THIS AGREEMENT is made the 8th day of December, 1998.
B E T W E E N:
THE BANK OF NOVA SCOTIA
(the "Vendor")
- and -
VENTRA GROUP INC.
(the "Purchaser")
- and -
GENERAL MOTORS CORPORATION and
GENERAL MOTORS OF CANADA LIMITED
(collectively "GM")
XXXXX XXXXXXXX LIMITED
(the "Interim Receiver").
WHEREAS:
A. Each of the Vendor and GM is a secured creditor of JPE Canada Inc. (the
"Company").
B. The Company is in default under its lending arrangements with the Vendor and
GM.
C. By order of X.X. Xxxxxx, Registrar of the Ontario Court of Justice (General
Division) dated August 27, 1998, the Interim Receiver was appointed as the
Interim Receiver of the Company.
D. The Vendor has marketed and now wishes to sell to the Purchaser and the
Purchaser wishes to purchase from the Vendor, all of the Vendor's and the
Company's right, title and interest in the undertaking, property and assets of
the Company.
NOW THEREFORE, for value, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS
In this Agreement, the following terms have the following meanings unless
the context otherwise requires:
1.1.1 "Purchased Property" means the Vendor's and the Company's right, title and
interest in the undertaking, property and assets of the Company comprised of the
Parcels described in Section 3.2.
1.1.2 "Real Property" means the Vendor's and the Company's right, title and
interest in the real property described as Parcel II in Section 3.2.
1.1.3 "Purchase Price" means the aggregate of the amounts listed under the
heading "Price" in Section 3.2.
1.1.4 "Permitted Encumbrances" means those liens, charges, encumbrances and
qualifications to title of the Purchased Property listed in annexed Schedule
"E".
1.1.5 "Trustee" means the party named as Trustee in Bankruptcy of the Company.
1.2 CURRENCY
Unless otherwise indicated, all dollar amounts referred to in this
Agreement are in lawful money of Canada.
ARTICLE II
BANKRUPTCY AND COURT ORDER
2.1 BANKRUPTCY AND COURT ORDER
It is agreed that prior to the Closing Date, either the Company shall make
a voluntary assignment in bankruptcy or that a petition and receiving order
shall be applied for by GM and the Vendor placing the Company into bankruptcy.
In addition, the Vendor and GM shall make application to the Ontario Court of
Justice (General Division) for an order (the "Approval Order"), inter alia,
approving of the purchase and sale transaction contemplated in this Agreement,
dispensing with the issuance of notices of sale under the Mortgages Act and, if
necessary, under the Personal Property Security Act. The Approval Order shall be
substantially in the form annexed hereto as Schedule "F". If at the Closing
Date, the Company is an undischarged bankrupt and the Approval Order has been
obtained, then the Agreement shall be completed in accordance with its terms and
if not, then this Agreement shall be considered to be terminated and the Deposit
(as herein defined) shall be returned to the Purchaser with interest earned
thereon and thereafter the Vendor and the Purchaser shall not be under any
further obligation to the other.
ARTICLE III
AGREEMENT OF PURCHASE AND SALE
3.1 PURCHASED PROPERTY
The Purchaser agrees to purchase from the Vendor and the Vendor agrees to
sell to the Purchaser on the Closing Date at the Time of Closing (as hereafter
defined), the Purchased Property for the Purchase Price subject to the terms and
conditions contained in this Agreement.
3.2 PURCHASE PRICE
The Purchase Price attributable to the Parcels comprising the Purchased
Property shall be the following:
Parcel Description Price
------ ----------- -----
Parcel I Inventory of the Company comprised of:
(a) work in progress At the lower of market or
Company's standard cost in
effect as of October 1, 1998,
less reasonable allowance for
obsolete, unusable, damaged
items, and any items requiring
rework. (For purposes of this
clause, "market" for an item will
be determined by calculating the
percentage of completion for
such item and multiplying such
percentage by the price for the
related finished product.)
(b) raw materials and non-painted At the lower of market or cost
regrind inventory to the Company for all raw
materials on hand including
any freight and delivery costs
paid by the Company, but excluding
any raw materials held by Company
on consignment and with a reasonable
allowance for obsolete, excessive
and unusable items.
Parcel II The following real property owned by }
the Company as described in annexed }
Schedule "A" and municipally known as: }
}
(i) 000 Xxxxxxxx Xxxxx }
Xxxxxxxxx, Xxxxxxx }
}
(ii) 000 Xxxxxxxxxx Xxxxx } $15,000,000.00 Canadian
Peterborough, Ontario } Dollars for Parcels II - IV,
} inclusive (to be allocated
Parcel III Machinery and equipment of the } among the parcels by the
Company, including without limitation } Purchaser, and the Vendor
those items described in annexed } acting reasonably)
Schedule "D" }
}
Parcel IV Other assets not included in Parcels I-III }
and specifically including, without }
limitation, those assets referred to on }
annexed Schedule "B", save and except }
the Excluded Assets (as hereinafter }
defined). }
3.3 EXCLUDED ASSETS
There shall be specifically excluded from the Purchased Property the
following assets of the Company (the "Excluded Assets"), namely:
(a) finished goods inventory, painted regrind inventory and obsolete inventory
of the Company;
(b) accounts receivable of the Company, including without limitation, the
tooling accounts receivable; and
(c) the equipment described in Schedule "G" (provided this equipment is the
same equipment that GM has agreed to sell to the Purchaser by letter dated
December 9, 1998).
3.4 PAYMENT OF THE PURCHASE PRICE
The Purchase Price shall be paid by the Purchaser to the Vendor as follows:
(a) The Purchaser shall deliver to the Vendor with a copy of this Agreement
signed by the Purchaser, a certified cheque drawn on, or a bank draft of, a
Schedule I Canadian chartered bank, payable to KPMG Inc. as agent of The
Bank of Nova Scotia in the amount of $1,000,000.
(b) If this Agreement is accepted by the Vendor and approved by GM and the
Interim Receiver, the said cheque or draft shall constitute a cash deposit
(the "Deposit") and shall be deposited in an interest-bearing bank account
to be applied toward the Purchase Price for the benefit of the Purchaser.
(c) On the Closing Date, subject to the provisions of Section 8.3, the
Purchaser shall pay to the Vendor, or to whom the Vendor shall in writing
direct, the balance of the Purchase Price (which shall be the Purchase
Price adjusted as contemplated in Section 3.11, less the Deposit and any
interest earned thereon) and all taxes referred to in Section 3.9 by
certified cheque drawn on, or bank draft of, a Schedule I Canadian
chartered bank.
3.5 ACCEPTANCE
If this Agreement is accepted by the Vendor and approved by GM and the
Interim Receiver, then such acceptance shall be communicated to the Purchaser by
5:00 p.m. (Toronto time) December 22, 1998 by notice in writing sent by the
Vendor or KPMG Inc. to the Purchaser at the address set forth and in the manner
provided in Section 9.11.
3.6 RETURN OF DEPOSIT CHEQUES
Any cheque or draft of the Purchaser accompanying this Agreement that is
not accepted by the Vendor shall be returned to the Purchaser by prepaid postage
mail or courier addressed to the Purchaser, at the address set forth below.
3.7 AGREEMENT OF PURCHASE AND SALE
This Agreement, once signed by the Purchaser, accepted by the Vendor and
approved by GM and the Interim Receiver, shall constitute a binding agreement of
purchase and sale between the parties hereto for the Purchased Property subject
to the Company being bankrupt, and the Approval Order described in Article II
being obtained and the conditions in Article VI being satisfied by the Closing
Date.
3.8 CLOSING DATE
The completion of the Agreement will take place at 10:00 a.m. ("Time of
Closing") on January 25, 1999 or such other date as the Vendor and Purchaser
shall agree in writing (the "Closing Date") at the office of the Vendor's
solicitors, Xxxxxx & Xxxxxx, Scotia Plaza, 00 Xxxx Xxxxxx Xxxx, Xxxxxxx,
Xxxxxxx, X0X 0X0.
3.9 PAYMENTS ON THE CLOSING DATE
The Purchaser shall pay, on the Closing Date, and shall be liable for, in
addition to the Purchase Price, any and all applicable federal and provincial
taxes, duties or like charges exigible in connection with the transfer of the
Purchased Assets including, without limitation, all land transfer taxes, all
federal and provincial sales, use, consumption and similar taxes and all goods
and services tax imposed under the Excise Tax Act (Canada), unless the Purchaser
or this transaction is exempt under the relevant taxing statute and the
Purchaser complies to the reasonable satisfaction of the Vendor with all
requirements as to certification, filing or otherwise to validly qualify for
such exemption. Where necessary, the Vendor agrees to execute and deliver such
elections or other documents reasonably required to permit the Purchaser to
claim any available exemption. The Purchaser will deliver an Indemnity Agreement
at closing in a form reasonably satisfactory to the Vendor indemnifying the
Vendor against any tax, interest or penalty incurred by the Vendor as a result
of the failure of the Purchaser to pay any such taxes, duties or charges
referred to above except those that arise from Vendor's omission or
misrepresentation.
3.10 TAXES NOT ASSUMED
The Purchaser does not assume and shall not be liable for any taxes under
the Income Tax Act (Canada) or any other taxes or other amounts whatsoever which
may be or become payable by the Company, the Vendor or any third party from or
as a consequence of the operation of any aspect of the Company's business or
using the Purchased Assets prior to the Closing Date. Neither the Vendor, nor
GM, nor the Interim Receiver shall be liable to the Purchaser for any of the
foregoing taxes, other taxes or other amounts (except with respect to GM as
otherwise provided in Section 6.3(i)).
3.11 ADJUSTMENTS
Adjustments to the Purchase Price shall be made on the Closing Date for
realty taxes and utilities with respect to the Real Property, the Closing Date
itself being for the account of the Purchaser.
3.12 PENSION PLANS NOT TO BE ASSUMED
Neither the Vendor, nor GM, nor the Interim Receiver, nor the Purchaser
adopts or assumes or shall be liable for any duties, liabilities or obligations
under any pension plan established for employees of the Company or under any
agreements or documents relating to such plans (except in the case of GM as
provided in Section 6.3(i).
3.13 COMPANY'S EMPLOYEES TO BE HIRED
The Vendor and GM acknowledge having been informed that, subject to the
provisions contained in the tentative, amended Collective Agreement as
negotiated between the representatives of the National Automobile, Aerospace,
Transportation and General Workers Union of Canada ("CAW - Canada") and its
Locals 1564 and 1987 (the "Union") and the Purchaser, the Purchaser intends only
to offer employment effective from the Closing Date to such of the employees of
the Company as the Purchaser, in its sole discretion, may determine and only
upon such terms as the Purchaser may in writing, agree to with such employees or
the Union.
ARTICLE IV
REAL PROPERTY AND OTHER PURCHASED PROEPRTY
4.1 REAL PROPERTY AND OTHER PURCHASED PROPERTY
The Purchaser shall examine title to the Real Property ("Title") at its own
expense and shall not call for the production of any xxxx of sale, assignment,
title deed, abstract or survey or proof or evidence of title or to have
furnished to it any copies of any such documents other than those in the
possession or within the reasonable control of the Vendor. The Purchaser shall
be allowed until 5:00 p.m. on January 15, 1999 to satisfy itself as to Title at
its own expense. If within such time, the Purchaser shall furnish the Vendor
with any valid objection as to Title which the Vendor shall be unable or
unwilling to remove at or before the Closing Date, and which the Purchaser will
not waive, the Agreement shall at or before the Closing Date be null and void,
the Deposit shall be returned to the Purchaser, with interest earned thereon,
and thereafter the Vendor and the Purchaser shall not be under any further
obligation to the other.
4.2 NO REPRESENTATIONS
The Purchaser acknowledges that except as expressly otherwise provided in
this Agreement, the Vendor, KPMG Inc., GM and the Interim Receiver have not
made, do not make and shall not be required to make any representation or
warranty with respect to the condition of the Purchased Property and that none
of the Vendor, KPMG Inc., GM or the Interim Receiver shall have any liability or
obligation with respect to the value, state or condition of the Purchased
Property, any deficiencies therein or repairs or replacements or other work
required with respect thereto, whether or not within the knowledge of the
Vendor, KPMG Inc., GM or the Interim Receiver, or any of their respective
officers, directors, agents, employees or contractors, all of which shall be
accepted and assumed by the Purchaser as of the Closing Date. The Vendor, KPMG
Inc., GM and the Interim Receiver make no representation or warranty of any kind
that the present use of the Purchased Property or the future use thereof
intended by the Purchaser is or will be lawful or permitted.
4.3 BUILDING AND ZONING
The Purchaser agrees to accept the Vendor's right, title and interest in
the Real Property and fixtures subject to municipal requirements, including
without limitation, building and zoning by-laws, the limitations, reservations,
provisions and conditions expressed in any original grants from the Crown, as
may be varied by statute and minor easements for hydro, telephone and like
services and restrictions and covenants that run with the Real Property
providing all such municipal requirements, restrictions, covenants, limitations,
reservations, provisions and conditions are being complied with.
4.4 DEED TO REAL PROPERTY
Subject to obtaining the Approval Order, the Vendor will deliver, or cause
to be delivered, a transfer/deed of land in registerable form to transfer its
right, title and interest in the Real Property to the Purchaser on the Closing
Date.
4.5 PLANNING ACT
The Agreement shall be effective to create an interest in the Real Property
only if the provisions of the Planning Act (Ontario) are complied with, failing
which, the Agreement shall be terminated, in which event the Deposit shall be
returned to the Purchaser forthwith with interest earned thereon and thereafter
the Vendor and the Purchaser shall not be under any further obligation to the
other.
4.6 RISK AND INSURANCE
The Purchased Property shall be at the risk of the Purchaser only after the
Closing Date. Until the Time of Closing, in the vent of material damage to the
Purchased Property, the Purchaser may either have the proceeds of any insurance
which is carried by the Company (if available to the Purchaser) and complete the
Agreement or may cancel the Agreement and have the Deposit returned with
interest earned thereon but without compensation of any other kind whatsoever.
Where any damage is not material to either the Purchased Assets or the business
as presently conducted by the Company, the Purchaser shall be obliged to
complete the Agreement and be entitled to receive the proceeds of the insurance
carried by the Company (if available to the Purchaser) which is referable to
such damage. The Purchaser agrees that all the insurance maintained by the
Company shall be cancelled on the Closing Date and that the Purchaser shall be
responsible for placing its own insurance thereafter.
4.7 "AS IS - WHERE IS"
By entering into this Agreement, the Purchaser acknowledges that it has
inspected the Purchased Property, that subject to provisions of 4.6, the
Purchased Property is sold on an "as is, where is" basis on the Closing Date and
that no representation, warranty or condition is expressed or implied as to
title, description, fitness for purpose, existence, merchantable quality,
conditions or quality thereof or, in respect of any other matter or thing
whatsoever (except as otherwise expressly provided in this Agreement). Without
limitation, all of the Purchased Property is specifically offered as it exists
on the Closing Date with no adjustments to be allowed to the Purchaser for
changes in conditions, qualities or quantities from the date hereof to the
Closing Date, except as provided for in Article VIII. The Purchaser acknowledges
and agrees that the Vendor is not required to inspect the Purchased Property or
any part thereof and the Purchaser shall be deemed, at its own expense, to have
relied entirely on its own inspection and investigation. The Purchaser
acknowledges that all warranties and conditions, express or implied, pursuant to
all applicable legislation do not apply hereto and are hereby waived by the
Purchaser. Furthermore, the Purchaser acknowledges that it shall be the
Purchaser's sole responsibility to obtain and pay the costs of any consents,
permits, licenses or other authorizations necessary for the transfer of such
right, title and interest, if any, as the case may be, to the Purchaser or for
the operation or use of the Purchased Property. The Purchaser further
acknowledges that any information obtained from the Vendor, KPMG Inc., GM or the
Interim Receiver, or any of their respective officers, directors, agents,
employees or contractors has been provided solely for the convenience of the
Purchaser and is not warranted to be accurate or complete and does not form part
of the terms hereof. The provisions of this Section shall survive the
termination of the Agreement.
4.8 FAILURE TO CLOSE
If the Purchaser fails to comply with any provision of this Agreement and
wrongfully fails to complete the Agreement, the Deposit, together with any
interest accrued thereof, and all other payments made in connection with the
Purchase Price shall be forfeited as liquidated damages and, without limiting
the rights and remedies the Vendor may have hereunder or at law, the Purchased
Property may be resold by the Vendor and provided the Vendor has acted in a
commercially reasonable manner in doing so, the deficiency, if any, arising on
such resale, together with all charges and expenses attending the same or
occasioned by the defaulting Purchaser, less the amount of the Deposit, shall be
made good on demand by the defaulting Purchaser, or paid forthwith to the Vendor
on demand, as the case may be.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
5.1 PURCHASER REPRESENTATION AND WARRANTIES
The Purchaser represents and warrants that:
(a) it is a corporation duly incorporated, organized and subsisting under the
laws of Ontario, Canada;
(b) it has the corporate power and authority to enter into and perform its
obligations under the Agreement and all necessary actions and approvals
have been taken or obtained by the Purchaser to authorize the creation,
execution, delivery and performance of this Agreement and this Agreement
has been duly executed and delivered by the Purchaser and constitutes a
legal, valid and binding obligation of the Purchaser, and this Agreement is
enforceable against the Purchaser in accordance with its terms;
(c) it is not a non-Canadian for the purpose of the Investment Canada Act
(Canada) and it is not a non-resident of Canada within the meaning of the
Income Tax Act (Canada); and
(d) it has received a term sheet from The Toronto-Dominion ("TD") Bank which it
has accepted under which TD has committed to provide sufficient funds to
the Purchaser to complete the purchase herein which is subject only to
conditions which have been disclosed to the Vendor.
5.2 VENDOR REPRESENTATION AND WARRANTIES
The Vendor represents and warrants to the Purchaser that:
(a) the Vendor has not discharged, assigned or encumbered the security granted
to it by the Company except for certain priority arrangements entered into
between the Vendor and GM and which will be discharged or released from the
Purchased Assets by GM at Closing;
(b) no person, firm or corporation who is entitled to do so has to date taken
any action to redeem any of the Purchased Property and given notice of such
action to the Vendor and no action or proceeding at law or in equity is to
the knowledge of the Vendor pending or threatened by any party to enjoin,
restrict or prohibit the Vendor's sale to the Purchaser of the Purchased
Property.
ARTICLE VI
CONDITIONS
6.1 CONDITIONS FOR THE BENEFIT OF VENDOR
The obligation of the Vendor to complete the Agreement is subject to the
terms and conditions of this Agreement and the satisfaction of the following
terms and conditions at or prior to the Closing Date, which following terms and
conditions are for the sole benefit of the Vendor and which may be waived by the
Vendor in its sole discretion:
(a) the representations and warranties of the Purchaser in Section 5.1 are true
and accurate as of the Closing Date;
(b) no action or proceeding at law or in equity shall be pending or threatened
by any person, firm, government, governmental authority, regulatory body or
agency to enjoin, restrict or prohibit the purchase and sale of the
Purchased Property;
(c) the ability to sell the Purchased Property shall not have been removed from
the control of the Vendor by any means or process; and
(d) no party shall take any action to redeem any of the Purchased Property.
6.2 CONDITIONS FOR VENDOR NOT SATISFIED
In the event any of the conditions in Section 6.1 is not satisfied as of
the Closing Date, this Agreement shall thereupon at the option of the Vendor or
rendered null and void and the Purchaser shall be entitled only to the return of
the Deposit with accrued interest earned thereon and thereafter the Vendor and
the Purchaser shall not be under any further obligations to the other.
6.3 CONDITIONS FOR BENEFIT OF PURCHASER
The obligation of the Purchaser to complete the Agreement is subject to the
terms and conditions of this Agreement and the satisfaction of the following
terms and conditions at or prior to the Closing date, which following terms and
conditions are for the sole benefit of the Purchaser and which may be waived by
the Purchaser in its sole discretion:
(a) The representations and warranties of the Vendor in Section 5.2 are true
and correct as of the Closing Date.
(b) All of the terms, covenants and conditions of this Agreement to be
performed or complied with by the Vendor or otherwise at or prior to the
Time of Closing shall have been performed or complied with and all other
conditions herein for the benefit of the Purchaser shall have been
satisfied in accordance with their terms.
(c) Notwithstanding any other provisions hereof, between the date of this
Agreement and the Time of Closing, no material adverse change shall have
occurred with respect to the business of the Company or the prospects
thereof or any of the Purchased Assets, considered as a whole. In this
paragraph "material adverse change" shall mean an event such as a major
product recall, the expense of which would in all likelihood have to be
borne by the Purchaser following the Closing Date, the loss of a majority
of the key management of the Company who cannot be replaced in the short
term, a major labour dispute or other event similar to the foregoing in
scope and magnitude.
(d) On the Closing Date, the Company shall be an undischarged bankrupt and the
Approval Order shall have been issued by the Ontario Court of Justice
(General Division) and no appeal shall have been initiated within the
applicable time period.
(e) At the Time of Closing, the Purchaser shall have satisfied itself, acting
reasonably, that Purchaser is acquiring from Vendor good and marketable
title to the real and personal property which is included in the Purchased
Assets free and clear of any encumbrances, liens, charges or claims which
rank pari passu wit or prior to the Vendor's security other than the
Permitted Encumbrances and any claims which the Vendor may undertake to
satisfy and indemnify Purchaser from or that the Transfer of the Purchased
Assets has been vested in the Purchaser pursuant to the Approval Order free
of all such encumbrances, liens, charges or encumbrances.
(f) On or before January 15, 1999, the National Automobile, Aerospace,
Transportation and General Workers Union of Canada (CAW - Canada) and its
locals 1524 and 1987 (the "Union") shall have ratified the tentative
amended collective agreement as negotiated between its representatives and
the Purchaser with respect to the business to be carried by the Purchaser
following completion of the transaction of purchase and sale contemplated
herein.
(g) On the Closing Date, the Purchaser's Banks shall advance the funds
necessary to fund the Purchase Price in accordance with the terms contained
in the term Sheet offered by the Toronto-Dominion Bank and accepted by the
Purchaser.
(h) The Purchaser shall on o before the Closing Date, have obtained the right
to occupy the real properties leased by the Company and municipally known
as 725 and 000 Xxxxxxxx Xx., Xxxxxxxxxxxx, Xxxxxxx for the 90 day occupancy
period from the Closing Date upon the understanding that the Purchaser
shall be responsible for the occupation rent during such period either
pursuant to the Approval Order or an Occupation Agreement between the
Interim Receiver or the Trustee and the Purchaser.
(i) On the Closing Date, the Purchaser shall have entered into an agreement
with General Motors Corporation ("GMC") indemnifying the purchaser with
respect to all amounts pertaining to the Company and its employees in
respect of each of the following, namely:
(i) unremitted source deductions under the Income Tax Act, and Canada
Pension Plan premiums and Unemployment Insurance premiums;
(ii) accrued vacation pay entitlements of the Company's employees, if any,
to the extent they exceed in the aggregate $500,000;
(iii) remittances and assessments due pursuant to the provisions of the
Workplace Safety and Insurance Act, Pension Benefits Act (excluding,
for greater certainty, any obligation to pay or be responsible for any
unfunded deficiency under any existing Pension Plan of the Company
upon such plan's wind-up), Excise Tax and Corporations Tax Act;
(iv) unpaid suppliers who have delivered any asset included in the
Purchased Assets (i) within 30 days prior to the Time of Closing or
(ii) who has delivered to the Vendor, Interim Receiver, or Trustee,
written demand for repossession; and
(v) all amounts due and payable by the Company for property taxes and
utilities;
such Agreement to be in a form reasonably satisfactory to the Purchaser.
(j) On the Closing Date, at the Time of Closing, the Purchaser shall have
obtained possession or control of the Purchased Assets.
6.4 CONDITIONS FOR PURCHASER NOT SATISFIED
In the event any of the conditions in Section 6.3 is not satisfied by the
date indicated, this Agreement shall thereupon at the option of the Purchaser be
rendered null and void and the Purchaser shall be entitled to the return of the
Deposit with accrued interest thereon and thereafter the Vendor and Purchaser
shall not be under any further obligation to the other.
ARTICLE VII
COVENANTS OF THE PURCHASER
7.1 COVENANTS OF THE PURCHASER
(a) the Purchaser shall ensure that the representations and warranties of the
Purchaser contained herein are true and correct at the Time of Closing on
the Closing Date;
(b) the Purchaser will not enter into any agreements with the Ministry of the
Environment and Energy before the Time of Closing, without the prior
written consent of the Vendor.
7.2 COVENANTS OF THE VENDOR
(a) At the Time of Closing, the Vendor shall deliver to the Purchaser such
deeds of conveyance, bills of sale, assignments and instruments, in such
form as may be reasonably necessary so as to convey to the Purchaser all of
the right, title and interest of the Vendor in and to the Purchased Assets.
(b) Between the date of the acceptance of this Agreement by the Vendor and the
Time of Closing, the Interim Receiver will make reasonable efforts to cause
the Company to provide access to and to permit the Purchaser, through its
representatives, to make such investigation of, the operations, properties,
assets and records of the Company and of its financial and legal condition
as the Purchaser deems necessary or advisable. The Interim Receiver shall
make reasonable efforts to cause the Company to make available for
discussions with the Purchaser and its authorized representatives, the
persons responsible for managing the Company's business and, to the extent
reasonably possible, the auditors, environmental consultants, engineers and
other similar consultants who have provided services to or with respect to
the Company's business and it is expressly acknowledged that the Purchaser
shall be permitted access to the representatives of the bargaining unit for
the Company's employees. Any fees and expenses required to be paid to the
auditors, environmental consultants, engineers and other similar
consultants referred to above shall be paid by the Purchaser at the time of
the said discussions. Until the Time of Closing or the termination of this
Agreement in accordance with its terms, the Interim Receiver shall make
reasonable efforts to cause the Company to cooperate with the Purchaser in
the conduct of the Purchaser's investigations and due diligence and shall
authorize governmental agencies, authorities and other similar third
parties as Purchaser may deem advisable, acting reasonably, to provide
information concerning the Company to the Purchaser. The Purchaser through
its representatives, shall be permitted to enter upon the Company's
premises during usual business hours to carry out such reasonable tests,
audits and inspections as it deems necessary or advisable, provided such
tests, audits and inspections are carried out in a commercially reasonable
manner and do not interfere with the operations of the Company. Provided
however, it is expressly acknowledged and agreed that the Purchaser shall
not assume any management, care or control over any assets of the Company,
including any of the Purchased Assets for purposes of any Federal or
Provincial Environmental Legislation or other legislation of any kind as a
result of any steps taken by the Purchaser pursuant to any rights of access
or investigation by its representatives conducted under the provisions of
this Agreement. The Vendor shall in its application for the Approval Order
apply for the order to include provisions allowing access to the Purchaser
on the same basis as contemplated in this paragraph 7.2(c).
ARTICLE VIII
SPECIAL ARRANGEMENT FOR INVENTORY AND RECEIVABLES
AND ENVIRONMENTAL RESERVE
8.1 MANAGEMENT OF INVENTORY DURING INTERIM PERIOD
From the time of acceptance of this Agreement until the Time of Closing, GM
and the Interim Receiver shall make reasonable efforts to cause the Company to
consult on a regular basis with the Purchaser as to the Company's current
inventory levels and requirements.
8.2 PRELIMINARY INVENTORY CALCULATION
It is expressly acknowledged and agreed that in the calculation of the
Purchase Price at the Time of Closing attributable to the inventory described in
Parcel I, the parties will use the inventory as it is recorded in the financial
records of the Company as at December 31, 1998.
8.3 HOLDBACK WITH RESPECT TO INVENTORY
It is expressly acknowledged and agreed that an amount equal to 25% of the
Purchase Price which is attributable to Parcel I (inventory) and which is
otherwise payable by the Purchaser to the Vendor on the Closing Date in
accordance with the provisions hereof, shall instead be placed in escrow, on the
Closing Date in accordance with an escrow agreement in the form annexed hereto
as Schedule "C" (the "Escrow Agreement"). The Purchaser, GM and the Interim
Receiver each agree to execute the Escrow Agreement on the Closing Date. In this
Agreement, the term "Escrow Agent" shall mean the Interim Receiver, as referred
to in the Escrow Agreement and the term "Escrow Funds" shall have the meaning
attributed thereto in the Escrow Agreement.
8.4 AUDIT/FINAL ADJUSTMENTS TO PURCHASE PRICE WITH RESPECT TO INVENTORY
Forthwith after the closing Date and as of the Closing Date, the Purchaser
shall cause a physical count and valuation to be conducted of the inventory of
the Company described in Parcel I (the "Closing Inventory"). The representatives
of the auditors of the Purchaser (the "Purchaser's Auditors") and BBK Ltd.
("BBK") (being the representatives of GM), the Interim Receiver and
representatives of the Company will be permitted to attend and observe at the
inventory court and carry out at their own expense such procedures s they deem
appropriate. This count and valuation shall be conducted by employees of the
Purchaser who were formerly employees of the Company and who are knowledgeable
of the inventory and its costing. The inventory shall be valued s set forth in
Section 3.2 and the count and valuation will be conducted and completed as
quickly as possible after the Closing Date. If the parties are unable to agree
to a resolution of any differences within fifteen (15) days after completion of
the physical count, the parties agree that the resolution of such differences
shall be submitted to the Toronto office of Deloitte & Touche (the "Arbitrator")
for a final and binding determination. In the event that Deloitte & Touche are
unable to accept the appointment, the Purchaser and GM shall appoint a mutually
agreeable substitute. The arbitrator's fees and expenses shall be allocated and
paid based upon the relative difference between the respective positions of the
parties as submitted to the Arbitrator and the final determination of the
Arbitrator. The Purchaser shall make available to the Interim Receiver, the
Purchaser's Auditors, BBK, and if necessary, the Arbitrator, the books and
records utilized in conducting the Closing Inventory together with the employees
working on the Closing Inventory.
8.5 FINAL PURCHASE PRICE
The "Final Purchase Price" shall be the Purchase Price adjusted upwards or
downwards, by the difference between the value with respect to the inventory of
the Company as finally agreed upon by the Vendor, GM and the Purchaser or as
determined by the Arbitrator and the values with respect to the inventory of the
Company otherwise used to calculate the Purchase Price, in accordance with this
agreement, on the Closing Date.
8.6 FINAL DETERMINATION
Immediately upon final determination of the Final Purchase Price, the
Purchaser, and GM shall jointly notify the Escrow Agent of the amount of any
final adjustment in accordance with the notice provisions of the Escrow
Agreement. If an amount is due to the Purchaser as a refund of excess Purchase
Price previously paid, the Escrow Agent shall pay that amount to the Purchaser
from the Escrow Funds pursuant to the Escrow Agreement. If the amount due to the
Vendor is less than the balance of the Escrow Funds, the remaining balance of
the Escrow Funds shall be paid by the Escrow Agent to the Purchaser. If an
amount is due to the Vendor in excess of the Escrow Funds, such amount shall be
paid to the Vendor by the Purchaser on demand. All amounts contemplated by this
Section 8.6 shall be made by cheque within five (5) business days after final
determination of the Final Purchase Price. Notwithstanding the foregoing, if a
portion of the holdback is not the subject matter of a dispute referred to in
Section 8.4, such portion shall be released if an irrevocable direction
addressed to the Escrow Agent agreeing to the release of such portion signed by
the Vendor, Purchaser, GM, BBK and the Interim Receiver is delivered to the
Escrow Agent.
ARTICLE IX
GENERAL
9.1 TIME OF ESSENCE
All stipulations as to time are strictly of the essence.
9.2 TENDER
Any tender of documents or money hereunder may be made upon the Vendor or
the Purchaser at their respective solicitors or at the address in Section 9.11.
9.3 KPMG
KPMG Inc. acts in its capacity as agent of the Vendor and neither KPMG Inc.
nor any of its officers, directors, agents, employees or contractors shall have
any personal or corporate liability or obligation under or in connection with
the Agreement.
9.4 NO ASSIGNMENT
The Purchaser shall not be entitled to assign its rights and obligations
under this Agreement without the prior written consent of the Vendor.
9.5 GOVERNING LAW
The validity and interpretation of the Agreement shall be governed by the
laws of Ontario and the laws of Canada applicable in the Province of Ontario,
and such Agreement shall enure to the benefit of and be binding upon the parties
thereto, and their respective successors or permitted assigns, as the case may
be.
9.6 NO COMMISSIONS
The Vendor shall not be required to pay any commission or brokerage fee
whatsoever in connection with any sale pursuant to the Agreement.
9.7 SURVIVAL OF OBLIGATIONS, REPRESENTATIONS
Unless otherwise specifically stated herein, all obligations,
representations and warranties of the parties contained in the Agreement shall
survive the completion of the sale.
9.8 ENTIRE AGREEMENT
The Agreement shall constitute the entire agreement between the parties to
it pertaining to the subject matter thereof and shall supersede all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties and there shall be no agreements or
understandings between the parties in connection with the subject matter thereof
except as specifically set forth herein and except a separate agreement between
the Vendor and GM which does not bind the Purchaser. No supplement,
modification, waiver or termination of the Agreement or any part thereof shall
be binding, unless executed in writing by the parties to be bound thereby,
provided that the time provided for doing any matter or thing contemplated
herein may be abridged or extended by written agreement, in letter form or
otherwise, executed by the duly authorized solicitors for the parties. This
Agreement may be executed in one or more counterparts, which together shall
constitute one and the same Agreement. Any counterpart of this Agreement may be
executed and delivered by telecopier as sufficient evidence of the Agreement of
any party executing and delivering a counterpart.
9.9 HEADINGS AND REFERENCES
The headings in this Agreement introducing Sections and subsections are for
convenience of reference only and shall not affect the interpretation of the
Agreement. All references to the parties hereto shall be read with such changes
in number and gender as may be appropriate, according to whether the party is a
male or female person or a corporation or partnership, and if more than one
xxxxxx, shall be deemed joint and several. References to Sections are references
to sections in this Agreement.
9.10 FURTHER ASSURANCES
The parties hereby undertake and agree with each other to execute and
deliver such other documents, papers, matters and assurances as the other party
may reasonably require or request in connection with the Agreement for the
purposes of the more effectual carrying out of the Agreement. All expenses in
connection with such further documents, papers and assurances shall be borne by
the party requesting the same.
9.11 NOTICES
Any notice or other communication required or permitted to be given under
the Agreement shall be in writing and shall be given by telecopier, prepaid
registered mail or personal delivery and shall be conclusively deemed to have
been given and received on the day on which it was delivered or sent by
telecopier, or five days after deposited in the post office or telegraph office
as the case may be, (personal delivery including delivery by commercial courier)
to the Purchaser, the Vendor and the other parties as follows:
If to the Vendor: The Bank of Nova Scotia
Special Accounts Management
One Financial Place
0 Xxxxxxxx Xxxxxx Xxxx, 0xx Xxxxx
XXXXXXX, Xxxxxxx
X0X 0X0
Attention: Vice-President
Facsimile: (000)000-0000
with a copy to: KPMG Inc.
Xxxxx 0000, Xxxxxxxx Xxxxx Xxxx
X.X. Xxx 00, Stn. Commerce Court
TORONTO, Ontario
M5L 1B2
Attention: Xxxxxxx Xxxxxx
Senior Vice-President
Facsimile: (000)000-0000
with a copy to: Xxxxxx & Xxxxxxx
Scotia Plaza
00 Xxxx Xxxxxx Xxxx
XXXXXXX, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx X. Xxxxxxxxx
Facsimile: (000)000-0000
If to GM: General Motors Corporation
0000 Xxxx Xxxxx Xxxxxxxxx, 0xx Xxxxx
XXXXXXX, Xxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx
Facsimile: (000)000-0000
with a copy to: Thornton Grout Xxxxxxxx
0000 - 00 Xxxx Xxxxxx Xxxx
Royal Trust Tower
Toronto-Dominion Centre
TORONTO, Ontario
M5K 1K7
Attention: Xxxxx X. Xxxxx
Facsimile: (000)000-0000
with a copy to: General Motors of Canada Limited
0000 Xxxxxxx Xxxx Xxxxx
XXXXXX, Xxxxxxx
X0X 0X0
Attention: Xxxxxxxx Xxxxxx and
Xxxxxxx Xxxxx
Facsimile: (000)000-0000
with a copy to: Honigman, Miller, Xxxxxxxx and Xxxx
0000 Xxxxx Xxxxxxxx Xxxxxxxx
XXXXXXX, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxx, Xx.
Facsimile: (000)000-0000
If to Interim Receiver: Xxxxx Xxxxxxxx Limited
00xx Xxxxx, Xxxxx Xxxxx
Xxxxx Xxxx Xxxxx
000 Xxx Xxxxxx, Xxx 00
XXXXXXX, Xxxxxxx
X0X 0X0
Attention: Xxxxx X. Xxxxxx
Facsimile: (000)000-0000
If to Purchaser: Ventra Group Inc.
0000 Xxxx Xxx Xxxxxx Xxxx
Xxxxx 000
XXXX, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Executive Vice-President
Facsimile: (000)000-0000
with a copy to: XxXxxxx, XxXxxxxxx & Xxxxxx
Barristers and Solicitors
X.X. Xxx 000
00 Xxxxx Xxxxxx
XXXXXXX, Xxxxxxx
X0X 0X0
Attention: R. Xxxx XxXxxxxxx
Facsimile: (000)000-0000
9.12 SCHEDULES
The following are the Schedules annexed hereto and incorporated by
reference and deemed to be part hereof:
- Schedule "A" - Real Property of the Company;
- Schedule "B" - Other Assets of the Company (Parcel IV);
- Schedule "C" - Escrow Agreement;
- Schedule "D" - Machinery and Equipment of the Company (Parcel III);
- Schedule "E" - Permitted Encumbrances;
- Schedule "F" - Approval Order approving sale of Purchased Assets;
- Schedule "G" - Special Excluded Assets.
ARTICLE X
OFFER AND ACCEPTANCE
10.1 OFFER AND ACCEPTANCE
This Agreement, when signed by the Purchaser and before it is signed by the
Vendor, s hall be considered to be a form of offer by the Purchaser to purchase
the Purchased Property from the Vendor on, and subject to, the terms and
conditions contained herein. The offer shall be open for acceptance by the
Vendor and approval and agreement by GM and the Interim Receiver until 5:00 p.m.
(Toronto time) on the 22nd day of December, 1998 at which time, if not accepted
by the Vendor and approve and agreed to by GM and the Interim Receiver, this
offer shall be null and void. The expression "this Agreement" or "the Agreement"
herein shall mean the agreement resulting from the acceptance by the Vendor and
approval and agreement by GM and Interim Receiver of the offer.
IN WITNESS WHEREOF the Purchaser has signed this Agreement by a person
authorized to do so on the Purchaser's behalf.
VENTRA GROUP INC.
By: /s/ W. Xxxxxx Xxxxxxx
---------------------------------
Name: W. Xxxxxx Xxxxxxx
Title: Chief Financial Officer
ACCEPTANCE
The Vendor hereby accepts this offer and GM and t he Interim Receiver
hereby approve and agree to this offer as of the day of December, 1998.
THE BANK OF NOVA SCOTIA
By:
Name:
Title:
GENERAL MOTORS OF CANADA GENERAL MOTORS CORPORATION
LIMITED
By: By:
Name: Name:
Title: Title:
XXXXX XXXXXXXX LIMITED
By:
Name:
Title:
