UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported): April 29, 2009
CLEAN HARBORS, INC.
(Exact name of registrant as specified in its charter)
Massachusetts
|
|
0-16379
|
|
04-2997780
|
(State or other jurisdiction
of incorporation)
|
|
(Commission
File Number)
|
|
(IRS Employer
Identification No.)
|
|
|
|
|
|
42 Longwater Drive, Norwell,
Massachusetts
|
|
02061-9149
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Registrants telephone number, including area code (781) 792-5000
Not Applicable
(Former name or former address, if changed since last report.)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
o Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On April 29, 2009, Clean Harbors, Inc. (Clean Harbors),
Clean Harbors Canada, Inc. (Purchaser), and Eveready Inc. (Eveready),
signed an acquisition agreement dated as of that date (the Acquisition Agreement) which provides
that, subject to the terms and conditions contained in the Acquisition
Agreement, Clean Harbors will acquire through Purchaser all of the outstanding shares
of Eveready. Eveready is an Alberta corporation headquartered in Edmonton,
Alberta, that provides industrial maintenance and production, lodging, and
exploration services to the oil and gas, chemical, pulp and paper,
manufacturing and power generation industries.
Operating from 79 locations in the United States, Canada, and
internationally, Eveready currently employs over 2,100 employees and operates a
service fleet of over 2,400 truck and trailer units. Eveready shares trade on the Toronto Stock
Exchange under the trading symbol EIS.
Under the terms of the Acquisition Agreement,
Clean Harbors will acquire all of Evereadys 18.4 million outstanding shares in
exchange for approximately USD $49 million in cash (CDN $3.30, or approximately
USD $2.64, for each Eveready share), 2.4 million shares of Clean Harbors common
stock (a ratio of 0.1304 Clean Harbors
shares for each Eveready share), and the assumption or payment of approximately
USD $220 million of Eveready debt. In total, the transaction is currently
valued at approximately USD $387 million, based on an agreed upon price for
Clean Harbors common stock for purposes of the acquisition of USD $48.81 per
share.
The Acquisition Agreement provides that the acquisition will take place through a plan
of arrangement (the Plan of Arrangement) which will be subject to approval by
the Court of Queens Bench of Alberta. The acquisition is also subject
to approval by regulators, lenders and
the Eveready shareholders, as well as other customary closing conditions, and is expected to be completed during the third quarter of
2009. The Acquisition Agreement is
subject to termination by either Clean Harbors or Eveready under certain
circumstances.
Eveready has agreed that, while the
Acquisition Agreement remains in effect, Eveready will not solicit or initiate
discussions with any party other than Clean Harbors and its affiliates
regarding any other business combination or sale of material assets. Eveready
has also granted Clean Harbors a right to match competing unsolicited proposals.
The Acquisition Agreement also provides that, under certain circumstances,
Eveready could become liable to pay to Clean Harbors a break fee of CDN $8.0
million, plus reimbursement of up to CDN $5.0 million of Clean Harbors
expenses, or that Clean Harbors could become liable to pay to Eveready a
reverse break fee of CDN $3.0 million, plus reimbursement of up to CD $2.0
million of Evereadys expenses. The Acquisition Agreement also provides that,
in the event that certain conditions to completing the entire transaction were
not met, Eveready will sell and Clean Harbors will purchase certain Eveready
assets for cash proceeds approximating CDN $53 million.
The board of directors of each of Clean
Harbors and Eveready has adopted and approved the Acquisition Agreement and the
Plan of Arrangement. Eveready will submit the Plan of Arrangement to Evereadys
shareholders for their approval at a meeting now expected to be held during July 2009.
The board of directors of Eveready has unanimously recommended that the
Eveready shareholders vote in favor of the Plan of Arrangement.
Eveready executive officers and shareholders
holding 26% of the total outstanding Eveready shares (collectively, the Eveready
Management Shareholders) have entered into a voting and lock-up agreement made
on April 29, 2009 (the Voting and Lock-Up Agreement) with Clean Harbors
and Purchaser under which the Eveready Management Shareholders have agreed to
vote their shares in favor of the Plan of Arrangement. The Eveready Management
Shareholders have also agreed in the Voting and Lock-Up Agreement that, if the
Plan of Arrangement becomes effective, they will not sell or otherwise dispose
without the prior consent of Clean Harbors (except for certain permitted
transfers) of any of the Clean Harbors shares which they will receive as a
result of the acquisition for a period commencing on the date of such Agreement
and ending on the date that is 182 days following the effective date of the
acquisition.
Copies of the Acquisition Agreement (with the
Plan of Arrangement attached as Schedule A thereto) and the Voting and Lock-Up
Agreement are filed as exhibits to this report and are incorporated herein by
reference. The
2
foregoing description of the terms of those
Agreements and the Plan of Arrangement is qualified in its entirety by
reference to the full text of those Agreements and the Plan of Arrangement.
Item 3.02. Unregistered Sales of Equity Securities.
As described in Item 1.01 of this report,
Clean Harbors has agreed in the Acquisition Agreement that, if the Plan of
Arrangement becomes effective and its acquisition of Eveready is thereby
completed, Clean Harbors will issue to the Eveready shareholders 2.4 million
shares of Clean Harbors common stock as part of the consideration in exchange
for all of the outstanding Eveready shares. If issued, such 2.4 million Clean
Harbors shares will represent approximately 10.1% of the total number of
primary shares of Clean Harbors common stock which are now outstanding.
Section 3(a)(10) of the Securities
Act of 1933, as amended (the Securities Act), exempts from the registration requirements under that Act the
issue and exchange of securities which have been approved, after a hearing upon
the fairness of the terms and conditions on which all persons to whom it is
proposed the securities will be issued shall have the right to appear, by any
court expressly authorized by law to grant such approval. Under the Acquisition
Agreement, Eveready will submit the Plan of Arrangement to the Court of Queens
Bench of Alberta (the Court) pursuant to the Business Corporations Act
(Alberta) and apply for an interim order permitting notice to all persons to
which the Clean Harbors shares will potentially be issuable. Following the
requisite approval by the Eveready shareholders and a hearing at which such
persons will have the right to appear, Eveready will seek a final order from
the Court as to the fairness of the Plan of Arrangement. Such final order is a
condition to the consummation of the Plan of Arrangement and the issuance of
the Clean Harbors shares. Clean Harbors therefore anticipates that, if the Plan
of Arrangement becomes effective under the terms and conditions described in
the Acquisition Agreement (including the receipt of such final order from the
Court), the issuance of the 2.4 million Clean Harbors shares to the Eveready
shareholders will be exempt from the registration requirements under the
Securities Act pursuant to Section 3(a)(10) thereof.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
2.6 Acquisition Agreement dated as of April 29,
2009, among Clean Harbors, Inc., Clean Harbors Canada, Inc., and
Eveready Inc. (including the Plan of Arrangement attached as Schedule A to such
Agreement).
2.7 Voting and Lock-Up Agreement made on April 29,
2009, between the executive officers and directors of Eveready Inc. listed on
Schedule A thereto, Clean Harbors, Inc., and Clean Harbors Canada, Inc.
3
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
Clean
Harbors, Inc.
|
|
(Registrant)
|
|
|
|
|
April 30, 2009
|
/s/ James M. Rutledge
|
|
|
Executive Vice
President and
|
|
Chief Financial Officer
|
4
Exhibit 2.6
ACQUISITION AGREEMENT
dated
as of April 29, 2009,
among
CLEAN
HARBORS, INC.,
a corporation incorporated
under the laws of Massachusetts (Parent),
CLEAN
HARBORS CANADA, INC.,
a corporation incorporated
under the laws of New Brunswick (Purchaser),
and
EVEREADY
INC.,
a corporation incorporated
under the laws of Alberta (Eveready)
TABLE OF CONTENTS
ARTICLE I. INTERPRETATION
|
|
1
|
|
|
|
Section 1.1.
|
Definitions
|
|
1
|
Section 1.2.
|
Interpretation Not Affected by
Headings
|
|
12
|
Section 1.3.
|
Interpretation
|
|
12
|
Section 1.4.
|
Date for Any Action
|
|
12
|
Section 1.5.
|
Statutory References
|
|
12
|
Section 1.6.
|
Currency
|
|
12
|
Section 1.7.
|
Accounting Principles
|
|
12
|
Section 1.8.
|
Knowledge
|
|
12
|
Section 1.9.
|
Schedules
|
|
13
|
|
|
|
|
ARTICLE II. THE ACQUISITION
|
|
13
|
|
|
|
|
Section 2.1.
|
Arrangement
|
|
13
|
Section 2.2.
|
Implementation Steps by Eveready
|
|
13
|
Section 2.3.
|
Interim Order
|
|
14
|
Section 2.4.
|
Closing; Potential Asset Purchase;
Articles of Arrangement
|
|
14
|
Section 2.5.
|
Circular
|
|
18
|
Section 2.6.
|
Preparation of Filings
|
|
18
|
Section 2.7.
|
Court Proceedings
|
|
20
|
Section 2.8.
|
Public Communications
|
|
20
|
|
|
|
|
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF EVEREADY
|
|
21
|
|
|
|
|
Section 3.1.
|
Representations and Warranties
|
|
21
|
Section 3.2.
|
Survival of Representations and Warranties
|
|
35
|
|
|
|
|
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PARENT
|
|
36
|
|
|
|
|
Section 4.1.
|
Representations and Warranties of
Parent
|
|
36
|
Section 4.2.
|
Survival of Representations and
Warranties
|
|
45
|
|
|
|
|
ARTICLE V. COVENANTS OF THE PARTIES
|
|
45
|
|
|
|
|
Section 5.1.
|
Covenants of Eveready Regarding the
Conduct of Business
|
|
45
|
Section 5.2.
|
Pre-Acquisition Transactions
|
|
49
|
Section 5.3.
|
Covenants of Eveready Regarding the
Arrangement
|
|
50
|
Section 5.4.
|
Covenants of Parent
|
|
51
|
Section 5.5.
|
Mutual Covenants
|
|
53
|
|
|
|
|
ARTICLE VI. CONDITIONS
|
|
54
|
|
|
|
|
Section 6.1.
|
Mutual Conditions Precedent
|
|
54
|
Section 6.2.
|
Additional Conditions Precedent to
the Obligations of Parent and Purchaser
|
|
54
|
Section 6.3.
|
Additional Conditions Precedent to
the Obligations of Eveready
|
|
56
|
|
|
|
|
ARTICLE VII. ADDITIONAL AGREEMENTS
|
|
57
|
i
Section 7.1.
|
Notice Provisions
|
|
57
|
Section 7.2.
|
Non-Solicitation
|
|
57
|
Section 7.3.
|
Right to Match
|
|
60
|
Section 7.4.
|
Agreement as to Damages
|
|
61
|
Section 7.5.
|
Fees and Expenses
|
|
62
|
Section 7.6.
|
Liquidated Damages, Injunctive Relief and No
Liability of Others
|
|
62
|
Section 7.7.
|
Access to Information; Confidentiality
|
|
63
|
Section 7.8.
|
Insurance and Indemnification
|
|
64
|
Section 7.9.
|
Exchange De-Listing
|
|
64
|
Section 7.10.
|
Tax Matters
|
|
65
|
Section 7.11.
|
Resignations
|
|
65
|
|
|
|
|
ARTICLE VIII. TERM, TERMINATION, AMENDMENT AND WAIVER
|
|
65
|
|
|
|
|
Section 8.1.
|
Term
|
|
65
|
Section 8.2.
|
Termination
|
|
65
|
Section 8.3.
|
Amendment
|
|
67
|
Section 8.4.
|
Waiver
|
|
67
|
|
|
|
|
ARTICLE IX. GENERAL PROVISIONS
|
|
68
|
|
|
|
|
Section 9.1.
|
Notices
|
|
68
|
Section 9.2.
|
Governing Law; Waiver of Jury Trial
|
|
69
|
Section 9.3.
|
Injunctive Relief
|
|
69
|
Section 9.4.
|
Time of Essence
|
|
69
|
Section 9.5.
|
Entire Agreement, Binding Effect and Assignment
|
|
69
|
Section 9.6.
|
Severability
|
|
70
|
Section 9.7.
|
No Third Party Beneficiaries
|
|
70
|
Section 9.8.
|
Rules of Construction
|
|
70
|
Section 9.9.
|
Counterparts, Execution
|
|
70
|
|
|
|
|
|
|
|
|
SCHEDULE A
|
Plan of Arrangement
|
|
|
SCHEDULE B
|
Special Resolution of the Eveready Shareholders
|
|
|
SCHEDULE C
|
Regulatory Approvals
|
|
|
ii
ACQUISITION AGREEMENT
ACQUISITION AGREEMENT dated as of April 29, 2009, among CLEAN HARBORS, INC., a corporation incorporated under the
laws of Massachusetts, United States (Parent), CLEAN HARBORS CANADA, INC., a corporation incorporated under
the laws of New Brunswick, Canada (Purchaser),
and EVEREADY INC., a corporation
incorporated under the laws of Alberta, Canada (Eveready).
WHEREAS, (i) the board of directors of Parent has deemed
it advisable and in the best interests of its shareholders and (ii) the
board of directors of Eveready has deemed it fair to the shareholders of
Eveready and in the best interests of Eveready, upon the terms and subject to
the conditions set forth herein, for Purchaser to acquire all of the
outstanding common shares of Eveready pursuant to the plan of arrangement
provided for herein (the Plan of Arrangement);
and
WHEREAS, in furtherance of such acquisition, the board of
directors of each of Parent, Purchaser and Eveready has approved the
transactions contemplated by this Agreement, and Eveready has agreed upon the
terms and subject to the conditions set forth herein to (i) submit a
special resolution, substantially in the form of Schedule B hereto (the Arrangement Resolution), to the holders of Eveready common
shares for approval, and (ii) submit the Plan of Arrangement to the Court
of Queens Bench of Alberta for approval;
NOW THEREFORE, in consideration of the covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I.
INTERPRETATION
Section 1.1. Definitions
In this Agreement, unless something in the subject matter or the
context is inconsistent therewith:
ABCA means the Business Corporations Act (Alberta), R.S.A. 2000, c. B-9,
together with any amendments thereto and all of the regulations thereunder.
Acquisition Proposal means any (i) proposal
or offer (written or oral) relating to any merger, consolidation, amalgamation,
take-over bid, tender offer, exchange offer, arrangement, recapitalization,
liquidation, dissolution, share exchange, sale of assets representing 20% or
more of the net income, revenues or assets of Eveready and its Subsidiaries,
taken as a whole (or any license, lease, long-term supply agreement or other
arrangement having the same economic effect as a sale of assets representing
20% or more of the net income, revenues or assets of Eveready and its
Subsidiaries, taken as a whole), (ii) purchase or sale of shares or other
securities of Eveready or any of its Subsidiaries or rights or interests
therein or thereto representing 20% or more of the voting securities of
Eveready (in terms of number of shares or voting power) in a single transaction
or series of transactions, (iii) sale of any of its Subsidiaries
representing 20% or more of the net income, revenues or assets of Eveready and
its Subsidiaries, taken as a whole,
(iv) similar transactions involving Eveready and/or any of its
Subsidiaries, excluding the Arrangement and the transactions contemplated by
this Agreement or any transaction to which Parent, Purchaser or an Affiliate of
Parent or Purchaser is a party, (v) other transaction the consummation of
which would reasonably be expected to impede, interfere with, prevent or
materially delay the Arrangement, or (vi) proposal or offer to, or public
announcement of an intention to, do any of the foregoing from any Person other
than Parent, Purchaser or an Affiliate of Parent or Purchaser.
Affiliate has the meaning ascribed
thereto in the Securities Act.
Agreement means this Acquisition
Agreement as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms hereof.
Arrangement means the arrangement of
Eveready under Section 193 of the ABCA on the terms
and subject to the conditions set out in the Plan of Arrangement, subject to
any amendments or variations thereto made in accordance with Section 8.3
hereof or Article 4 of the Plan of Arrangement or made at the direction of
the Court in the Final Order.
Arrangement Resolution means the
special resolution of the Eveready Shareholders approving the Plan of
Arrangement to be considered at the Eveready Meeting, to be substantially in
the form and content as set out on Schedule B.
Articles of Arrangement means the
articles of arrangement of Eveready in respect of the Arrangement, required by
the ABCA to be sent to the Registrar after the Final Order is made.
Board and Board of
Directors means the board of directors of Eveready.
Business Day means any day, other than
a Saturday, a Sunday or a statutory holiday in Calgary, Alberta, Canada, or
Boston, Massachusetts, United States.
Canadian GAAP has the meaning ascribed thereto in Section 1.7.
Cat Tech Assets means all of the
outstanding equity interests in Cat Tech Operating Limited Partnership, Cat
Tech Canada Ltd., Cat Tech, LLC, Breathing Systems International, Inc. and
Safety Watch, LLC, and the respective Subsidiaries of such Persons, together
with all of the assets and business now held and conducted by such Persons and
their Subsidiaries.
Cat Tech Purchase has the meaning
ascribed thereto in Section 2.4(c)(i).
Cat Tech Purchase Price has the
meaning ascribed thereto in Section 2.4(c)(i).
Certificate means
the certificate or other confirmation of filing to be issued by the Registrar
pursuant to subsection 193(11) of the ABCA giving effect to the Arrangement.
Closing Conditions has the meaning ascribed thereto in Section 2.4(a).
Closing Date has the meaning ascribed
thereto in Section 2.4(a).
2
commercially reasonable efforts means,
with respect to any Party, the agreement of such Party to cooperate and to use
its reasonable efforts consistent with commercial practice without (a) payment
or incurrence of any liability or obligation, other than reasonable expenses,
or (b) the requirement to engage in litigation.
Competition Act means the Competition Act (Canada), as amended from time to time and
the rules and regulations promulgated thereunder.
Confidentiality Agreement means the
letter agreement dated January 26, 2009 between Parent and Eveready
relating primarily to the provision, subject to the terms and conditions
therein specified, of confidential information of Eveready to Parent and of
Parent to Eveready.
Contract means any contract,
agreement, option, entitlement, license, franchise, lease, arrangement,
commitment (contingent or otherwise), understanding or other right or obligation
(written or oral) to which Eveready or any of its Subsidiaries is a party or by
which Eveready or any of its Subsidiaries is bound or affected or to which any
of their respective properties or assets is subject.
Court means the Court of Queens Bench
of Alberta.
Disclosure Letter means the letter of
disclosure dated as of the date of this Agreement and signed by one or more
officers of Eveready and delivered to Parent.
Effective Time has the meaning
ascribed thereto in the Plan of Arrangement.
Environment means the natural
environment (including soil, land surface or subsurface strata), surface
waters, groundwater, sediment, ambient air (including all layers of the
atmosphere), organic and inorganic matter and living organisms, and any other
environmental medium or natural resource.
Environmental Laws means all
applicable Laws relating to public health and safety, noise control, pollution
or the protection or preservation of the Environment or to the generation,
production, installation, use, storage, treatment, transportation, Release or
threatened Release or remediation of Hazardous Substances, including civil
responsibility for acts or omissions with respect to the Environment, and all
Permits issued pursuant to such Laws.
Environmental Reports has the meaning
ascribed thereto in Section 3.1(v)(ii).
Eveready has the meaning ascribed
thereto in the preamble to this Agreement.
Eveready Amended and Restated Credit Agreement
means the amended and restated credit agreement dated December 31, 2008
between Eveready and a syndicate of lenders led by a Canadian affiliate of GE
Energy Financial Services, as amended from time to time.
Eveready Circular means the notice of
the Eveready Meeting and accompanying Eveready management information circular,
including all schedules, appendices and exhibits
3
thereto, to be sent to the Eveready Shareholders in connection with the
Eveready Meeting, as amended, supplemented or otherwise modified from time to
time.
Eveready Common Shares means the
common shares in the capital of Eveready.
Eveready Debentures means the 7%
convertible unsecured subordinated debentures of Eveready in the principal
amount of $50,000,000, originally issued by Predecessor and assumed by Eveready
pursuant to the Trust Indenture.
Eveready Deferred Annual Bonus Share Plan
means the deferred annual bonus share plan dated December 31, 2008
established by Eveready.
Eveready Deferred Shares means the
outstanding deferred shares granted under the Eveready Deferred Annual Bonus
Share Plan.
Eveready Environmental Permits has the
meaning ascribed thereto in Section 3.1(v)(i)(A).
Eveready Financial Statements has the
meaning ascribed thereto in Section 3.1(i).
Eveready Interim Financial Statements
has the meaning ascribed thereto in Section 3.1(i).
Eveready Intellectual Property Rights
has the meaning ascribed thereto in Section 3.1(t).
Eveready Management Shareholders means
Rod Marlin, Bert Holtby, Peter Lacey, Glen Fleming, Marvin Lefebvre, Wally
Dumont and Lyle Jeffries.
Eveready Material Adverse Effect means any change, effect, event,
occurrence, state of facts or development that, individually or in the
aggregate with other such changes, effects, events, occurrences, states of
facts or developments, is both material and adverse with respect to the
financial condition, business, operations, results of operations, properties,
assets, liabilities (including contingent liabilities) or capitalization of
Eveready and its Subsidiaries taken as a whole, as the case may be; provided,
however, that to the extent any effect, event, occurrence, state of facts or
development is caused by or results from any of the following, it shall not be
taken into account in determining whether there has been (or whether there
could reasonably be expected to be) an Eveready Material Adverse Effect: (a) conditions
affecting the United States or Canadian economy generally, (b) conditions
generally affecting the industries in which Eveready and its Subsidiaries
conduct their business (and not having a disproportionate adverse effect on
Eveready and its Subsidiaries), (c) conditions directly caused by the
actions of Parent or Purchaser or resulting from actions taken in accordance
with a request or the consent of Parent made after the date hereof, (d) any
change in the market price or trading volume of securities or failure by
Eveready to meet published securities analyst estimates (but not the underlying
causes thereof), and (e) material worsening of market conditions caused by
acts of terrorism or war occurring after the date hereof.
4
Eveready Meeting means the special
meeting of Eveready Shareholders, including any adjournment or postponement
thereof, to be called and held in accordance with the Interim Order to consider
the Arrangement Resolution.
Eveready Option means an option to
purchase Eveready Common Shares granted under the Eveready Share Option Plan.
Eveready Organizational Documents has
the meaning ascribed thereto in Section 3.1(b).
Eveready Plans has the meaning
ascribed thereto in Section 3.1(r)(i).
Eveready Reports has the meaning ascribed thereto in Section 3.1(h).
Eveready Shareholders means the
holders of Eveready Common Shares.
Eveready Share Option Plan means the
stock option plan dated December 31, 2008 established by Eveready.
Eveready Public Disclosure Record
means all documents filed on the System for Electronic Document Analysis and
Retrieval (SEDAR) by either Eveready or Predecessor after December 31,
2006 and before the date of this Agreement.
Eveready Technology has the meaning
ascribed thereto in Section 3.1(t).
Eveready Termination Fee has the
meaning ascribed thereto in Section 7.4(a)(i).
Eveready Year-End Financial Statements
has the meaning ascribed thereto in Section 3.1(i).
Expense Reimbursement Costs means and
includes all documented, out of pocket expenses incurred in connection with the
acquisition contemplated by this Agreement, including without limitation all
attorneys, accountants, consultants, experts and investment banking fees and
expenses incurred by a Party to this Agreement or any of its Affiliates in
connection with or relating to the preparation, authorization, negotiation,
execution and/or performance of this Agreement and the transactions
contemplated thereby, including the financing thereof.
Final Order means the final order of
the Court approving the Arrangement, as such order may be amended or varied at
any time prior to the Effective Time or, if appealed, then, unless such appeal
is withdrawn or denied, as affirmed or as amended on appeal.
Financing has the meaning ascribed
thereto in Section 5.4(d).
Governmental Entity means (a) any
multinational, federal, provincial, state, regional, municipal, local or other
government, governmental or public department, ministry, central bank, court,
tribunal, arbitral body, commission, board, bureau, Crown corporation, stock
exchange or agency, domestic or foreign, (b) any subdivision, agent or
authority of any of the foregoing, or (c) any quasi-governmental or
private body, including any tribunal, commission, regulatory
5
agency or self-regulatory organization, exercising any regulatory,
expropriation or taxing authority under or for the account of any of the
foregoing.
Hazardous Substances means any waste
or other substance that is prohibited, listed, defined, regulated, designated
or classified as dangerous, hazardous, radioactive, explosive or toxic or a
pollutant or a contaminant under or pursuant to any applicable Environmental
Laws, and specifically including petroleum and all derivatives thereof or
synthetic substitutes therefor and asbestos or asbestos-containing materials or
any substance which is deemed under Environmental Laws to be deleterious to
natural resources or the Environment or worker or public health and safety.
including means including without
limitation, and include and includes have a corresponding meaning.
Indebtedness means, without
duplication, with respect to any Person (a) every obligation of such
Person for borrowed money, secured or unsecured, (b) every obligation of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(c) every obligation of such Person under purchase money mortgages,
conditional sale agreements or other similar instruments relating to purchased
property or assets, (d) every capitalized lease obligation of such Person,
(e) every obligation of such Person under interest rate cap, swap, collar
or similar transactions or currency hedging transactions (valued at the
termination value thereof), and (f) every obligation of the type referred
to above of any other Person, the payment of which such first Person has
guaranteed or for which such first Person is otherwise responsible or liable.
Interim Order means the interim order
of the Court, as the same may be amended in respect of the Arrangement, as
contemplated by Section 2.2.
Investment Canada Act means the Investment Canada Act, as amended from time to time and the rules and
regulations promulgated thereunder.
Law or Laws
means all laws (including common law), by-laws, statutes, rules, regulations,
principles of law and equity, orders, rulings, ordinances, judgments,
injunctions, determinations, awards, decrees or other requirements, whether
domestic or foreign, and the terms and conditions of any grant of approval,
permission, authority or license of any Governmental Entity or self-regulatory
authority (including the TSX and the NYSE), and the term applicable with
respect to such Laws (including Environmental Laws and Securities Laws) and in
a context that refers to one or more Parties, means such Laws as are applicable
to such Party or its business, undertaking, property or securities and emanate
from a Person having jurisdiction over the Party or Parties or its or their
business, undertaking, property or securities.
Lease Documents has the meaning
ascribed thereto in Section 3.1(n)(ii).
Leased Properties has the meaning
ascribed thereto in Section 3.1(n)(ii).
Legal Actions has the meaning ascribed
thereto in Section 3.1(l).
Letter of Credit has the meaning
ascribed thereto in Section 2.4(d).
6
Lien means any hypothecation,
mortgage, lien, charge, security interest, pledge, claim, encumbrance or
adverse right or claim.
Material Contracts has the meaning
ascribed thereto in Section 3.1(p)(i)(J).
McKinsey Agreement means the Agreement
dated as of April 29, 2009, among McKinsey & Company, Inc.,
United States, Eveready and Parent.
material fact has the meaning ascribed
thereto in the Securities Act.
MD&A has the meaning ascribed
thereto in Section 3.1(i).
NYSE has the meaning ascribed thereto
in Section 4.1(e).
Original Closing Date has the meaning
ascribed thereto in Section 2.4(a).
Outside Date means July 31, 2009,
subject to the right of (i) either Parent or Eveready to postpone the
Outside Date for up to an additional 60 days (in 30-day increments) after the
Original Closing Date if the Regulatory Approvals have not been obtained but
have not been denied by a non-appealable decision of a Governmental Entity, or (ii) Parent
to extend the Outside Date until August 31, 2009 in order to allow more
time to complete the Financing as described in Section 5.4(d), by giving
written notice to the other Party to such effect no later than 5:00 p.m.
(Eastern time) on the date that is not less than five (5) Business Days
prior to the original Outside Date (and any such subsequent Outside Date), or
such later date as may be agreed to in writing by the Parties; provided that
notwithstanding the foregoing, a Party will not be permitted to postpone the
Outside Date if the failure to obtain a Regulatory Approval or of Parent to
complete the Financing is materially the result of such Partys failure to
comply with its covenants under this Agreement.
Owned Real Properties has the meaning
ascribed thereto in Section 3.1(n)(i).
Parent has the meaning ascribed
thereto in the preamble to this Agreement.
Parent Common Shares means the shares
of common stock, par value U.S. $0.01, of Parent.
Parent Environmental Permits has the
meaning ascribed thereto in Section 4.1(o)(i)(A).
Parent Intellectual Property Rights
has the meaning ascribed thereto in Section 4.1(t).
Parent Material Adverse Effect means
any change, effect, event, occurrence, state of facts or development that,
individually or in the aggregate with other such changes, effects, events,
occurrences, states of facts or developments, is both material and adverse with
respect to the financial condition, business, operations, results of
operations, properties, assets, liabilities (including contingent liabilities)
or capitalization of Parent and its Subsidiaries taken as a whole, as the case
may be; provided, however, that to the extent any effect, event, occurrence,
state of
7
facts or development is caused by or results from any of the following,
it shall not be taken into account in determining whether there has been (or
whether there could reasonably be expected to be) a Parent Material Adverse
Effect: (a) conditions affecting the United States or Canadian economy
generally, (b) conditions generally affecting the industries in which
Parent and its Subsidiaries conduct their business (and not having a
disproportionate adverse effect on Parent and its Subsidiaries), (c) conditions
directly caused by the actions of Eveready or resulting from actions taken in
accordance with a request or the consent of Eveready made after the date
hereof, (d) any change in the market price or trading volume of securities
or failure by Parent to meet published securities analyst estimates (but not
the underlying causes thereof), and (e) material worsening of market
conditions caused by acts of terrorism or war occurring after the date hereof.
Parent Plans has the meaning ascribed
thereto in Section 4.1(p)(i).
Parent Reports has the meaning ascribed
thereto in Section 4.1(f).
Parent Termination Fee has the meaning
ascribed thereto in Section 7.4(c).
Parent Technology has the meaning
ascribed thereto in Section 4.1(t).
Parents Original Closing Date Notice
has the meaning ascribed thereto in Section 2.4(b).
Parties means, collectively, Parent,
Purchaser and Eveready, and Party means
any of them.
Pembina Purchase has the meaning
ascribed thereto in Section 2.4(c)(i).
Pembina Purchase Price has the meaning
ascribed thereto in Section 2.4(c)(i).
Pembina Landfill Assets means all of
the outstanding equity interests in Pembina Area Landfill Ltd. and Pembina Area
Landfill Limited Partnership, together with all of the assets and business now
held and conducted by such Persons.
Permit means any license, permit,
certificate, consent, order, grant, approval, classification, registration,
flagging or other authorization of and from any Governmental Entity.
Permitted Liens means, in respect of
any property or asset of Eveready and its Subsidiaries at any time, any one or
more of the following:
(a) Liens
for current Taxes and assessments not yet due and payable or Liens for income
and similar taxes that are being contested in good faith and for which Eveready
has made adequate provision in accordance with Canadian GAAP;
(b) inchoate
mechanics and materialmens Liens for construction in progress which have not
at such time been filed and which do not secure Indebtedness;
8
(c) to
the extent such Liens would not reasonably be expected to have an Eveready
Material Adverse Effect, (i) workmens, repairmens, warehousemens and
carriers Liens arising in the ordinary course of business of Eveready or a
Subsidiary thereof consistent with past practice, and (ii) all Liens and
other imperfections of title and encumbrances which would not reasonably be
expected to materially interfere with the conduct of the business of Eveready
or a Subsidiary thereof;
(d) rights
reserved to or vested in any Governmental Entity by the terms of any lease,
license, franchise, grant or permit, or by any statutory provision, to
terminate the same, to take action which results in an expropriation or
condemnation, or to require annual or other payments as a condition to the
continuance thereof;
(e) security
given by such Person to a public utility or any Governmental Entity, when
required by such utility or Governmental Entity in connection with the
operations of such Person, in the ordinary course of business of Eveready or a
Subsidiary thereof;
(f) the
reservations, limitations, exceptions, provisos and conditions, if any,
expressed in the original grant from the Crown, including the reservation for
mines and minerals in the Crown or in any other Person;
(g) the
security interests arising pursuant to the Eveready Amended and Restated Credit
Agreement;
(h) assignments
of insurance provided to landlords (or their mortgagees) pursuant to the terms
of realty leases and Liens, rights and reversions reserved in any realty lease
for rent, leasehold improvements or for compliance with the terms of such
realty lease; and
(i) the
interests of lessors under leases.
Person includes an individual, limited
or general partnership, limited liability company, limited liability partnership,
trust, joint venture, association, body corporate, unincorporated organization,
trustee, executor, administrator, legal representative, Governmental Entity or
any other entity, whether or not having legal status.
Plan of Arrangement means the plan of
arrangement, substantially in the form of Schedule A and any amendments or
variations thereto made in accordance with Section 8.3 hereof or Article 4
of the Plan of Arrangement or made at the direction of the Court in the Final
Order.
Post-Signing Returns has the meaning
ascribed thereto in Section 7.10(a).
Pre-Acquisition Transaction has the
meaning ascribed thereto in Section 5.2(a).
Predecessor means Eveready Income
Fund, a limited purpose trust established under the laws of the Province of
Alberta, which is on the date of this Agreement a wholly-owned Subsidiary of
Eveready.
9
Predecessors Employee Participation Plan
means the Eveready Income Fund Employee Participant Plan dated as of March 22,
2006.
Properties has the meaning ascribed
thereto in Section 3.1(n)(ii).
Purchaser has the meaning ascribed
thereto in the preamble to this Agreement.
Registrar means the Registrar of
Corporations appointed pursuant to Section 263 of the ABCA.
Regulatory Approvals means those
sanctions, rulings, consents, orders, exemptions, permits and other approvals
(including the lapse, without objection, of a prescribed time under a statute
or regulation that states that a transaction may be implemented if a prescribed
time lapses following the giving of notice without an objection being made) of
Governmental Entities required to consummate the Plan of Arrangement, including
those set forth in Schedule C.
Release has the meaning prescribed in
any Environmental Law and includes any sudden, intermittent or gradual release,
spill, leak, pumping, addition, pouring, emission, emptying, discharge,
migration, injection, escape, leaching, disposal, dumping, deposit, spraying,
burial, abandonment, incineration, seepage, placement or introduction of a
Hazardous Substance, whether accidental or intentional, into the environment.
Required Vote has the meaning ascribed
thereto in Section 2.3(b).
Response Period has the meaning
ascribed thereto in Section 7.3(a)(ii).
Returns means all returns, reports,
declarations, elections, designations, notices, filings, information returns
and statements including all amendments, schedules, attachments or supplements
thereto, whether tangible, electronic or other form, filed or required to be
filed in respect of Taxes.
SEC means the United States Securities
and Exchange Commission.
Securities Act means the Securities Act (Alberta) and the rules, regulations and
published policies and instruments made thereunder.
Securities Authorities means the
applicable Canadian and United States federal, provincial and state securities
commissions, securities exchanges and other securities regulatory authorities.
Securities Laws means all applicable
Canadian and United States federal, provincial and state securities laws, rules and
regulations and published policies and instruments thereunder.
Subsidiary means, with respect to a
specified Person, any Person of which at least 50% of the voting power
ordinarily entitled to elect a majority of the board of directors or other
managers thereof (whether or not shares of any other class or classes will or
might be entitled to vote upon the happening of any event or contingency) are
at the time owned directly or indirectly
10
by such specified Person and includes any Person over which such
specified Person exercises direction or control or which is in a like relation
to a Subsidiary.
Superior Proposal means any unsolicited
bona fide written Acquisition Proposal made after the date hereof and prior to
the closing of the Pembina Purchase and/or the Cat Tech Purchase in accordance
with the terms of this Agreement by a third party with whom Eveready and its
Subsidiaries deal at arms length (as such term is interpreted for purposes of
the Tax Act) (i) that relates to not less than 50% of the outstanding
Eveready Common Shares or not less than 50% of the assets of Eveready and its
Subsidiaries taken as a whole, (ii) that is reasonably capable of being
completed without undue delay, taking into account to the extent considered
appropriate by the Board, all financial, legal, regulatory and other aspects of
such proposal and the Person making such proposal, and (iii) which the
Board determines, in its good faith judgment, after receiving the advice of its
outside legal counsel and financial advisors, if any, and after taking into
account all the terms and conditions of the Acquisition Proposal, is on terms
and conditions more favourable from a financial point of view to the Eveready
Shareholders than those contemplated by this Agreement (including any
amendments to this Agreement agreed to in writing by Parent in accordance with Section 7.3).
Tax Act means the Income Tax
Act (Canada) and the regulations made thereunder as now in effect
and as may be amended from time to time prior to the Effective Time.
Taxes means (a) all taxes,
duties, fees, premiums, assessments, imposts, levies and other charges of any
kind whatsoever imposed by any Governmental Entity or payable under any Laws,
together with all interest, penalties, fines, additions to tax or other
additional amounts imposed in respect thereof, including those levied on, or
measured by, or referred to as income, gross receipts, profits, capital,
transfer, land transfer, sales, goods and services, harmonized sales, use,
value-added, excise, stamp, withholding, business, franchising, property,
employer health, payroll, employment, health, social services, education and
social security taxes, all surtaxes, all customs duties and import and export
taxes, all license, franchise and registration fees and all employment
insurance, health insurance, workers compensation and Canada, Québec and other
governmental pension plan premiums or contributions; and (b) any liability
for the payment of any amounts of the type described in clause (a) above
as a result of any express or implied obligation to indemnify any other Person
or as a result of any obligations under any agreements or arrangements with any
other Person with respect to such amounts and including any liability for Taxes
of a predecessor entity.
Transaction Resolution has the meaning
ascribed thereto in Section 5.2(b).
Trust Indenture means the trust
indenture entered into between Predecessor and Computershare Trust Company of
Canada, as Trustee, dated June 15, 2006 in respect of the Eveready
Debentures, as supplemented by the supplemental indenture entered into between
Predecessor, Eveready and the Trustee dated as of December 31, 2008.
TSX has the meaning ascribed thereto
in Section 2.8.
U.S. GAAP has the meaning ascribed
thereto in Section 4.1(f)(ii).
11
Voting and Lock-Up Agreements means
the voting and lock-up agreements dated April 29, 2009 between Parent and
each of the Eveready Management Shareholders.
Section 1.2. Interpretation Not
Affected by Headings
The division of this Agreement into Articles and Sections and the
insertion of a table of contents and headings are for convenience of reference
only and do not affect the construction or interpretation of this
Agreement. The terms hereof, hereunder
and similar expressions refer to this Agreement and not to any particular
Article, Section or other portion hereof.
Unless something in the subject matter or context is inconsistent
therewith, references herein to Articles, Sections and Schedules are to
Articles and Sections of and Schedules to this Agreement.
Section 1.3. Interpretation
In this Agreement words importing the singular number include the
plural and vice versa, and words importing any gender include both genders and
neuter. The term third party means any
Person other than Eveready, Parent, Purchaser or any of their respective
Affiliates.
Section 1.4. Date for Any Action
If the date on which any action is required to be taken hereunder by a
Party is not a Business Day, such action will be required to be taken on the
next day which is a Business Day.
Section 1.5. Statutory References
In this Agreement, unless something in the subject matter or context is
inconsistent therewith or unless otherwise herein provided, a reference to any
statute is to that statute as now enacted or as the same may from time to time
be amended, re-enacted or replaced and includes any regulations made
thereunder.
Section 1.6. Currency
Unless otherwise stated, all references in this Agreement to sums of
money are expressed in lawful money of Canada and $ refers to Canadian
dollars.
Section 1.7. Accounting Principles
Wherever in this Agreement reference is made to a calculation to be
made or an action to be taken in accordance with Canadian GAAP, such reference
will be deemed to be to the generally accepted accounting principles from time
to time approved by the Canadian Institute of Chartered Accountants, or any
successor institute, applicable as at the date on which such calculation or
action is made or taken or required to be made or taken (Canadian
GAAP).
Section 1.8. Knowledge
(a) In
this Agreement, references to the knowledge of Eveready means the actual
knowledge, in their capacity as officers and/or employees of Eveready and not
in their personal capacity, of the President and Chief Executive Officer of
Eveready, the Chief Financial
12
Officer
of Eveready, and the current Director, Corporate Development of Eveready, after
reasonable inquiry.
(b) In
this Agreement, references to the knowledge of Parent means the actual
knowledge, in their capacity as officers and/or employees of Parent and not in
their personal capacity, of the President and Chief Executive Officer of Parent
and the Chief Financial Officer of Parent, after reasonable inquiry.
Section 1.9. Schedules
The following Schedules are annexed to this Agreement and are
incorporated by reference into this Agreement and form a part hereof:
Schedule A
|
-
|
Plan of Arrangement
|
Schedule B
|
-
|
Special Resolution of the Eveready Shareholders
|
Schedule C
|
-
|
Regulatory Approvals
|
ARTICLE II.
THE ACQUISITION
Section 2.1. Arrangement.
The Parties agree that the Arrangement will be implemented in
accordance with and subject to the terms and conditions contained in this
Agreement and the Plan of Arrangement.
Section 2.2. Implementation Steps by
Eveready
Eveready covenants in favour of Parent and Purchaser that Eveready
will:
(a) subject
to the terms of this Agreement, as soon as reasonably practicable, but in any
event not later than June 3, 2009 or such other date as is agreed to by
Parent, apply in a manner reasonably acceptable to Parent under Section 193
of the ABCA for the Interim Order;
(b) subject
to the terms of this Agreement and in accordance with the Interim Order, as
soon as reasonably practicable, but in no event later than July 17, 2009,
convene and hold the Eveready Meeting for the purpose of considering the
Arrangement Resolution;
(c) subject
to Section 7.3(a), not postpone or adjourn (other than a postponement or
adjournment not exceeding five Business Days for the purpose of attempting to obtain
the Required Vote) or cancel the Eveready Meeting without Parents prior
written consent, except as required for quorum purposes, to comply with
requirements of applicable Law (including any disclosure obligations under
applicable Laws provided that Eveready uses all reasonable efforts to comply
with such Laws in a timely manner) or by the Court;
(d) subject
to the terms of this Agreement and compliance by the directors and officers of
Eveready with their fiduciary duties, use commercially reasonable efforts to
solicit
13
from
holders of Eveready Common Shares proxies in favour of the approval of the
Arrangement Resolution;
(e) subject
to the terms of this Agreement and compliance by the directors and officers of
Eveready with their fiduciary duties and obtaining such approvals as are
required by the Interim Order, proceed with and diligently pursue the
application to the Court for the Final Order; and
(f) subject
to obtaining the Final Order and in accordance with Section 2.4, file the
Articles of Arrangement and such other documents as may be required in
connection therewith under the ABCA to give effect to the Arrangement.
Section 2.3. Interim Order
The notice of motion for the application referred to in Section 2.2(a) will
request that the Interim Order provide:
(a) for
the class of persons to whom notice is to be provided in respect of the
Arrangement and the Eveready Meeting and for the manner in which such notice is
to be provided;
(b) that,
subject to the approval of the Court, the requisite approval for the
Arrangement Resolution will be 66²/3 % of the votes cast on the Arrangement
Resolution by Eveready Shareholders present in person or represented by proxy
at the Eveready Meeting (such approval described in this Section 2.3(b),
the Required Vote);
(c) that
the terms, restrictions and conditions of the by-laws and articles of Eveready,
including quorum requirements and all other matters, will apply in respect of
the Eveready Meeting;
(d) for
the notice requirements with respect to the presentation of the application to
the Court for a Final Order; and
(e) that
the Eveready Meeting may be adjourned or postponed from time to time by
Eveready without the need for additional approval of the Court.
Section 2.4. Closing; Potential Asset
Purchase; Articles of Arrangement
(a) Unless
the Parties shall otherwise unanimously agree in writing, the closing of the
transactions contemplated hereby and by the Arrangement will take place at
10:00 a.m. (Eastern Time) on a date (the Closing Date)
determined in accordance with this Section 2.4(a) at the Calgary,
Alberta offices of Gowling Lafleur Henderson LLP, 1400 Scotia Centre, 700-2nd Street S.W., Calgary, Alberta, Canada. Subject
to satisfaction or, where permitted, waiver of the conditions to the respective
obligations of the Parties set forth in Article VI (the Closing Conditions), the Closing Date shall, unless the
Parties shall otherwise unanimously agree in writing, be the first Friday which
shall occur on or following the last of (i) July 31, 2009 (the Original Closing Date),
(ii) the satisfaction or waiver (subject to applicable Laws) of all
of the Closing Conditions (excluding conditions that, by their terms, cannot be
satisfied until the
14
Closing
Date and provided that such date shall not be later than the Outside Date), and
(iii) in the event either Eveready or Parent shall have postponed the
Outside Date in accordance with the definition of such term, such date (which
shall be not later than the Outside Date as so postponed) as shall be specified
by the Party which postponed the Outside Date in a written notice given to the
other Parties no later than 5:00 p.m. (Eastern time) on a date that is at
least five (5) Business Days prior to the Closing Date as so determined.
(b) If
Parent shall postpone the Outside Date beyond the Original Closing Date in
order to allow more time to complete the Financing, Parent shall give to
Eveready by not later than 5:00 p.m. (Eastern time) on July 24, 2009
a notice (Parents Original Closing Date Notice)
stating that Parent has postponed the Outside Date to a date not later than August 31,
2009 and confirming that Parent is prepared to complete the Cat Tech Purchase
and/or the Pembina Purchase, as applicable, on the terms and conditions set
forth in Section 2.4(c).
(c) (i) If
Parent shall extend the Outside Date as described in Section 2.4(b) in
order to allow more time to complete the Financing, on the Original Closing
Date (or such later date as shall be determined in accordance with clause (ii) below),
Parent shall, subject to the additional terms and conditions set forth below in
this Section 2.4(c), purchase (or designate and cause one or more of its
Subsidiaries to purchase), and Eveready shall cause its appropriate
Subsidiaries to sell, transfer and deliver to Parent or its designee(s), the
Cat Tech Assets (such purchase and sale shall be deemed the Cat Tech Purchase) for a purchase price of $28.0 million
(the Cat Tech Purchase Price) and the
Pembina Landfill Assets (such purchase and sale shall be deemed the Pembina Purchase)
for a purchase price of $25.0 million (the Pembina
Purchase Price).
(ii) If Parent has not completed the Financing
by the Original Closing Date and the Outside Date has been postponed in
accordance with subsection (i) of the definition of Outside Date
[Regulatory Approvals not obtained], Parent shall purchase (or designate and
cause one or more of its Subsidiaries to purchase), and Eveready shall cause
its appropriate Subsidiaries to sell, transfer and deliver to Parent or its
designee(s), the Cat Tech Assets for the Cat Tech Purchase Price and the
Pembina Assets for the Pembina Purchase Price within one week after the receipt
of any required Regulatory Approvals for such transactions.
(iii) Parents obligation to complete the Cat Tech Purchase
and/or the Pembina Purchase as described in clause (i) or (ii) of
this Section 2.4(c) shall be subject to the conditions that:
(A) on the closing date for the Cat Tech
Purchase and/or the Pembina Purchase, as applicable, (x) all of the
representations and warranties of Eveready contained in Section 3.1 shall
be true and complete in all material respects (unless the failure or failures
of all such representations and warranties to be so true and correct in all
respects would not reasonably be expected to have an Eveready Material Adverse
Effect), (y) insofar as the representations of Eveready contained in Section 3.1
relate to the Cat Tech Assets and/or the Pembina Landfill Assets, such
representations and warranties shall additionally be true and complete as if
Eveready had made such representations and warranties solely with respect to
the Cat Tech Assets and/or the Pembina Landfill Assets, as applicable, to be
acquired, and relative to the size thereof, as though the Cat Tech Assets
and/or the Pembina Landfill Assets, as applicable,
15
consisted of a
business independent of the other assets and business of Eveready (unless the
failure or failures of all such representations and warranties to be so true
and correct in all respects would not reasonably be expected to have an
Eveready Material Adverse Effect, as adjusted relative to the size thereof),
and (z) Parent shall have received a certificate of Eveready addressed to
Parent dated such closing date, signed on behalf of Eveready by two senior
executive officers of Eveready (on Evereadys behalf and without personal
liability) confirming the accuracy of the statements in clauses (x) and (y) as
of such closing date;
(B) on the closing date for the Cat Tech
Purchase and/or the Pembina Purchase, as applicable, any required Regulatory
Approvals or other third party consents or approvals (including, without
limitation, under the Eveready Amended and Restated Credit Agreement) shall
have been obtained (provided that if such Regulatory Approvals or other third
party consents or approvals have not been obtained by the Original Closing Date
for one or both of the Cat Tech Purchase or the Pembina Purchase, Parent shall
be obligated to complete any such purchase on the Original Closing Date for
which all such Regulatory Approvals or other third party consents or approvals
have been obtained by such date and shall, in accordance with clause (ii) of
this Section 2.4(c), be obligated to complete any other such purchase
following such Regulatory Approvals or other third party consents or approvals
having been obtained; and
(C) by not later than the Original Closing
Date, Eveready shall have held the Eveready Meeting and obtained the Required
Vote in favor of the Arrangement, provided that Eveready shall not be required
to hold the Eveready Meeting or obtain the Required Vote in favour of the Arrangement
if this Agreement has been terminated by Parent pursuant to Section 8.2(c)(iv) [Parents
inability to complete financing] or by Eveready pursuant to Section 8.2(d)(i) [Parents
failure to deliver Letter of Credit] or Section 8.2(d)(iii) [Parents
breach] (it being mutually acknowledged that the obligations under this Section 2.4(c) shall
survive any such termination of this Agreement).
(iv) Eveready shall, on the closing date for
the Cat Tech Purchase and/or the Pembina Purchase, as applicable, cause the
Subsidiaries whose equity interests are being transferred as part of the Cat
Tech Purchase and/or the Pembina Purchase, as applicable, and the respective
assets of such Subsidiaries to be released from any Indebtedness or Liens
(including, without limitation, any Indebtedness or Liens now outstanding under
the Eveready Amended and Restated Credit Agreement or any net Indebtedness owed
to, or held by, any other Subsidiary of Eveready either under any promissory
notes or any other instruments of Indebtedness) except with respect to any
Pembina or Cat Tech capital lease obligations under capital leases (which are
not cross-defaulted with the capital leases or other Indebtedness of any other
Person), Permitted Liens and any Liens (including those related to the royalty
interest granted to Kenneth Byram) on the assets of the Persons that comprise
the Pembina Landfill Assets registered against those assets on the date hereof
with the exclusion of those relating to the Eveready Amended and Restated
Credit Facility.
(v) Evereadys obligation to complete the
transactions contemplated by this Section 2.4(c) shall be subject to
the condition that any required Regulatory Approvals or other third party
consents or approvals (including, without limitation, under the Eveready
Amended and Restated Credit Agreement) shall have been obtained.
16
(vi) Notwithstanding anything to the contrary
herein, neither Eveready nor Parent will be obligated to complete any one of
the transactions contemplated by this Section 2.4(c) which has not
been completed by the Outside Date if any required Regulatory Approval or other
third party consent or approval (including, without limitation, under the
Eveready Amended and Restated Credit Agreement) for such transaction which
remains to be closed has not been obtained with respect to such transaction by
the Outside Date.
(vii) Parent covenants and agrees that it shall apply for
and use all commercially reasonable efforts to obtain all Regulatory Approvals
required for it to complete the transactions contemplated by this Section 2.4(c) and,
in doing so, keep Eveready reasonably informed as to the status of the
proceedings related to obtaining the Regulatory Approvals, including providing
Eveready with copies of all related applications and notifications in draft
form (other than confidential information contained in such applications and
notifications), in order for Eveready to provide its reasonable comments
thereon; provided, however, that nothing in this Agreement shall require Parent
or its Affiliates to divest or hold separate or otherwise take or commit to
take any action to obtain any such Regulatory Approval.
(viii) In the event the Cat Tech Purchase and/or the Pembina
Purchase, as applicable, shall occur, each of Parent and Eveready shall take,
and shall cause their respective Subsidiaries to take, all such further actions
and execute and deliver all such further documents as shall be necessary and
appropriate as if the Cat Tech Purchase and/or the Pembina Purchase, as
applicable, were being made under a separate purchase and sale agreement
containing customary terms and conditions for a similar transaction on an arms
length basis and without giving consideration to the other terms of this
Agreement.
(d) Parent
shall, by not later than 5:00 p.m. (Eastern time) on the date that is two
Business Days after the date of this Agreement, deliver to Eveready an
irrevocable letter of credit, in the form agreed to between Parent and Eveready
prior to the execution of this Agreement, for $5.0 million from Bank of
America, N.A. (the Letter of Credit). Eveready shall return the Letter of Credit to
Parent if either (i) the Arrangement or the Cat Tech Purchase and the
Pembina Purchase closes or (ii) all Regulatory Approvals and other third
party consents required for any one of the transactions contemplated by this Section 2.4(c) which
remains to be closed shall not have been obtained by the Outside Date, unless
this Agreement has been terminated in accordance with the following
sentence. If Parent defaults in its
obligations to close either the Arrangement or the Cat Tech Purchase and the
Pembina Purchase in accordance with Section 2.4(c), (i) Eveready will
be entitled to terminate this Agreement in accordance with Section 8.2(d)(i) and call
on the Letter of Credit, and (ii) if Eveready so elects, sue for
specific performance on Parents obligations to complete the Cat Tech Purchase
and the Pembina Purchase in accordance with Section 2.4(c). If both the
Cat Tech Purchase and the Pembina Purchase thereafter close, Parent will
receive on the closing of both such transactions (if both such closings occur
on the same date) or the later of the closings of such transactions (if such
closings occur on different dates) credit for the $5.0 million drawn on
the Letter of Credit against the Cat Tech Purchase Price and/or the Pembina
Purchase Price, as applicable. If (i) Parent defaults in its obligations
to complete the Cat Tech Purchase or the Pembina Purchase, but (ii) Eveready
elects not to sue for specific performance or the Cat Tech Purchase or the
Pembina Purchase do not thereafter close for some other reason (but all
Regulatory Approvals and other third party consents required for the Cat Tech
Purchase or the Pembina Purchase, as applicable,
17
shall
have been obtained by the Outside Date), Eveready will be entitled to
retain the $5.0 million as liquidated damages relating to the Cat Tech Purchase
and the Pembina Purchase.
(e) If
the Arrangement closes on either the Original Closing Date or another Closing
Date pursuant to the terms of this Agreement, the Articles of Arrangement will
on that date be filed with the Registrar and, upon the issuance of a
Certificate by the Registrar, the Articles of Arrangement will implement the
Plan of Arrangement as of the Effective Time. As of the Effective Time, each
Eveready Share outstanding immediately prior to the Effective Time will be
exchanged, the Eveready Options and Eveready Deferred Shares will be redeemed
for cancellation and the Eveready Debentures will be repurchased all on the terms
provided in the Plan of Arrangement, and the Arrangement will, from and after
the Effective Time, have all of the effects provided by applicable Laws,
including the ABCA.
Section 2.5. Circular
Subject to compliance with Section 2.6, as promptly as reasonably
practicable after the execution and delivery of this Agreement, Eveready will
prepare the Eveready Circular together with any other documents required by the
ABCA, Securities Laws or other applicable Laws in connection with the Eveready
Meeting required to be filed or prepared by Eveready, and, subject to Section 2.6(b) as
promptly as is reasonably practicable after the execution and delivery of this
Agreement, Eveready will, unless otherwise agreed by the Parties, cause the
Eveready Circular and other documentation required in connection with the
Eveready Meeting to be sent to the Eveready Shareholders and filed as required
by the Interim Order and applicable Laws.
The Eveready Circular will include the recommendation of the Board that
the Eveready Shareholders vote in favour of the Arrangement Resolution unless
such recommendation has been withdrawn, modified or amended in accordance with
the terms of this Agreement.
Section 2.6. Preparation of Filings
(a) The
Parties will co-operate in the preparation of any application for the
Regulatory Approvals and any other orders, registrations, consents, filings,
rulings, exemptions, no-action letters and approvals and the preparation of any
documents reasonably deemed by the Parties to be necessary to discharge their
respective obligations or otherwise advisable under applicable Laws in
connection with the Arrangement and this Agreement as promptly as practicable
hereafter.
(b) The
Parties will co-operate in the preparation, filing and mailing of the Eveready
Circular. Eveready will provide Parent
and its representatives with a reasonable opportunity to review and comment on
the Eveready Circular, including by providing on a timely basis a description
of any information required to be supplied by Parent for inclusion in the
Circular, prior to its mailing to Eveready Shareholders and filing in
accordance with the Interim Order and applicable Laws. Parent and Purchaser acknowledge that whether
or not such comments are appropriate or any revisions will be made as a result
thereof to the Eveready Circular will be determined solely by Eveready acting
reasonably.
(c) Eveready
will ensure that the Eveready Circular complies with the Interim Order and all
applicable Laws and, without limiting the generality of the foregoing, that the
18
Eveready
Circular does not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements contained therein not misleading in light of the circumstances under
which they are made (other than with respect to any information relating to and
provided by Parent, Purchaser or their Affiliates). Eveready will promptly inform Parent of any
requests or comments made by Securities Authorities in connection with the
Eveready Circular.
(d) Parent
will furnish to Eveready such information concerning Parent, Purchaser or their
Affiliates as may be reasonably required by Eveready in the preparation of the
Eveready Circular and other documents related thereto, and Parent will ensure
that the information supplied by it for inclusion in the Eveready Circular
will, at the time of the mailing of the Eveready Circular, not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements contained
therein not misleading in light of the circumstances under which they are made.
(e) Each
of the Parties will, in the case of Eveready only with respect to Eveready and
in the case of Parent and Purchaser only with respect to Parent and Purchaser,
promptly notify the other if at any time before the Effective Time it becomes
aware that the Eveready Circular, an application for a Regulatory Approval or
any other order, registration, consent, ruling, exemption, no-action letter or
approval, any registration statement or any circular or other filing under
applicable Laws contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements contained therein not misleading in light of the circumstances under
which they are made, or of information that otherwise requires an amendment or
supplement to the Eveready Circular, such application, registration statement,
circular or filing, and the Parties will co-operate in the preparation of such
amendment or supplement as required, including the distribution and filing of
such amendment or supplement by Eveready.
(f) Parent
shall use reasonable efforts to obtain all orders required from the applicable
Securities Authorities to permit the issuance and first resale of the Parent
Common Shares issued, indirectly, to the Eveready Shareholders pursuant to the
Arrangement without qualification with or approval of or the filing of any
registration statement or prospectus, or the taking of any proceeding with, or
the obtaining of any further order, ruling or consent from any Governmental
Entity under any United States or Canadian federal, state, provincial or
territorial securities or other Laws or pursuant to the rules and
regulations of any Securities Authority administering such Laws or the
fulfillment of any other legal requirement in any such jurisdiction. However, in the case of the Eveready
Management Shareholders, the first resale of the Parent Common Shares received
by such shareholders shall be subject to the lock-up and potential manner of
sale restrictions set forth in the Voting and Lock-Up Agreements.
(g) Eveready
will advise Parent as Parent may reasonably request and at least on a daily
basis on each of the last seven Business Days prior to the Eveready Meeting, as
to the aggregate tally of the proxies received by Eveready (including voting
reports prepared by Broadridge) in respect of the Arrangement Resolution and
any other matters to be considered at the Eveready Meeting.
19
(h) Eveready
will give notice to Parent of the Eveready Meeting and allow Parents representatives
and legal counsel to attend the Eveready Meeting.
Section 2.7. Court Proceedings
Eveready will provide Parent and its legal counsel with reasonable
opportunity to review and comment upon drafts of all material to be filed with
the Court in connection with the Arrangement, including by providing on a
timely basis a description of any information required to be supplied by Parent
for inclusion in such material, prior to the service and filing of that
material, and will accept the reasonable comments of Parent and its legal
counsel. In addition, Eveready will not
object to legal counsel to Parent making such submissions on the hearing of the
motion for the Interim Order and the application for the Final Order as such
counsel considers appropriate, provided that Eveready is advised of the nature
of any submissions on a timely basis prior to the hearing. Eveready will also provide legal counsel to
Parent on a timely basis with copies of any notice of appearance and evidence
served on Eveready or its legal counsel in respect of the application for the
Final Order or any appeal therefrom.
Except as required by applicable Laws, Eveready will not file any
material with the Court in connection with the Arrangement or serve any such
material, and will not agree to modify or amend materials so filed or served,
except as contemplated hereby or with Parents prior written consent, such
consent not to be unreasonably withheld or delayed; provided that nothing
herein will require Parent to agree or consent to any increased purchase price
or other consideration or other modification or amendment to such filed or
served materials that expands or increases Parents or Purchasers obligations
set forth in any such filed or served materials.
Section 2.8. Public Communications
Eveready and Parent shall consult with each other prior to issuing any
press releases or otherwise making public announcements with respect to the
transactions contemplated by this Agreement and the Arrangement. Neither Eveready nor Parent will issue any
press release or otherwise make public statements with respect to this
Agreement or the Arrangement without the prior written consent of the other
Party (which consent will not be unreasonably withheld or delayed); Eveready
will not make any filing with any Governmental Entity or with the Toronto Stock
Exchange (the TSX) with respect thereto without
prior consultation with Parent; and Parent will not make any filing with any
Governmental Entity or with any stock exchange with respect thereto without
prior consultation with Eveready.
However, the foregoing provisions of this Section 2.8 will be
subject to each Partys overriding obligation to make any disclosure or filing
required under applicable Laws, and the Party making any such disclosure or filing
will use its commercially reasonable efforts to give prior oral or written
notice to the other Party and reasonable opportunity for the other Party to
review or comment on the disclosure or filing (other than with respect to
confidential information contained in such disclosure or filing), and, if such
prior notice is not possible, to give such notice immediately following the
making of any such disclosure or filing.
20
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF EVEREADY
Section 3.1. Representations and
Warranties
Contemporaneously with the execution and delivery of this Agreement,
Eveready is delivering to Parent the Disclosure Letter required to be delivered
pursuant to this Agreement, which is deemed to constitute an integral part of
this Agreement and to modify or supplement, as applicable, the representations
and warranties of Eveready contained in this Agreement. Eveready will not be in breach of this
Agreement as a result of a representation or warranty being inaccurate or
incomplete if, by virtue of any disclosure in any part of the Disclosure Letter
or of this Agreement, the true facts with respect to the representation or
warranty have been disclosed with particularity and the relevant facts are
described in reasonable detail. Eveready
represents and warrants to and in favour of Parent and Purchaser as follows and
acknowledges that Parent and Purchaser are relying upon such representations
and warranties in connection with entering into this Agreement:
(a) Board
Approval.
As of the date hereof, the Board, after consultation with its financial
and legal advisors, has determined unanimously that the Arrangement is fair to
the Eveready Shareholders and is in the best interests of Eveready and has
resolved unanimously to recommend to the Eveready Shareholders that they vote
their Eveready Common Shares in favour of the Arrangement.
(b) Organization
and Qualification.
Eveready and each of its Subsidiaries is a corporation duly
incorporated, continued or amalgamated or an entity duly created and validly
existing under the laws of its jurisdiction of incorporation, continuance,
amalgamation or creation and has the requisite corporate or other power and
authority to own its assets as now owned and to carry on its business as it is
now being conducted. Eveready and each
of its Subsidiaries is duly registered or otherwise authorized to do business
and in good standing in each jurisdiction in which the character of its
properties, owned, leased, licensed or otherwise held, or the nature of its
activities makes such registration necessary, except where the failure to be so
registered or in good standing would not, individually or in the aggregate,
reasonably be expected to have an Eveready Material Adverse Effect or prevent
or materially delay the Arrangement.
Correct, current and complete copies of the articles of incorporation,
continuance or amalgamation and by-laws (or the equivalent organizational
documents), each as amended to date, of Eveready and each of its Subsidiaries
listed in Section 3.1(g) of the Disclosure Letter (collectively, the Eveready Organizational Documents) have been made available
to Parent and its advisors.
(c) Authority
Relative to this Agreement. Eveready has the requisite corporate power
and authority to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of
this Agreement by Eveready and the consummation by Eveready of the transactions
contemplated by this Agreement have been duly authorized by the Board, and no
other corporate proceedings on the part of Eveready are necessary to authorize
the execution and delivery by it of this Agreement or any agreement ancillary
hereto and the consummation by it of the transactions contemplated hereby and
thereby, subject, in the case of
21
completion
of the Arrangement, to the receipt of the Required Vote and approval by the
Court. This Agreement has been duly
executed and delivered by Eveready and constitutes a legal, valid and binding
obligation of Eveready enforceable against Eveready in accordance with its
terms, subject to the qualification that such enforceability may be limited by
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting rights of creditors and that equitable remedies,
including specific performance, are discretionary and may not be ordered.
(d) No
Violations.
Neither the execution and delivery of this Agreement by Eveready, nor
the consummation of the Arrangement by Eveready, nor compliance by Eveready
with any of the provisions hereof will:
(i) except as described in Section 3.1(d) of
the Disclosure Letter, and subject to obtaining waivers or refinancing as of
the Effective Time of the outstanding debt of Eveready or its Subsidiaries as
contemplated in Section 5.4(d), and except where it would not,
individually or in the aggregate, reasonably be expected to have an Eveready
Material Adverse Effect, violate, conflict with, or result in a breach of any
provision of, require any consent, approval or notice under, or constitute a
default (or an event which with or without notice or lapse of time or both,
would constitute a default) under, or result in granting to a third party a
right to reduce fees or other payments to Eveready or any of its Subsidiaries
under, or result in granting to a third party a right of first refusal, first
opportunity, or other right or option to acquire properties or assets of
Eveready or any of its Subsidiaries under, or grant to a third party a right to
force Eveready or any of its Subsidiaries to purchase one or more assets under,
or result in a right of termination or acceleration under, or result in the
creation of any Lien upon, any of the properties or assets of Eveready or any
of its Subsidiaries or cause any Indebtedness of Eveready or any of its
Subsidiaries to come due before its stated maturity or cause any credit
commitment to cease to be available or cause any payment or other obligation to
be imposed on Eveready or any of its Subsidiaries under, any of the terms,
conditions or provisions of (A) the respective charters or by-laws or
other comparable organizational documents of Eveready and its Subsidiaries or (B) any
note, bond, mortgage, indenture, loan agreement, deed of trust, Lien, or other
Contract to which Eveready or any of its Subsidiaries is a party or to which
Eveready or any of its Subsidiaries, or any of their respective properties or
assets may be subject or by which Eveready or any of its Subsidiaries is bound;
or
(ii) subject to obtaining the Regulatory
Approvals and the Required Vote and compliance with the Interim Order and any
approvals required thereunder, the Final Order and filings with the Registrar
and compliance with any applicable Securities Laws, (A) violate in any
material respect any Law applicable to Eveready or any of its Subsidiaries or
any of their respective properties or assets, or (B) cause the suspension
or revocation of any material Permit currently in effect.
(e) Capitalization.
(i) The authorized share capital of Eveready
consists of an unlimited number of Eveready Common Shares and an unlimited
number of preferred shares issuable in series. As of the close of business on April 24,
2009, there were issued and outstanding: (A) 18,347,155 Eveready Common
Shares and nil preferred shares, (B) options to acquire up to
22
167,000 Eveready
Common Shares under the Eveready Share Option Plan as described in Section 3.1(e) of
the Disclosure Letter, (C) deferred shares exchangeable for 11,580
Eveready Common Shares under the Eveready Deferred Annual Bonus Share Plan as
described in Section 3.1(e) of the Disclosure Letter, (D) $50.0
million principal amount of Eveready Debentures (which are now, and will on the
Closing Date, be convertible into Eveready Common Shares at a conversion price
of $38.754 per share), and (E) rights granted to the Eveready Shareholders
pursuant to the Eveready Shareholders Rights Plan. With the exception of
251,726 outstanding Eveready Common Shares currently held by the trust
established for the benefit of the employees of Predecessor and its
Subsidiaries in connection with Predecessors Employee Participation Plan which
will vest to such employees in accordance with the terms of such Plan including
the past practices and policies of Eveready and Predecessor, there are no other
options, warrants or other rights, shareholder rights plans, agreements or
commitments of any character whatsoever requiring or which may require the
issuance, sale or transfer by Eveready of any shares of Eveready (including
Eveready Common Shares) or any securities convertible into, or exchangeable or
exercisable for, or otherwise evidencing a right to acquire, any shares of
Eveready (including Eveready Common Shares).
(ii) All outstanding Eveready Common Shares
have been duly authorized and validly issued, are fully paid and
non-assessable, and all Eveready Common Shares issuable upon (A) exercise
of rights under the Eveready Options, (B) conversion of the Eveready
Deferred Shares, and (C) conversion of the Eveready Debentures in
accordance with their respective terms have been duly authorized and, upon
issuance, will be validly issued as fully paid and non-assessable. All securities of Eveready (including the
Eveready Common Shares, the Eveready Options, the Eveready Deferred Shares, and
the Eveready Debentures) have been issued in compliance, in all material
respects, with all applicable Securities Laws.
(iii) Other than the Eveready Options, the Eveready Deferred
Shares, and the Eveready Debentures, there are no securities of Eveready or of
any of its Subsidiaries outstanding which have the right to vote generally (or
are convertible into or exchangeable for securities having the right to vote
generally) with the Eveready Shareholders on any matter. Except as contemplated by the Plan of
Arrangement, there are no outstanding contractual or other obligations of
Eveready to (A) repurchase, redeem or otherwise acquire any of its
securities, other than as provided in the Trust Indenture and the certificates
representing the Eveready Debentures, or (B) make any investment in or
provide any funds to (whether in the form of a loan, capital contribution or
otherwise) any Person, other than a wholly-owned Subsidiary of Eveready.
(f) Reporting
Status and Securities Laws Matters. Eveready is a reporting issuer and not on
any list of reporting issuers in default under applicable Securities Laws and
is in compliance in all material respects with all applicable Securities
Laws. No delisting of, suspension of
trading in or cease trading order is in effect with respect to any securities
of Eveready and, to the knowledge of Eveready, except as described in writing
by Eveready to Parent, no inquiry or investigation (formal or informal) of any
Securities Authority is ongoing or expected to be implemented or undertaken
with respect to Eveready. No Subsidiary
of Eveready is subject to the continuous disclosure requirements under any
Securities Laws.
23
(g) Ownership of Subsidiaries. Section 3.1(g) of the Disclosure
Letter sets forth a complete and accurate list and/or chart of all Subsidiaries
owned, directly or indirectly, by Eveready, each of which is wholly-owned
except as otherwise noted in such list or chart. All of the outstanding shares of capital and
other ownership interests in each of Evereadys Subsidiaries are duly
authorized, validly issued, fully paid and non-assessable, and all such shares
and other ownership interests held directly or indirectly by Eveready are,
except pursuant to restrictions on transfer contained in constating documents
or pursuant to existing financing arrangements involving Eveready or its
Subsidiaries, owned free and clear of all Liens other than Permitted Liens and
subject to no proxy, voting trust or other agreement relating to the voting of
such shares, and there are no outstanding Contracts regarding the right or
obligation to acquire any such shares of capital or other ownership interests
in or real properties of any of Evereadys Subsidiaries. Except as set out in section 3.1(g) of
the Disclosure Letter, there are no outstanding contractual or other
obligations of any Subsidiaries of Eveready to (i) repurchase, redeem or
otherwise acquire any of their respective securities or with respect to the
voting or disposition of any outstanding securities of any Subsidiaries of
Eveready, or (ii) make any investment in or provide any funds to (whether
in the form of a loan, capital contribution or otherwise) any Person, other
than a wholly-owned Subsidiary of Eveready.
(h) Eveready Reports. Since December 31, 2006, Eveready and
Predecessor have filed each report or proxy or informational statement required
to be filed by them with the Canadian Securities Authorities (collectively,
including any other reports filed with the Canadian Securities Authorities
subsequent to the date hereof and as amended, the Eveready
Reports), including Evereadys audited annual financial statements
for the year ended December 31, 2008 and related managements discussion
and analysis (including exhibits, annexes and any amendments thereto). The Eveready Reports are publicly and freely
available on www.sedar.com, or copies thereof have otherwise been, or for
Eveready Reports filed after the date hereof will otherwise be, provided to
Parent. The Eveready Reports, at the
time filed (or if amended or superseded by a filing prior to the date of
hereof, then on the date of such filing), complied and each Eveready Report
filed subsequent to the date hereof will comply, in all material respects with
the requirements of applicable Securities Laws and did not, and will not, at
the time furnished or filed, contain any material misrepresentation (as defined
in the Securities Laws, as applicable) or any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements, therein, in light of the
circumstances under which they were made, not misleading.
(i) Eveready Financial Statements. Evereadys audited consolidated financial
statements as at December 31, 2008 and 2007 and for the fiscal years then
ended (the Eveready Year-End Financial Statements),
and Evereadys unaudited quarterly financial statements included in the Eveready
Reports filed after the date hereof (the Eveready Interim Financial
Statements, and together with the Eveready Year-End Financial
Statements, the Eveready Financial Statements),
including the notes thereto and related managements discussion and analysis (MD&A), and all other financial statements of Eveready
and its Subsidiaries included or incorporated by reference in information
circulars, forms, reports, statements, prospectuses and other documents filed
or issued since December 31, 2006 were prepared or, in the case of the
Eveready Interim Financial Statements and any such other financial statements
for periods after December 31, 2008 will be prepared, in accordance with
Canadian GAAP consistently applied (except (A) as otherwise indicated in
such financial statements and the notes thereto or, in the
24
case of audited statements, in the
related report of Evereadys independent auditors, and (B) in the case of
unaudited interim consolidated financial statements, subject to normal
period-end adjustments and the omission of notes which are not required to be
included in such unaudited statements) and fairly present in all material
respects the consolidated financial position, results of operations and changes
in financial position of Eveready and its Subsidiaries as of the dates thereof
and for the periods indicated therein (subject, in the case of any unaudited
interim consolidated financial statements, to normal period-end adjustments)
and reflect reserves required by Canadian GAAP in respect of all material
contingent liabilities, if any, of Eveready and its Subsidiaries on a
consolidated basis. There has been no
material change in Evereadys accounting policies, except as described in the
notes to the Eveready Financial Statements, since December 31, 2008.
(j) Books, Records and Disclosure Controls.
(i) The records,
systems, controls, data and information of Eveready and each of its
Subsidiaries are recorded, stored, maintained and operated under means
(including any electronic, mechanical or photographic process, whether
computerized or not) that are under the exclusive ownership and direct control
of Eveready or such Subsidiary, except for any non-exclusive ownership or
non-direct control that would not have a material adverse effect on the system
of internal accounting control described in the following sentence. The statements in the certificates included
in the Eveready Reports of Evereadys chief executive officer and chief
financial officer relating to the internal control over financial reporting
maintained by Eveready and its Subsidiaries as being sufficient to provide
reasonable assurance regarding the reliability of financial reporting and
preparation of financial statements for Eveready and its Subsidiaries in
accordance with Canadian GAAP are true and complete.
(ii) Evereadys and
each of its Subsidiaries corporate records and minute books have been
maintained in material compliance with applicable Laws and are complete and
accurate in all material respects.
(k) Absence of Certain Changes. Since December 31, 2008, (i) Eveready
and each of its Subsidiaries have conducted their respective business in the
ordinary course of business consistent with past practice, and (ii) there
has been no Eveready Material Adverse Effect. Except
for the anticipated provision after the date hereof but prior to the Closing
Date of a guarantee for up to $7.7 million of loans obtained by employees of
Predecessor and its Subsidiaries to acquire securities of Predecessor pursuant
to Predecessors Employee Participation Plan, neither
Eveready nor any of its Subsidiaries has any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise), including any
Contract to create, assume or issue any bond, debenture, note or other similar
instrument or any Contract providing for the guarantee, indemnification,
assumption or endorsement or any similar commitment with respect to the
obligations, liabilities (contingent or otherwise) or Indebtedness of any other
Person, which is (A) material to Eveready and its Subsidiaries, taken as a
whole, and (B) required by Canadian GAAP to be set forth in a consolidated
balance sheet of Eveready and its Subsidiaries or in the notes thereto, but
has, individually or in the aggregate, not been reflected in the consolidated
balance sheet of Eveready and its Subsidiaries dated December 31, 2008
forming part of the Eveready Year-End Financial Statements, including the notes
thereto and the related MD&A filed under the Securities Laws, other than
liabilities, indebtedness or
25
obligations incurred by Eveready and
its Subsidiaries in the ordinary course of business since December 31,
2008.
(l) Litigation. Except as set forth in Section 3.1(l) to
the Disclosure Letter, there are no material claims, actions, suits, demands,
arbitrations, charges, indictments, hearings or other civil, criminal,
administrative or investigative proceedings, or other investigations or
examinations (collectively, Legal Actions)
pending or, to the knowledge of Eveready, threatened, affecting Eveready or any
of its Subsidiaries or any of their respective properties or assets at law or
in equity before or by any Governmental Entity or against any current or former
director or officer of Eveready or any of its Subsidiaries in their capacities
as directors or officers of Eveready or any of its Subsidiaries. Neither Eveready nor any of its Subsidiaries
nor any of their respective assets or properties is subject to any outstanding
judgment, order, writ, injunction or decree which would, individually or in the
aggregate, reasonably be expected to have an Eveready Material Adverse Effect.
(m) Taxes.
(i) Eveready and
each of its Subsidiaries has (A) duly and timely filed, or caused to be
filed with all the appropriate Tax authorities, all Returns required to be
filed by it prior to the date hereof, and all such Returns are true and correct
in all material respects; (B) paid to the appropriate Tax authority on a
timely basis all Taxes and all assessments and reassessments of Taxes due on or
before the date hereof, other than Taxes the failure to pay which would not,
individually or in the aggregate, reasonably be expected to have, an Eveready
Material Adverse Effect; (C) duly and timely withheld, or caused to be
withheld, all Taxes and other amounts required by Law to be withheld by it
(including Taxes and other amounts required to be withheld by it in respect of
any amount paid or credited or deemed to be paid or credited by it to or for
the account of any Person, including any employees, officers or directors and
any non-resident Person) and duly and timely remitted, or caused to be
remitted, to the appropriate Tax authority such Taxes and other amounts
required by Law to be remitted by it, except to the extent that such failure
would not, individually or in the aggregate, reasonably be expected to have an
Eveready Material Adverse Effect; and (D) duly and timely collected, or
caused to be collected, all Taxes required by Law to be collected by it and
duly and timely remitted to the appropriate Tax authority any such amounts
required by Law to be remitted by it, except to the extent that such failure
would not, individually or in the aggregate, reasonably be expected to have an
Eveready Material Adverse Effect.
(ii) The unpaid Tax
liability of Eveready and its Subsidiaries did not, as of the date of the
Eveready Financial Statements, exceed the reserves and provisions for Taxes
accrued but not yet due as reflected in Eveready Financial Statements, and
Taxes payable by Eveready and its Subsidiaries through the Closing Date will
not exceed such reserve as adjusted through the Closing Date in accordance with
the past custom and practice of Eveready and its Subsidiaries in filing their
Returns.
(iii) No
deficiencies, litigation, proposed adjustments or matters in controversy with
respect to Taxes have been asserted which remain unresolved at the date hereof,
and no action, audit, investigation or proceeding for assessment, reassessment
or collection of Taxes has been taken, asserted, or to the knowledge of
Eveready, threatened, against Eveready or
26
any of its Subsidiaries or any of their respective assets, except, in
each case, as disclosed or provided for in the Eveready Financial Statements or
the Disclosure Letter.
(iv) There are no
outstanding elections, agreements or waivers extending the statutory period or
providing for an extension of time with respect to the assessment or
reassessment of any Taxes of, or the filing of any Return or any payment of any
Taxes by, Eveready or any of its Subsidiaries.
(v) Eveready is a taxable
Canadian corporation as defined in the Tax Act;
(vi) There are no
liens for Taxes (other than Taxes not yet due and payable) upon any of the
assets of Eveready and its Subsidiaries.
(vii) Neither
Eveready nor any of its Subsidiaries is a party to any indemnification,
allocation or sharing agreement with respect to Taxes that could give rise to a
payment or indemnification obligation (other than agreements among Eveready and
its Subsidiaries and other than customary Tax indemnifications contained in
credit or loan agreements or other transactions entered into in the ordinary
course) and neither Eveready nor any of its Subsidiaries has any liability for
the Taxes of any Person (other than Eveready and its Subsidiaries) as a
transferee or successor, by contract, or otherwise.
(n) Property.
(i) Each parcel of
real property currently owned by, and material to the operations of, Eveready
or any of its Subsidiaries (collectively, the Owned Real Properties) is described in Section 3.1(n) of
the Disclosure Letter. Eveready or its
applicable Subsidiary as set out in Section 3.1(n) of the Disclosure
Letter owns good and marketable fee simple title to the Owned Real Properties,
free and clear of all Liens, other than Permitted Liens. None of the Owned Real Properties is subject
to any governmental decree or order to be sold or is being condemned,
expropriated or otherwise taken by any public authority with or without payment
of compensation therefor, nor, to the knowledge of Eveready, has any such
condemnation, expropriation or taking been proposed. None of Eveready or any of its Subsidiaries
is in violation of any covenant, or not in compliance with any condition,
restriction, zoning or land use Law or Permitted Lien, affecting any Owned Real
Properties which violations or non-compliances would, individually or in the
aggregate, reasonably be expected to have an Eveready Material Adverse Effect.
(ii) Each parcel of
real property currently leased or subleased by, and material to the operations
of, Eveready or any of its Subsidiaries from a third party (collectively, the Leased Properties and together with the
Owned Real Properties, the Properties)
is set forth in Section 3.1(n) of the Disclosure Letter identifying
the name of the entity (i.e., Eveready or its Subsidiary) holding such
leasehold interest and the documents under which such leasehold interests are
held (collectively, the Lease Documents). Eveready or its applicable Subsidiary holds
good and valid leasehold interests in the Leased Properties, free and clear of
all Liens other than Permitted Liens and the Lease Documents. Each of the Lease Documents is valid, binding
and in full force and effect as against Eveready or its Subsidiaries and, to
the knowledge of
27
Eveready, as against the other party thereto. None of Eveready or any of its Subsidiaries
and, to the knowledge of Eveready, any of the other parties to the Lease
Documents, is in breach or violation or default (in each case, with or without
notice or lapse of time or both) under any of the Lease Documents which breach,
violation or default would, individually or in the aggregate, reasonably be
expected to have an Eveready Material Adverse Effect, and none of Eveready or
any of its Subsidiaries has received or given any notice of default under any
such agreement which remains uncured which would, individually or in the
aggregate, reasonably be expected to have an Eveready Material Adverse
Effect. To the knowledge of Eveready,
neither Eveready nor any of its Subsidiaries is in violation of any covenant,
or not in compliance with any condition, restriction, zoning or land use Law or
Permitted Lien, affecting any Leased Properties which violations or
non-compliances would, individually or in the aggregate, reasonably be expected
to have an Eveready Material Adverse Effect.
(iii) Each of
Eveready and its Subsidiaries has good and sufficient title to such other real
property interests, licenses, easements and rights of way permitting the use of
land or premises by Eveready and its Subsidiaries, necessary to permit the
operation of its current businesses, as they are now being conducted, except
for such failure of title in respect of such other real property interests,
licenses, easements and rights of way as would not, individually or in the
aggregate, reasonably be expected to have an Eveready Material Adverse Effect.
(iv) The Properties
and all buildings and improvements thereon are in good operating condition and
repair, subject to normal wear and tear.
To the knowledge of Eveready, there are no latent defects affecting any
Property or the buildings or improvements thereon, other than those that would
not, individually or in the aggregate, reasonably be expected to have an
Eveready Material Adverse Effect.
(o) Personal Property. Eveready and its Subsidiaries have good and
marketable title to, or a valid and enforceable leasehold interest in, or
license to, all personal property owned, used or held for use by them, except
as would not, individually or in the aggregate, reasonably be expected to have
an Eveready Material Adverse Effect.
Neither Evereadys nor any of its Subsidiaries ownership of or
leasehold interest in any such personal property is subject to any Liens,
except for Permitted Liens and Liens that would not, individually or in the
aggregate, reasonably be expected to have an Eveready Material Adverse Effect.
(p) Contracts.
(i) Section 3.1(p) of
the Disclosure Letter contains a list of the following Contracts, correct,
current and complete copies of which have been provided to Parent:
(A) any lease of real property
by Eveready or any of its Subsidiaries, as tenant, with third parties providing
for annual rentals of $750,000 or more;
(B) any Contract under which
Eveready or any of its Subsidiaries is obliged to make payments on an annual
basis in excess of $750,000 in the aggregate;
28
(C) any partnership, limited
liability company agreement, joint venture, alliance agreement or other similar
agreement or arrangement relating to the formation, creation, operation,
management, business or control of any partnership or joint venture which is
not a wholly-owned Subsidiary of Eveready and material to the business of
Eveready and its Subsidiaries, and any agreement between any such partnership
or joint venture and Eveready or any Subsidiary thereof;
(D) any Contract (other than
among wholly-owned Subsidiaries of Eveready) under which Indebtedness for
borrowed money in excess of $750,000 is outstanding or may be incurred by
Eveready or any of its Subsidiaries or pursuant to which any property or asset
of Eveready or any of its Subsidiaries is mortgaged, pledged or otherwise
subject to a Lien (other than a Permitted Lien), or any Contract restricting
the incurrence of Indebtedness by Eveready or any of its Subsidiaries or the
incurrence of Liens (other than Permitted Liens) on any Properties or any
securities of any Subsidiaries of Eveready or restricting the payment of
dividends or the transfer of any Owned Real Properties;
(E) any Contract that purports to
limit in any material respect the right of Eveready or any of its Subsidiaries (i) to
engage in any line of business, or (ii) to compete with any Person or
operate in any location;
(F) any Contract providing for
the sale or exchange of, or option to sell or exchange, any Property with a
fair market value in excess of $750,000, or for the purchase or exchange of, or
option to purchase or exchange, any Property with a fair market value in excess
of $750,000 entered into in the past 12 months or in respect of which the
applicable transaction has not been consummated;
(G) any Contract entered into in
the past 12 months or in respect of which the applicable transaction has not
yet been consummated for the acquisition or disposition, directly or indirectly
(by amalgamation, merger or otherwise), of assets (other than Contracts
referenced in clause (F) of this Section 3.1(p)(i)) or capital or
other equity interests of another Person for aggregate consideration in excess
of $750,000;
(H) any standstill or similar
Contract currently restricting the ability of Eveready or any of its
Subsidiaries to offer to purchase or purchase the assets or equity securities
of another Person;
(I) any material Contract with
any present or former director, officer or employee of Eveready or any of its
Subsidiaries; and
(J) any Contract (other than
Contracts referenced in clauses (A) through (I) of this Section 3.1(p)(i))
which has been filed by Eveready or any of its Subsidiaries with Securities
Authorities and forming part of Evereadys Public Disclosure Record (the
Contracts described in clauses (A) through (J), together with all exhibits
and schedules thereto, being the Material
Contracts).
(ii) None of
Eveready or any of its Subsidiaries or, to the knowledge of Eveready, any of
the other parties thereto, is in breach or violation of, or default (in each
case, with or without notice or lapse of time or both) under, any Material
Contract and none of
29
Eveready or any of its Subsidiaries has received or given any notice of
default under any Material Contract which remains uncured and, to the knowledge
of Eveready, there exists no state of facts which after notice or lapse of time
or both would constitute a default or breach of such Material Contracts. All Material Contracts are in good standing
and in full force and effect without modification (written or oral) thereto and
Eveready or one of its Subsidiaries is entitled to all benefits thereunder.
(iii) Except as has
not and would not, individually or in the aggregate, reasonably be expected to
have an Eveready Material Adverse Effect, none of Eveready, any of its
Subsidiaries or, to the knowledge of Eveready, any of the other parties
thereto, is in breach or violation of, or default (in each case, with or
without notice or lapse of time or both) under, any Contract (other than the
Material Contracts) and none of Eveready or any of its Subsidiaries has
received or given any notice of default under any such Contract which remains uncured,
and, to the knowledge of Eveready, there exists no state of facts which after
notice or lapse of time or both would constitute a default or breach of any
such Contract.
(q) Permits. Eveready and each of its Subsidiaries has
obtained and is in compliance with all Permits required by applicable Laws
necessary to conduct their current businesses as they are now being conducted,
other than where the absence of such Permits or the failure to comply would
not, individually or in the aggregate, reasonably be expected to have an
Eveready Material Adverse Effect.
(r) Pension and Employee Benefits.
(i) Eveready and
each of its Subsidiaries has complied, in all material respects, with the terms
of all health, welfare, supplemental unemployment benefit, bonus, profit
sharing, deferred compensation, share purchase, share compensation, disability,
pension or retirement plans and other employee or director compensation or
benefit plans, policies, agreements or arrangements which are maintained by or
binding upon Eveready or such Subsidiary or in respect of which Eveready or any
of its Subsidiaries has any actual or potential liability (including the
Eveready Share Option Plan and the Eveready Deferred Share Plan) (collectively,
the Eveready Plans) and with all
applicable Laws relating thereto.
(ii) All of the
Eveready Plans are and have been established, registered, qualified and, in all
material respects, administered in accordance with all applicable Laws, and in
accordance with their terms and the terms of agreements between Eveready and/or
any of its Subsidiaries, as the case may be, and their respective employees and
former employees who are members of, or beneficiaries under, the Eveready
Plans.
(iii) All current
obligations of Eveready or any of its Subsidiaries regarding the Eveready Plans
have been satisfied in all material respects, and no Taxes are owing or
eligible under any of the Eveready Plans.
All contributions or premiums required to be made or paid by Eveready or
any of its Subsidiaries, as the case may be, under the terms of each Eveready
Plan or by applicable Laws have been made in a timely fashion in accordance
with applicable Laws in all material respects and in accordance with the terms
of the Eveready Plans.
30
(iv) Each Eveready
Plan is insured or funded as may be required by applicable Law and in good
standing with such Governmental Entities as may be applicable and, as of the
date hereof, no currently outstanding notice of under-funding, non-compliance,
failure to be in good standing or otherwise has been received by Eveready or
any of its Subsidiaries from any such Governmental Entities. No Eveready Plan provides any non-pension
post-retirement or post-employment benefits.
None of the Eveready Plans are pension plans. None of Eveready or any of its Subsidiaries
would incur any material withdrawal liability from withdrawing from any
multiemployer plan. Eveready has an
effective reservation of rights for each non-pension post-retirement or
post-employment benefit plan which allows Eveready to amend or terminate such
plan, subject to applicable Law.
(v) No Eveready
Plan is subject to any pending investigation, examination or other proceeding,
action or claim initiated by any Governmental Entity, or by any other party
(other than routine claims for benefits), and, to the knowledge of Eveready,
there exists no state of facts which after notice or lapse of time or both
would reasonably be expected to give rise to any such investigation, examination
or other proceeding, action or claim or to affect the registration or
qualification of any Eveready Plan required to be registered or qualified.
(vi) None of the
execution and delivery of this Agreement by Eveready or consummation of the
Arrangement or compliance by Eveready with any of the provisions hereof will
result in any payment (including severance, unemployment compensation, bonuses
or otherwise) becoming due to any director or employee of Eveready or any of
its Subsidiaries or result in any increase or acceleration of contributions,
liabilities or benefits, or acceleration of vesting, under any Eveready Plan or
restriction held in connection with an Eveready Plan.
(s) Compliance with Laws. Eveready and each of its Subsidiaries have
complied, in all material respects, with and are not, in any material respect,
in violation of any applicable Laws.
None of Eveready or any of its Subsidiaries or, to the knowledge of
Eveready, any of their respective directors, executives, representatives, agents
or employees (i) has used or is using any corporate funds for any illegal
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) has used or is using any corporate funds for any
direct or indirect unlawful payments to any foreign or domestic governmental
officials or employees, (iii) has violated or is violating any provision
of the United States Foreign Corrupt Practices Act of 1977, (iv) has
established or maintained, or is maintaining, any unlawful fund of corporate
monies or other properties, or (v) has made any bribe, unlawful rebate,
unlawful payoff, influence payment, kickback or other unlawful payment of any
nature.
(t) Intellectual Property. (i) Eveready and its Subsidiaries own
all right, title and interest in and to, or are validly licensed (and are not
in material breach of such licenses) to use, all patents, trade-marks, trade
names, service marks, copyrights, know-how, trade secrets, software,
technology, and all other intellectual property and proprietary rights that are
material to the conduct of the business, as presently conducted, of Eveready
and its Subsidiaries taken as a whole (collectively, the Eveready
Intellectual Property Rights); (ii) all such Eveready
Intellectual Property Rights are sufficient for conducting the business, as
presently conducted, of Eveready and its Subsidiaries taken as a whole; (iii) except
as disclosed in section 3.1(t) of the Disclosure Letter, to the knowledge
of Eveready, there are no adverse claims or agreements with respect to such
Eveready Intellectual Property Rights and all such Eveready Intellectual
Property
31
Rights are valid and enforceable
and do not infringe in any material way upon any third parties intellectual
property and proprietary rights, and no event will occur as a result of the
transactions contemplated hereby that would render invalid or unenforceable any
such Eveready Intellectual Property Rights; (iv) to the knowledge of
Eveready, no third party is infringing upon such Eveready Intellectual Property
Rights in any material respect; (v) all hardware, software and firmware,
processed data, technology infrastructure and other computer systems used in
connection with the conduct of the business, as presently conducted, of
Eveready and its Subsidiaries taken as a whole (collectively, the Eveready Technology) are sufficient for conducting the
business, as presently conducted, of Eveready and its Subsidiaries taken as a
whole; (vi) Eveready and its Subsidiaries own or have validly licensed
(and are not in material breach of such licenses) such Eveready Technology and
have commercially reasonable virus protection and security measures in place in
relation to such Eveready Technology; and (vii) Eveready and its
Subsidiaries have reasonable back-up systems and a disaster recovery plan
adequate to ensure the continuing availability of the functionality provided by
the Eveready Technology, and have ownership of or a valid license to the
Eveready Intellectual Property Rights necessary to allow them to continue to
provide the functionality provided by the Eveready Technology in the event of
any malfunction of the Eveready Technology or other form of disaster affecting
the Eveready Technology. Section 3.1(t) of
the Disclosure Letter sets forth the Eveready Intellectual Property Rights that
are owned or licensed by Eveready or its Subsidiaries.
(u) Insurance. Eveready and its Subsidiaries maintain
policies or binders of insurance as are listed in Section 3.1(u) of
the Disclosure Letter. Section 3.1(u) of
the Disclosure Letter contains a correct and complete description of all rights
to indemnification now existing in favour of any present or former officer,
director or employee of Eveready or any of its Subsidiaries or in favour of any
other Person, other than those provided in the ordinary course of
business. Except as would not,
individually or in the aggregate, reasonably be expected to have an Eveready
Material Adverse Effect, Eveready and each of its Subsidiaries is covered by
valid and currently effective insurance policies issued in favour of Eveready
or any of its Subsidiaries that Eveready reasonably has determined to be
prudent, taking into account the industries in which Eveready and its Subsidiaries
operate, and as is sufficient to comply with applicable Law. Except as would not, individually or in the
aggregate, reasonably be expected to have an Eveready Material Adverse Effect,
with respect to each insurance policy issued in favour of Eveready or any of
its Subsidiaries or pursuant to which Eveready or any of its Subsidiaries is a
named insured or otherwise a beneficiary under an insurance policy (i) the
policy is in full force and effect and all premiums due thereon have been paid,
(ii) neither Eveready nor any of its Subsidiaries is in breach or default,
and neither Eveready nor any of its Subsidiaries has taken any action or failed
to take any action which, with notice or the lapse of time, would constitute
such a breach or default, or permit termination or modification of, any such
policy, (iii) to the knowledge of Eveready, no insurer on any such policy
has been declared insolvent or placed in receivership, debt restructuring
proceedings or liquidation, and no notice of cancellation or termination has
been received by Eveready or any of its Subsidiaries with respect to any such
policy, (iv) to the knowledge of Eveready, none of such policies will
terminate or lapse by reason of the transactions contemplated by this
Agreement, (v) except as disclosed in Section 3.1(u) of the
Disclosure Letter, no insurer under any such policy has cancelled or generally
disclaimed liability under any such policy or indicated any intent to do so or
not to renew any such policy, (vi) there is no claim by Eveready or any of
its Subsidiaries pending under any such policy that
32
has been denied or disputed by
the insurer, and (vii) all claims under such policies have been filed in a
timely fashion.
(v) Environmental Matters.
(i) Except as set
forth in Section 3.1(v) of the Disclosure Letter:
(A) Eveready has obtained all
Permits required under any Environmental Laws (Eveready Environmental Permits) by Eveready or any of its
Subsidiaries in connection with the operation of their current businesses as
they are now being conducted, except where the failure to so obtain such
Permits would not result in liabilities that could reasonably be expected to
exceed $500,000 in aggregate;
(B) Eveready and each of its
Subsidiaries is in material compliance with all Eveready Environmental Permits
and has posted all appropriate financial assurance required pursuant to such
Permits, except where the failure to so comply with such Permits would not
result in liabilities that could reasonably be expected to exceed $500,000 in
aggregate;
(C) Eveready and each of its
Subsidiaries has not received any notice of non-compliance with the Eveready
Environmental Permits or any notice regarding amendment or revocation of such
Permits or amendment of any financial assurance posted pursuant to such
Permits, which could reasonably be expected to result in liabilities in excess
of $500,000 in aggregate;
(D) Eveready and each of its
Subsidiaries has not received any notice of non-compliance with any material
Environmental Law and, to the knowledge of Eveready, there are no facts which
could reasonably be expected to give rise to a notice of non-compliance with
any Environmental Law, which could reasonably be expected to result in
liabilities in excess of $500,000 in aggregate;
(E) Eveready and each of its
Subsidiaries has not Released or permitted to be Released any Hazardous
Substance on or to any real properties currently or formerly owned, leased or
operated by Eveready and its Subsidiaries, except in compliance with
Environmental Law or that would not result in liabilities that could reasonably
be expected to exceed $500,000 in aggregate;
(F) To the knowledge of
Eveready, there are no Hazardous Substances present on, at, in or under any of the
real properties currently or formerly owned, leased or operated by Eveready and
its Subsidiaries, except in compliance with Environmental Law or that would not
result in liabilities that could reasonably be expected to exceed $500,000 in
aggregate;
(G) To the knowledge of
Eveready, there are no Hazardous Substances migrating off-site from any real
properties currently or formerly owned, leased or operated by Eveready and its
Subsidiaries; and
33
(H) To the knowledge of Eveready, Eveready
and each of its Subsidiaries have no continuing liability pursuant to any
contract or agreement related to the presence, potential presence or Release of
Hazardous Substances at any real properties formerly owned, leased or operated
by Eveready and its Subsidiaries.
(ii) Eveready has made available to Parent,
its Affiliates and their respective advisors copies of all environmental
assessments, reports, audits and other documents in its possession that relate
to the current or past environmental condition of any real properties currently
or formerly owned, leased or operated by Eveready and its Subsidiaries (Environmental Reports) and all such
Environmental Reports are listed in Section 3.1(v) of the Disclosure
Letter.
(iii) No Lien in favour of a Governmental Entity arising
under Environmental Laws is pending or, to the knowledge of Eveready,
threatened, affecting Eveready or any of its Subsidiaries or any real or
personal property of Eveready or any of its Subsidiaries, except as would not,
individually or in the aggregate, reasonably be expected to have an Eveready
Material Adverse Effect.
(iv) Except as described in Section 3.1(v)(iv) of
the Disclosure Letter, neither Predecessor, Eveready nor any of their Subsidiaries
has, since the organization of Predecessor, used for disposing of any Hazardous
Substances any solid or hazardous waste treatment, storage or disposal
facilities which are owned or operated by any third parties and located within
the United States.
(w) Employment
and Labour Agreements. None of Eveready or any of its Subsidiaries
is a party to or bound or governed by:
(i) except for the Contracts with those
individuals listed in Section 3.1(w) of the Disclosure Letter, any
employment, retention or change of control agreement with any officer or
employee of Eveready or any of its Subsidiaries or any written or oral
agreement, arrangement or understanding providing for retention, severance or
termination payments to any officer or employee of Eveready or any of its
Subsidiaries except, in the case of employees who are not officers or other
management, as are customary in the ordinary course of business;
(ii) except for the Contracts listed in Section 3.1(w) of
the Disclosure Letter, any collective bargaining or union agreement, or any
actual or, to the knowledge of Eveready, threatened application for
certification or bargaining rights in respect of Eveready or any of its
Subsidiaries;
(iii) any labour dispute, strike or lock-out relating to or
involving any employees of Eveready or any of its Subsidiaries that would,
individually or in the aggregate, reasonably be expected to have an Eveready
Material Adverse Effect; or
(iv) any actual or, to the knowledge of
Eveready, threatened claim arising out of or in connection with employment by
Eveready or any of its Subsidiaries of any individual or the termination
thereof which could, individually or in the aggregate, reasonably be expected
to have an Eveready Material Adverse Effect.
34
Eveready has provided to the Purchaser correct, current and complete
copies (or descriptions, where applicable) of the Contracts referred to in
clauses (i) and (ii) of this Section 3.1(w).
(x) Vote
Required.
(i) The only vote of holders of securities of
Eveready necessary (under the Eveready Organizational Documents, the ABCA,
other applicable Laws or otherwise) to approve the Arrangement is, subject to
any requirements of the Interim Order, the Required Vote.
(ii) Except as described in Section 3.1(x) of
the Disclosure Letter and as provided in the Voting and Lock-Up Agreements,
there are no shareholders agreements, registration rights agreements, voting
trusts, proxies or similar agreements, arrangements or commitments to which
Eveready or any of its Subsidiaries is a party with respect to any shares or
other equity interests of Eveready or any of its Subsidiaries or any other
Contract relating to disposition, voting or dividends with respect to any
equity securities of Eveready or of any of its Subsidiaries.
(y) Customers. Section 3.1(y) of the Disclosure
Letter sets forth the 20 largest customers by revenue of Eveready and its
Subsidiaries for the year ended December 31, 2008.
(z) Brokers
and Finders.
No broker, finder or investment banker is entitled to any brokerage,
finders or other similar fee or commission from, or to the reimbursement of
any of its expenses by, Eveready or any of its Subsidiaries in connection with
this Agreement or the Arrangement.
(aa) United
States Operations. The total fair market value of the
assets of Eveready and its Subsidiaries located within the United States is
less than US $60.0 million, and the aggregate revenues generated by Eveready
and its Subsidiaries from sales and services within or into the United States
during the year ended December 31, 2008 was less than US $60.0 million.
Section 3.2. Survival of
Representations and Warranties
No investigation by or on behalf of, or knowledge of, Parent or
Purchaser or any of their Affiliates will mitigate, diminish or affect the
representations or warranties made by Eveready in this Agreement or any
certificate delivered by Eveready pursuant to this Agreement. Parent or Purchaser shall promptly notify
Eveready if, at any time before the Closing Date, it becomes aware of: (i) anything
that causes any of the representations or warranties of Eveready set out in
this Agreement to become materially untrue or inaccurate; or (ii) any
material breach of any covenant, term or condition of Eveready set out in this
Agreement. The representations and
warranties of Eveready contained in this Agreement will not survive the
completion of the Arrangement and will expire and be terminated on the earlier
of the Effective Time and the date on which this Agreement is terminated in
accordance with its terms. This Section 3.2
will not limit any covenant or agreement of Eveready or any of its Subsidiaries
which, by its terms, contemplates performance after the Effective Time or the
date on which this Agreement is terminated, as the case may be.
35
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PARENT
Section 4.1. Representations and
Warranties of Parent
Parent hereby represents and warrants to and in favour of Eveready as
follows and acknowledges that Eveready is relying upon such representations and
warranties in connection with entering into this Agreement:
(a) Organization
and Qualification.
Parent and each of its Subsidiaries (including Purchaser) is a
corporation duly incorporated or an entity duly created and validly existing
under the laws of its jurisdiction of incorporation or creation and has the
requisite corporate or other power and authority to own its assets as now owned
and to carry on its business as it is now being conducted. Parent and each of its Subsidiaries
(including Purchaser) is duly registered or otherwise authorized to do business
and is in good standing in each jurisdiction in which the character of its
properties, owned, leased, licensed or otherwise held, or the nature of its
activities makes such registration necessary, except where the failure to be so
registered or in good standing would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect or prevent or
materially delay the Arrangement. All of
the issued and outstanding securities or other ownership interests of each of
Parent and Purchaser are validly issued, fully paid and non-assessable.
(b) Authority
Relative to this Agreement. Each of Parent and Purchaser has the
requisite corporate authority to enter into this Agreement and to carry out its
obligations hereunder. The execution,
delivery and performance of this Agreement and the consummation by each of
Parent and Purchaser of the transactions contemplated by this Agreement have
been duly authorized by their respective boards of directors, and no other
corporate proceedings on the part of either Parent or Purchaser are necessary
to authorize the execution and delivery by it of this Agreement and the
consummation by it of the transactions contemplated thereby. This Agreement has been duly executed and
delivered by each of Parent and Purchaser and constitutes a legal, valid and
binding obligation of Parent and Purchaser enforceable against each of them in
accordance with its terms, subject to the qualification that such
enforceability may be limited by bankruptcy, insolvency, reorganization or
other laws of general application relating to or affecting rights of creditors and
that equitable remedies, including specific performance, are discretionary and
may not be ordered.
(c) No
Violations.
Neither the execution nor delivery of this Agreement by Parent and
Purchaser, nor the consummation of the Arrangement by Parent and Purchaser, nor
compliance by Parent and Purchaser with any of the provisions hereof will:
(i) violate, conflict with, or result in a
breach of any material provision of, require any consent, approval or notice
under, or constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default) under (A) the articles of
incorporation or by-laws governing Parent or Purchaser or (B) subject to
obtaining waivers or refinancing as of the Effective Time of the outstanding
debt of Parent and its Subsidiaries as described in Section 5.4(d), any
material contract or other instrument or obligation to which
36
Parent or any of
its Subsidiaries is a party or to which any of them, or any of their respective
properties or assets, may be subject or by which Parent or any of its
Subsidiaries is bound and, in each case, individually or in the aggregate would
materially adversely affect Parents or Purchasers ability to perform its
respective obligations under this Agreement, or subject to obtaining the
Regulatory Approvals, violate any Law applicable to Parent or any of its
Subsidiaries or any of their respective properties or assets; or
(ii) subject to obtaining the Regulatory
Approvals and, assuming compliance with the Interim Order and any approvals
required thereunder, the Final Order, and filings with the Registrar and
compliance with applicable Securities Laws, violate in any material respect any
Law applicable to Parent or any of its Subsidiaries or any of their respective
properties and assets.
(d) Capitalization.
(i) The authorized capital stock of Parent
consists of (A) 40,000,000 Parent Common Shares and (B) 1,080,415
shares of preferred stock, par value U.S. $0.01 per share. As of March 31, 2009, there were
outstanding: 23,755,619 Parent Common Shares (excluding 34,262 such shares held
in treasury), no shares of Parent preferred stock, and employee stock options
to purchase an aggregate of 211,873 Parent Common Shares (of which options for
195,943 such shares were then exercisable).
(ii) Except as set forth above, for changes
since March 31, 2009 resulting from the exercise of stock options or the
grant of stock based compensation to employees or as provided for under this
Agreement and the Plan of Arrangement, there are no preemptive or other
outstanding rights, options, warrants, conversion rights, stock appreciation
rights, redemption rights, repurchase rights, agreements, arrangements, calls,
commitments or rights of any kind that obligate Parent or any of its
Subsidiaries to issue or to sell any shares of capital stock or other
securities of Parent or any of its Subsidiaries or any securities or
obligations convertible to, exchangeable into, or exercisable for, or giving
any Person a right to subscribe for or acquire, any securities of Parent or any
of its Subsidiaries, and no securities or obligations evidencing such rights
are authorized, issued or outstanding.
(iii) Parent does not have outstanding any bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the holders of Parent Common Shares on any matter.
(iv) The Parent Common Shares to be issued, indirectly,
to the Eveready Shareholders in accordance with the Arrangement will, when
issued, indirectly, to the Eveready Shareholders in accordance with the
Arrangement be validly issued, fully paid and non-assessable, will be
registered in the name of the applicable Eveready Shareholder (or as otherwise
instructed by the applicable Eveready Shareholder on such Eveready Shareholders
applicable letter of transmittal), and will be free of any adverse claims other
than as suffered or permitted by that Eveready Shareholder, and no shareholder
of Parent will have any preemptive right of subscription or purchase in respect
thereof. Such Parent Common Shares, when
issued as described in the preceding sentence, and the first resale thereof,
will be exempt from
37
registration under
applicable Canadian and U.S. Securities Laws.
However, in the case of the Eveready Management Shareholders, the first
resale of the Parent Common Shares received by such shareholders shall be
subject to the lock-up and potential manner of sale restrictions set forth in
the Voting and Lock-Up Agreements.
(e) Governmental
Filings; No Violations. Other than filings, notices and/or approvals (i) under
the Securities Laws, (ii) as required by the New York Stock Exchange (the NYSE) in respect of listing the Parent Common Shares to be
issued, indirectly, to the Eveready Shareholders in accordance with the
Arrangement, (iii) under the Investment Canada Act and the Competition
Act, and (vi) under the antitrust and/or notification laws of any other
jurisdiction, where required, no notices, reports or other filings are required
to be made by Parent or any of its Subsidiaries with, and no consents,
registrations, approvals, permits or authorizations are required to be obtained
by Parent or any of its Subsidiaries from, any Governmental Entity, in
connection with the execution and delivery of this Agreement by Parent and
Purchaser and the consummation by Parent and Purchaser of the transactions contemplated
by this Agreement and the Arrangement, except where the failure to make any
such notice, report or filing or obtain any such consent, registration,
approval, permit or authorization would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect or prevent,
materially delay or materially impair the ability of Parent and Purchaser to
consummate the transactions contemplated by this Agreement and the Arrangement.
(f) Parent
Reports; Financial Statements.
(i) Since December 31, 2006, Parent has
filed each report or proxy statement required to be filed by Parent with the
SEC since such date (collectively, including any other reports filed with the
SEC subsequent to the date hereof and as amended, the Parent Reports), including Parents Annual
Report on Form 10-K for the year ended December 31, 2008. The Parent Reports are publicly and freely
available on the SECs website at www.sec.gov, or copies thereof have otherwise
been or, for Parent Reports filed after the date hereof will otherwise be,
provided to Eveready. The Parent
Reports, at the time filed (or if amended or superseded by a filing prior to
the date of hereof, then on the date of such filing), complied, and each Parent
Report filed subsequent to the date hereof will comply, in all material
respects with the requirements of applicable Securities Laws and did not, and
will not, at the time furnished or filed, contain any material
misrepresentation (as defined in the Securities Laws, as applicable) or any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements, therein, in
light of the circumstances under which they were made, not misleading.
(ii) The annual audited consolidated financial
statements and the quarterly unaudited consolidated financial statements,
including in each case, any related notes thereto, contained in the Parent
Reports (the Parent Financial Statements)
complied as to form in all material respects with the published rules and
regulations of the SEC and the NYSE with respect thereto as of their respective
dates, and have been prepared in accordance with generally accepted accounting
principles in the United States (U.S. GAAP)
applied on a basis consistent throughout the periods indicated and consistent
with each other (except as may be indicated in the notes thereto). The Parent Financial Statements present
fairly, in all material respects, the consolidated financial position, results
of operation and cash flows of Parent and its
38
Subsidiaries as of
the dates and for the periods indicated therein (subject, in the case of
unaudited statements, to normal, recurring year-end adjustments that are not
expected to be material in amount and the absence of notes thereto) on a
consolidated basis. There has been no material change in Parents accounting
policies, except as described in the notes to the Parent Financial Statements,
since December 31, 2008.
(g) Information
Supplied.
None of the information supplied or to be supplied by Parent
specifically for inclusion or incorporation by reference in the Eveready
Circular will (except to the extent revised or superseded by amendments or
supplements contemplated thereby), at the date the Eveready Circular is first
mailed to the Eveready Shareholders, at the time of the Eveready Meeting or at
the time of any amendment or supplement thereof, as amended or supplemented at
such date or time, contain any misrepresentation or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they are made.
(h) Ownership
of Purchaser.
Parent indirectly owns all of the outstanding shares of capital stock of
Purchaser.
(i) Ownership
of Eveready Common Shares. None of Parent, Purchaser nor their
respective Affiliates legally or beneficially owns any Eveready Common Shares
or securities convertible into Eveready Common Shares. No Person is acting jointly or in concert
with Parent or Purchaser in connection with the Arrangement. As of the date of this Agreement, Parent has
no agreement, commitment or understanding, whether formal or informal, with any
director or officer of Eveready regarding any engagement at Eveready after the
Effective Time.
(j) Brokers
and Finders.
Neither Parent or any of its officers, directors or employees has
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finders fees in connection with the transactions contemplated by
this Agreement and the Arrangement, except that Parent has employed Goldman
Sachs LLP as its financial advisor, the arrangements with which have been
disclosed to Eveready prior to the date hereof.
(k) Reporting
Status and Securities Laws Matters. The Parent Common Shares are registered under
the United States Securities Exchange Act of 1934, as amended, and listed for
trading on the NYSE, and Parent and each of its Subsidiaries have filed all
reports and other documents with the SEC and the NYSE which are required in
connection with such registration and listing. Neither Parent nor any of its
Subsidiaries is on any list of reporting issuers in default under applicable
Securities Laws and is in compliance in all material respects with all
applicable Securities Laws. No delisting
of, suspension of trading in or cease trading order is in effect with respect
to any securities of Parent or any of its Subsidiaries and, to the knowledge of
Parent, no inquiry or investigation (formal or informal) of any Securities
Authority is ongoing or expected to be implemented or undertaken with respect
to Parent or any of its Subsidiaries.
(l) Absence
of Certain Changes.
Since December 31, 2008, (i) Parent and each of its
Subsidiaries have conducted their respective business in the ordinary course of
business consistent with past practice and (ii) there has been no Parent
Material Adverse Effect.
39
(m) Litigation.
Except as described in the Parent Reports, there are no claims, actions, suits,
demands, arbitrations, charges, indictments, hearings or other civil, criminal,
administrative or investigative proceedings, or other investigations or examinations
pending or, to the knowledge of Parent, threatened, affecting Parent or any of
its Subsidiaries or their respective properties or assets at law or in equity
before or by any Governmental Entity, or against any current or former director
or officer of Parent or any of its Subsidiaries in their capacities as
directors or officers of Parent or any of its Subsidiaries, which would,
individually or in the aggregate, reasonably be expected to have a Parent
Material Adverse Effect. Neither Parent
nor any of its Subsidiaries nor any of their respective assets or properties is
subject to any outstanding judgment, order, writ, injunction or decree which
would, individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect.
(n) Taxes.
(i) Parent and each of its Subsidiaries has (A) duly
and timely filed, or caused to be filed with all the appropriate Tax
authorities, all Returns required to be filed by it prior to the date hereof,
and all such Returns are true and correct in all material respects; (B) paid
to the appropriate Tax authority on a timely basis all Taxes and all
assessments and reassessments of Taxes due on or before the date hereof, other
than Taxes the failure to pay which would not, individually or in the aggregate,
reasonably be expected to have, a Parent Material Adverse Effect; (C) duly
and timely withheld, or caused to be withheld, all Taxes and other amounts
required by Law to be withheld by it (including Taxes and other amounts
required to be withheld by it in respect of any amount paid or credited or
deemed to be paid or credited by it to or for the account of any Person,
including any employees, officers or directors and any non-resident Person) and
duly and timely remitted, or caused to be remitted, to the appropriate Tax
authority such Taxes and other amounts required by Law to be remitted by it,
except to the extent that such failure would not, individually or in the
aggregate, reasonably be expected to have a Parent Material Adverse Effect; and
(D) duly and timely collected, or caused to be collected, all Taxes
required by Law to be collected by it and duly and timely remitted to the
appropriate Tax authority any such amounts required by Law to be remitted by
it, except to the extent that such failure would not, individually or in the
aggregate, reasonably be expected to have a Parent Material Adverse Effect.
(ii) The unpaid Tax liability of Parent and
its Subsidiaries did not, as of the date of the Parent Financial Statements,
exceed the reserves and provisions for Taxes accrued but not yet due as
reflected in Parent Financial Statements, and Taxes payable by Parent and its
Subsidiaries through the Closing Date will not exceed such reserve as adjusted
through the Closing Date in accordance with the past custom and practice of
Parent and its Subsidiaries in filing their Returns.
(iii) No deficiencies, litigation, proposed adjustments or
matters in controversy with respect to Taxes have been asserted which remain
unresolved at the date hereof, and no action, audit, investigation or
proceeding for assessment, reassessment or collection of Taxes has been taken,
asserted, or to the knowledge of Parent, threatened, against Parent or any of
its Subsidiaries or any of their respective assets, except, in each case, as
disclosed or provided for in the Parent Financial Statements.
40
(iv) Except for voluntary extensions arising
as part of customary audits by state or provincial tax authorities, there are
no outstanding elections, agreements or waivers extending the statutory period
or providing for an extension of time with respect to the assessment or
reassessment of any Taxes of, or the filing of any Return or any payment of any
Taxes by, Parent or any of its Subsidiaries.
(v) There are no liens for Taxes (other than
Taxes not yet due and payable) upon any of the assets of Parent and its
Subsidiaries.
(vi) Neither Parent nor any of its
Subsidiaries is a party to any indemnification, allocation or sharing agreement
with respect to Taxes that could give rise to a payment or indemnification
obligation (other than agreements among Parent and its Subsidiaries and other
than customary Tax indemnifications contained in credit or loan agreements or
other transactions entered into in the ordinary course) and neither Parent nor
any of its Subsidiaries has any liability for the Taxes of any Person (other
than Parent and its Subsidiaries) as a transferee or successor, by contract, or
otherwise.
(o) Environmental
Matters.
(i) Except as described in the Parent Reports
or as would not, individually or in the aggregate, reasonably be expected to
have a Parent Material Adverse Effect:
(A) Parent has obtained all Permits required
under any Environmental Laws (Parent
Environmental Permits) by Parent or any of its Subsidiaries in
connection with the operation of their current businesses as they are now being
conducted;
(B) Parent and each of its Subsidiaries is in
compliance with all Parent Environmental Permits and has posted all appropriate
financial assurance required pursuant to such Permits;
(C) Parent and each of its Subsidiaries has
not received any notice of non-compliance with Parent Environmental Permits or
any notice regarding amendment or revocation of such Permits or amendment of
any financial assurance posted pursuant to such Permits;
(D) Parent and each of its Subsidiaries has
not received any notice of non-compliance with any Environmental Law and, to
the knowledge of Parent, there are no facts which could reasonably be expected
to give rise to a notice of non-compliance with any Environmental Law;
(E) Parent and each of its Subsidiaries has
not Released or permitted to be Released any Hazardous Substance on or to any
real properties currently or formerly owned, leased or operated by Parent and
its Subsidiaries;
(F) To the knowledge of Parent, there are no
Hazardous Substances present on, at, in or under any of the real properties
currently or formerly owned, leased or operated by Parent and its Subsidiaries,
except in compliance with Environmental Law;
41
(G) To the knowledge of Parent, there are no
Hazardous Substances migrating off-site from any real properties currently or
formerly owned, leased or operated by Parent and its Subsidiaries; and
(H) To the knowledge of Parent, Parent and
each of its Subsidiaries have no continuing liability pursuant to any contract
or agreement related to the presence, potential presence or Release of
Hazardous Substances at any real properties formerly owned, leased or operated
by Parent and its Subsidiaries.
(ii) No Lien in favour of a Governmental
Entity arising under Environmental Laws is pending or, to the knowledge of
Parent, threatened, affecting Parent or any of its Subsidiaries or any real or
personal property of Parent or any of its Subsidiaries, except as would not,
individually or in the aggregate, reasonably be expected to have a Parent
Material Adverse Effect.
(p) Pension
and Employee Benefits.
(i) Parent and each of its Subsidiaries has
complied, in all material respects, with the terms of all health, welfare,
supplemental unemployment benefit, bonus, profit sharing, deferred
compensation, share purchase, share compensation, disability, pension or
retirement plans and other employee or director compensation or benefit plans,
policies, agreements or arrangements which are maintained by or binding upon
Parent or such Subsidiary or in respect of which Parent or any of its
Subsidiaries has any actual or potential liability (collectively, the Parent Plans) and with all applicable Laws
relating thereto.
(ii) All of the Parent Plans are and have been
established, registered, qualified and, in all material respects, administered
in accordance with all applicable Laws, and in accordance with their terms and
the terms of agreements between Parent and/or any of its Subsidiaries, as the
case may be, and their respective employees and former employees who are
members of, or beneficiaries under, the Parent Plans.
(iii) All current obligations of Parent or any of its
Subsidiaries regarding the Parent Plans have been satisfied in all material
respects, and no Taxes are owing or eligible under any of the Parent
Plans. All contributions or premiums
required to be made or paid by Parent or any of its Subsidiaries, as the case
may be, under the terms of each Parent Plan or by applicable Laws have been
made in a timely fashion in accordance with applicable Laws in all material
respects and in accordance with the terms of the Parent Plans.
(iv) Each Parent Plan is insured or funded as
may be required by applicable Law and in good standing with such Governmental
Entities as may be applicable and, as of the date hereof, no currently
outstanding notice of under-funding, non-compliance, failure to be in good
standing or otherwise has been received by Parent or any of its Subsidiaries
from any such Governmental Entities. No
Parent Plan provides any non-pension post-retirement or post-employment
benefits. Except as described in note 15
to Parents audited financial statements as at and for the three years ended December 31,
2008 which are included in the Parent Reports, none of the Parent Plans are
pension plans. None of Parent or any of
its Subsidiaries would incur any material withdrawal liability from withdrawing
from any
42
multiemployer
plan. Parent has an effective
reservation of rights for each non-pension post-retirement or post-employment
benefit plan which allows Parent to amend or terminate such plan, subject to
applicable Law.
(v) No Parent Plan is subject to any pending
investigation, examination or other proceeding, action or claim initiated by
any Governmental Entity, or by any other party (other than routine claims for
benefits), and, to the knowledge of Parent, there exists no state of facts
which after notice or lapse of time or both would reasonably be expected to
give rise to any such investigation, examination or other proceeding, action or
claim or to affect the registration or qualification of any Parent Plan
required to be registered or qualified.
(vi) None of the execution and delivery of
this Agreement by Parent or consummation of the Arrangement or compliance by
Parent with any of the provisions hereof will result in any payment (including
severance, unemployment compensation, bonuses or otherwise) becoming due to any
director or employee of Parent or any of its Subsidiaries or result in any
increase or acceleration of contributions, liabilities or benefits, or
acceleration of vesting, under any Parent Plan or restriction held in
connection with a Parent Plan.
(q) Compliance
with Laws.
Parent and each of its Subsidiaries have complied, in all material
respects, with and are not, in any material respect, in violation of any
applicable Laws. None of Parent or any
of its Subsidiaries or, to the knowledge of Parent, any of their respective
directors, executives, representatives, agents or employees (i) has used
or is using any corporate funds for any illegal contributions, gifts,
entertainment or other unlawful expenses relating to political activity, (ii) has
used or is using any corporate funds for any direct or indirect unlawful
payments to any foreign or domestic governmental officials or employees, (iii) has
violated or is violating any provision of the United States Foreign Corrupt
Practices Act of 1977, (iv) has established or maintained, or is
maintaining, any unlawful fund of corporate monies or other properties, or (v) has
made any bribe, unlawful rebate, unlawful payoff, influence payment, kickback
or other unlawful payment of any nature.
(r) Insurance. Except as would not, individually or in the
aggregate, reasonably be expected to have a Parent Material Adverse Effect,
Parent and each of its Subsidiaries is covered by valid and currently effective
insurance policies issued in favour of Parent or any of its Subsidiaries that
Parent reasonably has determined to be prudent, taking into account the
industries in which Parent and its Subsidiaries operate, and as is sufficient
to comply with applicable Law. Except as
would not, individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect, with respect to each insurance policy issued in
favour of Parent or any of its Subsidiaries or pursuant to which Parent or any
of its Subsidiaries is a named insured or otherwise a beneficiary under an
insurance policy (i) the policy is in full force and effect and all
premiums due thereon have been paid, (ii) neither Parent nor any of its
Subsidiaries is in breach or default, and neither Parent nor any of its
Subsidiaries has taken any action or failed to take any action which, with
notice or the lapse of time, would constitute such a breach or default, or
permit termination or modification of, any such policy, (iii) to the
knowledge of Parent, no insurer on any such policy has been declared insolvent
or placed in receivership, debt restructuring proceedings or liquidation, and
no notice of cancellation or termination has been received by Parent or any of
its Subsidiaries with respect to any such policy, (iv) to the knowledge of
Parent, none of such policies will terminate or lapse by reason of
43
the transactions contemplated by this Agreement, (v) no
insurer under any such policy has cancelled or generally disclaimed liability
under any such policy or indicated any intent to do so or not to renew any such
policy, (vi) there is no claim by Parent or any of its Subsidiaries
pending under any such policy that has been denied or disputed by the insurer,
and (vii) all claims under such policies have been filed in a timely
fashion.
(s) Property.
(i) Each of Parent and its Subsidiaries has
good and sufficient title to such real property interests, leases, licenses,
easements and rights of way permitting the use of land or premises by Parent
and its Subsidiaries, necessary to permit the operation of its current
businesses, as they are now being conducted, and is not in default of any
applicable Liens, leases, licenses, easements and rights of way, except for
such failure of title or default in respect of such real property interests,
leases, licenses, easements and rights of way as would not, individually or in
the aggregate, reasonably be expected to have a Parent Material Adverse Effect.
(ii) The properties and buildings and
improvements thereon necessary to permit the operation of the current
businesses of each of Parent and its Subsidiaries are in good operating
condition and repair, subject to normal wear and tear. To the knowledge of Parent, there are no
latent defects affecting any such property or the buildings or improvements
thereon, other than those that would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect.
(t) Intellectual
Property.
(i) Parent and its Subsidiaries own all right, title and interest
in and to, or are validly licensed (and are not in material breach of such
licenses) to use, all patents, trade-marks, trade names, service marks,
copyrights, know-how, trade secrets, software, technology, and all other
intellectual property and proprietary rights that are material to the conduct
of the business, as presently conducted, of Parent and its Subsidiaries taken
as a whole (collectively, the Parent Intellectual
Property Rights); (ii) all such Parent Intellectual Property
Rights are sufficient for conducting the business, as presently conducted, of
Parent and its Subsidiaries taken as a whole; (iii) to the knowledge of
Parent, all such Parent Intellectual Property Rights are valid and enforceable
and do not infringe in any material way upon any third parties intellectual
property and proprietary rights, and no event will occur as a result of the
transactions contemplated hereby that would render invalid or unenforceable any
such Parent Intellectual Property Rights; (iv) to the knowledge of Parent,
no third party is infringing upon such Parent Intellectual Property Rights in
any material respect; (v) all hardware, software and firmware, processed
data, technology infrastructure and other computer systems used in connection
with the conduct of the business, as presently conducted, of Parent and its
Subsidiaries taken as a whole (collectively, the Parent
Technology) are sufficient for conducting the business, as
presently conducted, of Parent and its Subsidiaries taken as a whole; (vi) Parent
and its Subsidiaries own or have validly licensed (and are not in material
breach of such licenses) such Parent Technology and have commercially
reasonable virus protection and security measures in place in relation to such
Parent Technology; and (vii) Parent and its Subsidiaries have reasonable
back-up systems and a disaster recovery plan adequate to ensure the continuing
availability of the functionality provided by the Parent Technology, and have
ownership of or a valid license to the Parent Intellectual Property Rights
necessary to allow them
44
to continue to provide the functionality provided by the
Parent Technology in the event of any malfunction of the Parent Technology or
other form of disaster affecting the Parent Technology.
(u) Material
Contracts.
(i) None of Parent or any of its Subsidiaries
or, to the knowledge of Parent, any of the other parties thereto, is in breach
or violation of, or default (in each case, with or without notice or lapse of
time or both) under, any contract material to it and none of Parent or any of
its Subsidiaries has received or given any notice of default under any such
material contract which remains uncured and, to the knowledge of Parent, there
exists no state of facts which after notice or lapse of time or both would
constitute a default or breach of any such material contracts. All such material contracts are in good
standing and in full force and effect without modification (written or oral)
thereto and Parent or one of its Subsidiaries is entitled to all benefits
thereunder.
(ii) Except as has not and would not,
individually or in the aggregate, reasonably be expected to have a Parent
Material Adverse Effect, none of Parent, any of its Subsidiaries or, to the
knowledge of Parent, any of the other parties thereto, is in breach or
violation of, or default (in each case, with or without notice or lapse of time
or both) under, any contract (other than the material contracts referred to in Section 4.1(u)(i) above)
and none of Parent or any of its Subsidiaries has received or given any notice
of default under any such contract which remains uncured, and, to the knowledge
of Parent, there exists no state of facts which after notice or lapse of time
or both would constitute a default or breach of such contract.
Section 4.2. Survival of
Representations and Warranties
No investigation by or on behalf of, or knowledge of, Eveready or any
of its Affiliates will mitigate, diminish or affect the representations or
warranties made by Parent and Purchaser in this Agreement or any certificate
delivered by Parent pursuant to this Agreement.
Eveready shall promptly notify Parent if, at any time before the Closing
Date, it becomes aware of: (i) anything that causes any of the
representations or warranties of Parent set out in this Agreement to be
materially untrue or inaccurate; or (ii) any material breach of any
covenant, term or condition of Parent or Purchaser set out in this
Agreement. The representations and
warranties of Parent contained in this Agreement will expire and be terminated
on the earlier of the Effective Time and the date on which this Agreement is
terminated in accordance with its terms.
This Section 4.2 will not limit any covenant or agreement of Parent
or Purchaser which, by its terms, contemplates performance after the Effective
Time or the date on which this Agreement is terminated, as the case may be.
ARTICLE V.
COVENANTS OF THE PARTIES
Section 5.1. Covenants of Eveready
Regarding the Conduct of Business
Eveready covenants and agrees that, during the period from the date of
this Agreement until the earlier of the Effective Time and the time that this
Agreement is terminated in accordance with its terms, unless Parent otherwise
agrees in writing (to the extent that such
45
consent is permitted by applicable Law), or as is otherwise expressly
permitted or specifically contemplated by this Agreement or the Plan of
Arrangement or as is otherwise required by applicable Law:
(a) The
business of Eveready and its Subsidiaries will be conducted only, and Eveready
and its Subsidiaries will not take any action except, in the usual and ordinary
course of business consistent with past practices, and Eveready will use all
commercially reasonable efforts to maintain and preserve its and its
Subsidiaries business organization, assets, properties, employees, goodwill
and business relationships.
(b) Eveready
will not, and will not permit any of its Subsidiaries to, directly or
indirectly: (i) amend its articles,
charter or by-laws or other comparable organizational documents; (ii) with
the exception of distributions to the holders of minority interests in one of
the limited partnership Subsidiaries of Eveready, declare, set aside or pay any
dividend or other distribution or payment (whether in cash, shares or property)
in respect of the Eveready Common Shares owned by any Person or the securities
of any Subsidiary owned by a Person other than Eveready or an Eveready
Subsidiary; (iii) adjust, split, combine or reclassify its shares; (iv) issue,
grant, sell or (with respect to the securities of its Subsidiaries only) cause
or permit a Lien other than a Permitted Lien to be created on, or agree to
issue, grant, sell or cause or (with respect to the securities of its
Subsidiaries only) permit a Lien other than a Permitted Lien to be created on,
any shares of Eveready or its Subsidiaries, or securities convertible into or
exchangeable or exercisable for, or otherwise evidencing a right to acquire,
shares of Eveready or any of its Subsidiaries, other than (A) the issuance
of Eveready Common Shares issuable pursuant to the terms of the Eveready
Debentures, the Eveready Options and the Eveready Deferred Shares outstanding
on the date hereof, and (B) transactions between two or more Eveready
wholly-owned Subsidiaries or between Eveready and an Eveready wholly-owned
Subsidiary; (v) redeem, purchase or otherwise acquire or (with respect to
the securities of its Subsidiaries only) subject to a Lien other than a
Permitted Lien any of its outstanding securities or securities convertible or
exchangeable into or exercisable for any such securities, unless otherwise
required by the terms of such securities and other than (A) in
transactions between two or more Eveready wholly-owned Subsidiaries or between
Eveready and a Eveready wholly-owned Subsidiary or (B) pursuant to the
terms of the mutual option agreements that are outstanding with respect to the
20% minority interest in one of the limited partnership Subsidiaries of
Eveready; (vi) amend or modify the terms of any of its securities; (vii) adopt
a plan of liquidation or resolution providing for the liquidation or
dissolution of Eveready or any of its Subsidiaries; (viii) amend its
accounting policies or adopt new accounting policies, in each case except as
required in accordance with Canadian GAAP; (ix) make, rescind or change
any material election relating to Taxes, settle (or offer to settle) any
material Tax claim, audit, proceeding or reassessment, or enter into any
agreement (including any waiver) with any governmental authority relating to
Taxes; or (x) authorize or propose any of the foregoing, or enter into,
modify or terminate any Contract with respect to any of the foregoing.
(c) Eveready
will promptly notify Parent in writing of (i) any circumstance or
development that, to the knowledge of Eveready, is or would reasonably be
expected to have an Eveready Material Adverse Effect or any change in any
material fact set forth in the Disclosure Letter or in the Eveready Public
Disclosure Record, (ii) any circumstance or development with respect to
any Legal Action affecting Eveready or any of its Subsidiaries or affecting any
of their
46
respective properties or assets at law or in equity before
or by any Governmental Entity, or against any current or former director or
officer of Eveready or any of its Subsidiaries in their capacities as directors
or officers of Eveready or any of its Subsidiaries that, to the knowledge of
Eveready, is or would, individually or in the aggregate, reasonably be expected
to have an Eveready Material Adverse Effect, and (iii) the occurrence of
any loss, breakage or damage to assets of Eveready or any of its Subsidiaries
in excess of $750,000 (irrespective of insurance or third party proceeds which
have been or may be received in connection with such loss, breakage or damage);
provided that the delivery of any such notification will not modify, amend or
supersede any disclosure set forth in the Disclosure Letter or any
representation or warranty of Eveready contained in this Agreement or in any
certificate or other instrument delivered in connection herewith and will not
affect any right of Parent or Purchaser hereunder.
(d) Eveready
will not, and will not permit any of its Subsidiaries to, directly or indirectly,
except, in the case of clauses (i), (ii), (iv), (v) and (vi) below,
in the ordinary course of business consistent with past practice: (i) sell,
pledge, lease, license, dispose of or cause or permit a Lien other than a
Permitted Lien to be created on any assets (including the shares of any
Subsidiary) of Eveready or of any Subsidiary; (ii) acquire (by merger,
amalgamation, consolidation or acquisition of shares or assets or otherwise)
any corporation, partnership or other business organization or division thereof
or any property or asset, or make any investment either by the purchase of
securities, contributions of capital (other than to wholly-owned Subsidiaries),
property transfer, or purchase of any property or assets of any other Person,
or enter into or extend any option to acquire, or exercise an option to
acquire, any real property, if any of the foregoing would reasonably be
expected to be material to Eveready and are otherwise not in the ordinary
course of business consistent with past practice; (iii) except pursuant to
the terms of the Eveready Amended and Restated Credit Agreement or to guarantee
the loans obtained by employees of Predecessor and its Subsidiaries to acquire
securities of Predecessor pursuant to Predecessors Employee Participation Plan
provided such guarantees shall not in the aggregate be for more than
$7,700,000, incur any Indebtedness or issue any debt securities or assume,
guarantee, endorse or otherwise as an accommodation become responsible for the
obligations of any other Person, or make any loans or advances in excess of
$750,000; (iv) make or commit to make capital expenditures that, together
with capital expenditures made or committed to be made since December 31,
2008, are, in the aggregate, in excess of $15,000,000; (v) take any action
that would cause any of the representations or warranties set forth in Article III
to be untrue as of the date of this Agreement or as of the Effective Time
(except with respect to any representation or warranty that is made as of a specific
date or time); (vi) pay, discharge or satisfy any material claims,
liabilities or obligations other than the payment, discharge or satisfaction of
liabilities reflected or reserved against in the Eveready Financial Statements;
(vii) waive, release, grant or transfer any rights of material value; (viii) enter
into a new line of business; or (ix) authorize or propose any of the
foregoing, or enter into or modify any Contract to do any of the foregoing.
(e) Eveready
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, (i) enter into, amend or voluntarily terminate any Contract
material to Eveready and its Subsidiaries taken as a whole; (ii) enter
into, amend or voluntarily terminate any Contract with any current or former director,
officer or employee of Eveready or any of its Subsidiaries; (iii) enter
into or amend any Contract or series of Contracts resulting in a new Contract
or series of related new Contracts or modifications to an existing Contract or
series of related existing
47
Contracts outside of the ordinary course of business, that
would result in any Contract having a term in excess of 12 months and which is
not terminable by Eveready or its Subsidiaries upon notice of 90 days or less
from the date of the relevant Contract or modification of Contract, or impose
payment or other obligations on Eveready or any of its Subsidiaries in excess
of $750,000; (iv) enter into any Contract that would limit or otherwise
restrict Eveready or any of its Subsidiaries or any of their successors, or
that would, after the Effective Time, limit or otherwise restrict Purchaser or
any of its Affiliates or any of their successors, from engaging or competing in
any line of business or in any geographic area; or (v) terminate, cancel
or amend in any material respect any Material Contract.
(f) Other
than as is necessary to comply with applicable Laws or Contracts, neither
Eveready nor any of its Subsidiaries will (i) grant to any officer or
director of Eveready or any of its Subsidiaries an increase in compensation in
any form; (ii) grant any general salary increase; (iii) take any
action with respect to the grant of any severance or termination pay not in
accordance with existing policies disclosed in the Disclosure Letter; (iv) enter
into any employment agreement with any officer or director of Eveready or any
of its Subsidiaries; (v) increase any benefits payable under its current
severance or termination pay policies; (vi) modify or waive the vesting
policies now in effect with respect to the 251,726 outstanding Eveready Shares
held by the trust established for the benefit of employees of Predecessor and
its Subsidiaries; or (vii) except to guarantee the loans obtained by
employees of Predecessor and its Subsidiaries to acquire securities of
Predecessor pursuant to Predecessors Employee Participation Plan provided such
guarantees shall not in the aggregate be for more than $7,700,000, adopt or
materially amend or make any contribution to any Eveready Plan or other bonus,
profit sharing, option, pension, retirement, deferred compensation, insurance,
incentive compensation, compensation or other similar plan, agreement, trust,
fund or arrangement for the benefit of directors, officers or employees or
former directors, officers, employees of Eveready or any of its Subsidiaries.
(g) Other
than in the ordinary course of business consistent with past practice, and,
except to guarantee the loans obtained by employees of Predecessor and its
Subsidiaries to acquire securities of Predecessor pursuant to Predecessors
Employee Participation Plan described in subsection 5.1(f) provided such
guarantees shall not in the aggregate be for more than $7,700,000, Eveready
will not, and will not permit any of Subsidiaries to, make any loans, advances
or capital contributions to, or investments in, or guarantees to, or grant
rights of indemnification in favour of, any other Person other than to
wholly-owned Subsidiaries, or make any loans to any director, officer or
employee of Eveready or any of its Subsidiaries.
(h) Eveready
will not, and will not permit any of Subsidiaries to, waive, release, assign,
settle or compromise (i) any Legal Action or any claim or liability other
than in the usual and ordinary course of business consistent with past practice
or (ii) any Legal Action that is brought by any current, former or
purported holder of any securities of Eveready in its capacity as such and that
(A) requires any payment to such security holder by Eveready or any of its
Subsidiaries or (B) adversely affects in any material respect the ability
of Eveready and its Subsidiaries to conduct their business in a manner
consistent with past practice.
(i) Eveready
will use its commercially reasonable efforts to cause the current insurance (or
re-insurance) policies maintained by Eveready or any of its Subsidiaries,
including
48
directors and officers insurance, not to be cancelled or
terminated and to prevent any of the coverage thereunder from lapsing, unless
simultaneously with such termination, cancellation or lapse, replacement
policies underwritten by insurance or re-insurance companies of nationally
recognized standing having comparable deductions and providing coverage equal
to or greater than the coverage under the cancelled, terminated or lapsed
policies for substantially similar premiums are in full force and effect;
provided that, subject to the provisions of Section 7.8, none of Eveready
or any of its Subsidiaries will obtain or renew any insurance (or re-insurance)
policy for a term exceeding 12 months.
Section 5.2. Pre-Acquisition
Transactions
(a) Prior
to the Effective Time, Eveready agrees to (i) at Parents expense,
cooperate with and provide reasonable assistance to Parent in connection with
Parents planning for and implementation of any such reorganizations of the
business, operations, assets or corporate structure of Eveready and its
Subsidiaries as Parent may request, acting reasonably (each a Pre-Acquisition Transaction), and (ii) at Parents
expense, use commercially reasonable efforts to implement in advance of the
Effective Time any Pre-Acquisition Transaction as reasonably requested by
Parent. At Parents option, such
Pre-Acquisition Transactions may include, without limitation, (i) formation
of new Eveready Subsidiaries, (ii) merger, amalgamation or consolidation
of existing Eveready Subsidiaries, (iii) transfer of securities in, or
assets held by, existing Eveready Subsidiaries either by sale, dividend or
contribution, and (iv) filing of any elections required or permitted under
applicable Tax Laws relating to such transactions. However, Eveready will not be required to
implement any such Acquisition Transaction prior to the Effective Time unless
it determines to its satisfaction, acting reasonably, that (A) such
implementation will not delay or prevent consummation of the Arrangement
(including by giving rise to litigation by third parties); (B) such
implementation will not have an adverse impact on the Eveready Shareholders or
holders of the Eveready Debentures; and (C) the Arrangement will be
consummated and the Effective Time will occur immediately following the
completion of such Pre-Acquisition Transaction.
Parent agrees that any Pre-Acquisition Transaction that is implemented
at Parents request in advance of the Effective Time will not be considered in
determining whether a representation or warranty of Eveready under this
Agreement has been breached.
(b) To
the extent that a Pre-Acquisition Transaction requires approval of the Eveready
Shareholders under the ABCA, Eveready shall at Parents expense, (i) seek
approval of the Eveready Shareholders for such Pre-Acquisition Transaction at
the Eveready Meeting, (ii) include in the Eveready Circular a form of
special resolution of the Eveready Shareholders (the Transaction
Resolution) approving such Pre-Acquisition Transaction in form and
substance acceptable to Parent, acting reasonably, either included within the
Arrangement Resolution or separate from the Arrangement Resolution if so
requested by Parent, and (iii) include in the Eveready Circular the
unanimous recommendation of the Board that the Eveready Shareholders vote in
favour of the Transaction Resolution, provided that Parent and Purchaser agree
to amend the provisions of this Agreement requiring Eveready to take certain
action by specified times, including such provisions contained in Sections 2.1
and 2.3, to the extent necessary to facilitate the foregoing. Subject to the provisions of this Section 5.2,
the provisions in this Agreement regarding Evereadys obligations respecting
the approval of the Arrangement Resolution shall apply mutatis
mutandis to the approval of the Transaction Resolution.
49
(c) Subject
to the provisions of Sections 5.2(a) and 5.2(b), the Parties will work
cooperatively and use commercially reasonable efforts to prepare prior to the
Effective Time all documentation necessary and do such other acts and things as
are necessary to give effect to any Pre-Acquisition Transactions. Subject to the provisions of Sections 5.2(a) and
5.2(b), the Parties shall give effect to any Pre-Acquisition Transactions
immediately before the Effective Time and shall seek to have them become
effective immediately before the Effective Time (but after Parent shall have
confirmed that all conditions in Sections 6.1 and 6.2 have been satisfied or
waived by Parent and Eveready shall have confirmed that all conditions in
Sections 6.1 and 6.3 have been satisfied or waived by Eveready). In no event
shall completion of any Pre-Acquisition Transactions be a condition to
completion of the Arrangement.
Section 5.3. Covenants of Eveready
Regarding the Arrangement
Eveready will perform, and will cause its Subsidiaries to perform, all
obligations required or desirable to be performed by Eveready or any of its
Subsidiaries under this Agreement, co-operate with Parent and Purchaser in
connection therewith, and do all such other acts and things as may be necessary
or desirable in order to consummate and make effective, as soon as reasonably
practicable, the transactions contemplated by this Agreement and, without
limiting the generality of the foregoing, Eveready will and, where appropriate,
will cause its Subsidiaries to:
(a) except
as specifically permitted by Section 7.2, use all commercially reasonable
efforts to obtain the Required Vote;
(b) unless
this Agreement will have been terminated in accordance with Section 8.2,
submit this Agreement to the Eveready Shareholders at the Eveready Meeting even
if the Board will have withdrawn, amended, modified or qualified its
recommendation of this Agreement or the Arrangement;
(c) use
all commercially reasonable efforts to obtain all necessary waivers, consents
and approvals required to be obtained by Eveready or a Subsidiary in connection
with the Arrangement from other parties to the Contracts and, in connection
with obtaining any approval or consent from any Person (other than a
Governmental Entity) with respect to any transaction contemplated by this
Agreement, (i) without the prior written consent of Parent, which consent
will not be unreasonably withheld, not pay or commit to pay to such Person
whose approval or consent is being solicited any cash or other consideration,
or make any commitment or incur any liability or other obligation to such
Person for such approval or consent, and (ii) not request of Purchaser or
any of its Affiliates to pay or commit to pay to any Person (other than a
Governmental Entity) whose approval or consent is being solicited any cash or
other consideration, or make any commitment or incur any liability or other
obligation to such Person for such approval or consent;
(d) use
its commercially reasonable efforts to effect all necessary registrations,
filings and submissions of information required by Governmental Entities from
Eveready or any of its Subsidiaries relating to the Arrangement;
50
(e) apply
for and use all commercially reasonable efforts to obtain all Regulatory
Approvals relating to Eveready or any of its Subsidiaries which are typically
applied for by a Person being acquired and, in doing so, keep Parent reasonably
informed as to the status of the proceedings related to obtaining the
Regulatory Approvals, including providing Parent with copies of all related
applications and notifications (other than confidential information contained
in such applications and notifications), in draft form, in order for Parent to
provide its comments thereon; provided, however, that nothing in this Agreement
shall require Eveready or its Affiliates to divest or hold separate or
otherwise take or commit to take any action with respect to any asset, property
or agreement of Eveready or any of its Subsidiaries in order to obtain any such
Regulatory Approval;
(f) waive
the Eveready Shareholders Rights Plan with respect to this Agreement and the
other transactions contemplated by this Agreement (with such Plan to be
terminated at the Effective Time in accordance with the Plan of Arrangement);
(g) use
its commercially reasonable efforts to defend all lawsuits or other legal,
regulatory or other proceedings against Eveready or any of its Subsidiaries
challenging or affecting this Agreement or the consummation of the transactions
contemplated hereby;
(h) subject
to applicable Laws relating to the exchange of information, and subject to the
terms of the Confidentiality Agreement, upon request by Parent, furnish Parent
with all information concerning (i) itself and its Subsidiaries (including
information concerning their respective businesses, operations, markets,
customers, suppliers and others they have business relations with), (ii) historical
and pro forma financial statements, and (iii) such other matters as may be
reasonably necessary or advisable, in connection with Parents financing
(including syndication efforts) for the transactions contemplated by this
Agreement. Without limitation, such
financing activities may include preparation of prospectus supplements and
information memoranda for securities offerings, loan syndication, road shows,
meetings with and presentations to (including participation by members of
senior management and representative of Eveready in such meetings and presentations),
and due diligence of, lenders, investors and ratings agencies, including with
respect to obtaining auditors consents and comfort letters, providing access
to auditors work papers, and assisting in Parents efforts to benefit from
Evereadys existing relationships with its lenders. Notwithstanding the foregoing, the
Confidential Information (as defined in the Confidentiality Agreement) of
Eveready may not be disclosed (except as provided in the Confidentiality
Agreement) to any Person without the prior written consent of Eveready; and
(i) abide
by the terms of the Confidentiality Agreement.
Section 5.4. Covenants of Parent
Parent will perform, and will cause Purchaser to perform, all
obligations required or desirable to be performed by it under this Agreement,
co-operate with Eveready in connection therewith, and do all such other acts
and things as may be necessary or desirable in order to consummate and make
effective, as soon as reasonably practicable, the transactions contemplated by
this Agreement and, without limiting the generality of the foregoing, Parent
will, and where appropriate will cause Purchaser to:
51
(a) use
its commercially reasonable efforts to preserve intact the business,
organization, assets, properties, goodwill and employees of Parent and its
Subsidiaries and other business relationships, continue to operate in the
ordinary course of business, maintain its books, records and accounts in
accordance with U.S. GAAP, and use its commercially reasonable efforts to
maintain its current financial condition, including working capital levels;
(b) apply
for and use all commercially reasonable efforts to obtain all Regulatory
Approvals relating to it and relating to Eveready or any of Evereadys
Subsidiaries which are typically applied for by an acquiror (including those
referenced in Schedule C) and, in doing so, keep Eveready reasonably informed
as to the status of the proceedings related to obtaining the Regulatory
Approvals, including providing Eveready with copies of all related applications
and notifications in draft form (other than confidential information contained
in such applications and notifications), in order for Eveready to provide its
reasonable comments thereon; provided, however, that nothing in this Agreement
shall require Parent or its Affiliates to divest or hold separate or otherwise
take or commit to take any action with respect to any asset, property or
agreement of Parent or any of its Subsidiaries in order to obtain any such
Regulatory Approval;
(c) use
its commercially reasonable efforts to (i) effect all necessary
registrations, filings and submissions of information required by Governmental
Entities from Purchaser or any of its Subsidiaries relating to the Arrangement,
and (ii) cause the Parent Common Shares to be issued, indirectly, to the
Eveready Shareholders pursuant to this Agreement and the Arrangement to be
approved for listing on the NYSE, subject to official notice of issuance, prior
to or as of the Effective Time;
(d) use
its commercially reasonable efforts to obtain (i) financing (whether in
the form of a further amendment and/or restatement of the Eveready Amended and
Restated Credit Agreement or a refinancing of the Eveready Indebtedness under
such agreement), and (ii) such waivers or amendments under Parents
existing credit instruments or refinancings thereof as will allow Parent and
Purchaser to complete the transactions described in this Agreement, each on
terms reasonably satisfactory to Parent provided that, if such financing shall
include the issuance of any Parent Common Shares or warrants or convertible
securities which are exercisable for or convertible into any Parent Common
Shares, the issuance, exercise or conversion price shall not (without the prior
written consent of Eveready) be less than U.S. $48.00 per Parent Common Share
(the financing, refinancing and/or waivers described in this Section 5.4(d) being
collectively the Financing);
(e) use
its commercially reasonable efforts to defend all lawsuits or other legal,
regulatory or other proceedings against Parent or Purchaser challenging or
affecting this Agreement or the consummation of the transactions contemplated
hereby;
(f) not: (i) amend its articles, charter or
by-laws or other comparable organizational documents; (ii) declare, set
aside or pay any dividend or other distribution or payment (whether in cash,
shares or property) in respect of its shares; (iii) adjust, split, combine
or reclassify its shares; (iv) amend or modify the terms of any of its
shares; or (v) adopt a plan of liquidation or resolution providing for its
liquidation or dissolution;
52
(g) promptly
notify Eveready in writing of (i) any circumstance or development that, to
the knowledge of Parent, is or would reasonably be expected to have a Parent
Material Adverse Effect or any change in any material fact set forth in the
Parent Reports, or (ii) any circumstance or development with respect to
any legal action affecting Parent or any of its Subsidiaries or affecting any
of their respective properties or assets at law or in equity before or by any
Governmental Entity that, to the knowledge of Parent, is or would reasonably be
expected to have a Parent Material Adverse Effect; provided that the delivery
of any such notification will not modify, amend or supersede any representation
or warranty of Parent contained in this Agreement or in any certificate or
other instrument delivered in connection herewith and will not affect any right
of Eveready hereunder;
(h) abide
by the terms of the Confidentiality Agreement; and
(i) on
and after the Effective Time, provide for the continuing employees of Eveready
and its Subsidiaries credit under the relevant Parent Plans for the period of
their employment by Eveready or its Subsidiaries and permit them to participate
in Parents employee stock purchase plan if they wish to do so. Evereadys continuing management employees
will be entitled to participate in Parents management incentive plan (MIP) and restricted stock plan on terms similar to
comparable management employees of Parent and its Subsidiaries. For purposes of
Parents MIP, separate EBITDA goals for Eveready will be established based on
the Evereadys performance during the stub period beginning on the Effective
Time and ending on December 31, 2009.
Section 5.5. Mutual Covenants
Each of the Parties covenants and agrees that, except as contemplated
in this Agreement, during the period from the date of this Agreement until the
earlier of the Effective Time and the time that this Agreement is terminated in
accordance with its terms:
(a) It
will, and will cause its Subsidiaries to, use commercially reasonable efforts
to satisfy (or cause the satisfaction of) the conditions precedent to its
obligations hereunder as set forth in Article VI to the extent the same is
within its control and to take, or cause to be taken, all other action and to
do, or cause to be done, all other things necessary, proper or advisable under
all applicable Laws to consummate the Arrangement, including using its
commercially reasonable efforts to: (i) obtain all Regulatory Approvals
required to be obtained by it, provided, however that Parent and Purchaser will
not be obligated hereby to divest or hold separate or otherwise take or commit
to take any action with respect to any asset, property, operation or agreement
of Eveready or any of its Subsidiaries in order to obtain any Regulatory
Approval from any Governmental Entity; (ii) effect all necessary
registrations, filings and submissions of information requested by Governmental
Entities required to be effected by it in connection with the Arrangement; (iii) oppose,
lift or rescind any injunction or restraining order against it or other order or
action against it seeking to stop, or otherwise adversely affecting its ability
to make and complete, the Arrangement; and (iv) co-operate with the other
Parties in connection with the performance by it and its Subsidiaries of their
obligations hereunder.
(b) It
will not (i) take any action, (ii) refrain from taking any
commercially reasonable action, or (iii) permit any action to be taken or
any commercially reasonable action to
53
not be taken, which is inconsistent with this Agreement or
which would reasonably be expected to significantly impede the consummation of
the Arrangement or to prevent or materially delay the consummation of the
transactions contemplated hereby.
ARTICLE VI.
CONDITIONS
Section 6.1. Mutual Conditions
Precedent
The obligations of the Parties to complete the transactions
contemplated by this Agreement, exclusive of those in Section 2.4 (c) of
this Agreement, are subject to the fulfillment, on or before the Effective
Time, of each of the following conditions precedent, each of which may only be
waived by the mutual consent of the Parties:
(a) the
Arrangement Resolution will have been approved and adopted by the Eveready
Shareholders at the Eveready Meeting by not less than the Required Vote in
accordance with the Interim Order;
(b) the
Interim Order and the Final Order will each have been obtained in form and on
terms consistent with this Agreement, and will not have been set aside or
modified in a manner unacceptable to the Parties, acting reasonably, on appeal
or otherwise;
(c) all
Regulatory Approvals will have been obtained or concluded or, in the case of
waiting or suspensory periods, expired or been terminated such that the
Arrangement may proceed without the need for further Regulatory Approvals;
(d) no
Governmental Entity will have enacted, issued, promulgated, enforced or entered
any Law (whether temporary, preliminary or permanent) that restrains, enjoins
or otherwise prohibits consummation of the Arrangement or the other
transactions contemplated by this Agreement;
(e) the
Parent Common Shares to be issued, indirectly, to the Eveready Shareholders in
accordance with the Arrangement pursuant to the Plan of Arrangement shall have
been approved for listing on the NYSE subject only to official notice of
issuance; and
(f) this
Agreement will not have been terminated in accordance with its terms.
Section 6.2. Additional Conditions
Precedent to the Obligations of Parent and Purchaser
The obligations of Parent and Purchaser to complete the transactions
contemplated by this Agreement, exclusive of those in Section 2.4 (c) of
this Agreement, will also be subject to the fulfillment of each of the
following conditions precedent (each of which is for the exclusive benefit of
the Parent and Purchaser and may be waived by Parent and Purchaser):
(a) all
covenants of Eveready under this Agreement to be performed on or before the
Closing Date will have been duly performed by Eveready in all material
respects, and Parent and Purchaser will have received a certificate of Eveready
addressed to Parent and
54
Purchaser and dated the Closing Date, signed on behalf of
Eveready by two senior executive officers of Eveready (on Evereadys behalf and
without personal liability), confirming the foregoing as of the Closing Date;
(b) (i) the
representations and warranties of Eveready set forth in this Agreement will be
true and correct in all respects, without regard to any materiality or Eveready
Material Adverse Effect qualifications contained in them, as of the Closing
Date, as though made on and as of the Closing Date (except for representations
and warranties made as of a specified date, the accuracy of which will be
determined as of that specified date), unless the failure or failures of all
such representations and warranties to be so true and correct in all respects
would not reasonably be expected to have an Eveready Material Adverse Effect; (ii) the
representations and warranties set forth in Section 3.1(e) will be
true and correct in all material respects; and (iii) Parent and Purchaser
will have received a certificate of Eveready addressed to Parent and Purchaser
and dated the Closing Date, signed on behalf of Eveready by two senior executive
officers of Eveready (on Evereadys behalf and without personal liability),
confirming the foregoing as of the Closing Date;
(c) all
Regulatory Approvals will have been obtained or concluded on terms and
conditions satisfactory to Parent, acting reasonably;
(d) between
the date hereof and the Effective Time, there will not have occurred an
Eveready Material Adverse Effect;
(e) no
act, action, suit, demand or proceeding shall have been taken by or before any
Canadian or foreign court, tribunal or Governmental Entity or by or before any
elected or appointed public official in Canada or elsewhere, and no law,
regulation or policy shall have been proposed, enacted, promulgated or applied
by a Governmental Entity in either case:
(i) to cease trade, enjoin, prohibit or
impose material limitations or conditions on the purchase by or the sale to
Purchaser of any of Eveready Common Shares or the right of Purchaser to own or
exercise full rights of ownership of Eveready Common Shares; or
(ii) which, if the Arrangement was
consummated, would reasonably be expected to lead to a Parent Material Adverse
Effect;
(f) the
Board of Directors shall not have either (i) withdrawn any recommendation
made by it that Eveready Shareholders approve the Arrangement Resolution or
modified, changed or qualified any such recommendation in a manner that has
substantially the same effect or issued a recommendation that Eveready
Shareholders not vote in favour of the Arrangement Resolution or (ii) failed
to reaffirm support of the Arrangement within five Business Days following an
announcement made by a third party in respect of any Acquisition Proposal;
(g) Eveready
shall not have entered into any agreements in respect of an Acquisition
Proposal other than a confidentiality agreement permitted to be entered into in
accordance with Section 7.2(d); and
55
(h) If
the Court shall have required that Eveready provide to the Eveready
Shareholders dissent rights in connection with the Arrangement, the aggregate
number of Eveready Common Shares held, directly or indirectly, by Eveready
Shareholders purporting to exercise dissent rights in connection with the
Arrangement does not exceed five percent (5.0%) of the total outstanding
Eveready Common Shares.
Section 6.3. Additional Conditions
Precedent to the Obligations of Eveready
The obligations of Eveready to complete the transactions contemplated
by this Agreement, exclusive of those in Section 2.4 (c) of this
Agreement, will also be subject to the following conditions precedent (each of
which is for the exclusive benefit of Eveready and may be waived by Eveready):
(a) all
covenants of Parent and Purchaser under this Agreement to be performed on or
before the Closing Date will have been duly performed by the Parent and
Purchaser, as applicable, in all material respects, and Eveready will have
received a certificate of Parent and Purchaser, addressed to Eveready and dated
the Closing Date, signed on behalf of Parent and Purchaser by two of their
respective senior executive officers (on each such Partys behalf and without
personal liability), confirming the foregoing as of the Closing Date;
(b) the
representations and warranties of Parent set forth in this Agreement will be
true and correct in all respects, without regard to any materiality or Parent
Material Adverse Effect qualifications contained in them, as of the Closing
Date, as though made on and as of the Closing Date (except for representations
and warranties made as of a specified date, the accuracy of which will be
determined as of that specified date), unless the failure or failures of all
such representations and warranties to be so true and correct in all respects
would not reasonably be expected to have a Parent Material Adverse Effect, and
Eveready will have received certificates of Parent and Purchaser, addressed to
Eveready and dated the Closing Date, signed on behalf of such Party by two of
its senior executive officers (on such Partys behalf and without personal
liability), confirming the foregoing as of the Closing Date;
(c) all
Regulatory Approvals will have been obtained or concluded on terms and
conditions satisfactory to Eveready, acting reasonably;
(d) between
the date hereof and the Effective Time, there will not have occurred a Parent
Material Adverse Effect;
(e) all
orders required from the applicable Securities Authorities to permit the
issuance and first resale of the Parent Common Shares issued, indirectly, to
the Eveready Shareholders pursuant to the Arrangement without qualification
with or approval of or the filing of any registration statement or prospectus,
or the taking of any proceeding with, or the obtaining of any further order,
ruling or consent from any Governmental Entity under any United States or
Canadian Securities Laws or pursuant to the rules and regulations of any
Securities Authority administering such Laws will have been obtained or
concluded on terms and conditions satisfactory to Eveready, acting reasonably,
and Parents legal counsel will have provided Eveready and the members of its
Board with a legal opinion to that effect in form and content satisfactory to
Eveready and its counsel, acting reasonably; and
56
(f) no
act, action, suit, demand or proceeding shall have been taken by or before any
Canadian or foreign court, tribunal or Governmental Entity or by or before any
elected or appointed public official in Canada or elsewhere, and no law,
regulation or policy shall have been proposed, enacted, promulgated or applied
by a Governmental Entity in either case:
(i) to cease trade, enjoin, prohibit or
impose material limitations or conditions on the purchase by or the sale to
Purchaser of any of Eveready Common Shares or the right of Purchaser to own or
exercise full rights of ownership of Eveready Common Shares; or
(ii) which, if the Arrangement was
consummated, would reasonably be expected to lead to a Parent Material Adverse
Effect.
ARTICLE VII.
ADDITIONAL AGREEMENTS
Section 7.1. Notice Provisions
(a) Each
of Eveready and Parent will give prompt notice to the other of the occurrence,
or failure to occur, at any time from the date hereof until the earlier to
occur of the termination of this Agreement and the Effective Time of any event
or state of facts which occurrence or failure would, or would be likely to:
(i) cause any of the representations or
warranties of such Party contained herein to be untrue or inaccurate in any
material respect on the date hereof or at the Effective Time; or
(ii) result in the failure to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
such Party hereunder prior to the Effective Time.
(b) Each
of Eveready and Parent will promptly notify the other Party of (i) any
communication from any Person alleging that the consent of such Person (or
another Person) is or may be required in connection with the transactions
contemplated by this Agreement (and the response thereto from such Party, its
Subsidiaries or its representatives), (ii) any material communication from
any Governmental Entity in connection with the transactions contemplated by this
Agreement (and the response thereto from such Party, its Subsidiaries or its
representatives), and (iii) any material Legal Actions threatened or
commenced against or otherwise affecting such Party or any of its Subsidiaries
that are related to the transactions contemplated by this Agreement.
Section 7.2. Non-Solicitation
(a) Except
as expressly provided in this Article VII, Eveready will not, directly or
indirectly, through any officer, director, employee, representative (including
any financial or other advisor) or agent of Eveready or any of its
Subsidiaries, take any action of any kind which might, directly or indirectly,
interfere with the successful completion of the Arrangement, including any
action to (i) solicit, assist, initiate, facilitate or encourage
(including by way of furnishing or providing access to any information or
permitting any visit to any
57
facilities or properties of Eveready or any of its
Subsidiaries, or entering into any form of Contract) the initiation of any
inquiries, proposals or offers regarding an Acquisition Proposal, (ii) participate
in any discussions or negotiations with any Person (other than Parent,
Purchaser and their Affiliates) regarding an actual or potential Acquisition
Proposal, (iii) withdraw, amend, modify or qualify, or propose publicly to
withdraw, amend, modify or qualify, in a manner adverse to Parent or Purchaser,
the approval or recommendation of the Board or any committee thereof of this
Agreement or the Arrangement, (iv) accept, approve, endorse or recommend
or remain neutral with respect to, or propose publicly to approve, endorse or
recommend or remain neutral with respect to, any Acquisition Proposal, or (v) accept
or enter into, or publicly propose to accept or enter into, any Contract in
respect of an Acquisition Proposal (other than a confidentiality agreement
permitted by Section 7.2(d)).
(b) Eveready
will, and will cause the officers, directors, employees, representatives and
agents of Eveready and its Subsidiaries to, immediately terminate any existing
solicitations, discussions or negotiations with any Person (other than Parent
or Purchaser and their Affiliates) that has made, indicated any interest to
make or may reasonably be expected to make, an Acquisition Proposal and will
cease to provide to any such Person any information or access to any
information, concerning Eveready or any of its Subsidiaries. Eveready agrees not to release any third party
from, waive any provision of, forebear in the enforcement of, or terminate any
confidentiality agreement or standstill agreement to which it is a party. Eveready will promptly request the return or
destruction of all information provided to any third party which, at any time
since January 1, 2008, has entered into a confidentiality agreement with
Eveready relating to a potential Acquisition Proposal to the extent that such
information has not previously been returned or destroyed, and will use all
commercially reasonable efforts to ensure that such requests are honoured in
accordance with the terms of such agreement. For greater certainty, Eveready
will not permit any Person other than Parent, Purchaser and their lenders and
advisors to access any virtual data room established except as permitted under Section 7.2(d)(D).
(c) Eveready
will promptly (and in any event within 24 hours of receipt by Eveready) notify
Parent, at first orally and thereafter in writing, of any proposal, inquiry,
offer (or any amendment thereto) or request relating to or constituting an
Acquisition Proposal, or that could be reasonably expected to lead to an
Acquisition Proposal, in each case received after the date hereof, of which any
of its directors, officers, representatives or agents are or become aware, or
any amendments to the foregoing, any request for discussions or negotiations,
any request for representation on the Board, or any request for non-public
information relating to Eveready or any of its Subsidiaries in connection with
an Acquisition Proposal or for access to the properties, books or records of
Eveready or any of its Subsidiaries by any Person that informs Eveready or such
Subsidiary that it is considering making, or has made, an Acquisition Proposal
or any amendment thereto; and Eveready will promptly provide to Parent a
description of the material terms and conditions of any such Acquisition
Proposal or, inquiry, offer or request, together with a copy of all
documentation relating to any such Acquisition Proposal or inquiry, offer or
request, the identity of the Person making such proposal, inquiry, offer or
request, and any other details of the Acquisition Proposal, contract, documents
or negotiations as Parent may reasonably request. Eveready will keep Parent
informed of any change to the material terms of any such Acquisition Proposal
or proposal, inquiry, offer or request.
58
(d) Notwithstanding
the foregoing provisions of this Section 7.2 or any other provision of this Agreement, the
Board will be permitted to (i) withdraw, amend, modify or qualify (or
propose to withdraw, amend, modify or qualify) in a manner adverse to Parent
the approval or recommendation of this Agreement or the Arrangement; and (ii) participate
in any discussions with, or furnish information to any Person in response to an
Acquisition Proposal by such Person, if and only to the extent that:
(A) Eveready has received an unsolicited bona
fide written Acquisition Proposal from such Person and such Acquisition
Proposal constitutes a Superior Proposal;
(B) Eveready will have complied with all
other requirements of this Section 7.2 (other than Section 7.2(g));
(C) the Board, after consultation with and
based upon the advice of its financial advisors and outside legal counsel,
determines in good faith that the failure to take such action would be
inconsistent with its fiduciary duties under all applicable Laws;
(D) in the case of clause (ii) of this Section 7.2(d),
prior to providing any information or data to such Person in connection with
such Acquisition Proposal, the Board receives from such Person an executed
confidentiality agreement having substantially the same terms as the
Confidentiality Agreement and, taken as a whole, being no less favourable to
Eveready than the Confidentiality Agreement (provided that such confidentiality
agreement, if not existing on the date hereof, may not preclude Eveready from
complying with the provisions of this Agreement and may not include any
provision calling for an exclusive right to negotiate with Eveready and may not
prohibit Eveready from providing information to Parent regarding the
Acquisition Proposal), and Eveready sends a copy of any such confidentiality
agreement to Parent promptly upon its execution and Parent is immediately
provided with a list of, or in the case of information that was not previously
made available to Parent, copies of or access to, any information provided to
such Person; and
(E) in the case of clause (ii) of this Section 7.2(d),
prior to providing any information or data to any such Person or entering into
discussions with any such Person who has made an Acquisition Proposal, Eveready
has complied with Section 7.2(c).
(e) Nothing
contained in this Section 7.2 will prohibit the Board from making any
disclosure to Eveready Shareholders prior to the Effective Time if, in the good
faith judgment of the Board, after consultation with outside legal counsel,
such disclosure is necessary for the Board to act in a manner consistent with
its fiduciary duties or is otherwise required under applicable Law.
(f) Eveready
will, within five (5) Business Days, promptly publicly reaffirm its
recommendation of this Agreement and the Arrangement after any Acquisition
Proposal that is not a Superior Proposal is publicly announced or made.
(g) Nothing
contained in this Section 7.2 will limit in any way the obligation of
Eveready to convene and hold the Eveready Meeting in accordance with Section 2.2
of this Agreement unless this Agreement is terminated in accordance with Article VIII.
59
Section 7.3. Right to Match
(a) Subject
to Section 7.3(b), Eveready covenants that it will not accept, approve,
recommend or enter into any agreement, understanding, arrangement or Contract
in respect of a Superior Proposal (other than a confidentiality agreement
permitted by Section 7.2(d)) unless:
(i) Eveready has complied with its
obligations under Section 7.2 and the other provisions of this Article VII
and has provided Parent with a copy of the Superior Proposal; and
(ii) a period (the Response Period) of five Business Days will have elapsed from
the date on which Parent received written notice from the Board of Directors of
Eveready that the Board of Directors of Eveready determined, subject only to
compliance with this Section 7.3, to accept, approve, recommend or enter
into a binding agreement to proceed with the Superior Proposal. In the event that Eveready provides Parent
with the notice contemplated in this Section on a date that is less than
five Business Days prior to the Eveready Meeting, Eveready will be entitled to
adjourn the Eveready Meeting to a date that is not more than five Business Days
after the date of such notice.
(b) During
the first three Business Days of the Response Period, Parent will have the
right, but not the obligation, to offer to amend the terms of this
Agreement. The Board of Directors of
Eveready will review any such proposal by Parent to amend the terms of this
Agreement, including an increase in, or modification of, the consideration to
be received by the Eveready Shareholders, to determine whether the Acquisition
Proposal to which Parent is responding would be a Superior Proposal when
assessed against the Arrangement as it is proposed by Parent to be amended. If the Board of Directors of Eveready
determines that the Acquisition Proposal would no longer be a Superior Proposal
if the Arrangement was so amended and Parent and Purchaser enter into an
amendment to this Agreement incorporating the terms of the amended offer, the
Board of Directors of Eveready will promptly publicly reaffirm its
recommendation of the Arrangement. If
the Board of Directors of Eveready determines, in good faith after consultation
with its financial advisors and its outside counsel, that the Acquisition
Proposal continues to be a Superior Proposal, Eveready may approve, recommend,
accept or enter into an agreement, understanding or arrangement to proceed with
the Superior Proposal.
(c) Each
successive amendment to any Acquisition Proposal that results in an increase
in, or modification of, the consideration (or value of such consideration) to
be received by the Eveready Shareholders will constitute a new Acquisition
Proposal for the purposes of this Section 7.3 and Parent will be afforded a
new Response Period in respect of each such Acquisition Proposal.
(d) Eveready
shall use its commercially reasonable efforts to ensure that the directors and
officers of Eveready and each of its Subsidiaries and any investment bankers,
counsel or other advisors, representatives or agents retained by Eveready are
aware of, and abide by, the provisions of Sections 7.2 and 7.3.
60
Section 7.4. Agreement as to Damages
(a) Notwithstanding
any other provision relating to the payment of fees or expenses, in the event
of termination of this Agreement and the Plan of Arrangement under the various
circumstances set forth below, either Eveready or Parent shall owe the other
Party a termination fee and/or reimbursement of expenses, if any, as follows:
(i) if Parent terminates this Agreement
pursuant to
(A) Section 8.2(c)(i) [Board fails
to recommend, etc. or third party acquires 33 1/3%],
(B) Section 8.2(c)(ii) [breach by
Eveready], or
(C) Section 8.2(c)(iii) [Meeting
cancelled],
Eveready will pay to Parent a termination fee of $8.0 million (the Eveready Termination Fee) within two
Business Days of such termination, plus Parents Expense Reimbursement Costs
not to exceed $5.0 million as provided in Section 7.4(e) below;
(ii) if
(A) after the date hereof and prior to the
termination of this Agreement, a bona fide Acquisition Proposal will have been
made or proposed to Eveready or otherwise publicly announced (which has not
been withdrawn), or a Person has publicly announced an intention to do so
(which has not been withdrawn),
(B) any of the facts set out in Section 8.2(c)(i) (A) through
(D) exist after the date hereof and prior to the termination of this
Agreement, and
(C) this Agreement is terminated by either
Parent or Eveready pursuant to Section 8.2(b)(ii) [Required Vote not
obtained],
Eveready will pay to Parent the Eveready Termination
Fee within two Business Days of such termination, plus Parents Expense
Reimbursement Costs not to exceed $5.0 million as provided in Section 7.4(e) below;
or
(iii) if Eveready terminates this Agreement pursuant to Section 8.2(d)(ii) [Board
approves agreement for Superior Proposal], Eveready will pay to Parent the
Eveready Termination Fee before or concurrently with such termination (and
payment of the Eveready Termination Fee will be a condition to the
effectiveness of such termination), plus Parents Expense Reimbursement Costs
not to exceed $5.0 million as provided in Section 7.4(e) below.
(b) If
either Parent or Eveready terminates this Agreement pursuant to Section 8.2(b)(ii) [Required
Vote not obtained], but not under the circumstances described elsewhere in this
Section 8.2, Eveready will pay to Parent its Expense Reimbursement Costs
not to exceed $5.0 million as provided in Section 7.4(e) below.
61
(c) If
Eveready terminates this Agreement pursuant to Section 8.2(d)(iii) [Parents
breach], Parent will pay to Eveready a termination fee of $3.0 million (the Parent Termination Fee) within two Business Days of such
termination, plus Evereadys Expense Reimbursement Costs not to exceed $2.0
million as provided under Section 7.4(e) below, and if Parents
breach relates to its obligations with respect to the Letter of Credit or the
Cat Tech Purchase or the Pembina Purchase, Eveready will be entitled, if it
elects to do so, to all of its rights referenced in Section 2.4(c) and
(d), including the right to call on the Letter of Credit and to pursue specific
performance of such Parent obligations as described in Section 2.4(c).
(d) If
Parent terminates this Agreement pursuant to Section 8.2(c)(iv) [Parent
unable to complete the Financing], Parent will pay to Eveready the Parent
Termination Fee before or concurrently with such termination (and payment of
the Parent Termination Fee will be a condition to the effectiveness of such
termination), plus Evereadys Expense Reimbursement Costs not to exceed $2.0
million as provided in Section 7.4(e) below.
(e) Expense
Reimbursement Costs shall be paid not later than two Business Days after
delivery to the Party responsible for such payment of notice of demand for
payment and documented itemization setting forth in reasonable detail all
Expense Reimbursement Costs (which itemization may be supplemented and updated
from time to time until the thirtieth day after delivery of the first notice of
demand for payment), provided that no notice of demand for payment may be made
more than 60 calendar days following the termination of this Agreement.
(f) The
Parties acknowledge that the agreements contained in this Section 7.4 are
an integral part of the transactions contemplated by this Agreement, and that,
without these agreements, neither Parent nor Eveready would have entered into
this Agreement; accordingly, if Eveready or Parent fails to timely pay any
amount due pursuant to this Section 7.4 and, in order to obtain the
payment, the Party who is owed such payment commences a suit which results in a
judgment against the other Party for the payment set forth in this Section 7.4,
the defaulting Party shall pay to the other Party its reasonable costs and
expenses (including reasonable attorneys fees) in connection with such suit,
together with interest on the amount due from each day for which payment is due
until the date of the payment at the prime rate of the Bank of Canada in effect
on the date such payment was required to be made.
Section 7.5. Fees and Expenses
Except as provided in Section 7.4, each Party will pay all fees,
costs and expenses incurred by such Party in connection with this Agreement and
the Arrangement. For such purposes, the
filing fees paid to Governmental Entities in connection with applicable filings
under the Competition Act and any applicable antitrust laws of other jurisdictions
shall be shared equally by Parent and Eveready.
Section 7.6. Liquidated Damages,
Injunctive Relief and No Liability of Others
Parent and Eveready acknowledge that all of the payment amounts set out
in Section 7.4 are payments of liquidated damages which are a genuine
pre-estimate of the damages Parent or Eveready will suffer or incur as a result
of the event giving rise to such payment and the resultant termination of this
Agreement and are not penalties. Parent
and Eveready irrevocably waive any
62
right to raise as a defense that any such liquidated damages are
excessive or punitive. For greater certainty, the Parties agree that, subject
to Section 7.4, payment of the amount determined pursuant to this Article in
the manner provided in respect thereof is the sole monetary remedy of the Party
receiving such payment. Nothing
contained herein will preclude a Party from seeking injunctive relief in
accordance with Section 9.3 to restrain any breach or threatened breach of
the covenants or agreements set forth in this Agreement or the Confidentiality
Agreement or otherwise to obtain specific performance of any of such acts,
covenants or agreements, without the necessity of posting a bond or security in
connection therewith. In the event that
either Parent or Eveready become liable to make a payment under Section 7.4,
there will be no liability of any shareholder, director, officer, employee,
advisor or representative of Parent or Eveready or any Affiliate thereof,
whether to the other Party or any other Person (including any shareholder,
director, officer, employee, advisor or representative thereof) in connection
with any liability or other obligation of the Parent or Eveready, and whether
hereunder or otherwise in connection with the transactions contemplated hereby.
Section 7.7. Access to Information;
Confidentiality
(a) From
the date hereof until the earlier of the Effective Time and the termination of
this Agreement, subject to compliance with applicable Law and the terms of any
existing Contracts, Eveready will, and will cause its Subsidiaries and their
respective officers, directors, employees, independent auditors, accounting
advisers and agents to, afford to Parent and to its officers, employees,
agents, representatives, advisers and lenders such access as Parent may
reasonably request at all reasonable times, including for the purpose of
facilitating integration business planning, to their officers, employees,
agents, properties, books, records and Contracts, and will furnish Parent with
all data and information as Parent may reasonably request. Without limiting the foregoing, Parent and
its representatives (including its financing sources) will, upon reasonable
prior notice, have the right to conduct appraisal and environmental and
engineering inspections of each of the Properties, and to contact any third
party to a Material Contract to which Eveready or any of its Subsidiaries is a
party; provided, that no such inspections will be conducted in a manner which
disrupts in any material respect the normal course of business of Eveready at
the applicable Property. Parent and
Eveready acknowledge and agree that information furnished pursuant to this Section 7.7(a) will
be subject to the terms and conditions of the Confidentiality Agreement.
(b) Parent
will provide Eveready and its employees, representatives, agents and advisors
with reasonable opportunity and access to investigate the financial condition
and operations of Parent and its Subsidiaries in order for the officers and
directors of Eveready to properly exercise their fiduciary duty in evaluating
the Parent Common Shares to be received by the Eveready Shareholders pursuant
to the Arrangement. Parent and its
advisors will cooperate with Eveready with respect to the investigation and, in
that regard, Eveready will, upon reasonable notice, have access at all
reasonable times to the facilities and personnel of Parent and its
Subsidiaries. Parent and Eveready
acknowledge and agree that information furnished pursuant to this Section 7.7(b) will
be subject to the terms and conditions of the Confidentiality Agreement.
(c) No
investigation conducted pursuant to Section 7.7(a) or Section 7.7(b) shall
affect or be deemed to modify any representation or warranty made by any Party
hereto,
63
and nothing in Section 7.7(a) shall require any
Party to permit any inspection, or to disclose any information, that in the
reasonable judgment of such Party would result in (i) a violation of any
of its obligations with respect to confidentiality if such Party shall have
used reasonable efforts to obtain the consent of any third party to such
inspection or (ii) any violation of Laws relating to the sharing of information
between competitors, it being understood that (A) the Parties will provide
extracts, or summaries, or aggregations or other information to the greatest
extent practicable in a manner that does not result in any such violation or
improper disclosure and (B) Eveready will provide certain information in
accordance with, and subject to, the confidentiality provisions of the McKinsey
Agreement.
Section 7.8. Insurance and
Indemnification
(a) If
the Arrangement shall become effective, Parent will, or will cause Eveready and
its Subsidiaries to, maintain in effect without any reduction in scope or
coverage for six years from the Effective Time customary policies of directors
and officers liability insurance providing protection equal to or better than
the protection provided by the policies maintained by Eveready and its
Subsidiaries which are in effect immediately prior to the Effective Time and
providing protection in respect of claims arising from facts or events which
occurred on or prior to the Effective Time; provided, however, that Parent will
not be required, in order to maintain such directors and officers liability
insurance policy, to pay, or to cause Eveready and its Subsidiaries to pay, an
annual premium in excess of 250% of the cost of the existing policies; and
provided further that, if equivalent coverage cannot be obtained or can only be
obtained by paying an annual premium in excess of 250% of such amount, Parent
will only be required to obtain, or to cause Eveready and its Subsidiaries to
obtain, as much coverage as can be obtained by paying an annual premium equal
to 250% of such amount. Furthermore,
prior to the Effective Time Eveready may, in the alternative, purchase run off
directors and officers liability insurance for a period of up to six years
from the Effective Time provided that the premiums will not exceed 250% of the
premiums currently charged to Eveready for directors and officers liability
insurance.
(b) Parent
agrees that it will directly honour all rights to indemnification or
exculpation now existing in favour of present and former officers and directors
of Eveready and its Subsidiaries which will survive the completion of the
Arrangement.
(c) The
provisions of this Section 7.8 are intended for the benefit of, and will
be enforceable by, each insured or indemnified Person described in Section 7.8(a),
his or her heirs and his or her legal representatives and, for such purpose,
the Parties hereby confirm that, in negotiating and agreeing with the
provisions of this Section 7.8, Eveready is acting as agent and trustee on
their behalf.
Section 7.9. Exchange De-Listing
Parent and Eveready will use their commercially reasonable efforts to
cause the Eveready Common Shares to be de-listed from the TSX promptly
following the Effective Time.
64
Section 7.10. Tax Matters
During the period from the date of this Agreement to the Effective
Time, Eveready and its Subsidiaries will:
(a) prepare
and timely file all Returns (which shall be correct and complete in all
respects) required to be filed by them on or before the Effective Time (Post-Signing Returns) in a manner consistent, in all
material respects, with past practice, except as otherwise required by
applicable Laws;
(b) pay,
withhold, collect and remit in a timely fashion all amounts of Taxes required
to be so paid, withheld, collected or remitted; and
(c) properly
reserve (and reflect such reserve in their books and records and financial
statements) for all Taxes payable by them for which no Post-Signing Return is
due prior to the Effective Time in a manner consistent with past practice.
Section 7.11. Resignations
Subject to confirmation that insurance coverage is maintained as
contemplated by Section 7.8, Eveready will obtain and deliver to Parent at
the Effective Time evidence reasonably satisfactory to Parent of the
resignation effective as of the Effective Time of those directors of Eveready
designated by Parent to Eveready in writing at least five calendar days prior
to the Effective Time.
ARTICLE VIII.
TERM, TERMINATION, AMENDMENT AND WAIVER
Section 8.1. Term
This Agreement will be effective from the date hereof until the earlier
of the Effective Time and the termination of this Agreement in accordance with
its terms.
Section 8.2. Termination
(a) Termination
by Mutual Consent.
This Agreement may be terminated at any time prior to the Effective Time
by mutual written consent of Parent and Eveready.
(b) Termination
by Either Parent or Eveready. This Agreement may be terminated by either
Parent or Eveready at any time prior to the Effective Time:
(i) if the Effective Time has not occurred on
or prior to the Outside Date, except that the right to terminate this Agreement
under this clause (i) will not be available to any Party to this Agreement
whose failure to fulfill any of its obligations has been a principal cause of,
or resulted in, the failure of the Effective Time to occur by such date; or
65
(ii) if the Required Vote is not obtained at
the Eveready Meeting (or any adjournment or postponement thereof); or
(iii) if any Law makes the consummation of the Arrangement
or the transactions contemplated by this Agreement illegal or otherwise
prohibited, and such Law has become final and non-appealable.
(c) Termination
By Parent.
This Agreement may be terminated by Parent at any time prior to the
Effective Time:
(i) if (A) the Board will have failed to
recommend this Agreement or the Arrangement, (B) the Board or any
committee thereof will have withdrawn or qualified, amended or modified in a
manner adverse to Parent or Purchaser its approval or recommendation of the
Arrangement, (C) Eveready or the Board or any committee thereof publicly
announces its intention to do, or that it has done, any of the foregoing, (D) the
Board fails to publicly reaffirm its recommendation of this Agreement and the
Arrangement within five Business Days after the announcement or commencement of
any Acquisition Proposal, or (E) any Person (other than Parent, Purchaser
or any of their Affiliates) will have become the beneficial owner of 33-1/3% or
more of the outstanding Eveready Common Shares (either on a primary or diluted
basis); or
(ii) if neither Parent nor Purchaser is in
material breach of its obligations under this Agreement and Eveready breaches
any of its representations, warranties, covenants or agreements contained in
this Agreement, which breach would give rise to the failure of a condition set
forth in Section 6.2(a) or Section 6.2(b), and which is not
cured within the earlier of (i) the Outside Date, and (ii) 15
Business Days following receipt by Eveready of written notice from Parent of
such breach, or which by its nature or timing cannot be cured within such period;
or
(iii) if the Eveready Meeting is cancelled, adjourned or
postponed except as agreed to by Parent in writing or as otherwise permitted in
this Agreement; or
(iv) if, notwithstanding Parents compliance
with its covenants under this Agreement (including, without limitation, its
covenant in Section 5.4(d)), Parent shall have been unable by the Outside
Date to complete the Financing as described in Section 5.4(d), but only so
long as Parent pays to Eveready the Parent Termination Fee in accordance with Section 7.4
simultaneously with such termination (any purported termination pursuant to
this Section 8.2(c)(iv) being void and of no force or effect unless
Parent will have made such payment).
(d) Termination
By Eveready.
This Agreement may be terminated by Eveready at any time prior to the
Effective Time:
(i) Parent shall fail to deliver the Letter
of Credit in accordance with Section 2.4(d) or, if the Arrangement
shall not be closed on the Original Closing Date, shall fail to comply with
Parents obligations to complete the Cat Tech Purchase or the Pembina Purchase
in accordance with Section 2.4(c); or
(ii) if the Board of Directors of Eveready
approves, and authorizes Eveready to enter into, an agreement providing for the
implementation of a Superior Proposal,
66
but only so long
as: (A) the Board of Directors of
Eveready has determined in good faith, after consultation with its financial
advisors and outside legal counsel, that such definitive agreement constitutes
a Superior Proposal; (B) Eveready pays to Purchaser the Eveready
Termination Fee in accordance with Section 7.4 simultaneously with such
termination (any purported termination pursuant to this Section 8.2(d)(ii) being
void and of no force or effect unless Eveready will have made such payment);
and (C) Eveready shall have no right to terminate this Agreement pursuant
to this Section 8.2(d)(ii) after the Required Vote for the
Arrangement has been obtained and Parent has completed the Cat Tech Purchase
and/or the Pembina Purchase to the extent then required by Section 2.4(c);
or
(iii) if Eveready is not in material breach of any of its
obligations under this Agreement and Parent breaches any of its
representations, warranties, covenants or agreements contained in this
Agreement, which breach would give rise to the failure of a condition set forth
in Section 6.3(a) or Section 6.3(b), and which is not cured
within the earlier of (A) the Outside Date, and (B) 15 Business Days
following receipt by Parent of written notice from Eveready of such breach, or
which by its nature or timing cannot be cured within such period.
(e) Effect
of Termination.
If this Agreement is terminated in accordance with the foregoing
provisions of this Section, this Agreement will forthwith become void and of no
further force or effect and no Party will have any further obligations
hereunder except as provided in Sections 2.4, 7.4, 7.5, 7.6, 9.2 and this Section 8.2(e) and
the Confidentiality Agreement and as otherwise expressly contemplated hereby.
Section 8.3. Amendment
This Agreement and the Plan of Arrangement may, at any time and from
time to time before or after the holding of the Eveready Meeting but not later
than the Effective Time, be amended by mutual written agreement of the Parties,
and any such amendment may, subject to the Interim Order and Final Order and
applicable Laws, without limitation:
(a) change
the time for performance of any of the obligations or acts of the Parties;
(b) waive
any inaccuracies or modify any representation or warranty contained herein or
in any document delivered pursuant hereto;
(c) waive
compliance with or modify any of the covenants herein contained and waive or
modify performance of any of the obligations of the Parties; and/or
(d) waive
compliance with or modify any conditions precedent herein contained.
Section 8.4. Waiver
Either Parent or Eveready may (i) extend the time for the
performance of any of the obligations or acts of the other Party, (ii) waive
compliance with any of the other Partys agreements or the fulfillment of any
conditions to its own obligations contained herein, or (iii)
67
waive inaccuracies in any of the other Partys representations or
warranties contained herein or in any document delivered by the other Party;
provided, however, that any such extension or waiver will be valid only if set
forth in an instrument in writing signed on behalf of such Party and, unless
otherwise provided in the written waiver, will be limited to the specific
breach or condition waived.
ARTICLE IX.
GENERAL PROVISIONS
Section 9.1. Notices
All notices and other communications given or made pursuant hereto will
be in writing and will be deemed to have been duly given or made as of the date
delivered or sent if delivered personally or sent by facsimile or e-mail
transmission, or as of the second following Business Day if sent by prepaid
overnight courier, to the Parties at the following addresses (or at such other
addresses as will be specified by either Parent or Eveready by notice to the
other given in accordance with these provisions):
if to Parent or Purchaser:
|
c/o Clean Harbors, Inc.
|
|
Attention:
|
Chairman and Chief Executive Officer
|
|
Facsimile:
|
781-792-5900
|
|
E-mail:
|
mckima@cleanharbors.com
|
|
|
|
|
with a copy (which will not constitute notice) to:
|
Davis, Malm & DAgostine, P.C.
|
|
One Boston Place
|
|
Boston, Massachusetts, U.S.A.
|
|
02108
|
|
Attention:
|
C. Michael Malm
|
|
Facsimile:
|
(617) 523-6215
|
|
E-mail:
|
cmalm@davismalm.com
|
|
|
|
|
and to
|
Gowling Lafleur Henderson LLP
|
|
Suite 1020 50 Queen Street North
|
|
Kitchener, ON N2H 6M2 Canada
|
|
Attention:
|
Bryce Kraeker
|
|
Facsimile:
|
(519) 571-5045
|
|
E-mail:
|
bryce.kraeker@gowlings.com
|
|
|
if to Eveready:
|
Eveready Inc.
|
|
Attention:
|
President and Chief Executive Officer
|
|
Facsimile:
|
780-451-2142
|
|
E-mail:
|
rod.marlin@evereadyinc.com
|
68
with a copy to (which will not constitute notice):
|
Shea Nerland Calnan LLP
|
|
2800, 715-5th Avenue SW
|
|
Calgary, Alberta T2P 2X6
|
|
Attention:
|
Joe Brennan
|
|
Facsimile:
|
(403) 299-9601
|
|
E-mail:
|
jbrennan@snclaw.com
|
Section 9.2. Governing Law; Waiver of
Jury Trial
This Agreement will be governed, including as to validity,
interpretation and effect, by the laws of the Province of Alberta and the laws
of Canada applicable therein, and will be construed and treated in all respects
as an Alberta contract. Each of the
Parties hereby irrevocably attorns to the non-exclusive jurisdiction of the
Courts of the Province of Alberta in respect of all matters arising under and
in relation to this Agreement and the Arrangement. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES
ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE PARTIES
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS
AGREEMENT.
Section 9.3. Injunctive Relief
The Parties agree that irreparable harm would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached for which money damages would
not be an adequate remedy at law. It is accordingly agreed that the Parties
will be entitled to an injunction or injunctions and other equitable relief to
prevent breaches of this Agreement, with any requirement for the securing or
posting of any bond in connection with obtaining any such injunctive or other
equitable relief hereby being waived.
Section 9.4. Time of Essence
Time will be of the essence in this Agreement.
Section 9.5. Entire Agreement, Binding
Effect and Assignment
(a) With
the exception of the obligation to issue Parent Common Shares to the Eveready
Shareholders in exchange for their Eveready Common Shares, as contemplated in
the Plan of Arrangement, and provided it is acceptable to the Court without the
imposition of commercially unreasonable conditions or any other conditions that
would impede, prevent or materially delay the completion of the transactions
contemplated hereby by the Outside Date,
Parent and Purchaser may assign all or any part of their respective
rights under this Agreement to, and their respective obligations under this
Agreement may be assumed by, a Subsidiary or Affiliate of Parent or Purchaser,
provided that if such assignment and/or assumption takes place, Parent and
Purchaser will continue to be liable jointly and severally with such Subsidiary
or Affiliate, as the case may be, for all of their respective obligations
hereunder. Without limitation of the
foregoing, Parent shall be entitled, subject to the terms and conditions of
this Section
69
9.5(a), to assign prior to the Effective Time, should Parent
elect to do so and by providing prompt written notice to the other Parties, to
either Parent or any wholly-owned direct or indirect Subsidiary of Parent the
rights and obligations of Purchaser, as the original purchaser under this
Agreement and to substitute either itself or such other wholly-owned Subsidiary
as the Purchaser under the Plan of Arrangement. This Agreement will be binding on and will
enure to the benefit of the Parties and their respective successors and
permitted assigns.
(b) This
Agreement (including the schedules hereto), and the Confidentiality Agreement
constitute the entire agreement, and supersede all other prior agreements and
understandings, both written and oral, among the Parties with respect to the
subject matter hereof and thereof.
Except as expressly permitted by the terms hereof, neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by any of the Parties without the prior written consent of all of the
other Parties.
Section 9.6. Severability
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule or Law or public policy, all other
conditions and provisions of this Agreement will nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
Parties will negotiate in good faith to modify this Agreement so as to effect
the original intent of the Parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to
the fullest extent possible.
Section 9.7. No Third Party
Beneficiaries
Except as provided in Section 7.8, and except for the rights of
the holders of Eveready Common Shares, Eveready Debentures, Eveready Options
and Eveready Deferred Shares to receive the consideration for their Eveready
Common Shares, Eveready Debentures, Eveready Options and Eveready Deferred
Shares following the Effective Time pursuant to the Arrangement, which rights
are hereby acknowledged and agreed by the Parties, this Agreement is not
intended to confer any rights or remedies upon any Person other than the
Parties to this Agreement.
Section 9.8. Rules of Construction
The Parties to this Agreement have been represented by counsel during
the negotiation and execution of this Agreement and waive the application of
any Laws or rule of construction providing that ambiguities in any
agreement or other document will be construed against the Party drafting such
agreement or other document.
Section 9.9. Counterparts, Execution
This Agreement may be executed in two or more counterparts, each of
which will be deemed to be an original but all of which together will
constitute one and the same instrument.
The Parties will be entitled to rely upon delivery of an executed
facsimile or similar executed
70
electronic copy of this Agreement, and such facsimile or similar
executed electronic copy will be legally effective to create a valid and
binding agreement among the Parties.
[Signature Page Follows]
71
IN WITNESS WHEREOF, Parent, Purchaser and Eveready have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
|
CLEAN
HARBORS, INC.
|
|
|
|
|
|
By:
|
/s/ James M.
Rutledge
|
|
|
James M.
Rutledge, Executive Vice President
|
|
|
|
CLEAN
HARBORS CANADA, INC.
|
|
|
|
|
|
By:
|
/s/ James M.
Rutledge
|
|
|
James M.
Rutledge, Executive Vice President
|
|
|
|
EVEREADY
INC.
|
|
|
|
|
|
By:
|
/s/ Jason
Vandenberg
|
|
|
Jason
Vandenberg, Chief Financial Officer
|
72
Schedule A
To the Acquisition Agreement
Plan of Arrangement
PLAN OF ARRANGEMENT
UNDER SECTION 193
OF THE
BUSINESS CORPORATIONS ACT (ALBERTA)
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Definitions. In
this plan of arrangement, unless there is something in the subject matter or
context inconsistent therewith, the following capitalized words and terms shall
have the following meanings:
(a) ABCA means the Business Corporations Act (Alberta), R.S.A. 2000, c. B-9, together with any amendments
thereto and all of the regulations thereunder;
(b) Acquisition Agreement means the agreement dated April 29,
2009 among Parent, Purchaser and Eveready, as amended in accordance with its
terms prior to the Effective Date, providing for, among other things, the
Arrangement;
(c) Arrangement means the arrangement pursuant
to Section 193 of the ABCA set forth in this plan of arrangement as
supplemented, modified or amended in accordance with the Acquisition Agreement,
the terms of this plan of arrangement or made at the direction of the Court in
the Final Order;
(d) Articles of Arrangement means the articles
of arrangement in respect of the Arrangement required under the ABCA to be
filed with the Registrar after the Final Order is made to give effect to the
Arrangement;
(e) Business Day means any day, other than a Saturday, a Sunday
or a statutory holiday in Calgary, Alberta, Canada or Boston, Massachusetts,
United States;
(f) Cash Consideration means the cash
component of the consideration payable to a holder of Eveready Common Shares
upon transfer of such Eveready Common Shares to Purchaser under the Arrangement
as set out in section 2.4(b);
(g) Certificate means the certificate or other confirmation of
filing to be issued by the Registrar pursuant to subsection 193(11) of the ABCA
giving effect to the Arrangement;
(h) Consideration Value means the sum of (a) $3.30 and (b) the
product of 0.1304 and the volume weighted average trading price (translated
into Canadian dollars based on the noon exchange rate between Canadian dollars
and U.S. dollars as posted on the Bank of Canada website on the date such
average trading price is calculated) of Parent Common Shares on the New York
Stock Exchange for the ten trading days ending on the Business Day prior to the
Effective Date;
(i) Court means the Court of Queens Bench of
Alberta;
(j) Deferred Share Payment Loan means the non-interest bearing
loan made by Purchaser to Eveready in the amount necessary to fund Evereadys payment
obligation in connection with the redemption of the Deferred Shares in section 2.4(g);
1
(k) Depositary means Computershare Trust
Company of Canada or such other Person that may be appointed by Eveready for
the purpose of receiving deposits of certificates formerly representing Eveready
Common Shares and Eveready Debentures;
(l) Eveready means Eveready Inc., a corporation incorporated
under the laws of Alberta;
(m) Eveready Common Shares means common shares in the capital
of Eveready;
(n) Eveready Debentures
means the 7% convertible unsecured subordinated debentures of Eveready in the
principal amount of $50,000,000, originally issued by Predecessor and assumed
by Eveready pursuant to the Trust Indenture;
(o) Eveready Deferred Annual Bonus Share Plan means the
deferred annual bonus share plan of Eveready with an effective date of December 31,
2008;
(p) Eveready Deferred Shares means
the deferred shares granted under the Eveready Deferred Annual Bonus Share
Plan;
(q) Eveready Meeting
means the special meeting of Eveready shareholders, including any adjournment
thereof, that is to be convened as provided by the Interim Order to consider
and, if deemed advisable, approve, among other things, the Arrangement;
(r) Eveready Options means the options of Eveready issued
pursuant to the Eveready Share Option Plan;
(s) Eveready Share Option
Plan means the stock option plan of Eveready dated December 31,
2008;
(t) Eveready Shareholder Rights Plan means the shareholder
rights plan of Eveready dated as of December 31, 2008;
(u) Effective Date means the effective date of
the Arrangement, being the date on which the Articles of Arrangement are filed
under the ABCA and the Certificate is issued, thereby giving effect to the
Arrangement;
(v) Effective Time means · a.m.
(Calgary time) on the Effective Date;
(w) Exercise Price means the price at which an Eveready Option
may be exercised;
(x) Final Order means the final order of the
Court approving the Arrangement pursuant to subsection 193(9) of the
ABCA, as such order may be affirmed, amended or modified by any court of
competent jurisdiction;
(y) Interim Order means the order of the Court
pursuant to subsection 193(4) of the ABCA ordering the Eveready
Meeting and setting out certain declarations and directions in respect of the
Arrangement and the holding of the Eveready Meeting, as such order may be
affirmed, amended or modified by any court of competent jurisdiction;
(z) Letter of Transmittal means the letter of transmittal sent
to Eveready shareholders and holders of Eveready Debentures for use in
connection with the Arrangement;
2
(aa) Lien means any hypothec, mortgage, lien, charge, security
interest, pledge, claim, right of first offer or refusal, voting agreement, encumbrance
and adverse right or adverse claim;
(bb) Option Payment Loan means the non-interest bearing loan, if
any, made by Purchaser to Eveready in the amount necessary to fund Evereadys payment
obligation, if any, in connection with the surrender of certain Eveready
Options in section 2.4(d);
(cc) Parent means Clean Harbors, Inc., a corporation
incorporated under the laws of Massachusetts, United States;
(dd) Parent Common Shares means common
shares in the capital stock of Parent;
(ee) Person includes an individual, limited or general
partnership, limited liability company, limited liability partnership, trust,
joint venture, association, body corporate, unincorporated organization,
trustee, executor, administrator, legal representative, governmental entity or
any other entity, whether or not having legal status;
(ff) Predecessor means Eveready Income Fund, a
limited purpose trust established under the laws of Alberta, which is on the
date of this plan of arrangement a wholly-owned Subsidiary of Eveready;
(gg) Purchaser means either (i) Clean Harbors Canada, Inc.,
a wholly-owned indirect subsidiary of Parent incorporated under the laws of New
Brunswick, or (ii) Parent or any other wholly-owned direct or indirect
Subsidiary of Parent in the event that prior to the Effective Time Parent shall
assign either to Parent or such other wholly-owned Subsidiary of Parent in
accordance with the Acquisition Agreement the rights and obligations of Clean
Harbors Canada, Inc. as the original Purchaser under the Acquisition
Agreement;
(hh) Put Right means the right of the holders of Eveready
Debentures to require Eveready to repurchase Eveready Debentures at a price
equal to 101% of the principal amount of Eveready Debentures in the event of a
change of control of Eveready, as provided in the Eveready Debentures and the Trust
Indenture;
(ii) Registrar means the Registrar of
Corporations appointed pursuant to section 263 of the ABCA;
(jj) Repurchase Loan means the non-interest bearing loan made by
Purchaser to Eveready in the amount necessary to fund Evereadys payment
obligation in connection with the repurchase of Eveready Debentures in section 2.4(i);
(kk) Subsidiary means, with respect to Eveready or Parent, as
the case may be, any entity, whether incorporated or unincorporated, of which
at least a majority of the securities or ownership interests having by their
terms ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions directly or indirectly owned or
controlled by such party or by one or more of its respective Subsidiaries or by
such party and any one or more of its respective Subsidiaries;
(ll) Tax Act means the Income Tax Act, R.S.C. 1985, C.1. (5th Supp.), together with any amendments thereto
and all of the regulations thereunder;
3
(mm) Trustee means Computershare Trust Company of Canada or such
other successor trustee duly appointed under the Trust Indenture; and
(nn) Trust Indenture means the trust indenture entered into
between Predecessor and
the Trustee dated June 15, 2006 in respect of the Eveready Debentures, as
supplemented by the supplemental indenture entered into between Predecessor, Eveready
and the Trustee dated December 31, 2008.
1.2 Interpretation Not
Affected by Headings. The division of this plan
of arrangement into articles, sections, subsections, paragraphs and
subparagraphs and the insertion of headings are for convenience of reference
only and shall not affect the construction or interpretation of this plan of arrangement.
Unless otherwise specifically indicated, the terms this plan of arrangement, the
Arrangement, hereof, herein, hereunder and similar expressions refer to
this plan of arrangement and the Arrangement as a whole and not to any
particular article, section, subsection, paragraph or subparagraph and include
any agreement or instrument supplementary or ancillary hereto.
1.3 Number and Gender.
Unless the context otherwise requires, words importing the singular number only
shall include the plural and vice versa, words importing the use of either
gender shall include both genders and neuter.
1.4 Meaning.
Words and phrases used herein and defined in the ABCA shall have the same
meaning herein as in the ABCA, unless the context otherwise requires.
1.5 Deemed Currency.
Unless otherwise stated, all references in this plan of arrangement to sums of
money are expressed in lawful money of Canada.
ARTICLE 2
THE ARRANGEMENT
2.1 Binding Effect. At
the Effective Time, the Arrangement will become effective and binding on: (a) Eveready;
(b) Parent; (c) Purchaser; (d) all holders and all beneficial
owners of Eveready Common Shares; (e) all holders and all beneficial
owners of Eveready Options; (f) all holders and all beneficial owners of Eveready
Deferred Shares; and (g) all holders and all beneficial owners of Eveready
Debentures.
2.2 Acquisition Agreement. This plan of arrangement is made pursuant to,
and is subject to the provisions of, the Acquisition Agreement.
2.3 Articles of Arrangement. The Articles of Arrangement shall be filed,
and the Certificate shall be issued, with respect to the Arrangement in its
entirety. The Certificate shall be
conclusive evidence that the Arrangement has become effective in accordance
with its terms in the sequence provided herein.
2.4 The Arrangement. At
the Effective Time, the following shall occur and shall be deemed to occur in
the following order and without any further act or formality:
Eveready Shareholder Rights Plan
(a) The Eveready
Shareholder Rights Plan shall be terminated and all rights issued thereunder
shall be extinguished without the payment of any consideration therefor.
4
Eveready Common Shares
(b) Each
outstanding Eveready Common Share held by each Eveready shareholder, other than
Parent, Eveready,
any Subsidiary of Parent or any Subsidiary of Eveready (which Eveready Common
Shares shall not be transferred under the Arrangement and shall be cancelled at
the Effective Time and cease to exist), will be transferred by the holder
thereof to, and acquired by, Purchaser without any act or formality on the part
of the holders of such Eveready Common Shares or Purchaser, free and clear of
all Liens in exchange, with respect to each Eveready Common Share held by such
holder, for (i) 0.1304 Parent Common Share; and (ii) a
cash payment in the amount of $3.30, payable in accordance with Article 3,
and the name of each such holder of Eveready Common Shares will be removed from
the register of holders of Eveready Common Shares and added to the register of
holders of Parent Common Shares, as applicable.
(c) With
respect to each Eveready Common Share transferred and acquired in accordance
with section 2.4(b):
(i) The holder thereof shall be
deemed to have executed and delivered all consents, releases, assignments and
waivers, statutory or otherwise required to transfer such Eveready Common
Shares in accordance with section 2.4(b) and such holder shall cease to
be the holder of such transferred Eveready Common Shares; and
(ii) Purchaser shall be deemed to
be the beneficial owner of all of Eveready Common Shares transferred and
acquired in accordance with section 2.4(b), free and clear of all Liens,
and Purchasers name shall be entered on the register of holders of Eveready Common Shares as the legal
holder thereof.
Eveready Options
(d) Each
Eveready Option, if any, that has not been exercised prior to the Effective
Time and that has an Exercise Price that is less than the Consideration Value
shall be surrendered to Eveready for cancellation in exchange for a cash
payment from Eveready in an amount equal to the difference between the
Consideration Value and the Exercise Price and the holder of such Eveready
Option shall thereafter only have the right to receive the consideration, if
any, to which he or she is entitled pursuant to this section 2.4(d) and
all such Eveready Options shall be terminated and Eveready shall have no
liabilities or obligations with respect to such Eveready Options except
pursuant to this section 2.4(d).
(e) Each
Eveready Option, if any, that has not been exercised prior to the Effective
Time and that has an Exercise Price that is equal to or greater than the
Consideration Value shall be cancelled and terminated and shall cease to
represent any right or claim whatsoever.
(f) The Eveready
Share Option Plan shall be terminated.
Eveready Deferred Shares
(g) The Eveready
Deferred Shares shall be redeemed for cancellation and each holder thereof
shall receive, for each Eveready Deferred Share recorded in such holders
deferred share account under the Eveready Deferred Annual Share Bonus Plan, a
cash payment equal to the volume weighted average price of all Eveready Common Shares
traded on the Toronto Stock Exchange for the ten trading days immediately
preceding the Effective Date.
5
(h) The Eveready
Deferred Annual Share Bonus Plan shall be terminated.
Eveready Debentures
(i) Each
of the holders of Eveready Debentures will be deemed to have exercised the Put
Right and Eveready Debentures shall be transferred by the holder thereof to,
and acquired by, Eveready, without any act or formality on the part of the
holders of such Eveready Debentures or Eveready, free and clear of all Liens
for $1,010 for each $1,000 aggregate face amount of Eveready Debentures held,
plus accrued interest to but excluding the Effective Date.
(j) With
respect to each Eveready Debenture transferred and acquired in accordance with
section 2.4(i):
(i)
|
The
holder thereof shall be deemed to have executed and delivered all consents,
releases, assignments and waivers, statutory or otherwise required to
transfer such Eveready Debentures in accordance with section 2.4(i) and such holder shall cease
to be the holder of such transferred Eveready Debentures;
|
|
|
(ii)
|
The
names of the holders who have transferred each of such holders Eveready
Debentures shall be removed as the holders from the register of Eveready
Debentures maintained by or on behalf of Eveready; and
|
|
|
(iii)
|
The
Eveready Debentures shall be cancelled and terminated.
|
Other Securities
(k) Any
and all others securities of Eveready that may be exercised for, or converted
into, Eveready Common Shares shall be fully and finally cancelled and
terminated and the holders thereof shall have no further rights or entitlements
thereunder.
ARTICLE 3
CASH, CERTIFICATES AND FRACTIONAL SHARES
3.1 Eveready Common Shares and
Eveready Debentures.
(a) After the Effective Time, each
certificate formerly representing Eveready Common Shares shall represent only
the right to receive the consideration the holder of Eveready Common Shares
represented by the certificate is entitled to in accordance with the terms of
the Arrangement (less any amounts withheld pursuant to section 3.8) upon such
holder depositing with the Depositary the certificate and such other documents
and instruments as the Depositary may reasonably require.
(b) After the Effective Time, each
certificate formerly representing Eveready Debentures shall represent only the
right to receive the consideration the holder of Eveready Debentures
represented by the certificate is entitled to in accordance with the terms of
the Arrangement (less any amounts withheld pursuant to section 3.8) upon such
holder depositing with the Trustee the certificate and such other documents and
instruments as the Trustee may reasonably require.
6
3.2 Payment of Consideration.
(a) At the Effective Time, Parent
and Purchaser shall cause to be deposited, on behalf of Purchaser, with the
Depositary and to be held in escrow for the benefit of Eveready shareholders,
holders of Eveready Options, holders of Eveready Deferred Shares and holders of
Eveready Debentures (i) cash in the aggregate amount equal to the payments
required by section 2.4(b), section 2.4(d),
section 2.4(g) and section 2.4(i) for the benefit of Eveready
shareholders, holders of Eveready Options, holders of Eveready Deferred Shares
and holders of Eveready Debentures; and (ii) the Parent Common Shares for
the benefit of Eveready shareholders, registered in such name or names as
instructed by the Depositary. The cash
deposited in respect of the payments required by section 2.4(d),
section 2.4(g) and section 2.4(i) shall constitute the Option
Payment Loan, the Deferred Share Payment Loan and the Repurchase Loan,
respectively. All cash deposited with
the Depositary shall be held in an interest-bearing account and any interest
earned on such funds shall be for the account of Purchaser.
(b) Purchaser shall direct the
Depositary to transfer and cause to be deposited with the Trustee the cash held
by the Depositary in escrow for the benefit of the holders of Eveready
Debentures, in the aggregate amount equal to the payments required by section 2.4(i). All cash deposited with the Trustee shall be
held in an interest-bearing account and any interest earned on such funds shall
be for the account of Purchaser.
(c) Upon surrender to the Depositary
for transfer to Purchaser of a certificate, which immediately prior to the
Effective Time represented Eveready Common Shares in respect of which the
holder is entitled to receive Parent Common Shares and Cash Consideration under
the Arrangement, together with a duly completed Letter of Transmittal and such
other documents and instruments as would have been required to effect the
transfer of Eveready Common Shares formerly represented by such certificate
under the ABCA and the by-laws of Eveready, and such additional documents and
instruments as the Depositary may reasonably require, the holder of such
surrendered certificate shall be entitled to receive in exchange therefor, and
the Depositary shall deliver to such holder: (i) the amount of cash such
holder is entitled to under the Arrangement; and (ii) a certificate
representing that number of Parent Common Shares which such holder has the
right to receive (less any amounts withheld pursuant to section 3.8), and any
certificates so surrendered shall be transferred to Purchaser. No interest
shall be paid to holders of certificates that formerly represented Eveready
Common Shares in respect of the Cash Consideration.
(d) Upon surrender to the Trustee
for cancellation of a certificate, which immediately prior to the Effective
Time represented Eveready Debentures in respect of which the holder is entitled
to receive a cash payment pursuant to section 2.4(i), together with a duly
completed Letter of Transmittal and such other documents and instruments as would
have been required to effect the transfer of Eveready Debentures formerly
represented by such certificate under the terms of the Trust Indenture, and
such additional documents and instruments as the Trustee may reasonably
require, the holder of such surrendered certificate shall be entitled to
receive in exchange therefor, and the Depositary shall deliver to such holder
the amount of cash such holder is entitled to under section 2.4(i) (less
any amounts withheld pursuant to section 3.8), and any certificates so
surrendered shall forthwith be cancelled. No interest shall be paid to holders
of certificates that formerly represented Eveready Debentures in respect of any
cash payable to such holders under section 2.4(i).
7
(e) Upon the written instruction
of Eveready, the Depositary shall deliver to each holder of Eveready Options,
if any, with an Exercise Price less than the Consideration Value, the amount of
cash such holder, if any, is entitled to under section 2.4(d) (less any
amounts withheld pursuant to section 3.8).
No interest shall be paid to holders of Eveready Options in respect of
any cash payable to such holders under section 2.4(d).
(f) Upon the written instruction
of Eveready, the Depositary shall deliver to each holder of Eveready Deferred
Shares, the amount of cash such holder is entitled to under section 2.4(g) (less
any amounts withheld pursuant to section 3.8).
No interest shall be paid to holders of Eveready Deferred Shares in
respect of any cash payable to such holders under section 2.4(g).
3.3 Lost Certificate. If
any certificate, which immediately prior to the Effective Time represented Eveready
Common Shares or Eveready Debentures, has been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the holder of such Eveready Common
Shares or Eveready Debentures claiming such certificate to be lost, stolen or
destroyed, the Depositary, in respect of Eveready Common Shares, and the
Trustee, in respect of Eveready Debentures, will issue in exchange for such
lost, stolen or destroyed certificate the consideration deliverable to such
holder in respect of such lost, stolen or destroyed certificate under section 2.4(b) or
section 2.4(i). When authorizing such
payment in exchange for any lost, stolen or destroyed certificate, the Person
to whom the consideration is to be delivered shall, as a condition precedent to
the delivery of such consideration, give a bond satisfactory to Purchaser and
the Depositary or Trustee, as the case may be, acting reasonably, in such sum
as Purchaser may direct, or otherwise indemnify Purchaser, Eveready, and the
Depositary or the Trustee, as the case may be, in a manner satisfactory to
Purchaser, Eveready, and the Depositary or the Trustee, acting reasonably,
against any claim that may be made against Purchaser, Eveready and the
Depositary or the Trustee, as the case may be, with respect to the certificate
alleged to have been lost, stolen or destroyed.
3.4 Dividends and Other
Payments. After the Effective Time, Eveready
shareholders and holders of Eveready Debentures shall not be entitled to any
interest, dividend, premium or other payment on or with respect to Eveready
Common Shares or Eveready Debentures other than the consideration which they are
entitled to receive pursuant to the terms of the Arrangement.
3.5 No Fractional Shares. No
fractional Parent Common Shares will be issued.
The aggregate number of Parent Common Shares issued to an Eveready
shareholder shall be rounded up to the next greater whole number of Parent
Common Shares if the fractional entitlement is equal to or greater than 0.5,
and shall be rounded down to the next lesser whole number of Parent Common
Shares if the fractional entitlement is less than 0.5.
3.6 Distribution with Respect
to Undelivered Certificates. All dividends paid or
distributions made in respect of Parent Common Shares to which a former Eveready
shareholder is entitled in accordance with the terms of the Arrangement, but
for which a certificate representing the Parent Common Shares has not been
delivered to such Eveready shareholder, shall be paid or delivered to the
Depositary to be held in trust for such Eveready shareholder for delivery to Eveready
shareholder (less any amounts withheld pursuant to section 3.8).
3.7 Extinguishment of Rights. Any
certificate formerly representing Eveready Common Shares or Eveready Debentures
that is not deposited with all other documents required hereunder on or before
the sixth anniversary of the Effective Date
shall cease to represent a right or claim of any kind or nature and the right
of the holder of Eveready Common Shares or Eveready Debentures represented by
any such certificate to receive consideration pursuant to this Arrangement
shall be deemed to be surrendered to Parent together with all dividends,
distributions and any interest thereon held for such holder.
8
3.8 Withholding Rights. Eveready,
Parent, Purchaser, Depositary and Trustee shall be entitled to deduct and
withhold from any dividend, price or consideration otherwise payable to any
holder of Eveready Common Shares, Eveready Debentures, Eveready Options or Eveready
Deferred Shares such amounts as Eveready, Parent, Purchaser, the Depositary or
the Trustee is required to deduct and withhold with respect to such payment
under the Tax Act, or any provision of federal, provincial, territorial, state,
local or foreign tax law, in each case, as amended. To the extent that amounts
are so withheld, such withheld amounts shall be treated for all purposes hereof
as having been paid to the holder of the securities in respect of which such
deduction and withholding was made, provided that such withheld amounts are
actually remitted to the appropriate taxing authority. Eveready, Parent,
Purchaser, the Depositary and the Trustee are hereby authorized to sell or
otherwise dispose of such portion of the consideration as is necessary to
provide sufficient funds to Eveready, Parent, Purchaser, the Depositary or the
Trustee, as the case may be, to enable it to comply with such deduction or
withholding requirement and Eveready, Parent, Purchaser, the Depositary or the
Trustee shall notify the holder thereof and remit to such holder any unapplied
balance of the net proceeds of such sale.
ARTICLE 4
AMENDMENTS
4.1 Amendments:
(a) Eveready,
Parent and Purchaser may, at any time and from time to time before the
Effective Date, vary, amend, modify or supplement this plan of arrangement,
provided that each such amendment, modification and/or supplement must be (i) set
out in writing; (ii) approved by each of Eveready, Parent and Purchaser; (iii) filed
with the Court and, if made following the Eveready Meeting, approved by the
Court, and (iv) communicated to Eveready shareholders, if and as required
by the Court.
(b) Any
amendment, modification or supplement to this Arrangement may, with the consent
of other Parties to the Acquisition Agreement, be proposed by Eveready, Parent
or Purchaser at any time prior to or at the Eveready Meeting with or without
any other prior notice or communication, and if so proposed and accepted by the
Persons voting at the Eveready Meeting (other than as may be required under the
Interim Order), shall become part of this plan of arrangement for all purposes.
(c) Notwithstanding
any other provision of this plan of arrangement, any amendment, modification or
supplement of this plan of arrangement that is approved by the Court following
the Eveready Meeting shall be effective only if it is consented to by each of Eveready,
Parent and Purchaser.
(d) Any amendment, modification or
supplement to this plan of arrangement may be made following the Effective Date
unilaterally by Purchaser, provided that it concerns a matter which, in the
reasonable opinion of Purchaser and its counsel, is of an administrative nature
required to better give effect to the implementation of the Arrangement and is
not adverse to the economic interest of any former holder of Eveready Common
Shares, Eveready Options, Eveready Deferred Shares or Eveready Debentures.
ARTICLE 5
FURTHER ASSURANCES
5.1 Further Assurances.
Notwithstanding that the transactions and events set out herein shall
occur and shall be deemed to occur in the order set out in this plan of
arrangement without any further act or
9
formality, each of the Parent, Purchaser and Eveready
shall make, do and execute, or cause to be made, done and executed, all such
further acts, deeds, agreements, transfers, assurances, instruments or
documents as may reasonably be required by either of them in order to further,
to document or to evidence any of the transactions or events set out herein.
10
Schedule B
To the Acquisition Agreement
Special Resolution of the Eveready Shareholders
BE IT RESOLVED THAT:
1. The arrangement (the Arrangement) under
Section 193 of the Business Corporations Act (Alberta) (the ABCA)
involving Eveready Inc. (Eveready) and the holders of Eveready common shares,
options, deferred shares and $50 million principal amount of 7% convertible
debentures (the Securityholders), all as more particularly described and in
the form set forth in Appendix · to the management information circular
(the Circular) of Eveready accompanying the notice of this meeting (as the
Arrangement may be modified or amended), is hereby authorized, approved and
adopted.
2. The plan of arrangement, as it may be or
has been amended (the Plan of Arrangement), involving Eveready, the full text
of which is set out in Schedule A to the Acquisition Agreement dated as of April 29,
2009, among Clean Harbors, Inc. (Parent), Clean Harbors Canada, Inc.
(Purchaser) and Eveready (the Acquisition Agreement), is hereby authorized,
approved and adopted.
3. The Acquisition Agreement, the actions of
the directors of Eveready in approving the Arrangement and the actions of the
officers of Eveready in executing and delivering the Acquisition Agreement and any
amendments thereto are hereby ratified and approved.
4. Notwithstanding that this resolution has
been passed (and the Arrangement adopted) by the shareholders of Eveready or
that the Arrangement has been approved by the Court of Queens Bench of Alberta,
the directors of Eveready, without further notice or approval of the
Securityholders, are hereby authorized and empowered (i) to amend the
Acquisition Agreement, or the Plan Arrangement to the extent permitted by the
Acquisition Agreement, or the Plan of Arrangement, (ii) subject to the
terms of the Acquisition Agreement, not to proceed with the Arrangement and (iii) to
revoke this resolution at any time prior to the Plan of Arrangement becoming
effective pursuant to the provisions of the ABCA.
5. Any officer or director of Eveready is
hereby authorized and directed for and on behalf of Eveready to execute and
deliver articles of arrangement and such other documents as are necessary or
desirable under the ABCA in accordance with the Acquisition Agreement.
6. Any officer or director of Eveready is
hereby authorized and directed for and on behalf of Eveready to execute or
cause to be executed and to deliver or cause to be delivered, all such other
documents and instruments and to perform or cause to be performed all such
other acts and things as in such persons opinion may be necessary or desirable
to give full effect to the foregoing resolution, including the transactions
contemplated by the Plan of Arrangement and
the matters authorized thereby, such determination to be conclusively
evidenced by the execution and delivery of such document, agreement or
instrument or the doing of any such act or thing.
Schedule C
To the Acquisition Agreement
Regulatory Approvals
Part A
Canada
· Expiration of the applicable waiting
period related to merger pre-notification under Part IX of the Competition
Act, or earlier termination or waiver thereof in accordance with the
Competition Act, and the Commissioner of Competition will have advised Purchaser
in writing (which advice will not have been rescinded or amended) that there
are not sufficient grounds to initiate proceedings before the Competition
Tribunal under the merger provisions of the Competition Act in respect of the
Arrangement; or the Commissioner will have issued an advance ruling certificate
in respect of the Arrangement pursuant to Section 102 of the Competition
Act.
· The Minister for the purposes of the
Investment Canada Act (ICA) (i) is satisfied or is deemed to be
satisfied that the investment is likely to be of net benefit to Canada pursuant
to s. 16(1) of the ICA, and (ii) is satisfied that the investment
would not be injurious to national security pursuant to s. 25.3(6) of the
ICA.
· Approvals of the Canadian Securities
Administrators and The Toronto Stock Exchange as required.
· All Canadian federal or provincial
government or regulatory approvals, waivers, permits, consents, reviews,
orders, decisions and exemptions that, in Parents reasonable judgment, are
necessary or desirable to complete the Arrangement shall have been obtained or
concluded, or in the case of waiting or suspensory periods, expired or been
terminated, each on terms and conditions satisfactory to Parent, acting
reasonably.
· An Order in
Council exclusion from the Foreign Ownership of Lands Regulation, ALTA. Reg.
160/1979.
Part B
United States
· All United States federal or state
government or regulatory approvals, waivers, permits, consents, reviews,
orders, decisions and exemptions that relate to operations in the United States
on the date of this Agreement of certain of the Eveready Subsidiaries and, in
Parents reasonable judgment, are necessary or desirable to complete the
Arrangement, shall have been obtained or concluded, or in the case of waiting
or suspensory periods, expired or been terminated, each on terms and conditions
satisfactory to Parent, acting reasonably.
Exhibit
2.7
VOTING AND LOCK-UP AGREEMENT
THIS
AGREEMENT is made on April 29, 2009.
BETWEEN:
The executive officers and directors listed on Schedule
A (each, an Eveready Management
Shareholder and collectively, the Eveready
Management Shareholders) of Eveready Inc., a corporation
incorporated under the laws of Alberta (Eveready)
- and -
Clean Harbors, Inc., a
corporation incorporated under the laws of Massachusetts (Parent)
- and -
Clean Harbors Canada, Inc., a
corporation incorporated under the laws of New Brunswick (Purchaser).
RECITALS:
A. Parent, Purchaser and Eveready intend to
enter into a business combination transaction by way of an arrangement (the Arrangement) pursuant to an acquisition agreement dated as
of April 29, 2009 (the Acquisition Agreement).
B. As an inducement to Parents and Purchasers
willingness to enter into the Acquisition Agreement, each Eveready Management
Shareholder undertakes to take certain actions and do certain things to support
the Arrangement as set out in this voting and lock-up agreement (this Agreement).
C. Each Eveready Management Shareholder is the
registered and/or direct or indirect beneficial owner of, or has control or
direction over, the number of issued and outstanding common shares of Eveready (Eveready Common Shares) set forth on Schedule
A.
D. Each Eveready Management Shareholder is the
holder of the number of options of Eveready (Eveready
Options) set forth on Schedule A
to purchase Eveready Common Shares granted under the Eveready
Share Option Plan.
E. The terms of the Arrangement are set out in
the Acquisition Agreement (including the proposed Plan of Arrangement), a copy
of which is attached as Schedule B.
Unless the context indicates otherwise, capitalized terms used herein and not
otherwise defined have the meanings set forth in the Acquisition Agreement.
THEREFORE, in
consideration of the covenants herein contained and such other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, each Eveready Management Shareholder, Parent and Purchaser agree
as follows.
ARTICLE 1
REPRESENTATIONS AND WARRANTIES
1.1 Eveready Management
Shareholder Representations
Each Eveready
Management Shareholder represents and warrants to Parent and Purchaser in
respect of such Eveready Management Shareholder only and not any other Eveready
Management Shareholder (and acknowledges that each of Parent and Purchaser is
independently relying upon such representations and warranties in entering into
the Acquisition Agreement) as follows:
(a) The Eveready Common Shares and Eveready
Options set forth opposite such Eveready Management Shareholders name on Schedule A to this Agreement
represent all securities or rights to acquire securities of Eveready held of record
or beneficially owned by such Eveready Management Shareholder (other than Eveready
Deferred Shares, rights to unvested shares pursuant to Predecessors employee
participation plan and Eveready Debentures), or over which such Eveready
Management Shareholder has any voting power or dispositive power or other
control or direction. Except as
described in the notes to Schedule A,
such Eveready Management Shareholder is the sole legal and sole beneficial
owner of, directly or indirectly, has sole voting power over, sole power of
disposition of, sole control and sole direction over such Eveready Common
Shares and Eveready Options, and sole power to agree to all of the matters set
forth in this Agreement. Except as described in the notes to Schedule A, such Eveready
Management Shareholder (or the respective affiliate of such Eveready Management
Shareholder described in the notes to Schedule A) has good and marketable title to such Eveready Common
Shares and Eveready Options, free and clear of any and all liens, pledges,
mortgages, charges, restrictions, security interests, encumbrances, adverse
claims and demands or rights of others of any nature or kind.
(b) Such Eveready Management Shareholder has
the legal capacity to execute and deliver this Agreement and to perform his
obligations under this Agreement. This
Agreement has been duly executed and delivered by such Eveready Management
Shareholder, and assuming the due authorization, execution and delivery by Parent
and Purchaser, this Agreement constitutes the legal, valid and binding
obligation of such Eveready Management Shareholder, enforceable in accordance
with its terms, subject to bankruptcy, insolvency and other applicable Laws
affecting creditors rights generally and general principles of equity.
(c) Such Eveready Management Shareholder has
not previously granted or agreed to grant any proxy or other right to vote in
respect of his Eveready Common Shares and Eveready Options or entered into any
voting trust, nor any pooling or other
2
agreement with respect to the right to
vote, call meetings of shareholders or give consents or approvals of any kind
as to his Eveready Common Shares and Eveready Options except those which are no
longer of any force or effect.
(d) No Eveready Management Shareholder has any
agreement or option, or any right or privilege (whether by law, pre-emptive or
contractual) capable of becoming an agreement or option, for the purchase,
requisition or transfer from such Eveready Management Shareholder of any of his
Eveready Common Shares and Eveready Options, or any interest therein or right
thereto, except pursuant to this Agreement and the Acquisition Agreement.
(e) Neither the execution and delivery of this
Agreement by such Eveready Management Shareholder, the performance by such Eveready
Management Shareholder of his obligations hereunder, nor the compliance by such
Eveready Management Shareholder with any of the provisions hereof will result
in the creation of any lien or encumbrance on any of his Eveready Common Shares
or Eveready Options or result in any breach of, or be in conflict with, or
constitute a default under, or create a state of facts which, after notice or
lapse of time, or both, would constitute a default under any contract or other
document to which such Eveready Management Shareholder is a party or subject,
or any judgment, decree, order, statute, law, rule or regulation applicable
to such Eveready Management Shareholder.
(f) There are no other obligations relating to
the Eveready Common Shares and Eveready Options outstanding between such Eveready
Management Shareholder or his Affiliates, on the one hand, and Eveready or its
Subsidiaries, on the other hand.
(g) There is no private or governmental action,
suit, proceeding, claim, arbitration or investigation pending before any
Governmental Entity, or, to the knowledge of such Eveready Management
Shareholder, threatened against such Eveready Management Shareholder or any of
his properties that, individually or in the aggregate, could impair the ability
of such Eveready Management Shareholder to perform his obligations under this
Agreement. There is no judgment, decree
or order against such Eveready Management Shareholder that could prevent,
enjoin, alter or delay such Eveready Management Shareholder from performing his
obligations under this Agreement.
(h) No consent, approval or authorization of,
or declaration or filing with, or notice to, any Governmental Entity which has
not been received or made is required by the Eveready Management Shareholder in
connection with the execution and delivery by the Eveready Management
Shareholder of this Agreement and the completion of the matters contemplated by
this Agreement.
3
1.2 Parent and Purchaser
Representations
Each of Parent
and Purchaser hereby represents and warrants to each Eveready Management
Shareholder (and acknowledges that the Eveready Management Shareholders are
relying upon such representations and warranties) as follows:
(a) It is a corporation duly incorporated and
validly existing under the Laws of its jurisdiction of incorporation.
(b) It has the legal capacity to execute and
deliver this Agreement and to perform its obligations under this Agreement. This Agreement has been duly executed and
delivered by Parent or Purchaser, as applicable, and has been duly authorized
by all necessary corporate action, and assuming the due authorization,
execution and delivery by each Eveready Management Shareholder, this Agreement
constitutes a legal, valid and binding obligation of Parent and Purchaser, as
applicable, enforceable in accordance with its terms, subject to bankruptcy,
insolvency and other applicable Laws affecting creditors rights generally and
general principles of equity.
(c) The execution, delivery and performance of
this Agreement by Parent or Purchaser, as applicable, will not (i) constitute
a violation of its articles of incorporation or by-laws, each as amended or (ii) constitute
a violation of any Law applicable or relating to it or its businesses.
ARTICLE 2
EVEREADY MANAGEMENT SHAREHOLDER OBLIGATIONS
2.1 Restrictions on Transfers
(a) Each Eveready Management Shareholder hereby
irrevocably covenants in favour of Parent and Purchaser that, except as
contemplated in this Agreement, such Eveready Management Shareholder will not: (i) sell,
transfer, gift, assign, pledge, hypothecate, encumber or otherwise dispose of
any of his Eveready Common Shares or Eveready Options or any additional common
shares of Eveready in respect of which such Eveready Management Shareholder
acquires direct or indirect legal or beneficial ownership or control or
direction after the date hereof (the Additional Eveready Common
Shares) or any additional options to acquire common shares of Eveready
in respect of which he acquires direct or indirect legal or beneficial
ownership or control or direction after the date hereof (the Additional Eveready Options), or enter into any agreement,
arrangement or understanding in connection therewith (whether by actual
disposition, derivative transaction or effective economic disposition through
cash settlement), or (ii) grant any proxies or powers of attorney, or
deposit any of his Eveready Common Shares, Eveready Options, Additional Eveready
Options or Additional Eveready Common Shares (collectively, the Owned Eveready Securities) into a voting trust or enter
into a voting agreement, pooling agreement, understanding or arrangement with
respect to such Owned Eveready Securities, without having
4
first obtained the prior written consent of
Parent, which consent may not be unreasonably withheld.
(b) Notwithstanding the restrictions in 2.1(a) above,
an Eveready Management Shareholder may transfer, sell or dispose of any Owned Eveready
Securities to an associate or affiliate (each within the meaning of the Securities Act (Alberta)) of that Eveready Management
Shareholder, provided, however, that prior to any such transfer, sale or disposition,
the transferee shall agree with Parent and Purchaser, in form and on terms
satisfactory to Parent and Purchaser, acting reasonably, to be bound by all of
the provisions of this Agreement in the same manner as the Eveready Management
Shareholder, and the Eveready Management Shareholder shall remain, with such
transferee, jointly and severally liable for its and such transferees
obligations under this Agreement.
2.2 Non-Solicitation
On the terms and
subject to the conditions of this Agreement, each Eveready Management
Shareholder hereby covenants and agrees in favour of Parent and Purchaser that
the Eveready Management Shareholder shall:
(a) not take any action of any kind which
might, directly or indirectly, interfere with the successful completion of the
Arrangement, including any action to (i) solicit, assist, initiate,
facilitate or encourage (including by way of furnishing or providing access to
any information or permitting any visit to any facilities or properties of Eveready
or any of its Subsidiaries, or entering into any form of contract) the
initiation of any inquiries, proposals or offers regarding an Acquisition
Proposal, (ii) participate in any discussions or negotiations with any
Person (other than Parent, Purchaser and their Affiliates) regarding an actual
or potential Acquisition Proposal, (iii) influence the Eveready Board or
any committee thereof to withdraw, amend, modify or qualify, or propose
publicly to withdraw, amend, modify or qualify, in a manner adverse to Parent
or Purchaser, the approval or recommendation of the Board or any committee
thereof of the Acquisition Agreement or the Arrangement, (iv) accept,
approve, endorse or recommend or remain neutral with respect to, or propose
publicly to approve, endorse or recommend or remain neutral with respect to,
any Acquisition Proposal, or (v) accept or enter into, or publicly propose
to accept or enter into, any contract in respect of an Acquisition Proposal;
(b) immediately terminate any existing
solicitations, discussions or negotiations with any Person (other than Parent
or Purchaser and their Affiliates) that has made, indicated any interest to
make or may reasonably be expected to make, an Acquisition Proposal and cease
to provide to any such Person any information, or access to any information,
concerning Eveready or any of its Subsidiaries; and
(c) promptly (and in any event within 24 hours)
notify the CEO and/or CFO of Eveready of any proposal, inquiry, offer (or any
amendment thereto) or request relating to or constituting an Acquisition
Proposal, or that could be reasonably
5
expected to lead to an Acquisition
Proposal, in each case received after the date hereof, of which the Eveready
Management Shareholder becomes aware, or any amendments to the foregoing, any
request for discussions or negotiations, any request for representation on the
Board, or any request for non-public information relating to Eveready or any of
its Subsidiaries in connection with an Acquisition Proposal, or for access to
the properties, books or records of Eveready or any of its Subsidiaries by any
Person that informs the Eveready Management Shareholder that it is considering
making, or has made, an Acquisition Proposal or any amendment thereto; promptly
provide to Parent a description of the material terms and conditions of any
such Acquisition Proposal or, inquiry, offer or request, together with a copy
of all documentation relating to any such Acquisition Proposal or inquiry,
offer or request, the identity of the Person making such proposal, inquiry,
offer or request, and any other details of the Acquisition Proposal, contract,
documents or negotiations as Parent may reasonably request; and keep Parent
informed of any change to the material terms of any such Acquisition Proposal
or proposal, inquiry, offer or request.
2.3 Voting Rights
(a) Subject to completion of a proxy as
contemplated under this Agreement, each Eveready Management Shareholder agrees
in favour of Parent and Purchaser that he will, to the extent permitted under
applicable Securities Laws, vote (or cause to be voted) all Owned Eveready Securities
at any meeting of the shareholders of Eveready, and in any action by written
consent of the shareholders of Eveready: (i) in favour of the approval,
consent, ratification and adoption of the Arrangement (and any actions required
in furtherance thereof); or (ii) against any action that would impede,
delay, interfere or discourage the Arrangement (including, for greater
certainty, against (A) any Acquisition Proposal, (B) any merger,
consolidation, business combination, sale of assets, amalgamation, arrangement,
reorganization or recapitalization of Eveready, (C) any sale, lease or
transfer of any significant part of the assets of Eveready, (D) any
dissolution, liquidation or winding up of Eveready, (E) any action to
remove or change any of the directors of Eveready, and (F) any material
change in the capitalization of Eveready, or the corporate structure or charter
of Eveready) (in each case where the relevant proposal does not have the
express written agreement of Parent and Purchaser); and (iii) against any
action that would result in any breach of any representation, warranty or
covenant of Eveready in the Acquisition Agreement.
(b) Upon the written request or direction of Parent
or Purchaser, each Eveready Management Shareholder agrees in favour of Parent
and Purchaser that such Eveready Management Shareholder shall promptly execute
and deliver, and not revoke, a proxy appointing such Person or Persons as Parent
or Purchaser may request or direct as proxy for such Eveready Management
Shareholder, with full power of substitution, to attend, vote and otherwise act
for and on behalf of such Eveready Management Shareholder in respect of all
such matters that may come before any meeting of Eveready Shareholders relating
to the Arrangement including any action that would impede, interfere or
discourage the Arrangement
6
and in such circumstances, the Eveready
Management Shareholder will not be responsible for voting under Section 2.3(a). If for any reason such proxy is invalid or
not effective or is not delivered promptly after request is made, such Eveready
Management Shareholder hereby unconditionally and irrevocably appoints Parent
and Purchaser as attorney in fact for and on its behalf to act in respect of
any such resolution in connection with any meeting of the Eveready
Shareholders.
(c) Each Eveready Management Shareholder agrees
in favour of Parent and Purchaser that such Eveready Management Shareholder
shall not, without the prior written consent of Parent and Purchaser,
requisition or join in the requisition of any meeting of the securityholders of
Eveready for the purpose of considering any resolution.
2.4 Additional Covenants of each Eveready
Management Shareholder
Each Eveready
Management Shareholder hereby undertakes in favour of Parent and Purchaser:
(a) to not make any statements against the Arrangement
or any aspect thereof and to not bring, or threaten to bring, any suit or
proceeding for the purpose of, or which has the effect of, directly or
indirectly, stopping, preventing, impeding, or varying such Arrangement or any
aspect thereof;
(b) to not do indirectly that which he may not
do directly in respect of the restrictions on his rights with respect to such Eveready
Management Shareholders Owned Eveready Securities pursuant to this Article 2,
including, but not limited to, the sale of any direct or indirect holding
company of such Eveready Management Shareholder or the granting of a proxy on
any of such Eveready Management Shareholders Owned Eveready Securities of any
direct or indirect holding company of such Eveready Management Shareholder
which would have, indirectly, the effects prohibited by this Article 2;
(c) to deposit all of such Eveready Management
Shareholders Owned Eveready Securities, together with a duly completed Letter
of Transmittal, with a depositary specified in the Eveready Circular in accordance
with the terms thereof;
(d) if such Eveready Management Shareholder is
also a director of Eveready, upon completion of the Plan of Arrangement, to
resign as a director of Eveready and its subsidiaries at the time and in the
manner requested by Parent provided that the foregoing shall not restrict the
ability of such Eveready Management Shareholder to resign at an earlier time if
such Eveready Management Shareholder so desires;
(e) if any of such Eveready Management
Shareholders Owned Eveready Securities are registered in the name of a Person
other than the Eveready Management Shareholder or otherwise held other than personally,
to cause the direct owner of such securities to abide by the transfer
restrictions set forth in Section 2.1 and the voting requirements set
forth in Section 2.3;
7
(f) to promptly notify Parent and Purchaser of
the number of Additional Eveready Common Shares and/or Additional Eveready
Options acquired by such Eveready Management Shareholder, if any, after the
date hereof. Any such securities shall
be subject to the terms of this Agreement as though they were Eveready Common
Shares and/or Eveready Options owned by such Eveready Management Shareholder on
the date hereof;
(g) to promptly notify Parent and Purchaser
upon any of the Eveready Management Shareholders representations and
warranties contained herein becoming untrue or incorrect in any material
respect prior to the Effective Time, and for the purposes of this provision,
each representation and warranty shall be deemed to be given at and as of all
times during such period (irrespective of any language which suggests that it
is only being given as at the date hereof); and
(h) to not take any other action of any kind
which might reasonably be regarded as likely to reduce the success of, or delay
or interfere with the completion of, the Arrangement.
2.5 Revised Arrangement
If Parent and
Purchaser conclude, after the date of this Agreement, that it is necessary or
desirable to proceed with a form of transaction other than the Arrangement
(including, without limitation, an amalgamation or a takeover bid) whereby Parent
and/or Purchaser, and/or their Affiliates, would effectively acquire all the Eveready
Common Shares on economic and other terms and conditions (including, without
limitation, tax treatment) having consequences to the Eveready Management
Shareholder that are equivalent to or better than those contemplated by this
Agreement (any such transaction is referred to as an Revised Arrangement),
the Eveready Management Shareholder agrees to support the completion of the
Revised Arrangement in the same manner as the Arrangement, including by
tendering Owned Eveready Securities pursuant to the Revised Arrangement and, if
necessary, by voting the Eveready Common Shares in favour of a special
resolution approving the Revised Arrangement.
In the event of any proposed Revised Arrangement, any reference in this
Agreement to the Arrangement shall refer to the Revised Arrangement to the
extent applicable, and all terms, covenants, representations and warranties of
this Agreement shall be and shall be deemed to have been made in the context of
the Revised Arrangement.
2.6 Fiduciary Obligations
Parent and
Purchaser hereby agree and acknowledge that each Eveready Management
Shareholder is bound hereunder solely in its capacity as a securityholder of Eveready
and that the provisions hereof shall not be deemed or interpreted to bind such Eveready
Management Shareholder in any capacity as a director or an officer of Eveready.
2.7 No Ownership Interest
Nothing contained
in this Agreement vests in Parent and Purchaser any direct or indirect
ownership, or incidence of ownership, of or with respect to any Owned Eveready
Securities. All rights, ownership and
economic benefits of and relating to any Owned Eveready Securities
8
remain vested in
and belong to each applicable Eveready Management Shareholder, and Parent and
Purchaser have no authority to manage, direct, superintend, restrict, regulate,
govern or administer any of the policies or operations of Eveready or exercise
any power or authority to direct any Eveready Management Shareholder in the
voting of any of the Owned Eveready Securities, or in the performance of the Eveready
Management Shareholders duties or responsibilities as a shareholder of Eveready,
except as otherwise provided herein.
2.8 Remedies
Each Eveready Management Shareholder agrees that irreparable harm would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached
for which money damages would not be an adequate remedy at law. It is
accordingly agreed that Parent and Purchaser will be entitled to an injunction
or injunctions and other equitable relief to prevent breaches of this
Agreement, with any requirement for the securing or posting of any bond in
connection with obtaining any such injunctive or other equitable relief hereby
being waived. In the event of any
litigation involving the rights of the parties to this Agreement, the
prevailing party shall be entitled to recover its costs and expenses incurred
in connection with such litigation including, without limitation, reasonable
attorneys fees and expenses.
ARTICLE 3
OTHER COVENANTS
3.1 Lock-Up Period; Potential
Manner of Sale Restrictions
Except
for a transfer, pledge or encumbrance of securities for the purpose of giving
collateral for a debt made in good faith, each Eveready
Management Shareholder agrees not to, directly or indirectly, offer, sell,
contract to sell, transfer, assign or grant any option to purchase or enter
into any other agreement to transfer the economic consequences of, or otherwise
dispose of or deal with, or publicly announce any intention to offer, sell,
contract to sell, transfer, assign, or grant any option to purchase, or enter
into any agreement to transfer the economic consequences of, or otherwise
dispose of or deal with, whether through the facilities of a stock exchange, by
private placement or otherwise, any of the Parent Common Shares acquired by the
Eveready Management Shareholder, directly or indirectly, in connection with the
Arrangement for a period (the Lock-Up Period)
commencing on the date hereof and ending on the date that is 182 days following
the Effective Date, unless the undersigned first obtains the consent of
Parent. Each Eveready Management
Shareholder authorizes Parent to cause its transfer agent during the Lock-Up
Period to decline to transfer and/or to note stop transfer restrictions on the
transfer books and records of Parent with respect to any Parent Common Shares
for which such Eveready Management Shareholder is either the record or
beneficial holder. Furthermore, if at
the time of any future sale or other disposition as described above in this Section 3 (whether occurring during or after the
Lock-Up Period) of any of the Parent Common Shares acquired by the undersigned,
directly or indirectly, in connection with the Arrangement the undersigned were
deemed to be an affiliate or insider of Parent under applicable Securities
Laws, the undersigned acknowledges that such sale or other disposition would be
subject to such manner of sale restrictions as shall then be applicable under
such Securities Laws to other affiliates and insiders of Parent (it being
mutually acknowledged and agreed that such manner of sale
9
restrictions
shall not impose any holding period restrictions on the undersigned with
respect to such Parent Common Shares).
3.2 No Dissent
Each Eveready
Management Shareholder hereby waives and agrees, in favour of Parent and
Purchaser, not to exercise any rights of appraisal or rights of dissent such Eveready
Management Shareholder may have in connection with the Arrangement.
3.3 Disclosure
Each Eveready
Management Shareholder agrees in favour of Parent and Purchaser:
(a) to the details of this Agreement being set
out in any information circular produced by Eveready or Parent in connection
with the Arrangement; and
(b) to this Agreement being made publicly
available on SEDAR and otherwise to the extent required by Law.
3.4 Release
Subject to the
completion of the Arrangement, each Eveready Management Shareholder, for himself
and for all of his predecessors, successors, assigns and affiliates
(collectively, the Eveready Management
Shareholder Related Parties), hereby unequivocally and irrevocably
releases, surrenders, acquits and forever discharges, as of the Effective Time,
each of Parent, Purchaser, and their respective Subsidiaries, and each of their
respective directors, officers, employees, heirs, successors and assigns
(collectively, the Released Parties),
from any and all actions, causes of action, claims, suits, controversies,
damages, judgments, remedies, demands and liabilities, of any nature
whatsoever, in law, at equity or otherwise relating to, arising under, or in
connection with, any actions, omissions or transactions from any time before
the Effective Time (collectively, Claims),
whether direct, derivative or otherwise, which may be asserted against any of
the Released Parties or which, whether currently known or unknown, fixed or
contingent, any Eveready Management Shareholder Related Party ever could
assert, either for themselves or otherwise, for or on behalf of any other
Person; provided, however, that the foregoing shall not release any Person from
any obligation (i) under this Agreement, the Acquisition Agreement, or any
other agreement entered into in connection with the Arrangement or (ii) in
respect of matters relating to or arising out of an Eveready Management
Shareholder being a director, officer of employee of Eveready or any of its
Subsidiaries.
ARTICLE 4
TERMINATION
4.1 Termination by Eveready
Management Shareholder
The obligations
of each Eveready Management Shareholder under this Agreement shall
automatically terminate upon the earlier of (a) the expiry of the Lock-Up
Period, (b) the termination of the Acquisition Agreement in accordance
with its terms, or (c) in the case of each Eveready Management Shareholder
who is an executive officer and employee of Eveready on
10
the date of this
Agreement, any date after the Effective Time on which the employment of such
Eveready Management Shareholder is terminated by Eveready or its successor.
However, each Eveready Management Shareholder shall be responsible and remains
liable for any breach of this Agreement by such Eveready Management Shareholder
occurring prior to the termination of this Agreement.
4.2 Termination by Parent and
Purchaser
Parent and
Purchaser, when not in default in the performance of its obligations under this
Agreement, may, at any time and without prejudice to any other rights it may
have under this Agreement or otherwise, terminate this Agreement, in respect of
any Eveready Management Shareholder, by notice in writing to such Eveready
Management Shareholder.
4.3 Effect of Termination
In the case of
any notice of termination of this Agreement pursuant to either Section 4.1
or 4.2, this Agreement shall terminate as between Parent and Purchaser and the
applicable Eveready Management Shareholder or Eveready Management Shareholders
and be of no further force or effect.
Notwithstanding anything else contained herein, such termination shall
not relieve any party hereunder from liability for any breach of this Agreement
prior to such termination.
ARTICLE 5
MISCELLANEOUS
5.1 Interpretation
In this
Agreement:
(a) Governing
Law
This Agreement will be governed, including as to validity, interpretation and
effect, by the laws of the Province of Alberta and the laws of Canada
applicable therein, and will be construed and treated in all respects as an
Alberta contract. Each party to this
Agreement hereby irrevocably attorns to the non-exclusive jurisdiction of the
Courts of the Province of Alberta in respect of all matters arising under and
in relation to this Agreement and the Arrangement. Each party to this Agreement hereby waives
any right to trial by jury in any action, proceeding or counterclaim (whether
based on contract, tort or otherwise) arising out of or relating to this
Agreement or the transactions contemplated hereby or the actions of the parties
in the negotiation, administration, performance and enforcement of this
Agreement.
(b) Headings Headings of Sections,
Articles and Schedules are inserted for convenience of reference only and do
not affect the construction or interpretation of this Agreement.
(c) Including Where the word including
or includes is used in this Agreement, it means including (or includes)
without limitation.
11
(d) Number
and Gender Unless the context otherwise requires, words importing the singular
include the plural and vice versa and
words importing gender include both genders and neuter.
(e) Severability
If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule or Law or public policy, all other
conditions and provisions of this Agreement will nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties will negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to
the fullest extent possible.
5.2 Incorporation of Schedules
The Schedules
attached hereto and described below shall, for all purposes hereof, form an
integral part of this Agreement.
Schedule A
|
-
|
Eveready
Management Shareholder Information
|
|
|
|
Schedule B
|
-
|
Acquisition
Agreement
|
5.3 Date for any Action
In the event that
any date on which any action is required to be taken hereunder by any party is
not a Business Day, such action shall be required to be taken on the next day
which is a Business Day.
5.4 Entire Agreement
This Agreement,
together with the agreements and other documents required to be delivered
pursuant to this Agreement, constitutes the entire agreement between Parent,
Purchaser and each Eveready Management Shareholder and sets out all the
covenants, promises, warranties, representations, conditions, understandings
and agreements between Purchaser, Parent and each Eveready Management
Shareholder pertaining to the subject matter of this Agreement and supersedes
all prior agreements, understandings, negotiations and discussions, whether
oral or written. No reliance has been
made upon, and there are no covenants, promises, warranties, representations,
conditions, understandings or other agreements, oral or written between Parent,
Purchaser and each Eveready Management Shareholder in connection with the
subject matter of this Agreement except as specifically set forth in this
Agreement and any document required to be delivered pursuant to this Agreement.
5.5 Survival
The
representations and warranties of the Eveready Management Shareholder made in
this Agreement shall survive the completion of the Arrangement and shall
continue in full force and
12
effect for the
benefit of Parent and Purchaser for a period of one year from the date of this
Agreement, with the exception of the representation and warranty in Section 1.1(a),
which shall survive indefinitely.
5.6 Notices
All notices and other communications given or made pursuant hereto will
be in writing and will be deemed to have been duly given or made as of the date
delivered or sent if delivered personally or sent by facsimile or e-mail
transmission, or as of the second following Business Day if sent by prepaid
overnight courier, to the parties at the following addresses:
if to a Eveready Management Shareholder:
|
|
at such Eveready Management Shareholders address,
fax number or e-mail address as set out in Schedule
A
|
|
|
|
if to Parent or Purchaser:
|
|
c/o Clean Harbors, Inc.
Attention: Chairman and Chief Executive Officer
Facsimile: 781-792-5900
E-mail: mckima@cleanharbors.com
|
|
|
|
with a copy (which will not constitute notice) to:
|
|
Davis, Malm & DAgostine, P.C.
One Boston Place
Boston, Massachusetts, U.S.A., 02108
Attention:
C. Michael Malm
Facsimile:
(617) 523-6215
E-mail:
cmalm@davismalm.com
|
|
|
|
and to
|
|
Gowling Lafleur Henderson LLP
Suite 1020 50 Queen Street North
Kitchener, ON N2H 6M2 Canada
Attention:
Bryce Kraeker
Facsimile:
(519) 571-5045
E-mail:
bryce.kraeker@gowlings.com
|
Parent and
Purchaser may, from time to time, change its address by giving notice to each
Eveready Management Shareholder in accordance with the provisions of this
Section, and each Eveready Management Shareholder may change his address by
giving Parent and Purchaser such notice in such manner.
5.7 Amendment
No amendment,
supplement, modification or waiver or termination of this Agreement and, unless
otherwise specified, no consent or approval by any party, shall be binding
unless executed in writing by the party to be bound.
13
5.8 Further Assurances
The parties will
with reasonable due 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 will 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.
5.9 Time of the Essence
Time will be of the essence in this Agreement.
5.10 Expenses
Parent, Purchaser
and each Eveready Management Shareholder shall pay their respective legal,
financial advisory and accounting costs and expenses incurred in connection
with the preparation, execution and delivery of this Agreement and all
documents and instruments executed or prepared pursuant hereto and any other
costs and expenses whatsoever and howsoever incurred.
5.11 Waiver
Each Eveready
Management Shareholder and Parent and Purchaser agree with each other and
confirm to each other that:
(a) any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by any party to be bound or
in the case of a waiver, by the party against whom the waiver is to be
effective; and
(b) no failure or delay by any
Eveready Management Shareholder or Parent and Purchaser in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
by such Eveready Management Shareholder, Parent and Purchaser.
5.12 Assignability
The provisions of
this Agreement are binding upon and enure to the benefit of Parent, Purchaser
and each Eveready Management Shareholder and their respective heirs, executors,
administrators, legal personal representatives, successors and permitted
assigns. No Eveready Management
Shareholder may assign, delegate or otherwise transfer any of his rights,
interests or obligations under this Agreement without the prior written consent
of Parent and Purchaser. Parent and
Purchaser may not assign, delegate or otherwise transfer any of its rights,
interest or obligations under this Agreement, in respect of any Eveready
Management Shareholder, without the prior written consent of such Eveready
Management Shareholder, except that Purchaser or Parent may assign, delegate or
otherwise transfer any of its rights, interest or obligations under this
Agreement, in respect of any Eveready Management Shareholder, to an Affiliate,
without
14
reducing its own
obligations hereunder, without the consent of such Eveready Management
Shareholder.
5.13 Independent Legal Advice
Each Eveready
Management Shareholder acknowledges in favour of Parent and Purchaser that he
has entered into this Agreement willingly with full knowledge of the
obligations imposed by the terms of this Agreement. Each Eveready Management Shareholder further
acknowledges in favour of Parent and Purchaser that he has been afforded the
opportunity to obtain independent legal advice and confirms by the execution of
this Agreement that he has either done so or waived his right to do so, and
agrees in favour of Parent and Purchaser that this Agreement constitutes a
binding legal obligation and that he is estopped form raising any claim on the
basis that he has not obtained such advice.
5.14 Public Notices
Each Eveready
Management Shareholder acknowledges and agrees in favour of Parent and Purchaser
that: all public notices to third parties and all other publicity concerning
this Agreement, the Acquisition Agreement and the transactions contemplated
hereunder and thereunder will be planned and co-ordinated by Purchaser, Parent
and/or Eveready in accordance with the Acquisition Agreement; and such Eveready
Management Shareholder shall not act unilaterally in this regard without the
prior approval of Parent and Purchaser unless such disclosure is required under
applicable Securities Laws and stock exchange rules in circumstances where
prior consultation with Parent and Purchaser is not practicable.
5.15 Execution and Delivery
This Agreement may be executed in two or more counterparts, each of
which will be deemed to be an original but all of which together will
constitute one and the same instrument.
The parties will be entitled to rely upon delivery of an executed
facsimile or similar executed electronic copy of this Agreement, and such
facsimile or similar executed electronic copy will be legally effective to
create a valid and binding agreement among the parties.
[Signature
Page Follows]
15
WITNESSES:
|
|
EVEREADY
MANAGEMENT SHAREHOLDER
|
|
|
|
|
|
|
(signed)
Chris Porter
|
|
(signed)
Rod Marlin
|
Name of
Witness: Chris Porter
|
|
Rod Marlin
|
|
|
|
(signed)
Theresa Holtby
|
|
(signed)
Bert Holtby
|
Name of
Witness: Theresa Holtby
|
|
Bert Holtby
|
|
|
|
(signed)
Lisa Degenhardt
|
|
(signed)
Peter Lacey
|
Name of
Witness: Lisa Degenhardt
|
|
Peter Lacey
|
|
|
|
(signed)
Chris Porter
|
|
(signed)
Glen Fleming
|
Name of
Witness: Chris Porter
|
|
Glen Fleming
|
|
|
|
(signed)
M.J. Joceline Bliska
|
|
(signed)
Marvin Lefebvre
|
Name of
Witness: M.J. Joceline Bliska
|
|
Marvin Lefebvre
|
|
|
|
(signed)
Chris Porter
|
|
(signed)
Wally Dumont
|
Name of
Witness: Chris Porter
|
|
Wally Dumont
|
|
|
|
(signed)
Cathey Monteith
|
|
(signed)
Lyle Jeffries
|
Name of
Witness: Cathey Monteith
|
|
Lyle Jeffries
|
|
|
|
|
|
|
|
|
CLEAN
HARBORS, INC.
|
|
|
|
|
|
|
|
|
Per:
|
(signed)
James M. Rutledge
|
|
|
|
Name: James M.
Rutledge
|
|
|
|
Title: Executive Vice President
|
|
|
|
|
|
|
|
|
CLEAN
HARBORS CANADA, INC.
|
|
|
|
|
|
|
|
|
Per:
|
(signed)
James M. Rutledge
|
|
|
|
Name: James M.
Rutledge
|
|
|
|
Title: Executive Vice President
|
16
SCHEDULE A
EVEREADY MANAGEMENT SHAREHOLDER INFORMATION
Pursuant to Section 1.1(a) of the
Agreement, each Oilers Management Shareholder is the sole legal and sole
beneficial owner of, directly or indirectly, has sole voting power over, sole
power of disposition of, sole control and sole direction over such Oilers
Common Shares and Oilers Options as set forth below opposite each such
shareholders name, and sole power to agree to all of the matters set forth in
the Agreement, except as set out below
Oilers Management
Shareholder
|
|
Oilers
Common Shares
|
|
Oilers
Options
|
|
|
|
|
|
|
|
Rodney Frank Marlin
|
|
811,990
|
(1)
|
Nil
|
|
|
|
|
|
|
|
John Herbert Holtby
|
|
814,374
|
(2)
|
5,000
|
|
|
|
|
|
|
|
Peter Alan Lacey
|
|
915,505
|
(3)
|
Nil
|
|
|
|
|
|
|
|
Glen Fleming
|
|
403,154
|
(4)
|
8,000
|
|
|
|
|
|
|
|
Marvin Gerard Lefebvre
|
|
781,115
|
(5)
|
Nil
|
|
|
|
|
|
|
|
Walter Charles Dumont
|
|
506,034
|
(6)
|
Nil
|
|
|
|
|
|
|
|
Lyle Brent Jeffries
|
|
539,621
|
(7)
|
Nil
|
|
Notes:
|
|
|
(1)
|
|
Includes 261,840 Shares held by Baimar Holdings
Ltd., 892 Shares held by Jeanie Marlin, the spouse of Rod Marlin, 129,722
Shares held in a retirement saving plan for Jeanie Marlin, 3,096 Shares held
in a registered education savings plan and 295,891 Shares held in a
retirement saving plan for Rod Marlin.
|
(2)
|
|
Includes
461,787 Shares held by 216928 Alberta Ltd.
|
(3)
|
|
Includes
4,452 Shares held by the Lacey Family Trust, 156,281 Shares held in a
registered retirement saving plan for Kathy Lacey, the spouse of Peter Lacey
and 754,334 Shares held in a registered retirement savings plan for Peter
Lacey.
|
(4)
|
|
Includes
212,322 Shares held in a registered retirement saving plan for Glen Fleming,
41,193 Shares held by Roxane Fleming, the spouse of Glen Fleming and 2,098
Shares held in a registered retirement saving plan for Roxane Fleming.
|
(5)
|
|
Includes
863 Shares held in a group registered savings retirement savings plan for
Judy Lefebvre, 117,460 Shares held by Judy Lefebvre, 6,633 Shares held in a
group registered savings retirement savings plan for Marvin Lefebvre, 1,000
Shares held in a retirement saving plan for Marvin Lefebvre and 537,256
Shares held by RVE Holdings Ltd.
|
(6)
|
|
Includes
4,782 Shares held in a group registered savings retirement savings plan for
Wally Dumont and 133,810 Shares held in a registered retirement savings plan
for Wally Dumont.
|
(7)
|
|
Includes
262,186 Shares held by Ace Tankers (2000) Ltd., 223,306 Shares held jointly
between Lyle Jeffries and Marcie Jeffries, the spouse of Lyle Jeffries, 25,026
Shares held by RDDB Trust and 4,053 Shares held in a group registered savings
retirement savings plan for Lyle Jeffries.
|
Pursuant to Section 1.1(a) of the
Agreement, each Oilers Management Shareholder has good and marketable title to
its Oilers Common Shares and Oilers Options, free and clear of any and all
liens, pledges, mortgages, charges, restrictions, security interests,
encumbrances, adverse claims and demands or rights of others of any nature or
kind, except as set out below:
Eveready
Management
Shareholder
|
|
|
|
|
|
|
|
Rod Marlin
|
1.
|
Debtor:
|
Rod Marlin
|
|
|
|
|
|
|
Lender:
|
Arms length third party
|
|
|
|
|
|
|
Details:
|
|
|
|
$333,333 debt owing to arms length third party
|
|
|
84,311 Shares pledged as security for loan
|
Bert Holtby
|
1.
|
Debtor:
|
Bert Holtby
|
|
|
|
|
|
|
Lender:
|
Arms length third party
|
|
|
|
|
|
|
Details:
|
|
|
|
$333,333 debt owing to arms length third party
|
|
|
84,311 Shares pledged as security for loan
|
Glen Fleming
|
1.
|
Debtor:
|
Glen Fleming
|
|
|
|
|
|
|
Lender:
|
Arms length third party
|
|
|
|
|
|
|
Details:
|
|
|
|
$1,000,000 debt owing to arms length third party
|
|
|
136,285 Shares pledged as security for loan
|
|
2.
|
Debtor(s):
|
Glen Fleming
|
|
|
|
Roxane Fleming
|
|
|
|
|
|
|
Secured Party:
|
Bank of Montreal
|
|
|
|
10199 101 Street
|
|
|
|
Edmonton, AB T5J 3Y4
|
|
|
|
|
|
|
Collateral:
|
|
|
|
All present and after acquired personal property
except goods. Proceeds All present and after acquired personal property.
|
|
|
350 M Eveready Industrial Group Ltd. Cert #40M
|
|
|
2625 Class J Eveready Industrial Group Ltd.
Cert #40J
|
18
Eveready
Management
Shareholder
|
|
|
|
Marvin Gerard Lefebvre
|
1.
|
Debtor:
|
Marvin Gerard Lefebvre
|
|
|
|
|
|
|
Secured Party:
|
Alberta Treasury Branches
|
|
|
|
9904 100 Avenue
|
|
|
|
Peace River, AB T8S 1S2
|
|
|
|
|
|
Collateral:
|
|
|
Accounts, chattel paper, instruments, investment
property, money and documents of title as defined in the Personal Property
Security Act together with all records of the Debtor in connection therewith.
Proceeds: All of the debtors present and after
acquired goods, motor vehicles, accounts, money, chattel paper, documents of
title, investment property, instruments and intangibles as defined in the
Personal Property Security Act, insurance proceeds and all other
substitutions, renewals, alterations or proceeds of every description and of
any kind whatsoever derived directly or indirectly from any dealings with the
general collateral or serial number collateral (if any) described above, or
proceeds therefrom.
|
Pursuant to Section 5.6 of the Agreement,
address for service for all above-listed Oilers Management Shareholders is as
follows:
c/o Eveready Inc.
14904 121A Avenue
Edmonton, AB T5V 1A3
Fax: (780) 451-2142
Attention: Rod Marlin
19
SCHEDULE B
ACQUISITION AGREEMENT