PURSUANT TO ITEM 601 (b)(2) OF REGULATION S-K, THIS EXHIBIT OMITS
CERTAIN NONMATERIAL SCHEDULES AND EXHIBITS COMPRISING A PART OF
ORIGINAL DOCUMENT. EACH OF THE SCHEDULES LISTED ON PAGE (iv)
AND EACH OF THE EXHIBITS LISTED ON PAGE (v) HEREOF HAVE BEEN
OMITTED. THE COMPANY AGREES TO SUPPLEMENTALLY FURNISH A COPY
OF ANY OF THE OMITTED ITEMS TO THE SECURITIES AND EXCHANGE
COMMISSION UPON REQUEST.
AGREEMENT AND PLAN OF MERGER
by and among
CANMAX INC.
(a Wyoming corporation)
and
CNMX MERGERSUB, INC.
(a Delaware corporation)
and
USCOMMUNICATION SERVICES, INC.
(a Delaware corporation)
Dated as of
January 30, 1998
TABLE OF CONTENTS
Page
ARTICLE 1. CLOSING; DEFINITIONS................................1
1.1. Closing............................................1
1.2. Definitions........................................1
ARTICLE 2. EFFECT OF MERGER AND CONSIDERATION TO BE RECEIVED
BY THE SHAREHOLDERS AT CLOSING......................7
2.1. Effect of Merger...................................7
2.2. Description of Consideration.......................7
2.3. Categories of Stock................................7
2.4. Escrow Account.....................................7
2.5 Exchange Requirements..............................8
2.6. Dividends..........................................8
2.7. Return of Canmax Common............................9
2.8. No Further Ownership Rights in Common Stock........9
2.9. Closing of USC Transfer Books......................9
2.10. Dissenters' Rights.................................9
2.11. Further Assurances.................................9
ARTICLE 3. REPRESENTATIONS AND WARRANTIES.....................10
3.1 Representations and Warranties of USC.............10
3.1.1. Authorization, etc. .......................10
3.1.2. Corporate Status...........................10
3.1.3. No Conflicts, etc. ........................11
3.1.4. Financial Statements.......................12
3.1.5. Absence of Undisclosed Liabilities.........12
3.1.6. Taxes......................................12
3.1.7. Absence of Changes.........................13
3.1.8. Litigation.................................14
3.1.9. Compliance with Laws; Governmental
Approvals and Consents; Governmental
Contracts................................14
3.1.10. Operation of the Business..................14
3.1.11. Assets.....................................15
3.1.12. Contracts..................................15
3.1.13. Territorial Restrictions...................16
3.1.14. Inventories................................16
3.1.15. Customers..................................16
3.1.16. Suppliers..................................17
3.1.17. Intellectual Property......................18
3.1.18. Insurance..................................18
3.1.19. Real Property..............................18
3.1.20. Environmental Matters......................18
3.1.21. Employees, Labor Matters, etc..............18
3.1.22. Employee Benefit Plans.....................19
3.1.23. Confidentiality............................19
3.1.24. Records....................................19
3.1.25. Brokers, Finders, etc......................19
3.1.26. Receivables................................19
3.1.27. Backlog....................................20
(i)
3.1.28. Liabilities to Affiliates..................20
3.1.29. Bank Accounts..............................20
3.1.30. Disclosure.................................20
3.2. Representations and Warranties of CMI................20
3.2.1. Corporate Status; Authorization, etc.......20
3.2.2. No Conflicts, etc..........................21
3.2.3. Litigation.................................21
3.2.4. Brokers, Finders, etc......................21
3.2.5 Exchange Act Reports.......................21
3.2.6. Securities to be Issued....................21
3.2.7. Consents...................................21
3.3. Representations and Warranties of Trustee............22
3.3.1. Authorization, etc.........................22
3.3.2. Organization of Voting Trust...............22
3.3.3. Ownership of USC Shares....................22
3.3.4. Investment Intent..........................22
3.3.5. Notices of Withdrawal......................22
ARTICLE 4. COVENANTS.......................................22
4.1. Covenants of USC.....................................22
4.1.1. Conduct of Business........................22
4.1.2. No Solicitation............................22
4.1.3. Access and Information.....................23
4.1.4. Additional Financial Statements............24
4.1.5. Public Announcements.......................24
4.1.6. Further Actions............................24
4.1.7. Delivery of Audited Financial Statements...25
4.2. Covenants of Canmax and CMI..........................25
4.2.1. Public Announcements.......................25
4.2.2. Access.....................................25
4.2.3. Further Actions............................25
4.2.4. Further Assurances.........................25
ARTICLE 5. ADDITIONAL AGREEMENTS...........................25
5.1. Shareholder Approvals................................25
5.2. Compliance with the Securities Act...................26
5.3. Listing of Merger Shares.............................26
5.4. HSR Act Filings......................................26
5.5. Termination of Affiliate Agreements..................26
5.6. Covenant Regarding Trust.............................26
5.7. Appointment of Director..............................26
ARTICLE 6. CONDITIONS PRECEDENT............................27
6.1. Conditions to Obligations of Each Party..............27
6.2. Conditions to Obligations of Canmax and CMI..........27
6.2.1. Representations............................27
6.2.2. Covenants..................................27
6.2.3. Consents...................................27
6.2.4. No Material Adverse Effect.................28
6.2.5. Opinion of Counsel.........................28
6.2.6. Required USC Vote..........................28
6.2.7. Corporate Documents........................28
6.2.8. Accredited Investor Letter.................28
(ii)
6.2.9. Non-Competition Agreement;
Employment Contract......................28
6.2.10. Employees..................................28
6.2.11. Bank Accounts..............................28
6.2.12. Officers and Directors.....................29
6.2.13. Resignation and Withdrawal of Trustee......29
6.2.14. Convertible Instruments....................29
6.3. Conditions to Obligations of USC.....................29
6.3.1. Representations............................29
6.3.2. Covenants..................................29
6.3.3. Required USC Vote..........................29
6.3.4. Opinion of Counsel.........................29
6.3.5. Corporate Documents........................29
6.3.6. Consents and Approvals.....................30
6.3.7. Non-Competition Agreement and
Employment Contract......................30
ARTICLE 7. ALLOCATION AND TAX ADVICE.......................30
7.1. Allocation...........................................30
7.2. Tax Advice...........................................30
ARTICLE 8. ESCROW AGREEMENT AND RELATED PROVISIONS.........30
8.1. Escrow Agreement.....................................30
8.2. Indemnification Procedure............................31
8.3. Shareholders Representative..........................32
ARTICLE 9. TERMINATION.....................................32
9.1. Termination..........................................32
9.2. Effect of Termination................................33
ARTICLE 10. MISCELLANEOUS...................................33
10.1. Expenses...........................................33
10.2. Severability.......................................33
10.3. Notices............................................33
10.4. Headings...........................................34
10.5. Entire Agreement...................................34
10.6. Counterparts.......................................35
10.7. Governing Law, etc.................................35
10.8. Binding Effect.....................................35
10.9. Assignment.........................................35
10.10. No Third Party Beneficiaries.......................35
10.11. Amendment; Waiver, etc.............................35
(iii)
SCHEDULES
List of Subsidiaries............................Schedule 3.1.2(a)
Jurisdictions of Business.......................Schedule 3.1.2(b)
List of Shareholders and Outstanding Shares
of Subsidiaries...............................Schedule 3.1.2(e)
Exceptions to No Conflicts......................Schedule 3.1.3
Taxes...........................................Schedule 3.1.6(a)
Conduct of Business Outside the Ordinary
Course of Business............................Schedule 3.1.7
Exceptions to Compliance with Applicable Laws...Schedule 3.1.9(a)
Government Approvals and Other Consents.........Schedule 3.1.9(b)
Contracts with Governmental Authorities.........Schedule 3.1.9(c)
Operation of the Business.......................Schedule 3.1.10
Title and Liens Against Assets
(Other than Permitted Liens)..................Schedule 3.1.11
Contracts, Agreements, Commitments,
Instruments and Arrangements..................Schedule 3.1.12(a)
Territorial Restrictions........................Schedule 3.1.13
Unusable and/or Unsalable Inventories...........Schedule 3.1.14
Customers.......................................Schedule 3.1.15
Suppliers.......................................Schedule 3.1.16
Intellectual Property...........................Schedule 3.1.17(a)
Intellectual Property Transfer Exceptions.......Schedule 3.1.17(b)
Insurance Policies..............................Schedule 3.1.18
Leases, including, Address, Landlord
and Tenant....................................Schedule 3.1.19(b)
Receivables as of the Cut-Off Date..............Schedule 3.1.26
Backlog.........................................Schedule 3.1.27
Liabilities to Officers, Directors,
Shareholders or Affiliates....................Schedule 3.1.28
Bank Accounts and Safe Deposit Boxes
Including Persons Authorized on Each..........Schedule 3.1.29
(iv)
EXHIBITS
Exhibit A - Accredited Investor Letter
Exhibit B - Escrow Agreement
Exhibit C - Non-Competition Agreement
Exhibit D - Employment Contract
(v)
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (together with the
Exhibits and Schedules hereto, the "Agreement"), is executed to
be effective as of January 30, 1998, by and among CANMAX
INC., a Wyoming corporation ("Canmax"), CNMX MERGERSUB, INC.,
a Delaware corporation ("CMI"), and USCOMMUNICATION SERVICES,
INC., a Delaware corporation ("USC") formerly known as
Nationwide Transportation Products, Inc., ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇, as
trustee (in such capacity, the "Trustee") of the trust (the
"Trust") created under the Voting Trust Agreement of Nationwide
Transportation Products, Inc. made as of May 1, 1997, as
amended by the First Amendment to Voting Trust Agreement dated
December 1, 1997 and ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇, individually ("Founder").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Canmax, CMI
and USC have approved a plan of reorganization which contemplates
the merger of USC with and into CMI (the "Merger"), pursuant to
which the outstanding shares of capital stock of USC will be
converted into shares of no par value common stock of Canmax
("Canmax Common") and warrants to acquire shares of Canmax
Common;
WHEREAS, the parties hereto desire to enter into this
Agreement for the purpose of setting forth certain
representations, warranties, covenants and agreements by and
among the parties and to set forth the terms and conditions of
the Merger; and
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and promises herein contained, and on the terms
and subject to the conditions herein set forth, the parties
hereto agree as follows:
ARTICLE 1. CLOSING; DEFINITIONS
1.1. CLOSING. The closing for the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices
of ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, on a date (the "Closing Date") selected by Canmax
within five (5) Business Days of the satisfaction or waiver of
all conditions precedent set forth in Article 6 hereof and
communicated to USC not later than two (2) Business Days
immediately prior thereto. The Certificate of Merger shall be
filed with the appropriate authorities in the State of Delaware
on or as soon as practicable after the Closing Date.
1.2. DEFINITIONS. The terms defined in this Section 1.2,
whenever used in this Agreement (including the Schedules), shall
have the respective meanings indicated below for all purposes of
this Agreement. All references herein to a Section, Article or
Schedule are to a Section, Article or Schedule of or to this
Agreement, unless otherwise indicated.
Accredited Investor Letter: the Accredited Investor
Letter in the form of Exhibit A hereto, to be executed and
delivered by the Trustee and the Founder at the Closing.
-1-
Affiliate: of a Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first
Person. "Control" (including the terms "controlled by" and
"under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction
of the management policies of a person, whether through the
ownership of voting securities, by contract or credit
arrangement, as trustee or executor, or otherwise.
Agreement: as defined in the Preamble to this
Agreement.
Applicable Law: all applicable provisions of all (i)
constitutions, treaties, statutes, laws (including the
common law), rules, regulations, ordinances, codes or orders
of any Governmental Authority, (ii) Governmental Approvals
and (iii) orders, decisions, injunctions, judgments, awards
and decrees of or agreements with any Governmental
Authority.
Beneficiary: as defined in Section 3.3.2.
▇▇▇▇▇▇: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the President of USC.
Business Day: a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are
authorized or required to close.
Canmax: as defined in the Preamble of this Agreement.
Canmax's Accountants: Ernst & Young, LLP.
Canmax Common: as defined in the Recitals to this
Agreement.
Canmax Materials: Canmax's annual report on Form 10-K
for the period ended October 31, 1996, Canmax's quarterly
reports on Form 10-Q for the periods ended January 31, 1997,
April 30, 1997 and July 31, 1997 and Canmax's registration
statement on Form S-3 (file no. 333-33523) declared
effective by the SEC on November 26, 1997.
Certificate of Merger: the certificate of merger to be
filed with the appropriate authorities in the State of
Delaware, which is required to effect the Merger in
accordance with the Applicable Law of Delaware.
Certificate: as defined in Section 2.5.
Closing: as defined in Section 1.1.
Closing Date: as defined in Section 1.1.
CMI: as defined in the Preamble of this Agreement.
Code: the Internal Revenue Code of 1986, as amended.
-2-
Consent: any consent, approval, authorization, waiver,
permit, grant, franchise, concession, agreement, license,
exemption or order of, registration, certificate,
declaration or filing with, or report or notice to, any
Person, including but not limited to any Governmental
Authority.
Contingent Amount: as defined in Section 2.3.
Contract: as defined in Section 3.1.12(a).
Conversion Amount: as defined in Section 2.3.
Covered Returns: as defined in Section 3.1.6(a).
Covered Taxes: as defined in Section 3.1.6(a).
Cut-off Date: December 31, 1997.
Cut-off Date Balance Sheet: as defined in
Section 3.1.5.
Damages: any and all losses, claims, obligations,
demands, assessments, penalties, liabilities, costs,
damages, expenses (including attorneys' fees and expenses
and reasonable costs of settlement) whether fixed or
contingent, suffered or incurred by a Person, without regard
to the timing of any payment or performance.
Effective Time: the date and time at which the filing
of the Certificate of Merger in the State of Delaware has
occurred in the manner required to cause the Merger to
become effective under Applicable Law in Delaware.
Employee: as defined in Section 3.1.22.
Employee Benefit Plan: as defined in Section 3.1.22.
Environmental Laws: all Applicable Law relating to the
protection of the environment, to human health and safety,
or to any emission, discharge, generation, processing,
storage, holding, abatement, existence, release, threatened
release or transportation of any hazardous substances,
including, without limitation, (i) the Comprehensive
Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, and the Occupational
Safety and Health Act, (ii) all other requirements
pertaining to reporting, licensing, permitting,
investigation or remediation of emissions, discharges,
releases or threatened releases of hazardous materials into
the air, surface water, ground water or land, or relating to
the manufacture, processing, distribution, use, sale,
treatment, receipt, storage, disposal, transport or handling
of hazardous substances, and (iii) all other requirements
pertaining to the protection of the health and safety of
employees or the public.
ERISA: the Employee Retirement Income Security Act of
1974, as amended.
-3-
Escrow Account: the separate accounts or funds
maintained by the Escrow Agent pursuant to the Escrow
Agreement for purposes of holding and administering (i) the
Canmax Common comprising the Contingent Amount, and (ii)
cash for purposes of purchasing fractional shares of Canmax
Common and any other amounts that may be contained therein
from time to time, as required by Section 2.5.
Escrow Agent: the bank or trust company selected to
administer the Escrow Agreement, as contemplated by
Section 8.1.
Escrow Agreement: the Escrow Agreement among the
Escrow Agent, the Shareholders Representative, Canmax and
CMI, in the form of Exhibit B hereto.
Exchange Act: the Securities Exchange Act of 1934, as
amended.
Financial Statements: each of the financial statements
required to be provided by Section 3.1.4.
Founder: as defined in the Preamble of this Agreement.
GAAP: generally accepted accounting principles as in
effect in the United States as of the date of any
application thereof, consistently applied.
Governmental Approval: any Consent of, with or from
any Governmental Authority.
Governmental Authority: any nation or government, any
state or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government,
including, without limitation, any government authority,
agency, department, board, commission or instrumentality of
the United States, any State of the United States or any
political subdivision thereof, and any tribunal or
arbitrator(s) of competent jurisdiction, and any
self-regulatory organization.
HSR Act: The ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976.
Indemnified Party: as defined in Section 8.2.
Indemnifying Party: as defined in Section 8.2.
Initial Amount: as defined in Section 2.3.
Intellectual Property: any and all United States and
foreign: (a) patents (including design patents, industrial
designs and utility models) and patent applications
(including reexaminations, docketed patent disclosures
awaiting filing, reissues, divisions, continuations-in-part
and extensions), patent disclosures awaiting filing,
provisional applications, reissues, divisions,
contributions, continuations-in-part and extensions,
inventions and improvements thereto; (b) trademarks, service
marks, trade names, trade dress, logos, business and product
names, slogans, and registrations and applications for
registration thereof; (c) copyrights (including all
software) and registrations thereof; (d) inventions,
processes, designs, formulae, trade secrets, know-how,
-4-
industrial models, confidential and technical information,
manufacturing, engineering and technical drawings, product
specifications and confidential business information; (e)
mask work and other semiconductor chip rights and
registrations thereof; (f) intellectual property rights
similar to any of the foregoing; and (g) copies and tangible
embodiments thereof (in whatever form or medium, including
electronic media).
IRS: the Internal Revenue Service.
Leased Real Property: all interests leased pursuant to
the Leases.
Leases: the real property leases, subleases, licenses
and occupancy agreements pursuant to which USC or any
Subsidiary is the lessee, sublessee, licensee or occupant.
Lien: any mortgage, pledge, hypothecation, right of
others, claim, security interest, encumbrance, lease,
sublease, license, occupancy agreement, adverse claim or
interest, easement, covenant, encroachment, burden, title
defect, title retention agreement, voting trust agreement,
interest, equity, option, lien, right of first refusal,
charge or other restrictions or limitations of any nature
whatsoever, including but not limited to such as may arise
under any Contracts.
Material Adverse Effect: with regard to any Person,
any event, occurrence, fact, condition, change or effect
that individually or in the aggregate with related events,
occurrences, facts, conditions, changes or effects will or
can reasonably be expected to result in a cost, expense,
charge, liability, loss of revenue or diminution in value
equal to or greater than $10,000.
Merger: as defined in the Recitals to this Agreement.
Merger Shares: as defined in Section 2.2.
Permitted Liens: deposits under worker's compensation,
unemployment insurance or social security laws, or to secure
statutory obligations or surety or other similar bonds;
mechanic's, suppliers', carriers', warehousemen's or similar
liens; liens securing Taxes, government charges or other
governmental levies which are not yet due and payable, or
are being contested in good faith by appropriate proceedings
with adequate reserves in conformity with generally accepted
accounting principles; and the interest or title of any
lessor in property subject to a lease of property.
Person: any natural person, firm, partnership,
association, corporation, company, limited liability
company, limited partnership, trust, business trust,
Governmental Authority or other entity.
Rule 145 Affiliates: as defined in Section 5.2.
SEC: the Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as
amended.
Series A Warrants: as defined in Section 2.2.
-5-
Series B Warrants: as defined in Section 2.2.
Shareholder: as defined in Section 2.2.
Shareholders Representative: as defined in
Section 8.3.
Subsequent Monthly Financial Statements: as defined in
Section 4.1.4.
Subsidiaries: each corporation or other Person in
which a Person owns or controls, directly or indirectly,
capital stock or other equity interests representing at
least 50% of the outstanding voting stock or other equity
interests or conferring the power to name a majority of the
members of the Board of Directors or other governing body or
otherwise direct the management or policies thereof.
Surviving Corporation: as defined in Section 2.1.
Tax: any federal, state, provincial, local, foreign or
other income, alternative minimum, accumulated earnings,
personal holding company, franchise, capital stock, net
worth, capital, profits, windfall profits, gross receipts,
value added, sales, use, goods and services, excise, customs
duties, transfer, conveyance, mortgage, registration, stamp,
documentary, recording, premium, severance, environmental
(including taxes under Section 59A of the Code), real
property, personal property, ad valorem, intangibles, rent,
occupancy, license, occupational, employment, unemployment
insurance, social security, disability, workers'
compensation, payroll, health care, withholding, estimated
or other similar tax, duty or other governmental charge or
assessment or deficiencies thereof (including all interest
and penalties thereon and additions thereto whether disputed
or not).
Tax Return: any return, report, declaration, form,
claim for refund or information return or statement relating
to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.
Transaction Expenses: as defined in Section 10.1.
Trust: as defined in the Preamble of this Agreement.
Trustee: as defined in the Preamble of this Agreement.
USC Common: as defined in Section 3.1.2(d).
USC's Accountants: Ernst & Young, LLP
Warrants: the Series A Warrants and the Series B
Warrants.
Withholding Taxes: as defined in Section 3.1.6(a).
-6-
ARTICLE 2. EFFECT OF MERGER AND CONSIDERATION TO BE
RECEIVED BY THE SHAREHOLDERS AT CLOSING
2.1. EFFECT OF MERGER. At the Effective Time, subject in
all instances to each of the terms, conditions, provisions and
limitations contained in this Agreement (i) USC will merge with
and into CMI by the filing with the Secretary of State of
Delaware of a Certificate of Merger, with CMI being the surviving
corporation in the Merger (the "Surviving Corporation"); (ii)
each share of USC Common outstanding at the Effective Time shall
be automatically converted into the number of shares of Canmax
Common and Warrants described in Section 2.2 below; (iii) each
share of common stock of CMI outstanding prior to the Merger
shall be automatically transformed and converted into one share
of common stock of the Surviving Corporation, so that thereafter
Canmax will be the sole and exclusive owner of equity securities
of the Surviving Corporation; (iv) the Surviving Corporation
shall amend its Certificate of Incorporation to change its name
to "USCommunication Services, Inc."; and (v) the Surviving
Corporation shall be the owner of all of the business, assets,
rights and other attributes thereto of, or held by, either USC or
CMI.
2.2. DESCRIPTION OF CONSIDERATION. The Trustee is the
record holder of all outstanding shares of USC Common (in such
capacity, the "Shareholder"). At the Effective Time, pursuant to
and in the manner herein provided, all of the outstanding shares
of USC Common will be converted into and exchanged for an
aggregate of (a) 1.5 million shares of Canmax Common (the "Merger
Shares"), (b) warrants to acquire 1.5 million shares of Canmax
Common at an exercise price of $1.25 per share (the "Series A
Warrants") in the form attached as Exhibit A to the Escrow
Agreement and (c) warrants to acquire 1.0 million shares of
Canmax Common Stock at an exercise price of $2.00 per share (the
"Series B Warrants") in the form attached as Exhibit B to the
Escrow Agreement (collectively, the Merger Shares, the Series A
Warrants and the Series B Warrants are referred to as the "Merger
Consideration"). The Merger Consideration shall constitute all
of the consideration to be issued to the Shareholder or any other
person in respect of USC Common or any option, warrant, note or
other securities convertible into or exchangeable for any USC
Common or any other capital stock of USC or any of its
Affiliates.
2.3. CATEGORIES OF STOCK. The Merger Consideration to be
delivered to the Shareholder upon the conversion of the
outstanding shares of USC Common as described in Section 2.2
above, shall be divided into two categories, (a) the "Initial
Amount," which shall be 1.2 million shares of Canmax Common and
the Series A Warrant and the Series B Warrant and (b) the
"Contingent Amount," which shall be 0.3 million shares of Canmax
Common. The Initial Amount shall be delivered to the Shareholder
at or as soon as practicable following the Effective Time,
subject to the compliance by the Shareholder with the exchange
requirements relating thereto set forth in Section 2.5 below.
The Contingent Amount shall be deposited with the Escrow Agent
and either delivered in whole or part to the Shareholder or
returned in whole or in part to Canmax as provided hereafter and
in the Escrow Agreement. At the Effective Time, the outstanding
shares of USC Common shall be converted into the right to receive
the number of shares of Canmax Common (the "Conversion Amount")
equal to the sum of (i) the Initial Amount and (ii) upon the
expiration of the Escrow Agreement and after any adjustments for
the payment of any Damages, as described in Article 8 herein, the
Contingent Amount, as contemplated by Section 2.5 hereof.
2.4. ESCROW ACCOUNT. At the Closing, CMI shall deposit with
the Escrow Agent shares of
-7-
Canmax Common representing the Contingent Amount of the Canmax
Common to be held in the Escrow Account and administered in
accordance with the Escrow Agreement. The Escrow Agent shall
administer the Escrow Account, as it may exist from time to time,
on behalf of Canmax, CMI, the Shareholder, subject to the Escrow
Agreement, for the purposes of securing the Shareholder's
indemnity obligations under Article 8 hereof.
2.5. EXCHANGE REQUIREMENTS. Immediately prior to the
Effective Time, Canmax shall deposit with the Escrow Agent shares
of Canmax Common, the Series A Warrant and the Series B Warrant
representing the Initial Amount to be held by the Escrow Agent
and distributed to the Shareholder in accordance with this
Agreement and the Escrow Agreement. As soon as practicable after
the Effective Time, the Escrow Agent shall mail or deliver to
the Shareholder a letter of transmittal, which shall specify that
delivery shall be effected, and risk of loss and title to the
certificates representing shares of USC Common (the
"Certificates") shall pass, only upon actual delivery of the
Certificates to the Escrow Agent and shall contain instructions
for use in effecting the surrender of the Certificates in
exchange for the Conversion Amount. Upon surrender of a
Certificate for cancellation to the Escrow Agent, together with
such letter of transmittal, duly executed, the holder of such
Certificate shall receive in exchange therefor that portion of
the Initial Amount and shall be entitled to receive, upon the
expiration of the escrow established under the Escrow Agreement,
that portion of the Contingent Amount (as adjusted for the
payment of any Damages in accordance with Article 8) for the
shares of USC Common represented by such Certificate, and the
Certificate so surrendered shall forthwith be cancelled. Until
surrendered as contemplated by this Section 2.5, each Certificate
shall, at and after the Effective Time, be deemed to represent
only the right to receive, upon surrender of such Certificate,
that portion of the Initial Amount and the Contingent Amount,
with respect to each share of USC Common represented thereby in
accordance with the terms of this Agreement, as follows:
a) At the Effective Time, each holder of a
Certificate shall receive that portion of the Initial Amount
for the USC Common represented by such Certificate;
b) Upon the expiration of the escrow established
under the Escrow Agreement and upon the satisfaction of the
conditions set forth in Article 8 with respect to the
adjustments for the payment of Damages provided for therein,
each holder of a Certificate shall be entitled to receive
that portion of the Contingent Amount for the USC Common
represented by such Certificate. If the portion of the
Contingent Amount allocable to any Shareholder shall result
in a fractional share of Canmax Common being allocated to
such Shareholder, such Shareholder shall receive only the
number of whole shares so allocated and any such fractional
shares shall be repurchased by Canmax (at $1.25 per share)
and the amount payable with respect thereto shall be paid to
such Shareholder out of the cash funds in the Escrow Account
to be used for such purpose; and
c) Any payment to be made to the Shareholder for
fractional shares shall be made at the time of the
distribution of the Contingent Amount.
2.6. DIVIDENDS. No dividends or other distributions that
are declared on or after the Effective Time on Canmax Common or
which are otherwise payable to the holders of record of Canmax
Common on or after the Effective Time will be paid to Persons
entitled by reason of the Merger to receive Canmax Common until
such Persons surrender their Certificates, as provided in this
Article 2. Subject to the effect of Applicable Law, there shall
be paid to the record holders of Canmax
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Common (i) at the time of such surrender or as promptly as
practicable thereafter, the amount of any dividends or other
distributions theretofore paid with respect to whole shares of
Canmax Common and having a record date on or after the Effective
Time and a payment date prior to such surrender and (ii) at the
appropriate payment date or as promptly as practicable
thereafter, the amount of dividends or other distributions
payable with respect to Canmax Common and having a record date on
or after the Effective Time but prior to surrender and a payment
date subsequent to surrender. In no event shall the Person
entitled to receive such dividends or other distributions be
entitled to receive interest on such dividends or other
distributions.
2.7. RETURN OF CANMAX COMMON. Any portion of the Merger
Consideration and any dividends or distributions with respect
thereto which remain undistributed to the former holders of USC
Common for three (3) months after the expiration of escrow
established under the Escrow Agreement shall be delivered to
Canmax, upon demand of Canmax, and any former holders of USC
Common who have not theretofore complied with this Article 2
shall thereafter look only to Canmax for payment of their
Conversion Amount into which such shares of USC Common are
convertible, any cash in lieu of fractional shares of Canmax
Common, and any dividends or distributions with respect to the
Canmax Common.
2.8. NO FURTHER OWNERSHIP RIGHTS IN COMMON STOCK. All
shares of Canmax Common issued, and any cash paid pursuant to
this Article 2, upon the surrender in exchange for Certificates
in accordance with the terms hereof, shall be deemed to have been
issued or paid, as the case may be, in full satisfaction of all
rights pertaining to the shares of USC Common arising out of or
in any way relating to this Agreement and the Merger contemplated
hereby.
2.9. CLOSING OF USC TRANSFER BOOKS. At the Effective Time,
the stock transfer books of USC shall be closed and no transfer
of shares of USC Common shall thereafter be made. If, after the
Effective Time, Certificates are presented to Canmax, they shall
be cancelled and exchanged as provided in this Article 2.
2.10. DISSENTERS' RIGHTS. To the extent that any
Shareholder exercises dissenters' rights pursuant to applicable
provisions of the Delaware General Corporation Law, and Canmax
elects, in its discretion to proceed to consummate the Merger,
each share of USC Common of such holder shall not be converted
into a right to receive the Initial Amount or the Contingent
Amount, but the Warrants and the shares of Canmax Common
representing the Initial Amount and the Contingent Amount
attributable to such shares shall be held by the Escrow Agent
subject to the provisions of such law. In such event, if any
such Shareholder fails to perfect or withdraws or loses its
dissenters' rights, such shares of USC Common shall then be
treated as if they had been converted as of the Effective Time
into a right to receive the Initial Amount and the Contingent
Amount (in accordance with Section 2.3).
2.11. FURTHER ASSURANCES. If at any time after the
Effective Time the Surviving Corporation shall reasonably
determine that any deeds, bills of sale, assignments or
assurances or any other acts or things are necessary, desirable
or proper (i) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation, its right, title or
interest in, to or under any of the rights, privileges, powers,
franchises, properties or assets of USC or (ii) otherwise to
carry out the purposes of this Agreement, the Surviving
Corporation and its proper officers and directors or their
designees shall be authorized to execute and deliver, in the name
and on behalf of each of such corporations, all such deeds, bills
of sale, assignments and assurances and do, in the name and on
behalf of each of such corporations, all
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such other acts and things necessary, desirable or proper to
vest, perfect or confirm its right, title or interest in, to or
under any of the rights, privileges, powers, franchises,
properties or assets of such corporation and otherwise to carry
out the purposes of this Agreement and the transactions
contemplated hereby.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
3.1. REPRESENTATIONS AND WARRANTIES OF USC. USC represents
and warrants to Canmax and CMI as follows:
3.1.1. AUTHORIZATION, ETC. USC has the corporate
power and authority to execute and deliver this Agreement
and each of the other agreements required to be executed and
delivered by it hereunder or pursuant hereto, and to perform
fully its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby.
The execution and delivery by USC of this Agreement have
been, and the execution and delivery of each of the other
agreements required to be executed and delivered by it
hereunder or pursuant hereto and the consummation of the
transactions contemplated hereby and thereby will not later
than Closing have been, duly authorized by all requisite
corporate action of USC. USC has duly executed and
delivered this Agreement and on the Closing Date will have
duly executed and delivered each of the other agreements
required to be executed and delivered by it hereunder or
pursuant hereto. This Agreement is, and on the Closing Date
each of the other agreements required to be executed and
delivered by USC hereunder or pursuant hereto will be,
legal, valid and binding obligations of USC, enforceable
against USC, in accordance with their respective terms.
3.1.2. CORPORATE STATUS.
a. USC is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware, with full corporate power and
authority to carry on its business and to own or lease
and to operate its properties as and in the places
where such business is conducted and such properties
are owned, leased or operated. Schedule 3.1.2(a) lists
each Subsidiary of USC. Except as set forth on
Schedule 3.1.2(a), USC does not own, directly or
indirectly, any shares of stock or any other equity or
securities of any corporation or have any equity
interest in any other Person. Each Subsidiary is duly
organized, validly existing and, if applicable, in good
standing under the laws of the State set forth opposite
its name on Schedule 3.1.2(a), with full power and
authority to carry on its business and to own or lease
and to operate its properties as and in the places
where such business is conducted and such properties
are owned, leased or operated.
b. USC and each Subsidiary are duly qualified or
licensed to do business and are in good standing in
each of the jurisdictions specified in
Schedule 3.1.2(b) (except as otherwise noted therein),
which are the only jurisdictions in which the conduct
of their businesses or the character of the properties
owned, leased or operated by them makes such
qualification or licensing necessary.
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c. USC has delivered to Canmax and CMI complete
and correct copies of the articles of incorporation or
other organizational documents of USC and each
Subsidiary, in each case, as amended and in effect on
the date hereof. Neither USC nor any Subsidiary is in
violation of any of the provisions of its respective
articles of incorporation or any other organizational
documents.
d. The authorized capital stock of USC consists
of Twenty Four Million (24,000,000) shares of Class A
common stock, par value $0.001 per share (the "USC
Common") of which 20,000,000 shares are issued and
outstanding, and five million (5,000,000) shares of
Class B common stock, par value $.001 per share, none
of which is outstanding. All of the issued and
outstanding shares of capital stock of USC (i) are
owned by the Shareholder, (ii) have been duly
authorized and validly issued, free of any pre-emptive
rights of shareholders, and (iii) are fully paid and
non-assessable. There are no rights, subscriptions,
warrants, options, conversion rights or agreements of
any kind outstanding to purchase or otherwise acquire
from USC any shares of capital stock of USC or any
securities or other obligations of any kind of USC
convertible into or exchangeable for any shares of
capital stock of USC, other than voting trust
certificates issued pursuant to the terms of the Trust.
e. The authorized capital stock of each
Subsidiary consists of the shares of capital stock and
are issued and outstanding in the respective amounts
set forth on Schedule 3.1.2(e). All of the issued and
outstanding shares of capital stock of each Subsidiary
are owned of record and beneficially by the Persons in
the respective amounts set forth as to each Person on
Schedule 3.1.2(e), and all of such shares of capital
stock of each Subsidiary have been duly authorized and
validly issued, free of any pre-emptive rights of
shareholders, and are fully paid and non-assessable.
There are no rights, subscriptions, warrants, options,
conversion rights or agreements of any kind outstanding
to purchase or otherwise acquire from any Subsidiary,
any shares of capital stock of any Subsidiary or
securities or other obligations of any kind of any
Subsidiary convertible into or exchangeable for any
shares of capital stock of any Subsidiary.
3.1.3. NO CONFLICTS, ETC. The execution, delivery
and performance by USC or any Subsidiary of this Agreement
and the other agreements executed and delivered by it
hereunder or pursuant hereto and the consummation of the
transactions contemplated hereby and thereby, do not and
will not conflict with or result in a violation of or a
default under (with or without the giving of notice or the
lapse of time or both) (i) any Applicable Law applicable to
USC, or any of its Subsidiaries or any of the properties or
assets of USC or any Subsidiary, (ii) the articles of
incorporation or other organizational documents of USC or
any Subsidiary, or (iii) except as set forth in
Schedule 3.1.3, any Contract or other contract, agreement or
other instrument to which USC or any Subsidiary is a party
or by which USC or any Subsidiary or any of their respective
properties or assets may be bound or affected. Except as
specified in Schedule 3.1.3, no Governmental Approval or
other Consent is required to be obtained or made by USC or
any Subsidiary in connection with the execution and delivery
of this Agreement or any of the other agreements to be
executed and delivered by any of them hereunder or pursuant
hereto or the consummation of the transactions contemplated
hereby or thereby, except such required Governmental
Approvals and Consents which, if not obtained, would not,
individually or in the aggregate, cause a Material Adverse
Effect.
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3.1.4. FINANCIAL STATEMENTS. USC has delivered to
Canmax and CMI USC's consolidated annual financial
statements for the fiscal year ending, including balance
sheets as of, December 31, 1997 together with related
statements of income and supporting schedules and ledgers
for such periods collectively, (the "Financial Statements").
The Financial Statements have been prepared from, and are in
accordance with, the books and records of USC and fairly
present, in all material respects, the financial position of
USC and each Subsidiary as of the date thereof and the
results of operations and changes in financial position
therefor for the period then ended, in each case in
conformity with the GAAP, consistently applied (subject, in
the case of unaudited statements, to normal year-end
adjustments which will not be material in amount or in
effect). Since December 31, 1997, there has been no change
in accounting principles applicable to, or methods of
accounting utilized by, USC, except as noted in the
Financial Statements. The books and records of USC have
been and are being maintained in accordance with good
business practices, reflect only valid transactions, are
complete and correct in all material respects, and fairly
present in all material respects a basis for the financial
position and results of operation of USC set forth in the
Financial Statements.
3.1.5. ABSENCE OF UNDISCLOSED LIABILITIES. USC and
its Subsidiaries do not have liabilities or obligations of
any nature, whether known or unknown, absolute, accrued,
contingent or otherwise and whether due or to become due,
except (a) as and to the extent disclosed or reserved
against in the balance sheet included in the Financial
Statements for the period ended as of the Cut-Off Date (the
"Cut-off Date Balance Sheet"), and (b) for liabilities and
obligations that (i) were incurred after the Cut-off Date in
the ordinary course of business consistent with prior
practice and (ii) individually and in the aggregate are not
material to USC or any Subsidiary and have not had or
resulted in, and will not have or result in, a Material
Adverse Effect. None of the employees of USC or any
Subsidiary is now or will by the passage of time hereinafter
become entitled to receive any vacation time, vacation pay
or severance pay attributable to services rendered prior to
such date that is not reflected as an accrued liability on
the Cut-off Date Balance Sheet.
3.1.6. TAXES.
a. USC has (or by the Closing will have) duly
and timely filed all Tax Returns relating to USC and
its Subsidiaries with respect to Taxes required to be
filed on or before the Closing Date ("Covered
Returns"). Except for Taxes set forth on Schedule
3.1.6(a), which are being contested in good faith and
by appropriate proceedings, the following Taxes
("Covered Taxes") have (or by the Closing Date will
have) been duly and timely paid: (i) all Taxes shown
to be due on the Covered Returns, (ii) all deficiencies
and assessments of Taxes of which notice has (or by the
Closing Date will have) been received by USC or any
Subsidiary that are or may become payable by Canmax,
CMI or any Subsidiary or chargeable as a Lien upon any
of the properties or assets of Canmax, CMI or any
Subsidiary following the Merger, and (iii) all other
Taxes due and payable on or before the Closing Date for
which neither filing of Covered Returns nor notice of
deficiency or assessment is required, if USC is or
reasonably should be (or by the Closing Date will be or
reasonably should be) aware that these other Taxes are
or may become payable by Canmax, CMI or any Subsidiary
or chargeable as a Lien upon any of the properties or
assets of Canmax, CMI or any Subsidiary following the
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Merger. All Taxes required to be withheld by or on
behalf of USC and each Subsidiary in connection with
amounts paid or owing to any employee, independent
contractor, creditor or other party with respect to USC
and each Subsidiary ("Withholding Taxes") have been
withheld, and such withheld Taxes have either been duly
and timely paid to the proper Governmental Authorities
or set aside in accounts for such purpose.
b. No agreement or other document extending, or
having the effect of extending, the period of
assessment or collection of any Covered Taxes or
Withholding Taxes, and no power of attorney with
respect to any such Taxes, has been filed with the IRS
or any other Governmental Authority.
c. There are no Covered Taxes or Withholding
Taxes asserted by any Governmental Authority to be due,
and no issue has been raised by any Governmental
Authority in the course of any audit with respect to
Covered Taxes or Withholding Taxes. No Covered Taxes
and no Withholding Taxes are currently under audit by
any Governmental Authority.
d. There is no litigation or administrative
appeal pending or, to the best knowledge of USC
threatened against or relating to USC or any
Subsidiary, in connection with Covered Taxes.
3.1.7. ABSENCE OF CHANGES. Except as set forth in
Schedule 3.1.7, since the Cut-off Date, USC and each
Subsidiary has conducted its respective business, only in
the ordinary course consistent with prior practice and has
not, on behalf of, in connection with or relating to its
business:
a. suffered or permitted to have occurred any
Material Adverse Effect;
b. incurred any Lien, obligation or liability,
absolute, accrued, contingent or otherwise, whether due
or to become due, except current liabilities for trade
or business obligations incurred in connection with the
purchase of goods or services in the ordinary course of
business consistent with prior practice, none of which
Liens or liabilities, in any case or in the aggregate,
have had or could have a Material Adverse Effect;
c. sold, transferred, leased to others or
otherwise disposed of any of its material assets,
except for inventory sold in the ordinary course of
business, or cancelled or compromised any debt or
claim, or waived or released any right of substantial
value;
d. received any notice of termination of any
contract, lease or other agreement or suffered any
damage, destruction or loss (whether or not covered by
insurance) which, in any case or in the aggregate, has
had or could have a Material Adverse Effect;
e. made any material change in the rate of
compensation, commission, bonus or other direct or
indirect remuneration payable, or paid or agreed or
orally promised to pay, conditionally or otherwise, any
bonus, incentive, retention or other compensation,
retirement, welfare, fringe or severance benefit or
vacation pay, to or in respect of any of its directors,
officers, employees, salesmen, distributors or agents;
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f. made any capital expenditures or capital
additions or improvements in excess of an aggregate of
$10,000;
g. lost or terminated any key employees or
terminated or, to the knowledge of USC, lost any
customers or suppliers that has had or could have any
Material Adverse Effect;
h. materially amended, modified or terminated,
or agreed to amend, modify or terminate, any existing
(or entered or committed to enter into any new)
material contract, agreement, plan, lease, license,
permit or franchise; or
i. taken any action or omitted to take any
action that would result in the occurrence of any of
the foregoing.
3.1.8. LITIGATION. There is no action, claim,
demand, suit, proceeding, arbitration, grievance, citation,
summons, subpoena, inquiry or investigation of any nature,
civil, criminal, regulatory or otherwise, in law or in
equity, pending or, to the best knowledge of USC threatened,
against USC or any Subsidiary and USC does not know or have
reason to be aware of any basis for the same. No citations,
fines or penalties have been asserted against USC or any
Subsidiary under any Environmental Law or any foreign,
federal, state or local law relating to occupational health
or safety.
3.1.9. COMPLIANCE WITH LAWS; GOVERNMENTAL APPROVALS
AND CONSENTS; GOVERNMENTAL CONTRACTS.
a. Except as disclosed in Schedule 3.1.9(a), USC
and each Subsidiary have, to the best of its knowledge,
after investigation, complied in all material respects
with all Applicable Laws applicable to or otherwise in
any manner affecting it, and neither USC nor any
Subsidiary has received any notice alleging any failure
to so comply.
b. Schedule 3.1.9(b) sets forth all Governmental
Approvals and other Consents necessary for, or
otherwise material to, the conduct of the business of
USC and each Subsidiary. Except as set forth in
Schedule 3.1.9(b), all such Governmental Approvals and
Consents have been duly obtained and are in full force
and effect, and, to the best knowledge of USC after
investigation, USC and each Subsidiary are in
compliance with each of such Governmental Approvals and
Consents held by them.
c. Neither USC nor any Subsidiary is a party to
any Contracts with any Governmental Authority.
d. USC has filed with the proper authorities all
statements and reports required by the Applicable Laws
to which it and its Subsidiaries or any of their
employees (because of his or her activities on behalf
of his or her employer) is subject.
3.1.10. OPERATION OF THE BUSINESS. USC has conducted
its business directly and through each Subsidiary as
described on Schedule 3.1.10, and not through any other
Affiliate.
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3.1.11. ASSETS. Except as disclosed in Schedule
3.1.11, USC and each Subsidiary has good and marketable
title to all of its assets free and clear of any and all
Liens (other than Permitted Liens). The assets set forth on
or detailed in the Cut-off Date Balance Sheet comprise all
assets used or useable by USC and each Subsidiary in their
respective businesses. Except as disclosed in Schedule
3.1.11, there are no assets or properties used by USC or any
Subsidiary in the operation of its respective businesses and
owned by any Person other than USC or such Subsidiary, that
will not be leased or licensed to CMI under valid, current
leases or license arrangements. The assets reflected on the
Cut-off Date Balance Sheet are in all material respects
adequate for the purposes for which such assets are
currently used or are held for use, and are in reasonably
good repair and operating condition (subject to normal wear
and tear).
3.1.12. CONTRACTS.
a. Schedule 3.1.12(a) contains a complete and
correct description of all material agreements,
contracts, commitments and other instruments and
arrangements (whether written or oral) of the types
described below by which USC or any Subsidiary is a
party or bound (the "Contracts"):
(i) Leases, Governmental Approvals and other
contracts concerning or relating to the Leased
Real Property;
(ii) employment, employee benefits,
consulting or other similar contracts, agreements,
and other instruments and arrangements relating to
or for the benefit of current, future or former
employees, officers, directors, sales
representatives, distributors, dealers, agents,
independent contractors or consultants;
(iii) loan agreements, pledge agreements,
guarantees, and other agreements and instruments
relating to the borrowing of money or obtaining of
or extension of credit;
(iv) licenses, licensing arrangements and
other contracts providing in whole or in part for
the use of, or limiting the use of, any
Intellectual Property;
(v) brokerage or finder's agreements;
(vi) contracts (including, without
limitation, for the purchase or sale of inventory)
with respect to which the aggregate amount that
could reasonably expected to be paid or received
thereunder in the future exceeds $10,000;
(vii) sales agency, manufacturer's
representative, marketing or distributorship
agreements;
(viii) contracts, agreements or
commitments (designated on such Schedule as an
"affiliate agreement") with any director, officer,
employee, or Affiliate of USC, or any Subsidiary;
and
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(ix) any other contracts, agreements or
commitments that are material to the business of
any of USC or any Subsidiary.
b. USC has delivered to Canmax and CMI complete
and correct copies of all written Contracts, together
with all amendments thereto, and accurate descriptions
of all material terms of all oral Contracts, set forth
or required to be set forth in Schedule 3.1.12(a).
c. All Contracts are in full force and effect
and enforceable against each party thereto. Neither
USC nor any Subsidiary has received notice of any plan
or intention of any party to any Contract to exercise
any right to cancel or terminate any Contract. To the
best knowledge of USC, there does not exist under any
Contract any event of default or event or condition
that, after notice or lapse of time or both, would
constitute a violation, breach or event of default
thereunder on the part of USC or any Subsidiary or, to
the best of USC's knowledge, any other party thereto,
except for such events or conditions that, individually
and in the aggregate, (i) has not had or resulted in,
and will not have or result in, a Material Adverse
Effect, and (ii) have not and will not materially
impair the ability of USC to perform USC's obligations
under this Agreement or any of its obligations under
any other agreement executed and delivered by it
hereunder or pursuant hereto.
d. Neither USC nor any Subsidiary has granted
any power of attorney which is currently outstanding.
3.1.13. TERRITORIAL RESTRICTIONS. Neither USC nor
any of its Subsidiaries is restricted by any written
agreement or understanding with any other Person from
carrying on its respective business anywhere in the world.
3.1.14. INVENTORIES. Except as specifically
described on Schedule 3.1.14 hereto, all inventories
reflected on the Cut-off Date Balance Sheet and all
inventories acquired by USC after the Cut-off Date consist
of items of quality and quantity which are useable or
saleable in the ordinary course of business of USC and its
Subsidiaries. The values at which the inventories are
carried on the Cut-off Date Balance Sheet as at the Cut-off
Date and the values at which inventories are carried on the
books and records of USC for periods subsequent to the Cut-
off Date with respect to inventories acquired after the Cut-
off Date reflect the normal valuation policy of USC, in
setting inventory at the lower of cost or net realizable
market values, all in accordance with GAAP. Since the
Cut-off Date, inventories have been maintained at normal and
adequate levels for the continuation of the business of USC
and its Subsidiaries, in its normal course, no change has
occurred in such inventories which affect or will affect the
usability or salability thereof, no write-downs or write-ups
of the value of such inventories has occurred and no
additional amounts have been reserved with respect to such
inventories. Schedule 3.1.14 lists the locations of all
inventories, together with a brief description of the type
and amount at each location.
3.1.15. CUSTOMERS. Schedule 3.1.15 sets forth (a)
the names of all customers of USC and its Subsidiaries, and
(b) the locations at which such products, goods or services
were
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provided. Except as set forth on Schedule 3.1.15, neither
USC nor any Subsidiary has received any notice or has any
substantial reason to believe that any significant customer
of USC or any Subsidiary (i) has ceased, or will cease, to
use the products, goods or services of USC or such
Subsidiary, (ii) has substantially reduced, or will
substantially reduce, the use of products, goods or services
of USC or such Subsidiary, or (iii) has sought, or is
seeking, to reduce the price it will pay for products, goods
or services of USC or such Subsidiary, including in each
case after the consummation of the transactions contemplated
hereby. To the best knowledge of USC, no customer of USC or
any Subsidiary described in clause (a) of this section has
otherwise threatened to take any action described in the
preceding sentence as a result of the consummation of the
transactions contemplated by this Agreement or any other
agreement executed and delivered by USC hereunder or
pursuant hereto.
3.1.16. SUPPLIERS. Schedule 3.1.16 sets forth (a) the
names of all suppliers from which USC and its Subsidiaries
ordered inventories, and other products, goods and services
with an aggregate purchase price for each such supplier of
$25,000 or more during the twelve month period ended
December 31, 1997, and (b) the amount for which each such
supplier invoiced USC or such Subsidiary during such period.
Neither USC nor any Subsidiary has received any notice from
any such supplier indicating that there is or will be any
material change in the price of such items or services, and
neither USC nor any Subsidiary has any reason to believe
that there will be any such material change in the price of
any such item or services, or that any such suppliers will
not sell such items or provide any such services to Canmax
or CMI at any time after the Closing Date on terms and
conditions similar to those used in its current sales to USC
and its Subsidiaries, subject to general and customary price
increases.
3.1.17. INTELLECTUAL PROPERTY.
a. TITLE. Schedule 3.1.17(a) contains a
complete and correct list and a brief description of
all Intellectual Property that is owned, licensed or
used by USC and its Subsidiaries. USC or the
applicable Subsidiary owns or has the exclusive right
to use pursuant to license or sublicense agreements all
of its Intellectual Property, free from any Liens
(other than Permitted Liens) and free from any
requirement of any past, present or future royalty
payments, license fees, charges or other payments, or
conditions or restrictions which are not set forth on
Schedule 3.1.17(a). No Affiliate of USC or any
Subsidiary owns or has any interest in or with respect
to any Intellectual Property of USC or such Subsidiary
and the Intellectual Property set forth on
Schedule 3.1.17(a) comprises all of the Intellectual
Property necessary for CMI to conduct and operate the
business of USC and its Subsidiaries following the
Closing as now being conducted by USC and such
Subsidiaries.
b. TRANSFER. Except as set forth on Schedule
3.1.17(b), immediately after the Closing, CMI will have
all of USC and its Subsidiaries rights with respect to
all of the Intellectual Property owned, licensed or
used by each of them, free from any liens (other than
Permitted Liens) and on the same terms and conditions
as in effect prior to the Closing.
c. NO INFRINGEMENT. The conduct of the business
of USC and its Subsidiaries by them does not infringe
or otherwise conflict with any rights of any Person
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in respect of any Intellectual Property owned by any of
them and, to the best of their knowledge, does not
infringe or otherwise conflict with any rights of any
Person in respect of any Intellectual Property owned by
others.
3.1.18. INSURANCE. Schedule 3.1.18 contains a
complete and correct list and summary description of all
insurance policies maintained by USC and its Subsidiaries.
USC has delivered to Canmax and CMI complete and correct
copies of all such policies together with all riders and
amendments thereto. Such policies are in full force and
effect, and all premiums due thereon have been paid. To the
best knowledge of USC, USC and each Subsidiary has complied
in all material respects with the terms and provisions of
such policies. Schedule 3.1.18 sets out all claims made by
USC and each Subsidiary under any policy of insurance during
the past two years and in the opinion of USC reasonably
formed and held, there is no basis on which a claim should
or could be made under any such policy with respect to it.
3.1.19. REAL PROPERTY.
a. Neither USC nor any Subsidiary owns, directly
or indirectly, or has any fixed or contingent
obligation to acquire, any interest in any real
property that is used in any manner in connection with
its respective business.
b. Schedule 3.1.19(b) contains a complete and
correct list of all Leases, setting forth the address,
landlord and tenant for each Lease, along with the
address to which rental payments are made and the name
and phone number of a contact person at such address.
USC has delivered to Canmax and CMI correct and
complete copies of the Leases. Each Lease is legal,
valid, binding, enforceable, and in full force and
effect. Neither USC, any Subsidiary nor any other
party is in default, violation or breach in any
material respect under any Lease, and no event has
occurred and is continuing that constitutes or, with
notice or the lapse of time or both, would constitute a
default, violation or breach in any respect under any
Lease. USC and its Subsidiaries enjoy peaceful and
undisturbed possession under the Leases.
c. The Leased Real Property constitutes all of
the real property leased, occupied or utilized by USC
and its Subsidiaries in any manner in connection with
the conduct or operation of their respective
businesses.
3.1.20. ENVIRONMENTAL MATTERS. To the best knowledge
of USC, USC and each Subsidiary have complied and are in
compliance in all material respects with all applicable
Environmental Laws pertaining to the Leased Real Property
and all other properties and assets of their respective
businesses and the use and ownership thereof, and otherwise
in connection with the operation of their respective
businesses. No violation by USC or any Subsidiary is being
alleged of any applicable Environmental Law relating to any
of the properties or assets of its business, including the
Leased Real Property, or any use or ownership thereof, or
otherwise in connection with the operation of its business.
3.1.21. EMPLOYEES, LABOR MATTERS, ETC. There are no
labor disputes currently subject to any grievance procedure,
arbitration or litigation and there is no petition pending
or, to the best knowledge of USC, threatened with respect to
any employee employed in the operation of any of
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USC's or any of its Subsidiaries' businesses. To the best
knowledge of USC, USC and each Subsidiary have complied with
all provisions of Applicable Law pertaining to the
employment of employees, including, without limitation, all
such Applicable Law relating to labor relations, equal
employment, fair employment practices, entitlement,
prohibited discrimination or other similar employment
practices or acts, except for any failure so to comply that,
individually or together with all such other failures, has
not and will not result in a material liability or
obligation on the part of Canmax, CMI or any of their
Affiliates following the Closing, and has not had or
resulted in, and will not have or result in, a Material
Adverse Effect.
3.1.22. EMPLOYEE BENEFIT PLANS. Neither USC, its
Subsidiaries or any predessor thereto maintain, or have in
the past five (5) years maintained, any "employee benefit
plan," as such term is defined in Section 3(3) of ERISA,
whether or not subject to ERISA, or any bonus, incentive or
deferred compensation, severance, phantom stock or other
benefit or compensation plan, whether written or unwritten,
that provides benefits or compensation in respect of any
employee or former employee of USC or any Subsidiary or the
beneficiaries or dependents of any such employee or former
employee (such employees, former employees, beneficiaries
and dependents collectively, the "Employees") or under which
any Employee is or may become eligible to participate or
derive a benefit and that is or has been maintained or
established by USC or any Subsidiary (collectively, the
"Employee Benefit Plans"). Neither USC nor any Subsidiary
has communicated to any Employee any intention or commitment
to modify any Employee Benefit Plan or to establish or
implement any other employee or retiree benefit or
compensation arrangement.
3.1.23. CONFIDENTIALITY. To the best knowledge of
USC, USC and each Subsidiary have taken all reasonable steps
to preserve the confidential nature of all material
confidential information (including, without limitation, any
proprietary information) with respect to their respective
businesses, including but not limited to information
relating to the distribution, marketing or pricing of any of
its products or services or any promotional plans related
thereto.
3.1.24. RECORDS. The minute books of USC and each
Subsidiary are substantially complete and correct in all
material respects. The books of account of USC and each
Subsidiary are sufficient to prepare the Financial
Statements in accordance with GAAP. There are no false or
fictitious entries on the books and records of USC or any
Subsidiary.
3.1.25. BROKERS, FINDERS, ETC. All negotiations
relating to this Agreement and the transactions contemplated
hereby, have been carried on without the participation of
any Person acting on behalf of USC or any Affiliate of USC
in such manner as to give rise to any valid claim against
USC or any Subsidiary for any brokerage or finder's
commission, fee or similar compensation, or for any bonus
payable to any officer, director, employee, agent or sales
representative of or consultant to USC or any Subsidiary or
any other Affiliate of USC upon consummation of the
transactions contemplated hereby or otherwise.
3.1.26. RECEIVABLES. All of the accounts receivable
which have arisen in connection with the business of USC and
each Subsidiary and which are reflected in the Financial
Statements, have arisen, and all of such accounts receivable
which will be created between the date of the Cut-Off Date
Balance Sheet and the Closing Date will arise, only from
bona fide transactions in the ordinary course of business,
and, with respect to accounts receivable arising between the
date of the Cut-Off Date Balance Sheet and the Closing Date,
the reserves established in connection
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therewith have been established in accordance with past
practice and in no event greater than the percentages
established for determining the reserves for "current"
accounts receivable on the Cut-Off Date Balance Sheet. USC
has no knowledge of any facts or circumstances generally
(other than general economic conditions) which would result
in any material increase in the uncollectability of such
receivables in excess of the reserves therefor set forth on
the Cut-off Date Balance Sheet. Schedule 3.1.26 accurately
lists as of the Cut-off Date all receivables arising out of
or relating to the business of USC, and each Subsidiary, the
amount owing and the aging of such receivables. USC has
made available to Canmax and CMI complete and correct copies
of all instruments, documents and agreements evidencing such
receivables.
3.1.27. BACKLOG. All of the backlog of unfilled
orders for products manufactured or sold and services
performed by USC and each Subsidiary represent bona fide
transactions incurred in the ordinary course of the business
of USC and each Subsidiary, as the case may be, and are set
forth in Schedule 3.1.27.
3.1.28. LIABILITIES TO AFFILIATES. Except as set
forth on Schedule 3.1.28, neither USC nor any Subsidiary
owes any money or otherwise has any obligation to any
officer, director, shareholder or Affiliate of USC, any
Subsidiary or any other Person acting as a transferee of any
of them.
3.1.29. BANK ACCOUNTS. Schedule 3.1.29 sets forth a
list of all (i) bank accounts and lock box accounts of USC
and each Subsidiary and the Persons authorized to draw
thereon, and (ii) safe deposit boxes of USC and each
Subsidiary and the Persons who are authorized to have access
thereto.
3.1.30. DISCLOSURE. No representation or warranty by
USC contained in this Agreement nor any certificate or
agreement furnished or to be furnished by or on behalf of
USC to Canmax or CMI or their representatives in connection
herewith or pursuant hereto contains or will at Closing
contain any untrue statement of a material fact, or omits or
will omit to state any material fact required to make the
statements contained herein or therein not misleading.
There is no fact (other than matters of a general economic
or political nature which do not affect USC and its
Subsidiaries uniquely) known to USC that has not been
disclosed by USC to Canmax and CMI that might reasonably be
expected to have or result in a Material Adverse Effect.
3.2. REPRESENTATIONS AND WARRANTIES OF CMI. Canmax and CMI,
jointly and severally, represent and warrant to USC as follows:
3.2.1. CORPORATE STATUS; AUTHORIZATION, ETC. Each
of Canmax and CMI is a corporation duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation with full corporate power
and authority to execute and deliver this Agreement and each
of the agreements to be executed and delivered by it
hereunder or pursuant hereto, and to perform its obligations
hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery
by each of Canmax and CMI of this Agreement, and the
consummation of the transactions contemplated hereby, have
been, and on the Closing Date the other agreements to which
it is a party will have been, duly authorized by all
requisite corporate action of Canmax and CMI. Each of
Canmax and CMI has
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duly executed and delivered this Agreement and on the
Closing Date each of Canmax and CMI will have duly executed
and delivered the other agreements to which it is a party.
This Agreement is, and on the Closing Date, each of the
other agreements to be executed and delivered by Canmax or
CMI hereunder or pursuant hereto will be, valid and legally
binding obligations of Canmax or CMI, as the case may be,
enforceable against Canmax or CMI, as the case may be, in
accordance with its respective terms.
3.2.2. NO CONFLICTS, ETC. The execution, delivery
and performance by each of Canmax and CMI of this Agreement
and each of the other agreements to be executed and
delivered by Canmax or CMI hereunder or pursuant hereto, and
the consummation of the transactions contemplated hereby and
thereby, do not and will not conflict with or result in a
violation of or under (with or without the giving of notice
or the lapse of time, or both) (i) the certificate of
incorporation or bylaws of Canmax or CMI, (ii) any
Applicable Law applicable to Canmax, CMI, or any of their
Affiliates or any of their properties or assets or (iii) any
Contract, or other agreement or instrument applicable to
Canmax, CMI or any of their Affiliates or any of their
properties or assets. Except as disclosed in Section 3.2.7
below, no Governmental Approval or other Consent is required
to be obtained or made by Canmax or CMI in connection with
the execution and delivery of this Agreement or the other
agreements to be executed and delivered by it hereunder or
pursuant hereto or the consummation of the transactions
contemplated hereby or thereby.
3.2.3. LITIGATION. There is no action, claim, suit
or proceeding pending, or to the best knowledge of Canmax or
CMI threatened, by or against or affecting Canmax, CMI or
any of their Affiliates in connection with or relating to
the transactions contemplated by this Agreement or of any
action taken or to be taken in connection herewith or which
would in any way interfere with the consummation of the
transactions contemplated hereby.
3.2.4. BROKERS, FINDERS, ETC. All negotiations
relating to this Agreement and the transactions contemplated
hereby have been carried on without the participation of any
Person acting on behalf of Canmax or CMI in such manner as
to give rise to any valid claim against USC for any
brokerage or finder's commission, fee or similar
compensation.
3.2.5. EXCHANGE ACT REPORTS. Canmax has duly filed
all reports required to be filed by it with the SEC under
the Securities Act and the Exchange Act. All such reports
are complete and correct in all material respects and
conform in all material respects with the requirements of
the Securities Act and the Exchange Act, and the rules and
regulations thereunder.
3.2.6. SECURITIES TO BE ISSUED. When delivered to
the Shareholder pursuant to this Agreement, the Canmax
Common will have been duly and validly issued (free of any
pre-emptive rights of shareholders), and will be fully paid
and non-assessable.
3.2.7. CONSENTS. No Consent is required to be made
or obtained by Canmax or CMI in connection with the
execution and delivery of this Agreement by Canmax or the
consummation by Canmax and CMI of the transactions
contemplated hereby, except for (i) any necessary filings
pursuant to Securities Act, and the rules and regulations
promulgated by the SEC thereunder, (ii) the filing of the
Certificate of Merger in the State of Delaware in accordance
with the Applicable Law of such state, (iii) any consent or
approvals required under the HSR Act, and (iv) such
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consents, approvals, orders or authorizations which if not
obtained, or registration, declarations or filings which if
not made, would not materially adversely affect the ability
of Canmax to consummate the transactions contemplated
hereby.
3.3. Representations and Warranties of Trustee. The Trustee
hereby represents and warrants to Canmax, CMI and Surviving
Corporation as follows:
3.3.1. AUTHORIZATION, ETC. Trustee has the power and
authority to approve the Merger and to execute this
Agreement and each of the other agreements to be executed
and delivered by her hereunder or pursuant hereto, and to
perform fully any obligations hereunder and thereunder, and
to consummate the transactions contemplated hereby and
thereby. This Agreement is, and on the Closing Date each of
the other agreements required to be executed and delivered
by the Trustee hereunder or pursuant hereto will be, legal,
valid and binding obligations of the Trustee in accordance
with their respective terms.
3.3.2. ORGANIZATION OF VOTING TRUST. The Trust was
created on May 1, 1997 and all requisite action has been
taken to vest in the Trustee the rights and powers set forth
in the Voting Trust Agreement.
3.3.3. OWNERSHIP OF USC SHARES. Trustee is the
record holder of all outstanding shares of USC Common.
Except for the shares of USC Common held by Trustee, there
are no other outstanding shares of capital stock of USC or
rights or options to acquire the same.
3.3.4. INVESTMENT INTENT. Trustee is acquiring the
Merger Shares for her own account for investment and not
with the view to, or for sale in connection with, a
distribution of such Merger Shares or any part thereof.
Trustee understands that the Merger Shares acquired
hereunder have not been, and will not be, registered under
the Securities Act or under any state's securities laws, and
are being offered and sold in reliance upon federal and
state exemptions for transactions not involving any public
offering. Trustee is a sophisticated investor with
knowledge and experience in business and financial matters
and is experienced in the evaluation of businesses similar
to Canmax and its Subsidiaries. Trustee has received
information concerning Canmax and its Subsidiaries,
including without limitation the Canmax Materials, and has
been afforded, prior to the Closing Date, the opportunity to
ask questions of, and receive answers from, Canmax, its
Subsidiaries and their respective officers and directors and
to obtain any additional information, to the extent
available to Canmax without unreasonable effort or expense,
necessary for Trustee to make an informed decision with
regard to the Merger and its receipt of the Merger Shares.
3.3.5. NOTICES OF WITHDRAWAL. Trustee has not
received any notices from any Beneficiary of the Trust of
their intent to terminate the Trust or withdraw any shares
therefrom.
ARTICLE 4. COVENANTS
4.1. COVENANTS OF USC.
4.1.1. CONDUCT OF BUSINESS. From the date hereof to
the Closing Date, except as expressly permitted or required
by this Agreement or as otherwise consented to by Canmax and
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CMI in writing, USC will, and will cause each Subsidiary to:
a. carry on its business in the ordinary course,
in substantially the same manner as heretofore
conducted, and use all reasonable efforts to preserve
intact its present business organization, maintain its
properties in good operating condition and repair, keep
available the services of its present officers and
significant employees, and preserve its relationship
with customers, suppliers and others having business
dealings with it, with the goal and intent that its
goodwill and ongoing business shall be in all material
respects unimpaired following the Closing;
b. pay all accounts payable and other
obligations relating to its business when they become
due and payable in the ordinary course of business
consistent with prior practice;
c. perform in all material respects all of its
obligations under all Contracts and other agreements
and instruments relating to or affecting its business
or any of its assets, and comply in all material
respects with all Applicable Laws applicable to it or
its business:
d. other than sales and purchases of inventories
and supplies in the ordinary course, not enter into or
assume any material agreement, contract or instrument
relating to its business, or enter into or permit any
material amendment, supplement, waiver or other
modification in respect thereof;
e. continue all policies of insurance relating
to its business in full force and effect;
f. not grant (or commit to grant) any increase
in the compensation (including incentive or bonus
compensation) of any employee employed in the operation
of its business or institute, adopt or amend (or commit
to institute, adopt or amend) any compensation or
benefit plan or arrangement applicable to any such
employee;
g. not declare or pay any dividends or make any
distribution in respect of its equity interests; and
h. not take any action, or knowingly omit to
take any action, which would result in a breach of any
of the representations and warranties set forth in
Section 3.1.
4.1.2. NO SOLICITATION. So long as this Agreement
remains in effect, neither USC, any Subsidiary nor any
Affiliate nor any Person acting on their behalf shall (i)
solicit or encourage any inquiries or proposals for, or
enter into any discussions with respect to, the acquisition
of any properties and assets held for use in connection
with, necessary for the conduct of, or otherwise material
to, the business of USC or any Subsidiary, or (ii) furnish,
or cause to be furnished, any non-public information
concerning USC or any Subsidiary to any Person (other than
Canmax and CMI and their agents and representatives), other
than in the ordinary course of business without notice to
Canmax and CMI or pursuant to Applicable Law and after prior
written notice to Canmax.
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4.1.3. ACCESS AND INFORMATION. So long as this
Agreement remains in effect, and subject to such reasonable
limitations as may be necessary to prevent unreasonable
disruptions of its business, USC will (and will cause its
Subsidiaries, Affiliates and their respective accountants,
counsel, consultants, employees and agents to) give Canmax
and CMI, and their respective accountants, counsel,
consultants, employees and agents, full access during normal
business hours to, and furnish them with all documents,
records, work papers and information with respect to, all of
the assets, books, contracts, commitments, reports and
records relating to USC and each Subsidiary, as Canmax or
CMI shall from time to time reasonably request. In addition
and subject to such reasonable limitations as may be
necessary to prevent unreasonable disruptions of their
business, USC will permit Canmax and CMI, and their
respective accountants, counsel, consultants, employees and
agents, reasonable access to such personnel of USC and each
Subsidiary during normal business hours as may be necessary
or useful to Canmax or CMI in its review of the assets and
business affairs of the business of USC and each Subsidiary
and the above-mentioned documents, records and information.
USC and each Subsidiary will keep Canmax and CMI generally
informed as to the affairs of their businesses.
4.1.4. ADDITIONAL FINANCIAL STATEMENTS. Until the
earlier of the termination of this Agreement or the Closing,
on or before the 21st day of each calendar month, USC shall
deliver to Canmax and CMI unaudited financial statements of
USC and each Subsidiary as, at and for the monthly period
ending the last day of the preceding month (the "Subsequent
Monthly Financial Statements"), which shall include, in each
case, a balance sheet and statement of income. At the time
the Subsequent Monthly Financial Statements are delivered to
Canmax and CMI, USC shall, by such delivery, be deemed to
have made as to the Subsequent Monthly Financial Statements
just delivered the representations and warranties to Canmax
and CMI which are set forth in Section 3.1.4 hereof with
respect to Subsequent Monthly Financial Statements.
4.1.5. PUBLIC ANNOUNCEMENTS. Except as required by
Applicable Law, USC shall not, and shall not permit any
Subsidiary or Affiliate to, make any public announcement in
respect of this Agreement or the transactions contemplated
hereby without the prior written consent of Canmax and CMI,
which consent shall not be unreasonably withheld.
4.1.6. FURTHER ACTIONS.
a. USC agrees to use all reasonable efforts to
take all actions and to do all things necessary, proper
or advisable to consummate the transactions
contemplated hereby; provided, however, that the
refusal by USC to provide economic incentives to
induce, or to commence litigation to compel the
consummation of the transactions contemplated by this
Agreement, will not be deemed a failure by USC to use
such reasonable efforts.
b. USC, as promptly as practicable, will use all
reasonable efforts to obtain, or cause to be obtained,
all Consents (including, without limitation, all
Governmental Approvals and any Consents required under
any contract) necessary to be obtained by it or the
Subsidiaries in order to consummate the Merger and the
consummation of the other transactions contemplated
hereby.
c. At all times prior to the Closing, USC shall
promptly notify Canmax and
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CMI in writing of any fact, condition, event or
occurrence known to it in the exercise of reasonable
business prudence that will or may result in the
failure of any of the conditions contained in Sections
6.1 and 6.2 to be satisfied, promptly upon becoming
aware of the same.
4.1.7. DELIVERY OF AUDITED FINANCIAL STATEMENTS. At
the Closing, or as soon as practicable thereafter, USC shall
cooperate with Canmax in the preparation of audited
financial statements of USC for the periods required to be
reported by Canmax under applicable securities laws.
4.2. COVENANTS OF CANMAX AND CMI.
4.2.1. PUBLIC ANNOUNCEMENTS. Prior to the Closing,
except as required by Applicable Law, neither Canmax nor CMI
shall, and neither Canmax nor CMI shall permit any Affiliate
to, make any public announcement in respect of this
Agreement or the transactions contemplated hereby without
the prior written consent of USC, which consent will not be
unreasonably withheld.
4.2.2. ACCESS. At reasonable times, prior to
Closing, Canmax will afford USC's employees, accountants,
legal counsel, financial advisors and other authorized
representatives the opportunity to perform reasonable due
diligence with respect to Canmax and CMI.
4.2.3. FURTHER ACTIONS.
a. Canmax and CMI agree to use all reasonable
efforts to take all actions and to do all things
necessary, proper or advisable to consummate the
transactions contemplated hereby.
b. At all times prior to the Closing, Canmax and
CMI shall promptly notify USC in writing of any fact,
condition, event or occurrence that will or may result
in the failure of any of the conditions contained in
Sections 6.1 and 6.3 to be satisfied, promptly upon
becoming aware of the same.
4.2.4. FURTHER ASSURANCES. Following the Closing,
Canmax and CMI each shall, and each shall cause its
Affiliates to, from time to time, execute and deliver such
additional instruments, documents, conveyances or assurances
and take such other actions as shall be necessary to confirm
and assure that its obligations provided for in this
Agreement have been satisfied and to render effective the
consummation of the transactions contemplated hereby.
ARTICLE 5. ADDITIONAL AGREEMENTS
5.1. SHAREHOLDER APPROVALS. USC shall take all action
necessary in accordance with Applicable Law and in accordance
with its articles of incorporation and bylaws to convene meetings
of the Shareholder as promptly as practicable to consider and
vote upon the approval of this Agreement, the Merger and the
other transactions contemplated hereby, including the approval of
the Shareholders Representative and the Escrow Agent, as
contemplated by Article 8 hereof. Prior to any such meeting,
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USC shall deliver to the Shareholder the Canmax Materials. USC,
acting through its Board of Directors, shall recommend to its
Shareholder the approval of this Agreement, the Merger and the
other transactions contemplated hereby and thereby, including the
approval of the Shareholder's Representative and the Escrow
Agent, as contemplated by Article 8 hereof, and shall use all
reasonable efforts to obtain such approval by such Shareholder.
5.2. COMPLIANCE WITH THE SECURITIES ACT. The Trustee is the
only Person who, as of the date hereof, may be deemed to be an
"Affiliate" of USC, as that term is defined under Paragraphs (c)
and (d) of Rule 145 of the Securities Act ("Rule 145 Affiliate"),
and prior to the Closing Date, USC shall cause to be prepared and
delivered to Canmax and CMI an updated list (reasonably
satisfactory to counsel for Canmax and CMI) identifying all
Persons who at the time of the shareholders' meetings described
above may be deemed to be a Rule 145 Affiliate.
5.3. LISTING OF MERGER SHARES. Canmax shall file with the
National Association of Securities Dealers, Inc. a Nasdaq Stock
Market Notification Form for Listing Additional Shares and
Notification pursuant to SEC Rule 10b-17 with regard to the
Merger Shares to permit trading in such shares from and after the
Closing Date.
5.4. HSR ACT FILINGS. USC and Canmax will cooperate in
preparing and filing any notification and report forms and
related material that it may be required to file with the Federal
Trade Commission and the Anti-Trust Division of the United States
Department of Justice under the HSR Act, and will use their
respective best efforts to obtain an early termination of the
applicable waiting period, and will make any further filings
pursuant thereto that may be necessary, proper or advisable.
5.5. TERMINATION of Affiliate Agreements. At or prior to
the Closing, Canmax and CMI shall have the right to designate any
Contracts or other arrangements with Affiliates of USC and each
Subsidiary to be terminated (without liability or the payment of
consideration not otherwise due under such Contract or
arrangement) or fully performed at Closing, and USC shall fully
perform or shall terminate (without liability or the payment of
consideration not otherwise due under such Contract or
arrangement) or cause to be terminated such Contracts or other
arrangements at or prior to the Closing.
5.6. COVENANT REGARDING TRUST. Trustee hereby agrees to
provide Canmax prompt written notice of the receipt of any notice
of termination of the Trust by any beneficiary of the Trust or
election by any beneficiary of the Trust to withdraw shares from
the Trust, in either case prior to the Closing Date. Trustee
hereby agrees that no Merger Shares shall be distributed from the
Trust unless the beneficiary receiving such shares delivers to
the Trustee an investment representation letter in the form as
Exhibit A attached hereto. Further, Trustee covenants that
immediately following the Effective Time, Trustee shall exercise
her right as a beneficiary of the Trust to withdraw from the
Trust any Merger Shares for which she is the beneficiary and
resign in her capacity as Trustee of the Trust. Trustee further
covenants and agrees to take no other actions to cause a
dissolution of the Trust.
5.7. APPOINTMENT OF DIRECTOR. At Closing, Canmax will use
its best efforts to take all necessary corporate action in order
to cause two persons ("Designees") designated by ▇▇▇▇▇▇ to serve
on the Board of Directors of Canmax. The qualification of such
Designees shall be subject to the reasonable approval of the
Board of Directors of Canmax, and at least one Designee shall not
be an employee of Canmax or USC following the Closing. Such
approved Designees shall serve in such capacity until the next
regularly scheduled annual meeting of the shareholders of Canmax.
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ARTICLE 6. CONDITIONS PRECEDENT
6.1. CONDITIONS TO OBLIGATIONS OF EACH PARTY. The
obligations of the parties to consummate the transactions
contemplated hereby shall be subject to the conditions that (i)
the transactions contemplated hereby shall not have been
restrained, enjoined or otherwise prohibited by any Applicable
Law, including any order, injunction, decree or judgment of any
court or other Governmental Authority; (ii) no court or other
Governmental Authority shall have determined that any Applicable
Law makes illegal the consummation of the transactions
contemplated hereby or by any other agreement to be executed and
delivered hereunder or pursuant hereto; (iii) no proceeding with
respect to the application of any such Applicable Law to such
effect shall be pending; and (iv) any applicable waiting period
under the HSR Act shall have expired or been terminated.
6.2. CONDITIONS TO OBLIGATIONS OF CANMAX AND CMI. The
obligations of Canmax and CMI to consummate the transactions
contemplated hereby shall be subject to the fulfillment (or
waiver by Canmax and CMI, in their sole discretion) on or prior
to the Closing Date of the following additional conditions:
6.2.1. REPRESENTATIONS. The representations and
warranties of USC and the Trustee contained in this
Agreement (i) shall be true and correct in all respects (in
the case of any representation or warranty containing any
materiality qualification) or in all material respects (in
the case of any representation or warranty without any
materiality qualification) at and as of the date hereof, and
(ii) shall be repeated and shall be true and correct in all
respects (in the case of any representation or warranty
containing any materiality qualification) or in all material
respects (in the case of any representation or warranty
without any materiality qualification) on and as of the
Closing Date with the same effect as though made on and as
of the Closing Date.
6.2.2. COVENANTS. USC and the Trustee shall have
duly performed and complied in all material respects with
all covenants and conditions required by this Agreement to
be performed or complied with by it hereunder and with
respect to each of the other agreements to be executed and
delivered by it hereunder or pursuant hereto to be performed
or complied with by it prior to or on the Closing Date.
6.2.3. CONSENTS. USC shall have obtained and shall
have delivered to Canmax and CMI copies of (i) all
Governmental Approvals required to be obtained by USC in
connection with the execution and delivery of this Agreement
and the other agreements to be executed and delivered by USC
hereunder or pursuant hereto and the consummation of the
transactions contemplated hereby or thereby, unless the
failure to obtain any such Governmental Approval would not,
individually or in the aggregate, have a Material Adverse
Effect and (ii) all Consents (including, without limitation,
all Consents required under any Contract), other than
elective notices to creditors permitted under applicable
bulk transfer laws, if any, necessary to be obtained in
order to consummate the Merger pursuant to this Agreement
and the consummation of the other transactions contemplated
hereby and by the other agreements to be executed and
delivered by USC hereunder or pursuant hereto, unless the
failure to obtain any such Consent would not, individually
or in the aggregate, have a Material Adverse Effect.
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6.2.4. NO MATERIAL ADVERSE EFFECT. No event,
occurrence, fact, condition, change, development or effect
shall have occurred, exist or come to exist since the
Cut-off Date, that, individually or in the aggregate, has
constituted or resulted in, or could reasonably be expected
to constitute or result in, a Material Adverse Effect.
6.2.5. OPINION OF COUNSEL. USC shall have delivered
to Canmax and opinion of counsel in form and substance
reasonably acceptable to Canmax regarding the transactions
contemplated hereby.
6.2.6. REQUIRED USC VOTE. The Shareholder of USC
shall have duly adopted and approved this Agreement, the
Merger, and the other transactions contemplated hereby and
thereby, including the appointment of the Shareholder
Representative and the Escrow Agreement, by the affirmative
vote of 100% of the outstanding shares of capital stock of
USC entitled to vote thereon, and shall have authorized and
approved such other matters as may be required or
appropriate in connection with Applicable Law (collectively,
the "Required USC Vote"), and the Trustee shall not have
received any notice from any beneficiary of the Trust
electing to terminate the Trust or withdraw any shares
therefrom, except as contemplated in Section 5.6 hereof.
6.2.7. CORPORATE DOCUMENTS. All corporate
proceedings of USC in connection with this Agreement, the
Merger and the transactions contemplated hereby and thereby,
and all documents and instruments incident thereto, shall be
reasonably satisfactory in substance and form to Canmax, CMI
and their counsel, and Canmax, CMI and their counsel shall
have received all such documents and instruments, or copies
thereof, certified if requested, as may be reasonably
requested.
6.2.8. ACCREDITED INVESTOR LETTERS. At Closing, the
Shareholder and the Founder shall have executed and
delivered to Canmax and CMI an Accredited Investor Letter,
and the Shareholder shall have retained a qualified
representative to advise her on the investment decisions
regarding the approval of the Merger.
6.2.9. NON-COMPETITION AGREEMENT; EMPLOYMENT
CONTRACT. ▇▇▇▇▇▇ shall have duly executed and delivered to
Canmax and CMI a "Non-Competition Agreement" and "Employment
Contract" in the forms of Exhibit C and Exhibit D attached
hereto.
6.2.10. EMPLOYEES. Canmax and CMI shall have
received assurances, reasonably satisfactory to Canmax and
CMI, that the employees of USC and each Subsidiary which
Canmax and CMI wish to continue to employ following the
Merger will continue such employment on terms and conditions
satisfactory to Canmax and CMI, in their discretion.
6.2.11. BANK ACCOUNTS. USC and the Subsidiaries
shall have irrevocably instructed all banks and other
financial institutions where USC and any Subsidiary
maintains an account, lock box, safety deposit box or
similar arrangement, to change the persons authorized to
make withdrawals therefrom or deposits thereto or otherwise
to transact business in connection therewith, to such
persons as Canmax and CMI shall designate in writing at
least two (2) Business Days prior to the Closing Date.
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6.2.12. OFFICERS AND DIRECTORS. USC and each
Subsidiary shall have taken such action, corporate and
otherwise, as may be necessary or appropriate to change the
officers and directors of USC and each Subsidiary as may be
designated by Canmax and CMI.
6.2.13. RESIGNATION AND WITHDRAWAL OF TRUSTEE. The
Trustee shall have delivered to the Trust an irrevocable
resignation of her position as Trustee, and the Trustee, in
her capacity as a beneficiary of the Trust, shall, pursuant
to Section 6 of the Voting Trust Agreement deliver written
notice of her election to withdraw her shares from the Trust
and surrender her voting trust certificates.
6.2.14. CONVERTIBLE INSTRUMENTS. Any instrument or
other document giving any Person the right to acquire shares
of USC Common shall have been terminated or resolved to the
satisfaction of Canmax.
6.2.15. WAIVER OF CLAIMS. ▇▇▇▇▇▇ shall have waived
any claim to receive compensation from USC attrituble to
periods prior to the Closing Date, and shall have delivered
to the Surviving Corporation and Canmax written waiver of
any such claims in a form satisfactory to Canmax.
6.3. Conditions to Obligations of USC. The obligation of
USC to consummate the transactions contemplated hereby shall be
subject to the fulfillment (or waived by USC, in its sole
discretion), on or prior to the Closing Date, of the following
additional conditions:
6.3.1. REPRESENTATIONS. The representations and
warranties of Canmax and CMI contained in this Agreement (i)
shall be true and correct in all respects (in the case of
any representation or warranty containing any materiality
qualification) or in all material respects (in the case of
any representation or warranty without any materiality
qualification) at and as of the date hereof and (ii) shall
be repeated and shall be true and correct in all respects
(in the case of any representation or warranty containing
any materiality qualification) or in all material respects
(in the case of any representation or warranty without any
materiality qualification) on and as of the Closing Date
with the same effect as though made at and as of such time.
6.3.2. COVENANTS. Each of Canmax and CMI shall have
duly performed and complied in all material respects with
all covenants and conditions required by this Agreement to
be performed or complied with by it and under or with
respect to each of the other agreements to be executed and
delivered by it hereunder or pursuant hereto to be performed
or complied with by it prior to or on the Closing Date.
6.3.3. REQUIRED USC VOTE. The Required USC Vote
shall have been obtained.
6.3.4. OPINION OF COUNSEL. Canmax and CMI shall
have caused to be delivered to USC an opinion of counsel in
form and substance reasonably satisfactory to USC.
6.3.5. CORPORATE DOCUMENTS. All corporate and other
proceedings of Canmax and CMI in connection with this
Agreement, the Merger and the transactions contemplated
hereby and thereby, and all documents and instruments
incident thereto, shall be reasonably satisfactory in
substance and form to USC and its counsel, and USC and its
counsel shall have received all such
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documents and instruments, or copies thereof, certified if
requested, as may be reasonably requested.
6.3.6. CONSENTS AND APPROVALS. Canmax and CMI shall
have obtained all Governmental Approvals necessary to
consummate the transactions contemplated hereby.
6.3.7. Non-Competition Agreement and Employment
Contract. Canmax and Surviving Corporation shall have duly
executed and delivered to ▇▇▇▇▇▇ a "Non-Competition
Agreement" and "Employment Contract" in the forms of Exhibit
C and Exhibit D attached hereto.
ARTICLE 7. ALLOCATION AND TAX ADVICE
7.1. ALLOCATION. Notwithstanding any provision to the
contrary herein contained or any agreements, understandings or
negotiations prior to the date hereof, USC acknowledges that the
issuance of the Merger Shares to the Shareholder pursuant to the
terms hereof is to be made in accordance with instructions
received from USC, and USC for and on its own behalf and on
behalf of such Shareholder hereby expressly release Canmax and
CMI from any and all claims and liabilities in connection with
such allocation.
7.2. TAX ADVICE. Although the parties acknowledge and agree
that the Merger is intended to qualify as a "tax free" exchange
under Section 368(a)(2)(D) of the Code with regard to the Merger
Consideration comprised of Merger Shares, all parties to this
Agreement acknowledge and agree that no representation or
warranty has been made to any party or by any party's officers,
employees, agents, accountants or attorneys, with respect to
federal income or other tax consequences of the transactions
contemplated by this Agreement and the Merger or that such
transactions are or will be "tax free."
ARTICLE 8. ESCROW AGREEMENT AND RELATED PROVISIONS
8.1. ESCROW AGREEMENT. At the Closing, USC shall cause to
be delivered to Canmax and CMI the Escrow Agreement duly executed
by the Shareholders Representative (described in Section 8.2
hereof) and a bank or trust company mutually agreeable to Canmax,
CMI, and USC, as the Escrow Agent. The Contingent Amount held
pursuant to the Escrow Agreement shall be the sole recourse of
Canmax and the Surviving Connection against the Shareholder for
any Damages hereunder other than Damages attributable to fraud or
willful breach of this Agreement. Subject to the provisions of
the Escrow Agreement and the provisions of this Article 8, the
Shareholder (acting through the Shareholders Representative) will
indemnify and hold Canmax and the Surviving Corporation and their
respective Affiliates, officers and directors, agents and
employees harmless from and against:
a. any Damages resulting from the payment or
discharge of any obligation or liability of USC whether
accrued, absolute, fixed, contingent or otherwise,
arising on or before the date of the Cut-off Date
Balance Sheet, or in the balance sheet contained in the
most recent Subsequent Monthly Financial Statement
delivered to Canmax and CMI pursuant to Section 4.1.4
hereof, if applicable, to the extent not reflected in
or reserved
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against in such Cut-off Date Balance Sheet or such
other balance sheet;
b. any Damages resulting from any representation
or warranty of either USC contained in Section 3.1
hereof (and for the representations and warranties in
Section 3.1.4 containing a materiality qualification or
any representations or warranties containing Material
Adverse Effect qualifications, without regard to such
qualifications), or the Trustee contained in Section
3.3 hereof, or elsewhere herein or in any certificate
delivered by USC, the Trustee or the Shareholder
hereunder or pursuant hereto which is false or
misleading;
c. any Damages resulting from the failure by USC
or the Trustee to perform any agreements, covenants or
other obligations contained herein or in any other
agreement executed and delivered by it and required to
be performed by it hereunder or thereunder;
d. any Damages resulting from any Shareholder
immediately prior to the Merger becoming entitled,
under Applicable Law, or otherwise, to receive payment
for such Shareholders' USC Common in excess of the
amount such dissenting Shareholder would otherwise have
received pursuant to this Agreement;
e. any Damages resulting from any Employee
Benefit Plan (including all liabilities to any person
under ERISA and all liabilities to any Governmental
Authority), or for salary or other compensation or
benefits attributable to service or employment by USC
prior to the Effective Time;
f. any Damages resulting from the failure of USC
to comply with Applicable Law, including without
limitation, any local, state or federal laws relating
to the environment or to any employment relationship;
g. any Damages resulting from the failure of USC
to pay or withhold any Tax or adequately reserve for
the same on the Cut-Off Date Balance Sheet.
8.2. INDEMNIFICATION PROCEDURE. A party entitled to
indemnification hereunder (an "Indemnified Party") shall notify
the party against whom a claim of indemnification is to be made
(the "Indemnifying Party") with reasonable promptness of its
discovery of any matter giving rise to a claim of indemnity
pursuant hereto. Such notice shall set forth in reasonable
detail the facts of which the Indemnified Party is aware that may
give rise to the claim hereunder. With respect to any third
party claim or action that could give rise to indemnity
hereunder, the Indemnified Party and the Indemnifying Party shall
each have the opportunity to participate in the defense of such
claim or action with counsel of such party's choice.
Notwithstanding the foregoing, the Indemnified Party shall direct
the defense, but any settlement of a claim or action or the
resolution of any matter giving rise to a claim for indemnity
under Section 8.1 shall be subject to the consent of the
Indemnifying Party, which consent shall not be unreasonably
withheld. The Indemnifying Party shall reimburse the Indemnified
Party, promptly upon request therefor from time to time, for all
amounts owed and unpaid under Section 8.1, including costs of
defense and investigation as they accrue. Notwithstanding the
requirements of the preceding provisions of this Section 8.2, no
failure by an Indemnified Party to provide any notice, permit any
participation or seek any consent under this Section 8.2 shall
relieve the Indemnifying Party of its obligations under Section
8.1, unless and only to the extent that such failure shall
increase
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the Damages indemnified against.
8.3. SHAREHOLDERS REPRESENTATIVE. USC hereby irrevocably
appoints, and by its adoption and approval of this Agreement
pursuant to Section 5.1 hereof, the Shareholder shall be deemed
to have elected and irrevocably appointed ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇ as its
representative (the "Shareholders Representative") to act under
the Escrow Agreement solely and exclusively for the benefit of
the Shareholder with full power, without any further consent of
USC or Shareholder to (i) execute and deliver the Escrow
Agreement on behalf of the Shareholder, (ii) give any and all
instructions as may be required or as he in his sole discretion
deems appropriate under any provisions of the Escrow Agreement,
(iii) make all such other determinations and to give all such
other instructions to the Escrow Agent as the Shareholder's
Representative shall deem necessary or desirable to carry out the
provisions of the Escrow Agreement, and (iv) in the name and on
behalf of USC and the Shareholder to make any amendment to or
modification of the Escrow Agreement or make any determination,
compromise, settlement, request or demand or give any waiver,
notice or consent under the Escrow Agreement; and Canmax and the
Surviving Corporation shall be required to look to and may rely
exclusively upon any such instructions, amendments,
modifications, determinations, compromises, settlements, requests
or demands, waivers, notices or consents or other acts of the
Shareholders Representative. The duties of the Shareholders
Representative shall only be those which are specifically
provided in the Escrow Agreement, and the Shareholders
Representative shall incur no liability whatsoever in his
capacity as such except for his willful misconduct or gross
negligence so long as he acts in good faith. The Shareholders
Representative shall be fully protected in following any
instructions given to him by holders of more than 50% of the
outstanding shares of capital stock of USC immediately prior to
the Effective Time, whether such instructions be in writing or by
vote of such Shareholders at a meeting called by the Shareholders
Representative on ten (10) days' notice to such Shareholders at
their addresses as set forth in the stock books of USC
immediately prior to the Effective Time, but the Shareholders
Representative shall be under no duty to apply for such
instructions in making any determination or taking any other
action under the Escrow Agreement.
ARTICLE 9. TERMINATION.
9.1. TERMINATION. This Agreement may be terminated at any
time prior to the Closing Date:
a. by the written agreement of the parties hereto;
b. by any of USC, Canmax or CMI by written notice to
the other parties if the transactions contemplated hereby
shall not have been consummated pursuant hereto by 5:00 p.m.
San Diego, California time on January 31, 1998 unless such
date shall be extended by the mutual written consent the
parties hereto;
c. by Canmax and CMI by written notice to USC if any
of the conditions set forth in Sections 6.1 or 6.2 shall not
have been, or if it becomes apparent that any of such
conditions will not be, fulfilled by 5:00 p.m. San Diego,
California time on January 31, 1998 unless such failure
shall be due to the failure of Canmax or CMI to perform or
comply with any of the covenants, agreements or conditions
hereof to be performed or complied with by it prior to the
Closing; or
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d. by USC by written notice to Canmax and CMI if any
of the conditions set forth in Sections 6.1 or 6.3 shall not
have been, or if it becomes apparent that any of such
conditions will not be, fulfilled by 5:00 p.m. San Diego,
California time on January 31, 1998 unless such failure
shall be due to the failure of USC to perform or comply with
any of the covenants, agreements or conditions hereof to be
performed or complied with by it prior to the Closing.
9.2. EFFECT OF TERMINATION. In the event of the termination
of this Agreement pursuant to the provisions of Section 9.1
hereof, this Agreement shall become void and have no effect,
without any liability to any Person in respect hereof or in
connection with the transactions contemplated hereby on the part
of any party hereto, or any of its directors, officers,
employees, agents, consultants, representatives, advisers,
stockholders or Affiliates, except (i) as specified in
Section 10.1 hereof, (ii) for any Damages suffered by Canmax and
CMI resulting from USC's material breach of the covenants set
forth in Section 4.1 hereof, or the confidentiality provisions
contained in the letter of intent executed in connection herewith
(or nondisclosure agreement referred to therein), and (iii) for
any Damages suffered by USC resulting from Canmax or CMI's
material breach of the covenants set forth in Section 4.2 hereof
or the confidentiality provisions contained in the letter of
intent executed in connection herewith (or nondisclosure
agreement referred to therein).
ARTICLE 10. MISCELLANEOUS.
10.1. EXPENSES. USC on the one hand, and Canmax and
CMI, on the other hand, shall bear their respective expenses,
costs and fees (including attorneys', auditors' and financing
commitment fees) in connection with the transactions contemplated
hereby, including the preparation, execution and delivery of this
Agreement and compliance herewith (the "Transaction Expenses"),
whether or not the transactions contemplated hereby shall be
consummated; provided that, in the event of the termination of
this Agreement by any party for any reason other than
attributable to the breach of any representation, warranty or
covenant contained herein, the non-terminating party shall be
entitle to recover from the terminating party up to $30,000 of
the accounting and legal fees and expenses incurred in connection
herewith.
10.2. SEVERABILITY. If any provision of this Agreement,
including any phrase, sentence, clause, section or subsection is
inoperative or unenforceable for any reason, such circumstances
shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance,
or of rendering any other provision or provisions herein
contained invalid, inoperative, or unenforceable to any extent
whatsoever.
10.3. NOTICES. All notices, requests, demands, waivers
and other communications required or permitted to be given under
this Agreement shall be in writing and shall be deemed to have
been duly given if (a) delivered personally, (b) sent by
reputable next-day or overnight mail or delivery, proof of
delivery requested, or (c) sent by facsimile (receipt confirmed)
to the numbers set forth below:
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(i) if to Canmax or CMI,
Canmax Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to USC,
USCommunications, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, #▇▇▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Suite 157, The Promontory
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or, in each case, at such other address as may be specified in
writing to the other parties hereto.
All such notices, requests, demands, waivers and other
communications shall be deemed to have been received (x) if by
personal delivery on the day of such delivery, (y) if by next-day
or overnight mail or delivery, on the day delivered, or (z) if by
facsimile (receipt confirmed), the date of transmission.
10.4. HEADINGS. The headings contained in this
Agreement are for purposes of convenience only and shall not
affect the meaning or interpretation of this Agreement.
10.5. ENTIRE AGREEMENT. This Agreement (including the
Schedules hereto) and the other agreements executed and delivered
by the parties hereunder or pursuant hereto (when executed and
delivered) constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, among
the parties hereto with respect to the subject matter hereof.
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10.6. COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be deemed an original
and all of which shall together constitute one and the same
instrument. Executed signature pages of this Agreement may be
transmitted to other parties to this Agreement by facsimile and,
if so transmitted, shall be deemed valid and binding on the party
transmitting its signature by facsimile. That party shall
undertake to transmit original signature pages as soon as
possible thereafter.
10.7. GOVERNING LAW, ETC. This Agreement shall be
governed in all respects, including as to validity,
interpretation and effect, by the internal laws of the State of
Texas without giving effect to the conflict of laws rules
thereof.
10.8. BINDING EFFECT. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and
their respective heirs, successors and permitted assigns.
10.9. ASSIGNMENT. This Agreement shall not be
assignable or otherwise transferable by any party hereto without
the prior written consent of the other parties hereto.
10.10. NO THIRD PARTY BENEFICIARIES. Nothing in this
Agreement shall confer any rights upon any Person or entity other
than the parties hereto and their respective, successors and
permitted assigns.
10.11. AMENDMENT; WAIVERS, ETC. No amendment,
modification or discharge of this Agreement, and no waiver
hereunder, shall be valid or binding unless set forth in writing
and duly executed-by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such
waiver shall constitute a waiver only with respect to the
specific matter described in such writing and shall in no way
impair the rights of the party granting such waiver in any other
respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the
provisions of this Agreement, nor the failure by any of the
parties, on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other
breach or default of a similar nature, or as a waiver of any of
such provisions, rights or privileges hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of
any rights or remedies that any party may otherwise have at law
or in equity.
[Signature Pages Following]
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
CANMAX INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Title: Treasurer
-----------------------------
CNMX MERGERSUB, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Title: Treasurer
-----------------------------
USCOMMUNICATION SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name:
------------------------------
Title: President
-----------------------------
/s/ ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇'▇▇▇▇▇▇▇,
as Trustee of the trust created
under the Voting Trust Agreement of
National Transportation Products,
Inc. dated as of May 1, 1997 and
amended December 1, 1997.
/s/ ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇'▇▇▇▇▇▇▇, Individually
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