|
|
|||||||
|
X.X.
Xxxx Co. Ltd.
|
LO
690813
|
$65,942.23
|
|||||
|
Xxxxxx,
XX
|
XX
000000
|
27,360.22
|
|||||
|
|
|||||||
|
TOTAL
|
|
$93,302.45
|
SCHEDULE
10.1
AMALGAMATION
AGREEMENT
AND
ARTICLES
OF AMALGAMATION
See
attached.
SCHEDULE
10.11
EXISTING
CONTRACTS AND
QUOTES
See
attached.
EXHIBIT
I
Exclusions
from Canadian Customers
|
1.
|
Mestek
|
|
2.
|
Camus
Hydronics
|
|
3.
|
Thermohydronics
|
|
4.
|
Chilcon
|
|
5.
|
Koolair
|
|
6.
|
KeepRite
Heating and Cooling Products
|
EXHIBIT
II
Exclusive
Customers
|
1.
|
Trane
Inc.
|
|
2.
|
Carrier
Corporation
|
|
3.
|
Xxxxxxx
Controls Inc.
|
|
4.
|
Goodmans
|
|
5.
|
General
Electric
|
|
6.
|
Whirlpool
|
|
7.
|
Electrolux
|
|
8.
|
Xxxxxxx
|
|
9.
|
Rheem
|
EXHIBIT
III
AGENCY
CUSTOMERS
|
1.
|
X.X.
XxXxxxxx
|
|
2.
|
Xxxxxxx-Xxxx
|
|
0.
|
Diversified
Heat Transfer
|
|
4.
|
Ingersol
Rand Company and all of its Affiliates (Trane, Home Depot Supply,
ThermoKing, Map Industries)
|
|
5.
|
X.X.
Xxx
|
|
6.
|
Luvata
|
|
7.
|
The
CES Group (Temtrol, Mammoth, Webco, Nordyne, Nortek, Xxxx Air,
Ventrol)
|
|
8.
|
PVI
Industries
|
|
9.
|
Refrigeration
Research
|
|
10.
|
Spinco
Metal Products, Inc.
|
|
11.
|
Turbotec
|
|
12.
|
X.X.
Xxxx
|
|
13.
|
I.E.C.
(now Thermocline)
|
|
14.
|
Koax
|
|
15.
|
Dayco
|