Purchase Agreement, dated January 6, 2008, among Bon L Holdings Corporation, Idlewood Properties, Inc., The William L. Bonnell Company, Inc. and WXP Holdings, Inc. (subsequently assigned by WXP Holdings to its subsidiary, 6919464 Canada Inc.)

Exhibit 2.1

Execution Copy

 

THE WILLIAM L. BONNELL COMPANY, INC.

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BON L HOLDINGS CORPORATION

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IDLEWOOD PROPERTIES, INC.

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WXP HOLDINGS, INC.

 

 

	PURCHASE AGREEMENT
	January 6, 2008

 

 

 

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TABLE OF CONTENTS

 

Page

 

ARTICLE 1

ARTICLE 2

ARTICLE 3

ARTICLE 4

 

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TABLE OF CONTENTS

(continued)

Page

 

ARTICLE 5

ARTICLE 6

ARTICLE 7

 

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TABLE OF CONTENTS

(continued)

Page

 

ARTICLE 8

ARTICLE 9

 

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TABLE OF CONTENTS

(continued)

Page

 

ARTICLE 10

ARTICLE 11

 

 

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THIS PURCHASE AGREEMENT is made January 6, 2008

AMONG:

The William L. Bonnell Company, Inc., a corporation governed by the laws of the Sate of Georgia,

(the “Guarantor”)

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Bon L Holdings Corporation, a corporation governed by the laws of the Commonwealth of Virginia,

(the “Seller”)

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Idlewood Properties, Inc., a corporation governed by the laws of the Commonwealth of Virginia,

(“Idlewood Properties”)

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WXP Holdings, Inc., a corporation governed by the laws of Delaware,

(the “Purchaser”).

 

RECITALS:

 

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THEREFORE, the Parties agree as follows:

ARTICLE 1

DEFINITIONS AND PRINCIPLES OF INTERPRETATION

Whenever used in this Agreement, the following words and terms have the meanings set out below:

“Accounts Payable” means amounts owing by a Subject Company to any third party Person determined and classified in current liabilities in accordance with GAAP consistently applied;

“Accounts Receivable” means accounts receivable, bills receivable, trade accounts, book debts and insurance claims recorded as receivable in the Books and Records and other amounts due or deemed to be due to a Subject Company from a third party Person, net of an appropriate allowance for doubtful accounts and sales returns, determined and classified in current assets in accordance with GAAP consistently applied;

“Accrued Liabilities” means liabilities of a Subject Company incurred but which are not yet due and payable, determined and classified in current liabilities in accordance with GAAP consistently applied;

“Affiliate” has the meaning given to “affiliate” in the CBCA, as at the date hereof;

“Agreement” means this Purchase Agreement and the Disclosure Letter, including all schedules, exhibits, and all amendments or restatements, as permitted, and references to “Article” or “Section” mean the specified Article or Section of this Agreement;

“Apolo” means Apolo Tool & Die Manufacturing Inc., a corporation governed by the laws of Canada;

“Balance Sheet” means the combined balance sheet of the Subject Companies as at November 25, 2007, forming part of the Financial Statements;

“Benefit Plans” means material plans, arrangements, agreements, programs, policies, practices or undertakings, whether oral or written formal or informal, funded or unfunded, insured or uninsured, registered or unregistered to which a Subject Company is a party or bound or in which the Employees participate or under which a Subject

 

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Company has, or will have, any liability or contingent liability, or pursuant to which payments are made, or benefits are provided to, or an entitlement to payments or benefits may arise with respect to any of its Employees, directors or officers, individuals working on contract with a Subject Company or other individuals providing services to a Subject Company of a kind normally provided by employees (or any spouses, dependants, survivors or beneficiaries of any such persons), excluding Statutory Plans;

“Bon L Canada” means Bon L Canada Inc., a corporation governed by the laws of Canada;

“Bon L Canada Shares” means all of the issued and outstanding shares in Bon L Canada other than the New Share;

“Books and Records” means books and records of the Subject Companies, including tax, financial, corporate, operations and sales books, records, books of account, sales and purchase records, lists of suppliers and customers, formulae, business reports, plans and projections and all other documents, surveys, plans, files, records, assessments, correspondence, and other data and information, financial or otherwise, including all data, information and databases stored on computer-related or other electronic media;

“Business Day” means any day, other than a Saturday or Sunday, on which the principal commercial banks located in Toronto, Ontario and Atlanta, Georgia are open for commercial banking business during normal banking hours;

“CBCA” means Canada Business Corporation Act;

“Claims” means claims, demands, complaints, grievances, actions, applications, suits, causes of action, Orders, charges, indictments, prosecutions, informations or other similar processes, assessments or reassessments, judgments, debts, liabilities, expenses, costs, damages or losses, contingent or otherwise, including loss of value, reasonable professional fees, including fees and disbursements of legal counsel on a full indemnity basis, and all actual and documented costs incurred in investigating or pursuing any of the foregoing or any proceeding relating to any of the foregoing;

“Closing” means the completion of the transactions contemplated by Section 2.1;

“Closing Cash” means the combined balance of cash and highly liquid investments with original maturities of three months or less of the Subject Companies as at the Closing Date, net of any unpaid cheques, negative cash balances or drafts drawn thereon, determined in accordance with GAAP consistently applied;

“Closing Date” means the later of (i) February 12, 2008 and (ii) the date that is 5 Business Days after the satisfaction of the conditions precedent set out in Articles 7 and 8, provided that the Closing Date shall not be later than February 29, 2008 without the written agreement of the Parties;

“Closing Date Financial Statements” means the combined balance sheet and combined statement of the Closing Net Working Capital of the Subject Companies as at 12:01 a.m. on the Closing Date and the combined statement of income or loss of the Subject

 

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Companies for the interim period then ending, prepared by the Purchaser in accordance with GAAP consistent with past practice, with full cooperation of the Seller, as finally determined in accordance with the provisions of Section 3.4 and 3.6;

“Closing Net Working Capital” means as at 12:01 a.m. on the Closing Date:

and, for greater certainty, no amount that is included in the calculation of Indebtedness for purposes of Section 3.4, 3.5 or 3.6 shall be included in the calculation of Closing Net Working Capital;

“Closing Time” means 10:00 o’clock a.m. (Toronto time) on the Closing Date or such other time on such date as the Parties may agree in writing as the time at which the Closing shall take place;

“Collective Agreements” means the collective agreements by which a Subject Company is bound;

“Confidentiality Agreement” means the Confidentiality Agreement dated October 17, 2007 between Signature Aluminum, Inc. and Tredegar Corporation as amended by letter agreement dated the date hereof;

“Contracts” means oral and written contracts, licences, leases, agreements, obligations, commitments, entitlements or engagements to which a Subject Company is a party or by which it is bound, and includes any quotations, orders, proposals or tenders which remain open for acceptance and warranties and guarantees (but excluding statutory warranties and warranties implied by common law);

“DB Pension Plan” means a Pension Plan, as of the Closing Date, that is a registered pension plan and that provides benefits on a defined benefit basis, in whole or in part;

“Deficit Funding Position” means, in respect of each DB Pension Plan, the amount, if any, by which the fair market value of related assets is below the greater of solvency liabilities or wind-up liabilities using the methods and assumptions disclosed in the most recent actuarial report for such DB Pension Plan which methods and assumptions are in compliance with applicable Laws, current industry standards (including provision for expenses, but without provision for the present value of future special payments) and properly reflect the terms of the applicable DB Pension Plan and the benefits payable thereunderwith any adjustments necessary to reflect any changes in the benefits under any DB Pension Plan in effect prior to the Closing Date;

 

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“Disclosure Letter” means the disclosure letter from the Seller to the Purchaser dated the date of, and delivered concurrently with, this Agreement;

“Employees” means individuals employed by a Subject Company on a full-time, part-time or temporary basis (including officers), including those employees on disability leave, parental leave or other absence;

“Employment Contracts” means Contracts, other than Benefit Plans, in writing between an Employee and a Subject Company;

“Encumbrances” means pledges, liens, charges, security interests, leases, title retention agreements, mortgages, hypothecs, options, adverse claims, easements, servitudes or encumbrances of any kind or character whatsoever;

“Environment” means air, land, water, all organic and inorganic matter and all living organisms and includes surface water, ground water, land surface, soil, subsurface strata and all layers of the atmosphere;

“Environmental Approvals” means permits, certificates, licences, authorizations, consents, agreements, instructions, directions, registrations, or approvals required by a Governmental Authority pursuant to an Environmental Law relating to the operations, business or assets of the Subject Companies;

“Environmental Laws” means all applicable Laws in respect of the Environment, public or occupational health or safety, and the manufacture, importation, handling, transportation, storage, disposal and treatment of Hazardous Substances, including the Canadian Environmental Protection Act, the Fisheries Act (Canada), the Environmental Protection Act (Ontario), the Ontario Water Resources Act, Environment Quality Act (Quebec) and all regulations promulgated pursuant to the foregoing;

“Estimated Closing Cash” means the good faith estimate of Closing Cash delivered by the Seller to the Purchaser at least two Business Days prior to the Closing Date;

“Estimated Closing Net Working Capital” means the good faith estimate of Closing Net Working Capital delivered by the Seller to the Purchaser at least two Business Days prior to the Closing Date;

“Estimated Indebtedness” means the good faith estimate of Indebtedness as at the Closing Date delivered by the Seller to the Purchaser at least two Business Days prior to the Closing Date;

“Exchange Rate” means, for a given day, US dollar daily noon rate or closing rate, as applicable, (vis a vis the Canadian dollar) as published by the Bank of Canada on its website onthat day;

“Financial Statements” means the combined financial statements of the Subject Companies consisting of:

 

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all prepared in accordance with GAAP consistently applied throughout the periods to which they relate,a copy of which is annexed as Section 1.1(a) of the Disclosure Letter;

“GAAP” means United States generally accepted accounting principles, as in effect from time to time, subject to the exceptions set forth in Section 1.1(b) of the Disclosure Letter;

“Governmental Authorities” means governments, regulatory authorities, governmental departments, agencies, commissions, bureaus, officials, ministers, Crown corporations, courts, bodies, boards, tribunals or dispute settlement panels or other law, rule or regulation-making organizations or entities:

“Governmental Authorizations” means authorizations, approvals, licences or permits issued to a Subject Company by or from any Governmental Authority;

“Hazardous Substances” means any solid, liquid, gas, odour, heat, sound, vibration, radiation or combination of them that may impair the Environment, injure or damage property or plan or animal life or harm or impair the health of any individual and includes any contaminant, waste, substance or material defined by Environmental Law as hazardous, toxic or dangerous or any other substance or material prohibited, regulated or reportable pursuant to any Environmental Law;

“Hedge Escrow Agreement” has the meaning given in Section 2.1;

“Hedging Contracts” means futures, options or other derivative contracts entered into by the Seller or an Affiliate thereof on behalf of the Subject Companies to hedge related margin exposure on fixed-price forward sales contracts, each of which (including the related fixed-price forward sales contracts) are listed in Section 1.1(c) of the Disclosure Letter as such Section 1.1(c) of the Disclosure Letter may be amended from time to time in accordance with Section 9.1(a)(i) of this Agreement;

“Incur” or “Incurred” means, in relation to contributions to a DB Pension Plan, any contributions to a DB Pension Plan made by Bon L Canada when paid when due and owing to such plan under applicable Laws and as determined pursuant to filed actuarial

 

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valuations and, in the context of a full or partial plan wind-up of a DB Pension Plan, on the payment of any amount owing by Bon L Canada under applicable Laws;

“Indebtedness” means, with respect to the Subject Companies at any date, without duplication: (i) all obligations for borrowed money or in respect of loans or advances, (ii) all obligations evidenced by bonds, debentures, notes or other similar instruments or debt securities, (iii) all obligations in respect of letters of credit and bankers’ acceptances, (iv) all obligations arising from deferred compensation arrangements and employee bonuses (to the extent not accrued for in Closing Net Working Capital) and any payments triggered by the transactions contemplated by this Agreement, (v) all obligations secured by an Encumbrance, (vi) all purchased money debt and capital lease obligations determined in accordance with GAAP consistently applied, (vii) all notes and accounts payable to any Affiliates of the Subject Companies or any officers or employees thereof, (viii) deferred revenue obligations, (ix) contingent liabilities or any liabilities incurred outside the ordinary course of business, (x) Accounts Payable more than 60 days past due as at the Closing Date, (xi) legal and professional fees (to the extent not accrued for in Closing Net Working Capital), (xii) all guaranties, accrued interest, prepayment fees or penalties related to any of the foregoing and (xiii) any excess of the projected benefit obligation over the fair value of related plan assets for postretirement benefit plans other than Pension Plans, determined as at December 30, 2007 in accordance with GAAP consistently applied (the GAAP accounting rates shall be based on actuarial methodology that is consistent with the December 31, 2006 valuation provided to Purchaser which valuation resulted in a projected benefit obligation of approximately Cdn. $65,000); for greater certainty, “Indebtedness” of a Subject Company shall not include any obligations of such Subject Company in respect of or relating to any Pension Plans;

“Indemnified Party” has the meaning given in Section 10.3;

“Indemnifying Party” has the meaning given in Section 10.3;

“Independent Auditor” means Ernst & Young;

“Information Technology” means computer hardware, software in source code and object code form (including documentation, interfaces and development tools), websites for the Subject Companies, databases, telecommunications equipment and facilities and other information technology systems owned, used or held by a Subject Company;

“Intellectual Property” means intellectual property rights, whether registered or not, owned, used or held by a Subject Company;

“Intercompany Accounts” means all balances related to Indebtedness, including any intercompany Indebtedness (including intercompany trade payables and receivables) between the Seller and/or its Affiliates (other than the Subject Companies) on the one hand, and a Subject Company, on the other hand;

“Inventories” means all inventories of aluminium and alloy wheresoever situate owned by each of the Subject Companies including all such inventories of raw materials, work-in-progress, finished goods and scrap and valued at average cost in accordance with GAAP consistently applied;

 

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“Laws” means currently existing applicable statutes, by-laws, rules, regulations, Orders, ordinances or judgments, in each case of any Governmental Authority having the force of law;

“Leased Real Property” means lands and/or premises which are used by a Subject Company which are leased, subleased, licensed or otherwise occupied by a Subject Company and the interest of the Subject Companies in plants, buildings, structures, fixtures, erections, improvements, easements, rights of way, spur tracks and other appurtenances situate on or forming part of such premises;

“Material Adverse Effect” means any change, effect or circumstance that is materially adverse to the business, assets, financial condition or results of operations of the Subject Companies, taken as a whole; but shall exclude any Material Adverse Effect arising out of any of the following: (i) any change, effect or circumstance relating generally to financial markets or general economic conditions including fluctuations in currency; (ii) any change, effect or circumstance relating to conditions generally affecting the industry in which the Subject Companies operate; (iii) war, act of terrorism, civil unrest or similar event; (iv) any generally applicable change in Laws or interpretation thereof; (v) any change in the market price of products in the industry in which the Subject Companies operate; (vi) any change in the price of raw materials used to a significant degree by a Subject Company; (vii) any failure of a Subject Company to meet projections in respect of that Subject Company; (viii) any change, effect or circumstance resulting from an action required by this Agreement; or (ix) any change, effect or circumstance caused by the announcement of this Agreement or the transactions contemplated by this Agreement provided, however, that any such change, effect or circumstance described in clauses (i) to (vi) does not have a materially disproportionate effect on the business, assets, financial condition or results of operations of the Subject Companies, taken as a whole; and provided further that in the case of the fluctuations in currency described in clause (i) any such change, effect or circumstance does not have a materially disproportionate effect on the Subject Companies, taken as a whole, compared to similarly situated companies;

“Material Contract” means any (i) written Contract for the employment of any officer, individual employee or other Person on a full time, part-time, consulting or other basis or relating to loans to officers, directors, managers or Affiliates (excluding, for greater certainty, standard confidentiality agreements signed by the Employees of any Subject Company); (ii) Contract under which the Subject Companies have advanced or loaned any other Person an amount in excess $10,000 individually or in the aggregate; (iii) a Contract which contains (A) minimum purchase commitments for either Subject Company, (B) an escalation clause or (C) requires the purchase of all or substantially all of a Subject Company’s requirements for a particular product from one vendor, supplier or subcontractor; (iv) a Contract which contains any “most-favored-nations” or similar provisions; (v) a Contract prohibiting any Subject Company from freely engaging in any business or competing anywhere in the world or requiring it to exclusively purchase from or sell products to any Person or any “take or pay” Contract; and (vi) any lease of any Leased Real Property;

 

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“Notice ” has the meaning given in Section 11.3;

“Non-Competition Agreement” has the meaning given in Section 2.1;

“Objection Notice” has the meaning given in Section 3.6;

“Orders” means orders, injunctions, judgments, administrative complaints, decrees, rulings, awards, assessments, directions, instructions, penalties or sanctions issued, filed or imposed by any Governmental Authority or arbitrator and includes Remedial Orders;

“Owned Real Property” means real property owned by a Subject Company, including plants, buildings, structures, fixtures, erections, improvements, and other appurtenances situate on or forming part of such real property;

“Parties” means the Seller, Idlewood Properties, the Guarantor and the Purchaser collectively, and “Party” means any one of them;

“Pension Plans” means Benefit Plans providing pensions, superannuation benefits or retirement savings including pension plans, top up pensions or supplemental pensions, “registered retirement savings plans” (as defined in the Income Tax Act (Canada)), “registered pension plans” (as defined in the Income Tax Act (Canada)) and “retirement compensation arrangements” (as defined in the Income Tax Act (Canada)) relating in each case to Employees;

“Permitted Encumbrances” means (i) the liens and encumbrances of record described in Section 1.1(d) of the Disclosure Letter and the applicable municipal by-laws, development agreements, subdivision agreements, site plan agreements, other agreements, building and other restrictions, easements, servitudes, rights of way and licences which do not in the aggregate materially adversely affect the use or value of theReal Property affected thereby and provided the same have been complied with in all material respects to the Closing Date including the posting of any required security for performance of obligations thereunder; (ii) defects or irregularities in title to the Real Property which are of a minor nature and do not materially adversely affect the use or value of the Real Property affected thereby and provided the same have been complied with in all material respects to the Closing Date; (iii) inchoate statutory liens for Taxes, assessments, governmental or utility charges or levies not yet due as at the Closing Date; (iv) rights of equipment lessors under Contracts provided the terms of such Contracts have been fully performed to the Closing Date; and (v) all Encumbrances affecting a landlord’s freehold interest in any Leased Real Property;

“Person” means any individual, sole proprietorship, partnership, firm, entity, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, Governmental Authority, and where the context requires any of the foregoing when they are acting as trustee, executor, administrator or other legal representative;

“Personal Information” means information in the possession or under the control of the Seller about an identifiable individual;

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“Personal Property” means all machinery, equipment, furniture, motor vehicles and other chattels owned or leased by either of the Subject Companies (including those in possession of suppliers, customers and other third parties);

“Personal Property Lease” means a chattel lease, equipment lease, conditional sales contract and other similar agreement to which either Subject Company is a party or under which it has rights to use Personal Property;

“Purchase Price” means, collectively, the Purchased Shares Purchase Price and the Purchased Note Purchase Price, as adjusted pursuant to Article 3;

“Purchased Interests” means, collectively, the Purchased Shares and the Purchased Note;

“Purchased Note” means the promissory note issued by Bon L Canada in favour of Idlewood Properties dated October 1, 2007 and due October 1, 2012 in the principal amount of $34,388,796 (as reduced to the extent of any prepayments of principal amount) and bearing interest at the rate of 7.8% per annum;

“Purchased Note Purchase Price” has the meaning given in Section 3.1(b);

“Purchased Shares” means all of the issued and outstanding shares in the capital of Apolo;

“Purchased Shares Purchase Price” has the meaning given in Section 3.1(a);

“Real Property” means Owned Real Property and Leased Real Property;

“Real Property Leases” means those leases and subleases pursuant to which a Subject Company uses or occupies the Leased Real Property;

“Release” has the meaning prescribed in any Environmental Laws and includes any release, spill, leak, pumping, pouring, emission, emptying, discharge, injection, escape, leaching, disposal, dumping, deposit, spraying, burial, abandonment, incineration, seepage, migration, placement or introduction;

“Remedial Orders” means Orders issued, filed or imposed by any Governmental Authority pursuant to any Environmental Laws and include Orders requiring remediation of any site or any remediation or clean-up of any Hazardous Substance, or requiring that any Release be reduced, modified or eliminated;

“Representative” when used with respect to a Party means each director, officer, employee, agent, consultant, adviser and other representative of that Party who is involved in the transactions contemplated by this Agreement;

“Statutory Plans” means statutory benefit plans which a Subject Company is required to participate in or comply with, including the Canada and Quebec Pension Plans and plans administered pursuant to applicable health tax, workplace safety insurance and employment insurance legislation;

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“Subject Companies” means, jointly, Bon L Canada and Apolo and a “Subject Company” means any one of Bon L Canada and Apolo, as applicable;

“Tangible Personal Property” means machinery, equipment, furniture, furnishings, office equipment, computer hardware, materials, vehicles, material handling equipment, implements, parts, tools, jigs, dies, moulds, patterns, tooling and spare parts and tangible assets (other than Real Property and Inventory) owned or used or held by the Subject Companies;

“Target Net Working Capital” means the average net working capital of the Subject Companies computed using fiscal month ending balances from January 2007 to December 2007, inclusive, calculated using the methodology set out in Section 1.1(g) of the Disclosure Letter, such calculation to be provided by the Seller to the Purchaser and confirmed by the Purchaser within five Business Days with the reasonable cooperation of the Seller;

“Tax Returns” means returns, reports, declarations, elections, notices, filings, forms, statements and other documents (whether in tangible, electronic or other form) and including any amendments, schedules, attachments, supplements, appendices and exhibits thereto, made, prepared, filed or required to be made, prepared or filed by Law in respect of Taxes;

“Taxes” means taxes, duties, fees, premiums, assessments, imposts, levies and other similar charges imposed by any Governmental Authority under applicable Law, including all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Authority in respect thereof, and including those levied on, or measured by, or referred to as, income, gross receipts, profits, capital, transfer, land transfer, sales, goods and services, harmonized sales, use, value-added, excise, stamp, withholding, business, franchising, property, development, occupancy, employer health, payroll, employment, health, social services, education and social security taxes, all surtaxes, all customs duties and import and export taxes, countervail and anti-dumping, all licence, franchise and registration fees and all employment insurance, health insurance and Canada, Québec and other government pension plan premiums or contributions;

“Technical Information” means know-how and related technical knowledge owned, used or held by a Subject Company;

“Technology” means Intellectual Property, Technical Information and Information Technology;

“Transition Services Agreement” has the meaning give in Section 2.1; and

“U.S. Prime Rate” means, on any day, the annual rate of interest set forth in Federal Reserve Publication H.15(519) or any successor publication as published by the Board of Governors of the U.S. Federal Reserve System opposite the caption “Bank prime loan”.

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In this Agreement:

Any reference to the knowledge or awareness of any Party means to the actual knowledge of such Party and, in the case of the knowledge of the Seller, the actual knowledge of Duncan Crowdis, Michael E. Jones, D. Andrew Edwards, Jim Laverty and Wilf Holland, after having

 

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conducted a reasonable inquiry of those with responsibility for or knowledge of the relevant facts and matters, and investigation of the relevant facts and matters.

1.4	Entire Agreement

This Agreement, the Confidentiality Agreement and the agreements and other documents required to be delivered pursuant to this Agreement, constitute the entire agreement between the Parties and set out all the covenants, promises, warranties, representations, conditions and agreements between the Parties in connection with the subject matter of this Agreement and such other documents and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, pre-contractual or otherwise. There are no covenants, promises, warranties, representations, conditions, understandings or other agreements, whether oral or written, pre-contractual or otherwise, express, implied or collateral, whether statutory or otherwise, between the Parties in connection with the subject matter of this Agreement except as specifically set forth in this Agreement, the Confidentiality Agreement and any document required to be delivered pursuant to this Agreement and the Purchaser shall acquire the Purchased Interests as is and where is subject to the benefit of the representations and warranties in this Agreement. Each of this Agreement and the Confidentiality Agreement constitutes the complete and exclusive statement of its terms and no extrinsic evidence whatsoever may be introduced in any proceedings involving it. Any cost estimates, projections or other predictions contained or referred to in any other material that has been provided to the Purchaser or any of its Affiliates, agents or representatives (including any due diligence presentations or documents, and in particular any descriptive memorandum transmitted to the Purchaser relating to any Subject Company and the sale of the Purchased Interests, and any supplements or addenda thereto) are not and shall not be deemed to be representations or warranties of the Seller or any of their respective Affiliates, agents, employees or representatives (except as set forth herein). This Agreement is not intended to confer any benefit upon any Person other than the Parties and, solely with respect to Article 10, the other Indemnified Parties.

ARTICLE 2

PURCHASE AND SALE

Subject to the provisions of this Agreement, at the Closing Time:

 

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(b)

the Purchaser shall pay the Purchased Shares Purchase Price and the Purchased Note Purchase Price as provided in Section 3.2;

(c)

the Seller shall deliver to the Purchaser:

 

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                              (iii)            such other documents and instruments as may be reasonably required by the Seller to                                                 complete the transactions contemplated herein.

2.2          Place of Closing

The Closing shall take place at the Closing Time at the offices of Osler, Hoskin & Harcourt LLP located at 1 First Canadian Place, 63^rd Floor, Toronto, Ontario, Canada M5X 1B8, or at such other place as may be agreed upon by the Seller and the Purchaser.

ARTICLE 3

PURCHASE PRICE

At the Closing Time, the Purchaser shall satisfy the Purchase Price by payment to the Seller and Idlewood Properties, in such proportions as the Seller and Idlewood Properties may direct, of $25,000,001 plus Estimated Closing Cash plus the Estimated Closing Net Working Capital less the Target Net Working Capital less the Estimated Indebtedness by wire transfer of immediately available funds pursuant to wire instructions furnished to the Purchaser by the Seller at least two Business Days prior to the Closing Date.

The Seller and the Purchaser shall jointly count and value the Inventories as of 12:01 a.m. on the Closing Date.

As soon as reasonably practicable after the Closing Date and in any event not later than 45 days thereafter, the Purchaser, with full cooperation of the Seller, shall cause to be prepared and delivered to the Seller and Idlewood Properties the Closing Date Financial Statements.

 

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3.5         Purchase Price Adjustments

 

Subject to Section 3.6, within 10 days after delivery by the Purchaser to the Seller and Idlewood Properties of the Closing Date Financial Statements, if the Closing Net Working Capital plus Closing Cash less Indebtedness (as at the Closing Date, except as specified in the definition of Indebtedness) exceeds the Estimated Net Working Capital plus Estimated Closing Cash less Estimated Indebtedness (as at the Closing Date, except as specified in the definition of Indebtedness), the Purchaser shall pay to the Seller and Idlewood Properties, in such proportionsas the Seller and Idlewood Properties may direct, the amount of the excess and if the Closing Net Working Capital plus Closing Cash less Indebtedness (as at the Closing Date, except as specified in the definition of Indebtedness) is less than the Estimated Net Working Capital plus Estimated Closing Cash less Estimated Indebtedness (as at the Closing Date, except as specified in the definition of Indebtedness), then the Seller and Idlewood Properties, in such proportions as the Seller and Idlewood Properties may direct, shall pay the Purchaser the amount of the difference.

 

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Independent Auditor shall be final and binding on the Parties (absent fraud or clerical error) and the Closing Date Financial Statements shall be finalized in accordance with such determination.

(c)

Audit Expenses – Any fees and expenses of the auditor of the Subject Companies in acting in accordance with this Section 3.6 shall be paid by the Subject Companies. The fees and expenses of the Independent Auditor in acting in accordance with this Section 3.6 shall be allocated by the Independent Auditor between the Purchaser and the Seller (on behalf of itself and Idlewood Properties) based on the percentage which the portion of the contested amount not awarded to each Party bears to the amount actually contested by such Party. As an example and for illustrative purposes only, if the Purchaser contends that there should be a Purchase Price decrease of $1,000,000, the Seller contends that there should be no Purchase Price decrease and the Independent Auditor determines that there should be a Purchase Price decrease of $300,000, then the Purchaser shall pay 70% of the fees and expenses of the Independent Auditor and the Seller (on behalf of itself and Idlewood Properties) shall pay 30% of such fees and expenses.

The amounts paid as adjustments under Sections 3.5 and 3.6 shall be paid together with interest thereon calculated and compounded monthly from the Closing Date to the date of payment, at the rate per annum equal to 5.5%, less any applicable withholding taxes.

Any payment made by the Purchaser to the Seller and Idlewood Properties pursuant to Sections 3.2, 3.5 and 3.6 shall constitute an increase in the Purchase Price and any payment made by the Seller and Idlewood Properties to the Purchaser pursuant to Sections 3.2, 3.5 and 3.6 shall constitute a reduction of the Purchase Price. If the Purchase Price shall be adjusted pursuant to Section 3.2, Section 3.5 or Section 3.6, the amount of adjustment required shall be allocated first to the Purchased Note and any excess of the Purchase Price over the stated principal amount of the Purchased Note shall be allocated to the Purchased Shares. Each of the Parties shall report the purchase and sale of the Purchased Interests in any Tax Returns in accordance with the provisions of Section 3.8.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller (and solely with respect to the representations given by Idlewood Properties in Section 4.3(a), 4.3(c), 4.5, 4.7, 4.20(d), 4.27, 4.31, 4.32 and 4.38 Idlewood Properties and the Seller, jointly and severally), as of the date hereof and as of the Closing Date, represent and warrant to the Purchaser the matters set out below and acknowledge that the Purchaser is relying upon such representations and warranties in connection with the entering into of this Agreement. Disclosure of a fact or matter to the Purchaser in any section of the Disclosure Letter shall be sufficient disclosure for another representation or warranty under this Agreement if (a) a specific cross-reference is made to or from the appropriate section of the Disclosure Letter for such other representation or warranty or (b) the disclosure is described in sufficient detail such that the qualification of the other representation or warranty is reasonably apparent.

 

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Neither Subject Company owns, nor has any direct or indirect interest in, any shares or has an ownership interest in any other Person.

 

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The authorized and issued share capital of each Subject Company set forth in Section 4.4 of the Disclosure Letter is true and complete. All of the Purchased Shares have been duly and validly issued and are outstanding as fully paid and non-assessable shares. The New Share, upon receipt of consideration therefor, shall be fully paid and non-assessable. No options, warrants or other rights to purchase shares or other securities of a Subject Company and no securities or obligations convertible into or exchangeable for shares or other securities or phantom participations of a Subject Company have been authorized or agreed to be issued or are outstanding. Except as disclosed in Section 4.4 of the Disclosure Letter, there are no shareholders’ agreements governing the affairs of a Subject Company or the relationship, rights and duties of its shareholders, nor are there any voting trusts, pooling arrangements or other similar agreements with respect to the ownership or voting of any shares in the capital of a Subject Company. As of the Closing Date, the representation and warranties in this Section 4.4 shall be deemed to have been amended to reflect the cancellation of the Bon L Canada Shares and the issuance of the New Share, in each case, as contemplated in Section 2.1(a).

 

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to any of the Purchased Interests at law or in equity. To the knowledge of the Seller, there are no grounds on which any such Claim might be commenced and there is no Order outstanding against or affecting the Seller or Idlewood Properties which, in any such case, affects adversely or might affect adversely the ability of the Seller or Idlewood Properties to enter into this Agreement or to perform its obligations hereunder.

Except as disclosed in Section 4.6 of the Disclosure Letter, neither Subject Company is a party to, bound or affected by or subject to any:

which would be materially violated, breached by, or under which a material default would occur or a material Encumbrance or other right would be created, triggered or accelerated as a result of the execution and delivery of, or the performance of obligations under, this Agreement or any other agreement to be entered into under the terms of this Agreement. There has been no sale, assignment, subletting, licensing or granting of any rights in or other disposition of or in respect of any of a Subject Company’s assets or any granting of any agreement or right capable of becoming an agreement or option for the purchase, assignment, subletting, licensing or granting of any rights in or other disposition of any of such assets other than pursuant to the provisions of, or as disclosed in, this Agreement or pursuant to purchase orders for Inventory accepted by a Subject Company in the ordinary course of business.

No approval, Order, consent of or filing with any Governmental Authority is required, in connection with the execution, delivery and performance of this Agreement or any other documents and agreements to be delivered under this Agreement or the performance of the obligations of Seller or of Idlewood Properties under this Agreement or any other documents and agreements to be delivered under this Agreement other than those approvals, Orders, consents or filings where any failure to obtain or perform would not be material.

The Financial Statements of the Subject Companies have been prepared in accordance with GAAP consistently applied throughout the periods to which they relate, are accurate and complete, and present fairly in all material respects:

 

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Neither Subject Company has incurred any liabilities or obligations (whether accrued, absolute, contingent or otherwise), which continue to be outstanding, except as disclosed in the Financial Statements, in Section 4.9 of the Disclosure Letter, or current liabilities incurred in the ordinary course of business which are not material.

Except as set forth in Section 4.10 of the Disclosure Letter and except as contemplated by this Agreement, since November 25, 2007:

 

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respective Affiliates on one hand, and a Subject Company, on the other hand) to any other Person or incurred any other liability or obligation to any other Person which is required to be classified as a liability on the liability side of a balance sheet in accordance with GAAP;

 

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Except as disclosed in Section 4.12 of the Disclosure Letter, all material Tangible Personal Property necessary for the operation of the business of each Subject Company as currently operated is in satisfactory operating condition and repair having regard to normal wear and tear, its use, age and scheduled maintenance. Section 4.12 of the Disclosure Letter includes a list of any required maintenance or repair items reasonably expected to have a cost in excess of $15,000.

All Inventories are valued on the books of the Subject Companies at average cost in accordance with GAAP. Subject to reasonable allowance for obsolescence, the Inventories consist of items that are current and of good and merchantable quality and not subject to any write-down or write-off. The portion of the Inventories consisting of finished products is saleable in the ordinary course of business. Current Inventory levels are consistent with the level of Inventories that has been maintained in the operation of the businesses of the Subject Companies prior to the date hereof in accordance with the operation of such businesses in the ordinary course of business. Section 4.13 of the Disclosure Letter sets out a complete and accurate list of all locations where the Inventories are situate, including a brief description of the type and amount of such Inventories situate at each location.

The Accounts Receivable and Accounts Payable are bona fide. All Accounts Receivable and Accounts Payable are recorded in the financial records of each Subject Company, as the case may be. The Accounts Receivable are valid obligations which arose in the ordinary course of business. As of date hereof, to the Seller’s knowledge except as disclosed in Section 4.14 of the Disclosure Letter no Account Receivable in excess of $50,000 is subject to any valid dispute, set off or counterclaim. Except as set forth in Section 4.14 of the Disclosure Letter, none of the Accounts Receivable is due from an Affiliate of a Subject Company. Except as set forth in Section 4.14 of the Disclosure Letter, the Accounts Payable are valid obligations which arose in the ordinary course of business. Except as set forth in Section 4.14 of the Disclosure Letter, none of the Accounts Payable is due to an Affiliate of a Subject Company. Except as set forth in Section 4.14 of the Disclosure Letter, all amounts owing by a Subject Company to any Person have been paid in the ordinary course of business without undue delay.A true and complete list of the Accounts Receivable and the Accounts Payable, as at November 25, 2007 is set forth in Section 4.14 of the Disclosure Letter and such list shall be updated before Closing to include a true and complete list of the Accounts Receivable and the Accounts Payable, as at December 30, 2007 as soon as such numbers are available.

Section 4.15 of the Disclosure Letter lists all of the material licences, permits, authorizations, approvals or other evidence of authority issued or granted to, conferred upon, or otherwise created for, a Subject Company by any Governmental Authority (collectively, the “Licences”) and identifies those that by their terms are not transferable. The Licences are the only licences,

 

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permits, approvals or evidences of authority of any Governmental Authority required for the operation of the Subject Companies respective businesses and are held by the applicable Subject Company free and clear of any and all Encumbrances. The business of each Subject Company is being conducted by it in accordance with all terms and conditions of the Licences and in material compliance with applicable Law. All the Licences are valid and are in full force and effect, neither Subject Company is in violation of any material term or provision or requirement of any Licence, and no Person has threatened to revoke, amend or impose any condition in respect of, or commenced proceedings to revoke, amend or impose conditions in respect of, any Licence. Except as specifically disclosed in this Agreement, no Governmental Authorization is required in connection with the transactions contemplated by this Agreement or in order to maintain any Licence in full force and effect and in good standing after Closing.

 

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Governmental Authority having jurisdiction over the Owned Real Property or by any other Person entitled to enforce the same.

 

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Except as disclosed in Section 4.19 of the Disclosure Letter:

 

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which any such Claims might be commenced with any reasonable likelihood of success.

This Section 4.19 contains the sole and exclusive representations and warranties of the Seller with respect to matters relating to the Environment.

 

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to the Purchaser together with substantially all related documentation including funding agreements, actuarial reports, funding and financial information, returns and statements, material correspondence with Governmental Authorities and plan summaries, employee booklets and personnel manuals.

 

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Section 4.23 of the Disclosure Letter sets forth a complete list of the Material Contracts that have not been listed in any other section of the Disclosure Letter. The Material Contracts listed in Section 4.23 of the Disclosure Letter are all in full force and effect unamended and are valid, binding and enforceable subject to limitations on enforcement imposed by bankruptcy, insolvency, reorganization or other laws affecting the enforcement of the rights of creditors and others and to the extent that equitable remedies such as specific performance and injunctions are only available in the discretion of the court from which they are sought. Except as disclosed in Section 4.23 of the Disclosure Letter, neither of the Subject Companies is a party to any Contract with any current or former director, officer or employee of either Subject Company or with any Affiliate of either Subject Company. Neither Subject Company is, nor to the knowledge of the Seller is any other party to any Material Contract, in default under any Material Contract and there has not occurred any event which, with the lapse of time or giving of notice or both, would constitute a default under any Material Contract by the Subject Company or, to the knowledge of the Seller, any other party to the Material Contract. Neither Subject Company has received any notice of a default by the Subject Company under any Material Contract or of a dispute between the Subject Company, as the case may be, and any other Person in respect of any Material Contract. Except as disclosed in Section 7.5 of the Disclosure Letter, no consent or approval is required nor is any notice required to be given under any Material Contract by any party thereto or any other Person in connection with the completion of the transactions contemplated by this Agreement in order to maintain all rights of the Subject Company, as the case may be, under such Material Contract. The completion of the transactions contemplated by this Agreement will not afford any party to any of the Material Contracts or any other Person the right to terminate any Material Contract nor will the completion of such transactions result in any additional or more onerous obligation on a Subject Company under any Material Contract.

Except as set forth and described in Section 4.24 of the Disclosure Letter, there are no material Claims, investigations or other proceedings, including appeals and applications for review, in progress, or pending or, to the knowledge of the Seller, threatened against a Subject Company before any Governmental Authority, which Claim involves the possibility of any damages not fully covered by insurance (subject to deductibles under applicable insurance policies) nor, to the knowledge of the Seller, is there any factual or legal basis on which any such Claim might be commenced with any reasonable likelihood of success. Except as set forth and described in Section 4.24 of the Disclosure Letter, there is no Order outstanding against or affecting either Subject Company or any of its properties or assets. Without limiting the generality of the foregoing, except as set forth and described in Section 4.24 of the Disclosure Letter, there is no Claim for an amount greater than, or reasonably expected to be greater than, $10,000 involving any product liability claim in progress, pending or, to the knowledge of the Seller, threatened against or affecting a Subject Company alleging any defect in, or failure to warn concerning any

 

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risks or damages inherent in, the design or manufacture of or the materials used in any of the products manufactured or distributed by or for either Subject Company.

Except as specifically disclosed in Section 4.25 of the Disclosure Letter:

 

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The articles and by-laws for each Subject Company, including any and all amendments, have been made available to the Purchaser and such articles and by-laws as so amended are in full force and effect. The minute books of each of the Subject Companies have been maintained in accordance with applicable Law and contain true, correct and complete copies of its articles, its by-laws, the minutes of every meeting of its board of directors and every committee thereof and of its shareholders and every written resolution of its directors and shareholders. The share certificate book, register of shareholders, register of transfers and register of directors and officers of each of the Subject Companies are complete and accurate in all material respects.

 

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Each of the Seller and Idlewood Properties has carried on all negotiations relating to this Agreement and the transactions contemplated in this Agreement directly and without intervention on its behalf of any other party in such manner as to give rise to any valid claim for a brokerage commission, finder’s fee or other like payment against the Purchaser or a Subject Company.

Neither of the Subject Companies has made an assignment in favour of its creditors nor a proposal in bankruptcy to its creditors or any class thereof nor had any petition for a receiving order presented in respect of it. Neither of the Subject Companies has initiated proceedings with respect to a compromise or arrangement with its creditors or for its winding up, liquidation or dissolution. No receiver has been appointed in respect of either of the Subject Companies, or any of their respective property or assets and no execution or distress has been levied upon any of the property or assets of either of the Subject Companies. No act or proceeding has been taken or authorized by or against either of the Subject Companies with respect to any amalgamation, merger, consolidation, arrangement or reorganization of, or relating to, either of the Subject Companies nor have any such proceedings been authorized by any other Person.

The use and disclosure of Personal Information by each of the Subject Companies in connection with the conduct of the business of the Subject Companies prior to Closing was carried out in compliance with all applicable Laws.

Section 4.30 of the Disclosure Letter lists all the leases of Personal Property Leases and identifies those which cannot be terminated by the applicable Subject Company without liability at any time upon less than 30 days’ notice or which involve payment by the applicable Subject Company in the future of more than $15,000. Each Personal Property Lease is in full force and effect and has not been amended, and the applicable Subject Company is entitled to the full benefit and advantage of each Personal Property Lease in accordance with its terms. Each Personal Property Lease is in good standing and there has not been (a) any default by a Subject Company under any Personal Property Lease, (b) to the knowledge of the Seller, any default by any other party under any Personal Property Lease, or (c) any dispute between a Subject Company and any other party under any Personal Property Lease.

Except as set forth in Section 4.31 of the Disclosure Letter, no Governmental Authorization or filing with, notice to, or waiver from any Governmental Authority is required to be obtained or made by the Seller, Idlewood Properties or a Subject Company: (a) in connection with the execution and delivery of, and performance by each of the Seller and Idlewood Properties of its obligations under, this Agreement or the consummation of the transactions contemplated hereby;

 

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or (b) to permit each Subject Company to carry on its business after the Closing as such business is currently carried on by it.

Section 4.32 of the Disclosure Letter lists the 25 largest customers per facility for the years ended December 31, 2006 and December 31, 2007 (other than the Apolo facility, in which case the Disclosure Letter lists the 25 largest customers for the period ended November 30, 2007) and the 15 largest suppliers of the Subject Companies for the year ended December 31, 2006 and the period ended October 31, 2007, and the aggregate amount which each customer was invoiced and each supplier was paid during such period. Neither the Seller nor Idlewood Properties is aware of, nor has the Seller, Idlewood Properties or either Subject Company received notice of, any intention on the part of any such customer or supplier to cease doing business with a Subject Company or to modify or change in any material manner any existing arrangement with a Subject Company for the purchase or supply of any products or services. The relationships of each Subject Company with each of its principal suppliers, shippers and customers are satisfactory, and there are no unresolved material disputes with any such supplier, shipper or customer.

Except as disclosed in Section 4.33 of the Disclosure Letter, neither Subject Company is liable in respect of advances, loans, guarantees, liabilities or other obligations to or on behalf of any shareholder, officer, director, Employee or Affiliate of a Subject Company or any other Person with whom either Subject Company does not deal at arm’s length. There are no Intercompany services provided to a Subject Company by the Seller, Idlewood Properties or by any of their respective Affiliates except as set out in Section 4.33 of the Disclosure Letter.

The products produced by the Subject Companies have been manufactured in all material respects in accordance with, and meet all requirements of, applicable Law and meet the specifications in all contracts with customers of the Subject Companies relating to the sale of such products.

 

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Section 4.36 of the Disclosure Letter sets forth the name and location (including municipal address) of each bank, trust company or other institution in which a Subject Company has an account, money on deposit or a safety deposit box and the name of each Person authorized to draw thereon or to have access thereto and no Person holds a power of attorney over any such accounts.

Section 4.37 of the Disclosure Letter sets out all of existing Indebtedness of the Subject Companies.

Except as expressly set forth in this ARTICLE 4, neither the Seller nor Idlewood Properties makes any representation or warranty, and there is no condition, in each case, express or implied, at law, by statute or in equity, in respect of the Purchased Interests or the Subject Companies or any of their respective assets, liabilities or operations, including with respect to merchantability or fitness for any particular purpose, and any such other representations, warranties or conditions are expressly disclaimed.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser represents and warrants to the Seller and to Idlewood Properties the matters set out below:

 

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The Purchaser is a corporation existing under the laws of Delaware. The Purchaser is not a consumer as defined in the Consumer Protection Act, 2002.

The Purchaser has all necessary corporate power, authority and capacity to enter into this Agreement and to carry out its obligations under this Agreement. The execution and delivery of this Agreement and the consummation of the transaction contemplated under this Agreement have been duly authorized by all necessary corporate action of the Purchaser. This Agreement constitutes a valid and binding obligation of the Purchaser enforceable against it in accordance with its terms subject to any limitations imposed by Law.

The Purchaser is not a party to, bound or affected by or subject to any material:

which would be violated, breached by, or under which default would occur or an Encumbrance would be created as a result of the execution and delivery of, or the performance of obligations under, this Agreement or any other agreement to be entered into under the terms of this Agreement.

As of the Closing Date, the Purchaser will have cash on hand in an amount sufficient to enable it, on the Closing Date, to pay the Purchase Price including any adjustments, and all other costs and expenses in connection with the consummation of the transactions contemplated by this Agreement.

The Purchaser is a “WTO Investor” within the meaning of the Investment Canada Act (Canada).

There are no Claims, investigations, complaints or other proceedings, including appeals and applications for review, in progress or, to the knowledge of the Purchaser, pending or threatened against or relating to the Purchaser, which, if determined adversely to the Purchaser, would:

 

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The Purchaser’s use and disclosure of Personal Information in connection with the conduct of the business of the Subject Companies after Closing will be carried out in compliance with all applicable Laws.

The Purchaser has carried on all negotiations relating to this Agreement and the transactions contemplated in this Agreement directly and without the intervention on its behalf of any other party in such manner as to give rise to any valid claim for a brokerage commission, finder’s fee or other like payment.

ARTICLE 6

SURVIVAL

All representations and warranties contained in this Agreement on the part of each of the Parties shall survive:

in each case, for the same period of time during which an obligation to indemnify exists pursuant to Section 10.1(b) or Section 10.2(b).

ARTICLE 7

PURCHASER’S CONDITIONS PRECEDENT

The obligation of the Purchaser to complete the purchase of the Purchased Interests under this Agreement is subject to the satisfaction of, or compliance with, at or before the Closing Time, each of the following conditions precedent (each of which is acknowledged to be inserted for the

 

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exclusive benefit of the Purchaser and may be waived by it in whole or in part). If any of the following conditions has not been fulfilled by the Closing Date, the Purchaser may terminate this Agreement by notice in writing to the Seller, in which event the Parties are, subject to Section 9.17, released from all obligations under this Agreement. However, the Purchaser may waive compliance with any condition in whole or in part if it sees fit to do so, without prejudice to its rights of termination in the event of non-fulfilment of any other condition.

Since the date of this Agreement, there shall have been no Material Adverse Effect and no Material Adverse Effect shall be reasonably likely to occur.

The representations and warranties of the Seller and Idlewood Properties contained in this Agreement shall be true and correct in all material respects at the Closing (except where such representation and warranty is already qualified by materiality, in which case it shall be true in all respects).

The Seller shall have performed or complied with, in all material respects, all its obligations and covenants under this Agreement (including Section 2.1).

The Purchaser shall have received copies of all such documentation or other evidence as it may reasonably request in order to establish the consummation of the transactions contemplated by this Agreement and the taking of all corporate proceedings in connection with such transactions in compliance with these conditions.

All consents, approvals, Orders and authorizations of any Governmental Authority listed in Section 7.5 of the Disclosure Letter shall have been obtained at or before the Closing Time.

There shall be no Order issued preventing, and no pending or threatened Claim, or proceeding, judicial or administrative or investigation against any Party by any Governmental Authority or Person, for the purpose of enjoining or preventing the consummation of the transactions contemplated by this Agreement.

 

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All consents and approvals as listed in Section 7.7 of the Disclosure Letter shall have been obtained at or before the Closing Time.

The directors and officers of the Subject Companies as listed in Section 7.8 of the Disclosure Letter shall have resigned.

The Guarantor shall have executed and delivered the Transition Services Agreement and the Hedge Escrow Agreement, all in form and substance acceptable to the Purchaser, acting reasonably. The Guarantor and the Seller shall have executed and delivered the Non-Competition Agreement, in form and substance acceptable to the Purchaser, acting reasonably.

If the transactions contemplated by this Agreement are subject to notification under Part IX of the Competition Act (Canada), then either (a) the Commissioner of Competition under the said Act shall have issued an advance ruling certificate under subsection 102(1) of the Competition Act (Canada) or (b) the applicable waiting period under section 123 of the said Act shall have expired or been terminated or shall have been waived under paragraph 113(c) of the said Act and the Competition Tribunal shall not have issued an order under the Competition Act (Canada) which remains in force that prevents the completion of the proposed transaction.

The Seller and Idlewood Properties shall have delivered a release of Claims against the Subject Companies in the form of Exhibit 7.11 duly executed by the Seller and Idlewood Properties.

The Purchaser shall have received a certificate(s) of the Secretary or other officer of the Seller, Idlewood Properties and the Subject Companies dated as of the Closing Date, substantially in the form of Exhibit 7.12, attaching for each of the Seller, Idlewood Properties and each Subject Company, respectively, the constating documents, copies of all resolutions authorizing this Agreement and the transactions contemplated hereby and a certificate of good standing.

The Purchaser shall have received a certificate(s) from a senior officer of the Seller and Idlewood Properties confirming to his or her knowledge (after due inquiry), without personal liability, that the conditions set out in this Sections 7.1, 7.2 and 7.3 have been fulfilled, substantially in the form of Exhibit 7.13.

 

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As a result of its investigations carried out pursuant to Section 9.2, the Purchaser will have satisfied itself of the matters set out in Section 7.14 of the Disclosure Letter pursuant to and in accordance with the terms set out in Section 7.14 of the Disclosure Letter:

ARTICLE 8

SELLER’S CONDITIONS PRECEDENT

The obligation of the Seller and Idlewood Properties to complete the sale of the Purchased Interests under this Agreement shall be subject to the satisfaction of or compliance with, at or before the Closing Time, each of the following conditions precedent (each of which is acknowledged to be inserted for the exclusive benefit of the Seller and Idlewood Properties and may be waived by it in whole or in part). If any of the following conditions has not been fulfilled by the Closing Date, the Seller may terminate this Agreement by notice in writing to the Purchaser, in which event the Parties are, subject to Section 9.17, released from all obligations under this Agreement. However, the Seller and Idlewood Properties may waive compliance with any condition in whole or in part if they see fit to do so, without prejudice to their rights of termination in the event of non-fulfilment of any other condition.

The representations and warranties of the Purchaser in Article 5 shall be true and correct in all material respects at the Closing (except where such representation and warranty is already qualified by materiality, in which case it shall be true in all respects).

The Purchaser shall have performed or complied with, in all material respects, all its obligations and covenants under this Agreement (including Section 2.1).

All consents, approvals, Orders and authorizations of any Governmental Authority which, if not obtained, would render completion of the transactions contemplated by this Agreement unlawful, shall have been obtained at or before the Closing Time.

There shall be no Order issued preventing, and no pending or threatened Claim, or proceeding, judicial or administrative or investigation against any Party by any Governmental Authority or Person, for the purpose of enjoining or preventing the consummation of the transactions contemplated by this Agreement.

 

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The applicable counter parties thereto shall have executed and delivered the Hedge Escrow Agreement, all in form and substance acceptable to the Purchaser, acting reasonably.

The Seller shall have received a certificate of the Secretary or other officer of the Purchaser dated as of the Closing Date, substantially in the form of Exhibit 8.6, attaching the constating documents of the Purchaser, copies of all resolutions of the Purchaser authorizing this Agreement and the transactions contemplated hereby and a certificate of good standing.

The Seller shall have received a certificate from a senior officer of the Purchaser confirming to his or her knowledge (after due inquiry), without personal liability, that the conditions set out in this Sections 8.1 and 8.2 have been fulfilled, substantially in the form of Exhibit 8.7.

If the transactions contemplated by this Agreement are subject to notification under Part IX of the Competition Act (Canada), then either (a) the Commissioner of Competition under the said Act shall have issued an advance ruling certificate under subsection 102(1) of the Competition Act (Canada) or (b) the applicable waiting period under section 123 of the said Act shall have expired or been terminated or shall have been waived under paragraph 113(c) of the said Act and the Competition Tribunal shall not have issued an order under the Competition Act (Canada) which remains in force that prevents the completion of the proposed transaction.

ARTICLE 9

OTHER COVENANTS OF THE PARTIES

 

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such Hedging Contracts, Section 1.1(c) of the Disclosure Letter shall be deemed to be amended to reflect such Hedging Contracts and the Seller shall deliver an updated Section 1.1(c) of the Disclosure Letter as soon as practicable upon entering into such Hedging Contracts; and

 

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Prior to the Closing, the Seller shall give notice to the Purchaser of (a) the occurrence, or failure to occur, of any event which occurrence or failure would cause any representation or warranty contained in this Agreement or in any section of the Disclosure Letter to be untrue or inaccurate in any material respect, and (b) any failure of the Seller to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement. Any such notice shall set out particulars of the untrue or incorrect representation or warranty and details of any actions being taken by the Seller to rectify the incorrectness. No such notice will relieve either Party of any right or remedy provided for in this Agreement and will not be deemed to cure any breach for any purposes hereunder.

Notwithstanding any provision in this Agreement to the contrary, except with respect to the Intercompany Accounts listed in Section 9.4 of the Disclosure Letter, the Seller shall arrange for all Intercompany Accounts between a Subject Company, on the one hand, and the Seller and its Affiliates (excluding the Subject Companies), on the other hand, to be entirely settled effective as of the Closing. In addition, except as otherwise expressly contemplated by this Agreement, all agreements and commitments, whether written, oral or otherwise, which are solely between a Subject Company, on the one hand, and the Seller and its Affiliates (excluding the Subject Companies), on the other hand, shall be terminated and of no further effect, simultaneously with the Closing without any further action or liability on the part of the Parties. For greater certainty, any action by a Subject Company permitted under this Section 9.4 shall not result in or deemed to be, a violation of any other provision of this Agreement including, without limitation Section 9.1 and Section 4.10.

 

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Each Party shall provide any supplementary information requested by the Commissioner of Competition or her designees as soon as practicable upon receiving any such request.

The Purchaser shall take all reasonable steps to preserve and keep the records of the Subject Companies delivered to it in connection with the completion of the transactions contemplated by this Agreement for a period of six years from the Closing Date, or for any longer period as may be required by any Laws or Governmental Authority, and shall make such records available to the Seller on a timely basis, as may be requested by it.

 

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pay, all Taxes of, or with respect to, or payable by, a Subject Company that are either:

except to the extent that provision for such Taxes has been made in the Closing Date Financial Statements and such Taxes are included in Indebtedness at the Closing Date or in the calculation of Closing Net Working Capital. In the case of any taxable period that includes (but does not end on) the Closing Date (a “Straddle Period”), the amount of any Taxes based on or measured by income or receipts of the Subject Companies for the pre-Closing period shall be determined based on an interim closing of the books as of the close of business on the Closing Date and the amount of other Taxes of the Subject Companies for a Straddle Period that relates to the pre-Closing period shall be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on the Closing Date and the denominator of which is the number of days in such Straddle Period. Sections 10.1(b)(ii) and Sections 10.4 to 10.9 shall apply mutatis mutandis to the obligation in this Section 9.8(a).

 

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Company, would be subject as a result of the receipt or crediting of such Refund. This shall not apply to a Refund received by or credited to the account of a Subject Company in respect of any period ending on or prior to the Closing Date, to the extent such Refund arises as a result of the carry-back of a non-capital loss from a period ending after the Closing Date pursuant to paragraph 111(1)(a) of the Income Tax Act (Canada) or the equivalent provisions of applicable provincial or territorial legislation.

If the assets of the Subject Companies are damaged or destroyed or appropriated, expropriated or seized by any Person, on or prior to the Closing Date, and if such acts or events in the aggregate have a Material Adverse Effect, then the Purchaser may, within 5 days of becoming aware of such acts or events, terminate this Agreement.

 

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Agent at the Seller Process Agent’s above address or as notified pursuant to the notice provisions of this Agreement, and the Sellerirrevocably authorizes and directs the Seller Process Agent to accept such service on its behalf.

The Parties agree that:

 

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in the escrow agreement dated the date hereof between the Seller, the Purchaser and the Escrow Agent;

 

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Shares Purchase Price as expressed in Canadian dollars computed using the Exchange Rate exceeds the certificate limit of such Section 116 Certificate, to the Receiver General of Canada in accordance with the provisions of the Tax Act on the Remittance Date;

 

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subsection 116(4) of the Tax Act will be issued to the Seller, the Seller shall deliver to the Purchaser such written communication and the Escrow Agent shall remit forthwith the Tax Amount to the CRA as payment of the Tax Amount, and upon delivery of such Section 116 Certificate or certificate issued under subsection 116(4) of the Tax Act, the Purchaser shall pay to the Seller an amount equal to the Withheld Amount less the Tax Amount, together with all interest actually earned on the Withheld Amount less any withholding thereon required by the Tax Act, and the Withheld Amount shall be credited to the Purchaser as a payment to the Seller on account of the Purchased Shares Purchase Price; and

Within five Business Days of the Closing Date, the Purchaser will cause Bon L Canada to change its name. The Purchaser agrees that after the Closing Date it shall not use the trademarks, trade-names and business names set forth in Section 9.12 of the Disclosure Letter, provided that the Purchaser may make use of the “Bon L Canada Inc.” name for a period not exceeding 90 days following the Closing Date only (a) in connection with the sale of Inventory acquired from the Seller and to the extent such Inventory has been affixed with a “Bon L Canada Inc.” label supplied by the Seller or prior to the Closing Date; (b) on existing signage and stationary at the Subject Companies’ premises; and (c) in connection with email, business cards, telephones, voice mail and other forms of communication, and provided further that for a period not to exceed two years following the Closing Date the Purchaser may make use of the “Bon L Canada Inc.” name by affixing such name to ladders sold by the Subject Companies and for use in materials related to the sale of such ladders.

   

The Purchaser shall not make an election under Section 338(g) of the United States Internal Revenue Code (or any comparable election under other applicable Tax Laws) with respect to any of the Subject Companies without the prior written consent of the Seller.

Until the Closing Date, neither the Seller nor any of its Representatives or controlling shareholders shall directly or indirectly in any manner (nor permit any subsidiary to) (a) entertain, solicit or encourage, (b) furnish or cause to be furnished any information to any Persons (other than the Purchaser or its Representatives) in connection with, or (c) negotiate or otherwise pursue, any proposal or discussions for or in connection with any possible sale of any

 

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Purchased Interests or of the businesses of the Subject Companies, no matter how structured, including without limitation by sale of all or any significant or controlling part of the shares in the capital of the Seller, by sale or license of all or any significant part of the property and assets of either Subject Company, or by any merger or other business combination involving the Seller or otherwise (each of the foregoing proposals or discussions, whether written or oral, an “Alternative Transaction”). The Seller shall immediately notify the Purchaser in writing of (i) the receipt of any proposal for an Alternative Transaction or any requests for any information relating to the Seller, the Subject Companies, their respective business or for access to the properties, books or records of either Subject Company by any Person which has informed the Seller that such Person is considering making, or has made, a proposal for an Alternative Transaction, and (ii) the terms of any such Alternative Transaction. The Seller shall be responsible for any breach by its Representatives or controlling shareholders of any of the provisions of this Section 9.15. In the event that any of the provisions of this Section 9.15 are breached by the Seller, Idlewood Properties or any of their respective Representatives or controlling shareholders, the Seller (on behalf of itself and Idlewood Properties) shall reimburse the Purchaser for all of its and its Affiliates’ legal, accounting and other professional advisory fees, costs, expenses and other out-of-pocket expenses incurred in connection with the purchase and sale of the Purchased Interests and the preparation, execution and delivery of this Agreement and the Confidentiality Agreement and all documents and instruments to be executed pursuant to this Agreement and the Confidentiality Agreement and such reimbursement shall be paid by the Seller to the Purchaser on or before the 20th Business Day following the date that the Purchaser provides the Seller with reasonable evidence of such out-of-pocket expenses.

This Agreement may be terminated on or prior to the Closing Date:

If this Agreement is terminated:

 

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Except as with respect to the services to be provided pursuant to the agreements referred to in Section 2.1 to be entered into at the Closing, all data processing, cash management, accounting, insurance, banking, personnel, legal, communications and other products and services provided to the Subject Companies by the Seller or any Affiliate of Seller (other than the Subject Companies), including any agreements or understanding (written or oral) with respect thereto, shall terminate simultaneously with the Closing without any further action or liability on the part of the Parties.

The Parties shall cooperate in connection with the replacement or supplementation of the authorized signatories for each bank account of the Subject Companies effective as of the Closing.

If, after the Closing Date, the Seller, Idlewood Properties, or any of their respective Affiliates receives any payment or remittance with respect to any Account Receivable of either of the Subject Companies, the Seller or Idlewood Properties, as applicable, shall, or shall cause its Affiliate to, deliver promptly to the applicable Subject Company all cash, cheques or other property received with respect to such Account Receivables.

 

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Within ten Business Days of the date of this Agreement, the Seller shall provide to the Purchaser a good faith estimate of:

in each case as determined for purposes of the Income Tax Act (Canada) as of December 30, 2007.

 

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possible thereafter by the Seller and the Purchaser to a mutually acceptable firm of actuarial consultants of recognized standing (the “Independent Actuary”). The Independent Actuary shall act as expert and not as arbitrator and shall be required to determine the items in dispute that have been referred to it as soon as reasonably practicable but in any event not later than 30 days after the date of referral of the dispute to it. In making its determination, the Independent Actuary will only consider the issues in dispute placed before it. The Purchaser and the Seller shall provide or make available, all documents and information as are reasonably required by the Independent Actuary to make its determination. The determination of the Independent Actuary shall be final and binding on the Parties (absent fraud or clerical error) and the Deficit Funding Position(s) shall be finalized in accordance with such determination. The fees and expenses of the Independent Actuary shall be shared equally by the Purchaser and the Seller.

 

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million or more in aggregate contributions for the period on and after January 1, 2008 to the DB Pension Plan(s) for which a Deficit Funding Position has been determined to exist pursuant to this Section 9.23, the Seller’s Contingent Payment Liability shall be deemed to be nil and no amount shall be payable by the Seller under this Section 9.23.

ARTICLE 10

INDEMNIFICATION

 

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commercially reasonable efforts to advise the Seller of material developments in connection with such remediation work.

 

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Purchaser not being able to effectively contest the determination of any liability susceptible of being contested or to assert a right to recover an amount under applicable insurance coverage; and

 

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If the amount of any Claim incurred by a Party at any time subsequent to the making of an indemnity payment is reduced by any recovery, settlement or otherwise under or pursuant to any insurance coverage, or pursuant to any claim, recovery, settlement or payment by or against any other Person, the amount of such reduction (less any costs, expenses (including taxes) or premiums incurred in connection therewith), together with interest thereon from the date of payment thereof at the U.S. Prime Rate effective on the Business Day immediately preceding the date of payment, shall promptly be repaid by that Party to the other Party. Upon making a full indemnity payment, a Party shall, to the extent of such indemnity payment, be subrogated to all rights of the other Party against any third party in respect of the Claim to which the indemnity payment relates. For greater certainty, no investigations, inspections, surveys or tests made by or on behalf of the Purchaser at any time shall affect, mitigate, waive, diminish the scope of or otherwise affect any representation or warranty made by the Seller or Idlewood Properties in or pursuant to this Agreement.

The rights of indemnity set forth in this ARTICLE 10 are the sole and exclusive remedy of each Party in respect of any misrepresentation, incorrectness in or breach of any representation or warranty, or breach of covenant, by the other Party under this Agreement except fraud or intentional breach. The Parties agree that if a Claim for indemnification is made by one Party in accordance with Section 10.1(a) or Section 10.2(a), as the case may be, and there has been a refusal by the other Party to make payment or otherwise provide satisfaction in respect of such Claim, then a legal proceeding is the appropriate means to seek a remedy for such refusal. This ARTICLE 10 shall remain in full force and effect in all circumstances and shall not be terminated by any breach (fundamental, negligent or otherwise) by any Party of its representations, warranties or covenants under this Agreement or under any Closing document or by any termination or rescission of this Agreement by any Party.

A Party shall not be entitled to double recovery for any Claims even though they may have resulted from the breach of more than one of the representations, warranties, agreements and covenants made by the other Party in this Agreement.

 

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Nothing in this Agreement shall in any way restrict or limit the general obligation at law of a Party to mitigate any loss which it may suffer or incur by reason of the breach by the other Party of any representation, warranty or covenant of that other Party under this Agreement. If any Claim can be reduced by any recovery, settlement or otherwise under or pursuant to any insurance coverage, or pursuant to any claim, recovery, settlement or payment by or against any other Person, a Party shall take all commercially reasonable steps to enforce such recovery, settlement or payment.

Any payment made by the Seller to the Purchaser under this ARTICLE 10 shall constitute a downward adjustment to the Purchase Price.

The Purchaser shall be entitled to set-off the amount of any finally determined Claim subject to indemnification under this Agreement against any other amounts payable by the Purchaser to the Seller or its Affiliates under this Agreement or the ancillary agreements contemplated hereby.

ARTICLE 11

GENERAL

The Parties shall jointly plan and coordinate any public notices, press releases, and any other publicity concerning the transactions contemplated by this Agreement and no Party shall act in this regard without the prior approval of the other, such approval not to be unreasonably withheld, except:

Except as otherwise provided in this Agreement, each of the Parties shall pay their respective legal, accounting, and other professional advisory fees, costs and expenses incurred in connection with the purchase and sale of the Purchased Interests and the preparation, execution and delivery of this Agreement and the Confidentiality Agreement and all documents and

 

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instruments executed pursuant to this Agreement and the Confidentiality Agreement and any other costs and expenses incurred.

Any notice, consent or approval required or permitted to be given in connection with this Agreement (in this Section referred to as a “Notice”) shall be in writing and shall be sufficiently given if delivered (whether in person, by courier service or other personal method of delivery), or if transmitted by facsimile or e-mail:

Bon L Holdings Corporation

c/o Tredegar Corporation

1100 Boulders Parkway

with a copy to:

Osler, Hoskin & Harcourt LLP

Suite 6600, 1 First Canadian Place

Toronto, Ontario

Idlewood Properties Inc.

c/o Tredegar Corporation

1100 Boulders Parkway

Richmond, VA 23225

with a copy to:

Osler, Hoskin & Harcourt LLP

Suite 6600, 1 First Canadian Place

Toronto, Ontario

 

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The William L. Bonnell Company, Inc.

c/o Tredegar Corporation

1100 Boulders Parkway

Richmond, VA 23225

with a copy to:

Osler, Hoskin & Harcourt LLP

Suite 6600, 1 First Canadian Place

Toronto, Ontario

c/o H.I.G. Capital, LLC

1001 Brickell Bay Drive

27th Floor

Miami, FL 33131

with a copy to:

Greenberg Traurig, LLP

77 West Wacker Drive

Suite 2500

Chicago, IL 60601

USA

Any Notice delivered or transmitted to a Party as provided above shall be deemed to have been given and received on the day it is delivered or transmitted, provided that it is delivered or transmitted on a Business Day prior to 5:00 p.m. local time in the place of delivery or receipt. However, if the Notice is delivered or transmitted after 5:00 p.m. local time or if such day is not a Business Day then the Notice shall be deemed to have been given and received on the next Business Day.

Any Party may, from time to time, change its address by giving Notice to the other Parties in accordance with the provisions of this Section.

 

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No party may assign this Agreement or any rights or obligations under this Agreement without the prior written consent of the other Party, provided that the Purchaser shall have the right to assign the Agreement or any of its rights or obligations under this Agreement without consent to one or more Affiliates, to one or more lenders as collateral, or to a Person who is a buyer in the future of a Subject Company, provided that the Purchaser shall remain jointly and severally liable for the obligations of the Purchaser under this Agreement.

The Guarantor shall cause the Seller and Idlewood Properties to perform all of their respective obligations under this Agreement, and shall be liable jointly and severally with the Seller and Idlewood Properties to the Purchaser for the failure of each of the Seller and Idlewood Properties to discharge any of its obligations and for the fulfilment of all of its representations, warranties, indemnities and other obligations to the Purchaser under this Agreement or arising in connection with the transactions provided for in this Agreement as if the Guarantor were a direct obligor under this Agreement, without any further action being required on the part of the Purchaser.

This Agreement enures to the benefit of and is binding upon the Parties and their respective successors (including any successor by reason of amalgamation of any Party) and permitted assigns.

No amendment, supplement, modification or waiver or termination of this Agreement and, unless otherwise specified, no consent or approval by any Party, is binding unless executed in writing by the Party to be bound thereby.

Seller agrees to use commercially reasonable efforts to obtain prior to the Closing Date a non-disturbance and attornment agreement between the Great-West Life Assurance Company (as landlord’s mortgagee) and Apolo Tool & Die Manufacturing Inc. (as tenant) with respect to 75 Haist Avenue, Woodbridge, Ontario.

The Parties shall, with reasonable diligence, do all such things and provide all such reasonable assurances as may be required to consummate the transactions contemplated by this Agreement, and each Party shall provide such further documents or instruments required by any other Party as may be reasonably necessary or desirable to effect the purpose of this Agreement and carry out its provisions, whether before or after the Closing, provided that the costs and expenses of

 

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any actions taken after Closing at the request of a Party shall be the responsibility of the requesting Party.

This Agreement may be executed by the Parties in counterparts and may be executed and delivered by facsimile and all such counterparts and facsimiles together constitute one and the same agreement.

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IN WITNESS OF WHICH the Parties have executed this Agreement.