Exhibit 10.2

 

American Honda Motor Co., Inc.

 

(“Honda”)

 

- and -

 

John G. Armstrong, Sole Trustee of The FuelMaker Trust

 

(the “FM Trust”)

 

- and -

 

FuelMaker Corporation

 

(the “Corporation”)

 

- and -

 

Clean Energy Fuels Corp.

 

(the “Purchaser”)

 

 

SHARE PURCHASE AGREEMENT

 

September 5, 2008

 

 

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TABLE OF CONTENTS

 

ARTICLE 1 INTERPRETATION

2

1.1

Definitions

2

1.2

Construction

13

1.3

Certain Rules of Interpretation

13

1.4

Knowledge

14

1.5

Computation of Time

14

1.6

Performance on Business Days

14

1.7

Currency and Payment

14

1.8

Accounting Terms

15

1.9

Schedules

15

 

 

 

ARTICLE 2 PURCHASE AND SALE

16

2.1

Agreement to Purchase and Sell

16

2.2

Purchase Price

16

2.3

Withholding Matters

16

2.4

Purchase Price Adjustment

18

 

 

 

ARTICLE 3 CLOSING ARRANGEMENTS

20

3.1

Closing

20

3.2

Vendors’ Closing Deliveries

20

3.3

The Purchaser’s Closing Deliveries

22

 

 

 

ARTICLE 4 CONDITIONS OF CLOSING

23

4.1

The Purchaser’s Conditions

23

4.2

Vendors’ Conditions

25

4.3

Termination

26

 

 

 

ARTICLE 5 REPRESENTATIONS AND WARRANTIES

26

5.1

Representations and Warranties of FM Trust

26

5.2

Representations and Warranties of Honda

27

5.3

Representations and Warranties of the Corporation

37

5.4

Representations and Warranties of the Purchaser

52

5.5

Survival of Representations, Warranties and Covenants of the Vendors and the
Corporation

54

5.6

Survival of the Representations, Warranties and Covenants of the Purchaser

55

5.7

Indemnification; Limitations on Liability

55

5.8

Indemnification Procedures

57

5.9

Payment of Indemnification Claims

60

5.10

Taxes

60

 

 

 

ARTICLE 6 COVENANTS

60

6.1

Transfer of Documentation

60

6.2

Support of Products

61

6.3

Tax Matters

61

6.4

Covenant Not to Compete; Non-Solicitation; Confidentiality

63

6.5

Investigation

67

 

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6.6

Risk of Loss

67

6.7

Personal Information

68

6.8

Operation of Business

68

6.9

Cooperation

69

6.10

FM Trust Change of Name

69

 

 

 

ARTICLE 7 GENERAL

69

7.1

Public Announcements

69

7.2

Expenses

70

7.3

Commercially Reasonable Efforts

70

7.4

No Third Party Beneficiary

70

7.5

Entire Agreement

70

7.6

Time of Essence

71

7.7

Amendment

71

7.8

Waiver of Rights

71

7.9

Jurisdiction

71

7.10

Governing Law

72

7.11

Notices

72

7.12

Assignment

74

7.13

Further Assurances

75

7.14

Severability

75

7.15

Successors

75

7.16

Counterparts

75

 

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SHARE PURCHASE AGREEMENT dated this 5th day of September, 2008.

 

BETWEEN:

 

American Honda Motor Co., Inc., a corporation formed under the laws of the State
of California (“Honda”)

 

- and -

 

John G. Armstrong, Sole Trustee of The FuelMaker Trust, a trust established
under the laws of the Province of Ontario (“FM Trust”)

 

- and -

 

FuelMaker Corporation, a corporation existing under the laws of Canada (the
“Corporation”)

 

- and -

 

Clean Energy Fuels Corp., a corporation formed under the laws of the State of
Delaware (the “Purchaser”)

 

RECITALS:

 

A.                                   The Corporation primarily carries on the
business of manufacturing natural gas refueling systems for vehicles in
residential and commercial markets.

 

B.                                     2045951 Ontario Inc. (“HondaSub”), is a
wholly-owned subsidiary of Honda, owns 5,400 of the issued and outstanding
non-voting preferred shares in the Corporation (representing approximately
80.07% of all issued and outstanding non-voting preferred shares therein), has
outstanding loans to the Corporation and licenses and sublicenses various
intellectual property to the Corporation.

 

C.                                     Honda owns 1,344 of the issued and
outstanding non-voting preferred shares in the Corporation.

 

D.                                    Honda owns 1,344 of the issued and
outstanding voting common shares in the capital of the Corporation.

 

E.                                      FM Trust owns 5,400 of the issued and
outstanding voting common shares in the capital of the Corporation.

 

F.                                      Honda wishes to sell and the Purchaser
directly, or through a wholly-owned subsidiary, wishes to purchase all of the
shares of HondaSub.

 

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G.                                    Honda and the FM Trust wish to sell and
the Purchaser directly, or through a wholly-owned subsidiary, wishes to purchase
all of the non-voting preferred shares and all of the voting common shares of
the Corporation not owned by HondaSub.

 

THE PARTIES AGREE AS FOLLOWS:

 

ARTICLE 1
INTERPRETATION

 

1.1                               Definitions.                                In
this Agreement, including the Recitals to this Agreement, unless the context
otherwise requires:

 

(1)                                 “Accounting Firm” has the meaning attributed
to that term in Section 2.4(d).

 

(2)                                 “Accounts Receivable” means accounts
receivable, trade accounts receivable, notes receivable, book debts and other
debts due or accruing due to a Target Company, and the full benefit of any
related security.

 

(3)                                 “Administration” has the meaning attributed
to that term in Section 5.3(36)(a).

 

(4)                                 “Affiliate” means, with respect to any
Person, any other Person that directly, or through one or more intermediaries,
Controls or is Controlled by or is under common Control with such first Person,
and “Affiliated” has a corresponding meaning.

 

(5)                                 “Agreement” means this share purchase
agreement, including all Schedules to this share purchase agreement, as amended,
supplemented, restated and replaced from time to time in accordance with its
provisions.

 

(6)                                 “Applicable Law” means:

 

(a)                                  any domestic or foreign statute, law
(including common and civil law), code, ordinance, rule, regulation, restriction
or by-law (zoning or otherwise);

 

(b)                                 any judgment, order, writ, injunction,
decision, ruling, decree or award;

 

(c)                                  any regulatory policy, practice or
guideline; or

 

(d)                                 any Permit;

 

of any Governmental Authority, binding on or affecting the Person or the
Employee Plan referred to in the context in which the term is used or binding on
or affecting the property of that Person.

 

(7)                                 “Approvals” means franchises, licenses,
qualifications, authorizations, consents, certificates, registrations,
exemptions, waivers, filings, grants, notifications, privileges, rights, orders,
judgments, rulings, directives, Permits, and other permits and approvals.

 

(8)                                 “Assets” means all undertakings, property,
assets, rights and interests of the Target Companies, including the following:

 

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(a)                                  all cash and cash equivalents;

 

(b)                                 all rights and interests of the Target
Companies in and to the Leased Property and the Leases, including prepaid rents,
security deposits, options to renew or purchase, rights of first refusal under
the Leases and all leasehold improvements owned by the Target Companies and
forming part of the Leased Property;

 

(c)                                  the Personal Property and all rights and
interests of the Target Companies in and to the Personal Property Leases,
including prepaid rents, security deposits and options to renew or purchase;

 

(d)                                 the Accounts Receivable;

 

(e)                                  all rights and interests of the Target
Companies under or pursuant to all warranties, representations and guarantees,
express, implied or otherwise, of or made by suppliers or others in connection
with the Assets;

 

(f)                                    the Target Intellectual Property;

 

(g)                                 all rights and interests of the Target
Companies in and to all Contracts to which a Target Company is a party or by
which any of the Assets or the Business is bound or affected;

 

(h)                                 all Approvals issued to the Target
Companies;

 

(i)                                     the Books and Records;

 

(j)                                     all prepaid charges, deposits, sums and
fees paid by the Target Companies before the Closing Time;

 

(k)                                 all goodwill of the Target Companies,
including the present telephone numbers, internet domain addresses and other
communications numbers and addresses of the Target Companies; and

 

(l)                                     all proceeds of any or all of the
foregoing received or receivable after the Closing Time.

 

(9)                                 “Balance Sheet” means the balance sheet of a
Target Company as at the Financial Statements Date contained in the Financial
Statements of the Target Company for the financial year ended on that date.

 

(10)                           “Base Working Capital” means the Working Capital
as of April 30, 2008 and is equal to negative US$2,542,605.00.

 

(11)                           “Books and Records” means all books, records,
files and papers of a Target Company, including computer programs (including
source codes and software programs), computer manuals, computer data, financial
and Tax working papers, financial and Tax books and records, business reports,
business plans and projections, sales and advertising materials,

 

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sales and purchases records and correspondence, trade association files,
research and development records, lists of present and former customers and
suppliers, personnel and employment records, minute and share certificate books,
and all copies and recordings of the foregoing.

 

(12)         “Business” means the business carried on currently and prior to the
date of this Agreement by the Corporation primarily consisting of designing,
manufacturing, selling, distributing, installing and servicing natural gas
refueling systems for motor vehicles, fork lift trucks and ice resurfacers in
residential and commercial markets.

 

(13)         “Business Day” means any day, except Saturdays and Sundays, on
which banks are generally open for business:

 

(a)           for purposes of Section 7.11, in the place specified in that
Section; and

 

(b)           for all other purposes in this Agreement, in Toronto, Canada.

 

(14)         “Cap” has the meaning attributed to that term in Section 5.7(4)(b).

 

(15)         “Claim” means:

 

(a)           any suit, action, dispute, investigation, claim, arbitration,
order, summons, citation, directive, ticket, charge, demand or prosecution,
whether legal or administrative;

 

(b)           any other proceeding; or

 

(c)           any appeal or application for review;

 

whether at law or in equity, by or before any Governmental Authority.

 

(16)         “Closing” means the completion of the Transactions.

 

(17)         “Closing Date” means the 19th day of September, 2008 or such other
Business Day as Honda and the Purchaser may agree upon in writing.

 

(18)         “Closing Time” means 10:00 a.m. on the Closing Date or such other
time on the Closing Date as may be agreed to by the Parties in writing.

 

(19)         “Closing Working Capital” has the meaning attributed to that term
in Section 2.4(a).

 

(20)         “Competing Business” has the meaning attributed to that term in
Section 6.4(1).

 

(21)         “Constating Documents” means, with respect to any Person, its
articles or certificate of incorporation, amendment, amalgamation or
continuance, memorandum of association, letters patent, supplementary letters
patent, by-laws, partnership agreement, limited liability company operating
agreement or other similar document, and all unanimous shareholder agreements,
other shareholder agreements, voting trusts, pooling agreements and similar
Contracts, arrangements and understandings applicable to the Person’s Equity
Interests, each as amended, supplemented or restated from time to time.

 

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(22)                           “Contract” means any agreement, contract,
indenture, lease, deed of trust, license, option, undertaking, promise or any
other commitment or obligation, whether oral or written, express or implied,
other than a Permit.

 

(23)                           “Control”, with respect to the relationship with
a Person, means:

 

(a)                                  if that Person is a corporation, the
holding (other than by way of security) of securities of that Person to which
are attached more than 50% of the votes that may be cast for the election of
directors and those votes are sufficient, if exercised, to elect a majority of
the board of directors; or

 

(b)                                 if that Person is an entity other than a
corporation, the holding (other than by way of security) of securities of that
Person to which are attached more than 50% of the votes that may be cast for the
election of general partners, trustees or managers (or other Persons acting in a
similar capacity for a Person other than a corporation) and those votes are
sufficient, if exercised, to elect a majority of the general partners, trustees
or managers (or other Persons acting in a similar capacity for a Person other
than a corporation);

 

and “Controls” and “Controlled” have corresponding meanings.

 

(24)                           “Corporation” means FuelMaker Corporation, a
corporation existing under the laws of Canada.

 

(25)                            [intentionally omitted]

 

(26)                           “Corporation IP Contracts” has the meaning
attributed to that term in Section 5.3(17)(b).

 

(27)                           “Corporation IP Participant” has the meaning
attributed to that term in Section 5.3(17)(k).

 

(28)                           “CRA” has the meaning attributed to that term in
Section 2.3(c).

 

(29)                           “Declaration” means the Declaration of Trust of
FM Trust dated as of July 23, 2004.

 

(30)                           “Employee Plans” has the meaning attributed to
that term in Section 5.3(34)(a).

 

(31)                           “Encumbrance” means any encumbrance, lien,
charge, hypothecation, pledge, mortgage, title retention agreement, security
interest of any nature, adverse Claim, exception, reservation, easement, right
of occupation, option, right of pre-emption, privilege or any matter capable of
registration against title or any Contract to create any of the foregoing.

 

(32)                           “Environmental Laws” has the meaning attributed
to that term in Section 5.3(33)(a).

 

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(33)                           “Equity Interests” means, with respect to any
Person, any and all present and future shares, units, trust units, partnership
or other interests, participations or other equivalent rights in that Person’s
equity or capital, however designated and whether voting or non-voting.

 

(34)                           “Final Purchase Price” means the Initial Purchase
Price, as adjusted pursuant to Section 2.4.

 

(35)                           “Financial Statements” means:

 

(a)                                  in the case of the Corporation, the audited
financial statements of the Corporation as at and for the financial years ended
December 31, 2005, 2006 and 2007, consisting of the balance sheet, income
statement, cash flow statement and statement of retained earnings and notes
thereto, copies of which financial statements are attached as
Schedule 1.1(35)(a); and

 

(b)                                 in the case of HondaSub, the audited
financial statements of HondaSub as at and for the financial years ended
March 31, 2007 and 2008 consisting of the balance sheet, income statement and
statement of retained earnings, copies of which financial statements are
attached as Schedule 1.1(35)(b);

 

provided, however, that: (i) references in this Agreement to “Financial
Statements” in respect of times prior to the Closing shall be deemed to refer
(with all necessary changes) to the corresponding unaudited financial
statements; and (ii) the audited financial statements of HondaSub shall be
subject to restatement to reflect a loss on the Grid Note entered into by the
Corporation in favour of HondaSub as of July 23, 2004, and to reflect any tax
return refilings that are necessary or advisable in respect of periods prior to
the Closing Date.

 

(36)                           “Financial Statements Date” means, in the case of
the Corporation, December 31, 2007 and, in the case of HondaSub, March 31, 2008.

 

(37)                           “FM Trust” means John G. Armstrong, sole trustee
of The FuelMaker Trust, a trust established under the laws of the Province of
Ontario.

 

(38)                           “GAAP” means generally accepted accounting
principles in effect from time to time in Canada, including those principles set
forth in the Handbook published by the Canadian Institute of Chartered
Accountants or any successor institute, consistently applied.

 

(39)                           “Governmental Authority” means any domestic or
foreign government, whether federal, provincial, state, territorial, local,
regional, municipal, or other political jurisdiction, and any agency, authority,
instrumentality, court, tribunal, board, commission, bureau, arbitrator,
arbitration tribunal or other tribunal, or any quasi-governmental or other
entity, insofar as it exercises a legislative, judicial, regulatory,
administrative, expropriation or taxing power or function of or pertaining to
government.

 

(40)                           “Greenfield” means Greenfield AG, a Swiss
corporation.

 

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(41)                           “Greenfield/Honda Sublicense” has the meaning
attributed to that term in Section 3.2(d).

 

(42)                           “Greenfield License Agreement” means collectively
that license agreement with an effective date of August 5, 1989, entered into by
the Corporation and Sulzer Brothers Limited, as amended by the amendment entered
into by the Corporation and Sulzer Brothers Limited with an effective date of
March 19, 1990; the amendment, styled as “Amendment #1”, entered into by the
Corporation and Sulzer Burckhardt Engineering Works Limited with an effective
date of April 7, 1994; the amendment, styled as “Amendment #2”, entered into by
the Corporation and Sulzer Burckhardt Engineering Works Limited with an
effective date of September 25, 1995; the Assignment of License Agreement
entered into by the Corporation, Sulzer AG and Burckhardt Compression AG on
December 23, 2002; the Assignment of License Agreement entered into by the
Corporation and Greenfield dated February 13, 2003; the Assignment of License
Agreement as Amended between the Corporation, HondaSub and Honda dated May 6,
2004 (the “Assignment of License Agreement as Amended”); and the amendment,
styled as “Amendment #3”, entered into by Greenfield, HondaSub and Honda dated
March 18, 2008.

 

(43)                           “Greenfield Sublicense Agreement” means the
Sublicense Agreement between HondaSub and the Corporation dated May 6, 2004 in
respect of certain rights under the Greenfield License Agreement.

 

(44)                           “Hazardous Substances” has the meaning attributed
to that term in Section 5.3(33)(a).

 

(45)                           “Honda” means American Honda Motor Co., Inc., a
corporation formed under the laws of the State of California.

 

(46)                           “Honda Purchased Shares” has the meaning
attributed to that term in Section 2.3(a).

 

(47)                           “Honda’s Solicitors” means McMillan LLP.

 

(48)                           “HondaSub” means 2045951 Ontario Inc., a
corporation formed under the laws of the Province of Ontario.

 

(49)                           “HondaSub Intellectual Property” means HondaSub’s
right, title and interest in and to:

 

(a)                                  the Intellectual Property that was acquired
by HondaSub from the Corporation as of July 23, 2004, which, for greater
certainty, excludes the Intellectual Property that is the subject of the
Greenfield Sublicense Agreement and the Intellectual Property licensed by
Greenfield under the Greenfield License Agreement;

 

(b)                                 the right, title and interest of the
Corporation in and to all licenses and other agreements (if any) in connection
with the Intellectual Property licensed to or used by the Corporation in
connection with the HRA or VRA or both, that was acquired by HondaSub from the
Corporation as of July 23, 2004 (excluding the Greenfield License Agreement and
the Greenfield Sublicense Agreement); and

 

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(c)                                  the Intellectual Property developed or
acquired by the Corporation after July 23, 2004 that contributed to the
development of the HRA, the VRA or otherwise related to Refueling Technology.

 

(50)                           “HondaSub IP Contracts” has the meaning
attributed to that term in Section 5.2(14)(a).

 

(51)                           “HondaSub IP Participant” has the meaning
attributed to that term in Section 5.2(14)(k).

 

(52)                           “HRA” means the Home Refueling Appliance
developed or manufactured by the Corporation.

 

(53)                           “Indemnified Party” has the meaning attributed to
that term in Section 5.8(a).

 

(54)                           “Indemnifying Party” has the meaning attributed
to that term in Section 5.8(a).

 

(55)                           “Indemnification Claim Notice” has the meaning
attributed to that term in Section 5.8(a).

 

(56)                           “Initial Purchase Price” has the meaning
attributed to that term in Section 2.2.

 

(57)                           “Insurance Policies” has the meaning attributed
to that term in Section 5.3(18).

 

(58)                           “Intellectual Property” means (i) Patents; and
(ii) inventions, trade-marks, trade-mark applications and registrations, trade
names, trade name registrations, service marks, designs, copyrights, copyright
applications and registrations, industrial designs, industrial design
applications and registrations, trade secrets, know-how, show-how, computer
systems and software, including the content of all documentation relating
thereto, related object and source codes therefore, and any other proprietary,
intellectual property and other rights relating to any or all of the foregoing
anywhere in the world.

 

(59)                           “Interim Financial Statements” means the
unaudited financial statements of the Corporation and HondaSub as at and for the
six-month period ended June 30, 2008 and the three-month period ended June 30,
2008, respectively, copies of which financial statements are attached as
Schedule 1.1(59).

 

(60)                           “Interim Period” has the meaning attributed to
that term in Section 6.8.

 

(61)                           “Inventories” means inventories, including all
finished goods, works-in-progress, raw materials, spare parts, replacement
parts, and all other materials and supplies to be used or consumed by the
Corporation in the production of finished goods.

 

(62)                           “IP and Support Agreement” means the IP and
Support Agreement between HondaSub, Honda and the Corporation dated July 23,
2004 under which the Corporation transferred certain Intellectual Property to
HondaSub in exchange for support.

 

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(63)                           “IP License Agreement” means the License
Agreement between HondaSub, the Corporation and Honda dated July 23, 2004 under
which HondaSub granted a non-exclusive license to the Corporation in respect of
the HondaSub Intellectual Property.

 

(64)                           “Leased Property” has the meaning attributed to
that term in Section 5.3(11).

 

(65)                           “Leases” has the meaning attributed to that term
in Section 5.3(11).

 

(66)                           “Letter” has the meaning attributed to that term
in Section 2.3(c).

 

(67)                           “Loss” or “Losses” means any and all loss,
liability, damage, cost or expense actually suffered or incurred by a party
resulting from any act, omission or state of facts or any Claim, assessment,
judgment or settlement or compromise relating thereto which may give rise to a
right to indemnification under Section 5.7, including the costs and expenses of
any Claim, assessment, judgment, settlement or compromise relating thereto, but

 

(a)                                  excluding loss of profits and consequential
damages and excluding any contingent liability until it becomes actual; and

 

(b)                                 reduced by any recovery or settlement (net
of all expenses incurred in connection with obtaining such recovery or
settlement or payment thereof) under or pursuant to any insurance coverage, or
pursuant to any Claim, recovery, settlement or payment by or against any other
Person.

 

(68)                           “Material Adverse Change” or “Material Adverse
Effect,” as the case may be, means any change or effect that:

 

(a)                                  is or is reasonably likely to be materially
adverse to the Business, Assets, liabilities, capital, financial condition or
results of operation of the Corporation, taken as a whole; or

 

(b)                                 materially adversely affects the ability of
the Corporation to conduct the Business after the Closing Date substantially as
the Business has been conducted to the date of this Agreement.

 

The term Material Adverse Change or Material Adverse Effect shall not, however,
include any change or effect arising from or related to:  (i) any general
condition affecting the industry in which the Corporation is engaged and that
does not affect the Corporation disproportionately, as compared to other
companies in such industry; (ii) the announcement or pendency of this Agreement
or any of the transactions contemplated hereby, or the disclosure of the
identity of the Purchaser as the acquiror of the Corporation; (iii) acts of war
or terrorism; (iv) general economic, political and financial market changes that
do not affect the Corporation disproportionately; or (v) changes in law or in
GAAP that occur after the date of this Agreement.

 

(69)                           “Material Contract” has the meaning attributed to
that term in Section 5.2(16) in respect of HondaSub, and Section 5.3(20) in
respect of the Corporation.

 

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(70)                           “Notice” has the meaning attributed to that term
in Section 7.11(1).

 

(71)                           “Notice of Disagreement” has the meaning
attributed to that term in Section 2.4(c).

 

(72)                           “OHSA” has the meaning attributed to that term in
Section 5.3(36)(a).

 

(73)                           “Other Agreements” has the meaning attributed to
that term in Section 7.5.

 

(74)                           “Ordinary Course” means, with respect to an
action taken by a Person, that the action is consistent with past practices of
the Person and is taken in the normal day-to-day course of business of the
Person.

 

(75)                           “Parties” means collectively, Honda, FM Trust,
the Corporation and the Purchaser, and “Party” means any of them.

 

(76)                           “Patents” means all patents (including design
patents), patent applications (including design patent applications), invention
disclosures, certificates or models of utility, and other rights of invention,
worldwide necessary to or used in the Target Intellectual Property, including
any reissues, divisions, continuations and continuations-in-part, provisionals,
reexamined patents or other applications or patents claiming the benefit of the
filing date of any such application or patent.

 

(77)                           “Permits” means franchises, licenses,
qualifications, authorizations, consents, certificates, registrations,
exemptions, waivers, filings, grants, notifications, privileges, rights, orders,
judgments, rulings, directives, permits and other approvals, obtained from or
required by a Governmental Authority.

 

(78)                           “Permitted Encumbrances” means:

 

(a)                                  servitudes, easements, restrictions,
rights-of-way and other similar rights in real property or any interest therein,
provided that those servitudes, easements, restrictions, rights-of-way and other
similar rights are not of such a nature as to have a Material Adverse Effect on
the use by the Target Company of the property subject thereto;

 

(b)                                 undetermined or inchoate liens, charges and
privileges incidental to current construction or current operations, except for
liens, charges and privileges related to Taxes;

 

(c)                                  Encumbrances of any nature whatsoever
claimed or held by any Governmental Authority that have not at the time been
filed or registered against the title to the asset or served on a Target Company
or a Vendor pursuant to Applicable Law or that relate to obligations not due or
delinquent, except for Encumbrances related to Taxes;

 

(d)                                 assignments of insurance provided to
landlords or their mortgagees or hypothecary creditors pursuant to the terms of
any lease and liens or rights reserved in any lease for rent or for compliance
with the terms of that lease;

 

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(e)                                  security given in the Ordinary Course to
any public utility or Government Authority in connection with the operations of
the Business, other than security for borrowed money;

 

(f)                                    the reservations in any original grants
from the Crown of any real property or interest therein and statutory exceptions
to title that do not materially detract from the value of the real property
concerned or materially impair its use in the operation of the Business; and

 

(g)                                 the Permitted Encumbrances described in
Schedule 1.1(78).

 

(79)                           “Person” is to be broadly interpreted and
includes an individual, a corporation, a company, a limited liability company, a
partnership, a joint venture, a trust, a trustee, an association, an
unincorporated organization, a Governmental Authority, an executor or
administrator or other legal or personal representative, or any other juridical
entity.

 

(80)                           “Personal Information” means any information in
the possession, custody or control of the Target Companies about an identifiable
individual, and for greater certainty includes all such information which falls
within the definition of “personal information” in any personal information
protection law of Canada, or any province or territory thereof to which the
Target Companies are subject.

 

(81)                           “Personal Property” has the meaning attributed to
that term in Section 5.3(13).

 

(82)                           “Personal Property Leases” has the meaning
attributed to that term in Section 5.3(14).

 

(83)                           “Post-Closing Taxes” has the meaning attributed
to that term in Section 6.3(4).

 

(84)                           “Post-Signing Returns” has the meaning attributed
to that term in Section 6.3(1)(a).

 

(85)                           “Pre-Closing Date Tax Returns” has the meaning
attributed to that term in Section 6.3(2).

 

(86)                           “proposed to be conducted as contemplated as of
the Closing Date”, as used in connection with the Business, means the Business
proposed to be conducted as referred to in the management presentation made to
the Purchaser by the Corporation on June 20, 2008 at the Corporation’s offices
in Toronto, Ontario.

 

(87)                           “Purchased Shares” means, collectively,
(i) 26,235,528 issued and outstanding common shares in the capital of HondaSub,
(ii) 1,344 issued and outstanding non-voting preferred shares in the capital of
the Corporation and (iii) 6,744 issued and outstanding voting common shares in
the capital of the Corporation.

 

(88)                           “Purchaser” means Clean Energy Fuels Corp., a
corporation existing under the laws of the State of Delaware, or, subject to
complying with Section 7.12, its wholly-owned subsidiary.

 

(89)                           “Purchaser Claims” has the meaning attributed to
that term in Section 5.7(4)(a).

 

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(90)                           “Rate” has the meaning attributed to that term in
Section 2.4(e).

 

(91)                           “RC Election” has the meaning attributed to that
term in Section 6.4(7).

 

(92)                           “Refueling Technology” means natural gas
compression and refueling equipment and appliances and related research and
technology and know-how related to the design and manufacture of natural gas
compression and refueling equipment and appliances, including the HRA and VRA.

 

(93)                           “Remittance Amount” has the meaning attributed to
that term in Section 2.3(b).

 

(94)                           “Representatives” means, with respect to any
Party, its Affiliates and, if applicable, its and their respective directors,
officers, employees, agents, attorneys, accountants and other representatives
and advisors.

 

(95)                           “Restricted Period” has the meaning attributed to
that term in Section 6.4(1).

 

(96)                           “Restricted Territory” has the meaning attributed
to that term in Section 6.4(1).

 

(97)                           “SEC Requirements” has the meaning attributed to
that term in Section 7.1.

 

(98)                           “Section 116 Certificate” has the meaning
attributed to that term in Section 2.3(b).

 

(99)                           “Specified Representations and Warranties” has
the meaning attributed to that term in Section 5.5(1)(a).

 

(100)                     “Statement” has the meaning attributed to that term in
Section 2.4(b).

 

(101)                     “Straddle Period” has the meaning attributed to that
term in Section 6.3(4).

 

(102)                     “Target Companies” means, collectively, the
Corporation and HondaSub, and “Target Company” means either one of them.

 

(103)                     “Target Intellectual Property” means all Intellectual
Property owned or used by the Target Companies and that is necessary or used in
the conduct of the Business as it is presently conducted or proposed to be
conducted as contemplated as of the Closing Date, and all applications therefor
and all goodwill connected therewith, including all licenses and all like rights
used by or granted to the Target Companies in connection with the Business and
all rights to register or otherwise apply for the protection of any of the
foregoing.

 

(104)                     “Tax Act” means the Income Tax Act (Canada).

 

(105)                     “Tax Escrow Agent” has the meaning attributed to that
term in Section 2.3(b).

 

(106)                     “Taxes” means taxes, duties, fees, premiums,
assessments, imposts, levies and other charges of any kind whatsoever imposed by
any Governmental Authority, including 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

 

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receipts, profits, capital, transfer, land transfer, sales, goods and services,
harmonized sales, use, valued-added, excise, stamp, withholding, premium,
business, franchising, property, employer health, payroll, employment, health,
social services, education and social security taxes, surtaxes, customs duties
and import and export taxes, license, franchise and registration fees and
employment insurance, health insurance and Canada, and other government pension
plan premiums or contributions), and “Tax” has a corresponding meaning.

 

(107)                     “Tax Return” means all returns, declarations,
designations, forms, schedules, reports and other documents of every nature
whatsoever required to be filed with any Governmental Authority with respect to
any Taxes.

 

(108)                     “Threshold” has the meaning attributed to that term in
Section 5.7(4)(a).

 

(109)                     “Transactions” means the transactions contemplated by
this Agreement.

 

(110)                     “Transmission” has the meaning attributed to that term
in Section 7.11(1)(c).

 

(111)                     “Trustee” means John G. Armstrong, in his capacity as
sole trustee of the FM Trust.

 

(112)                     “Vendors” means, collectively, Honda and FM Trust, and
a “Vendor” means any of them.

 

(113)                     “VRA” means the Vehicle Refueling Appliance developed
or manufactured by the Corporation.

 

(114)                     “Working Capital” means the Corporation’s consolidated
current assets minus the Corporation’s consolidated current liabilities, as
determined in accordance with GAAP and converted into equivalent United States
dollars in accordance with Section 2.4(g). For greater certainty, current
liabilities shall not include debt or interest owing by the Corporation to
HondaSub or Honda.

 

1.2                              Construction.  This Agreement has been
negotiated by each Party with the benefit of legal representation, and any
rule of construction to the effect that any ambiguities are to be resolved
against the drafting Party shall not apply to the construction or interpretation
of this Agreement.

 

1.3                              Certain Rules of Interpretation.  In this
Agreement:

 

(a)                                  the division into Articles and Sections and
the insertion of headings and the Table of Contents are for convenience of
reference only and do not affect the construction or interpretation of this
Agreement;

 

(b)                                 the expressions “hereof”, “herein”,
“hereto”, “hereunder”, “hereby” and similar expressions refer to this Agreement
and not to any particular portion of this Agreement; and

 

(c)                                  unless specified otherwise or the context
otherwise requires:

 

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(i)

references to any Article, Section or Schedule are references to the Article or
Section of, or Schedule to, this Agreement;

 

 

(ii)

“including” or “includes” means “including (or includes) but is not limited to”
and shall not be construed to limit any general statement preceding it to the
specific or similar items or matters immediately following it;

 

 

(iii)

“the aggregate of”, “the total of”, “the sum of”, or a phrase of similar meaning
means “the aggregate (or total or sum), without duplication, of”;

 

 

(iv)

references to Contracts are deemed to include all present and future amendments,
supplements, restatements and replacements to those Contracts;

 

 

(v)

references to any legislation, statutory instrument or regulation or a section
thereof, unless otherwise specified, is a reference to the legislation,
statutory instrument, regulation or section as amended, restated and re-enacted
from time to time; and

 

 

(vi)

words in the singular include the plural and vice-versa and words in one gender
include all genders.

 

1.4                              Knowledge.  In this Agreement, any reference to
the knowledge of the Corporation means the actual knowledge of John Lyon, Ralph
Rackham and/or Don Jevons, and any reference to the knowledge of Honda means the
actual knowledge of Dan Bonawitz and/or Richard Crawford.

 

1.5                              Computation of Time.  In this Agreement, unless
specified otherwise or the context otherwise requires:

 

(a)                                  a reference to a period of days is deemed
to begin on the first day after the event that started the period and to end at
5:00 p.m. on the last day of the period, but if the last day of the period does
not fall on a Business Day, the period ends at 5:00 p.m. on the next succeeding
Business Day;

 

(b)                                 all references to specific dates mean
11:59 p.m. on the dates;

 

(c)                                  all references to specific times shall be
references to Los Angeles, California time; and

 

(d)                                 with respect to the calculation of any
period of time, references to “from” mean “from and excluding” and references to
“to” or “until” mean “to and including”.

 

1.6                              Performance on Business Days.  If any action is
required to be taken pursuant to this Agreement on or by a specified date that
is not a Business Day, the action is valid if taken on or by the next succeeding
Business Day.

 

1.7                              Currency and Payment.  In this Agreement,
unless specified otherwise:

 

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(a)                                  Except where the context indicates
otherwise, in which case references to dollar amounts or obligations, including
indemnification obligations, shall mean United States dollars, references to
dollar amounts or “$” are to Canadian dollars;

 

(b)                                 any payment is to be made by wire transfer
in immediately available funds;

 

(c)                                  any payment to Honda is to be made by wire
transfer in immediately available funds to:

 

Bank of America

100 West 33rd Street

New York, NY  10001

Account # 12358-01592

ABA #  0260-0959-3; and

 

(d)                                 except in the case of any payment due on the
Closing Date, any payment due on a particular day must be received and available
by 5:00 p.m. on the due date and any payment received and available after that
time is deemed to have been made and received on the next succeeding Business
Day.

 

1.8                               Accounting Terms.  In this Agreement, unless
specified otherwise, each accounting term has the meaning assigned to it under
GAAP.

 

1.9                               Schedules.  The following Schedules are
attached to and form part of this Agreement:

 

Schedule 1.1(35)(a)

 

Corporation’s Financial Statements

Schedule 1.1(35)(b)

 

HondaSub’s Financial Statements

Schedule 1.1(59)

 

Interim Financial Statements

Schedule 1.1(78)

 

Permitted Encumbrances

Schedule 3.2(c)

 

Form of Technology Agreement

Schedule 3.2(g)

 

Certificate of Representations and Warranties

Schedule 3.2(h)

 

Certificate of Covenants

Schedule 3.2(l)

 

Form of General Releases from Vendors

Schedule 3.3(g)(i)

 

The Purchaser’s Certificate of Representations and Warranties

Schedule 3.3(g)(ii)

 

The Purchaser’s Certificate of Covenants and Obligations

Schedule 4.2(1)(c)

 

Approvals

Schedule 5.2(14)

 

HondaSub Intellectual Property

Schedule 5.2(16)

 

HondaSub’s Material Contracts and Other Contracts

Schedule 5.2(27)

 

HondaSub’s Accounts and Attorneys

Schedule 5.3(5)

 

Capital of the Corporation

Schedule 5.3(11)

 

Leased Property

Schedule 5.3(13)

 

Personal Property Matters

Schedule 5.3(14)

 

Personal Property Leases

Schedule 5.3(17)

 

Target Intellectual Property Matters

Schedule 5.3(18)

 

Insurance Policies

Schedule 5.3(20)

 

Corporation’s Material Contracts

Schedule 5.3(22)

 

Permits

 

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Schedule 5.3(23)

 

Regulatory and Third Party Approvals

Schedule 5.3(28)

 

Changes Out of the Ordinary Course

Schedule 5.3(30)

 

Warranties

Schedule 5.3(31)

 

Litigation

Schedule 5.3(32)

 

Corporation’s Accounts and Attorneys

Schedule 5.3(33)

 

Environmental Matters

Schedule 5.3(34)

 

Employee Plans

Schedule 5.3(35)

 

Labor Matters

Schedule 5.3(36)

 

OSHA Requirements, Correspondence and Inspection Reports

Schedule 5.3(37)

 

Top 20 Customers

Schedule 5.4(5)

 

Required Government Permits, Filings and Notices of the Purchaser

Schedule 7.1

 

Press Release

 

ARTICLE 2

PURCHASE AND SALE

 

2.1                               Agreement to Purchase and Sell.  Subject to
the terms and conditions of this Agreement, at the Closing Time, Honda shall
sell to the Purchaser and the Purchaser shall purchase from Honda, all of the
Purchased Shares owned by Honda, constituting all of the issued and outstanding
shares in the capital of HondaSub and all of the issued and outstanding shares
in the capital of the Corporation other than those owned by HondaSub or the FM
Trust, free and clear of all Encumbrances.  Subject to the terms and conditions
of this Agreement, at the Closing Time, the FM Trust shall sell to the Purchaser
and the Purchaser shall purchase from the FM Trust all of the Purchased Shares
owned by the FM Trust, constituting all of the issued and outstanding shares in
the capital of the Corporation other than those owned by Honda and HondaSub,
free and clear of all Encumbrances.

 

2.2                               Purchase Price. Subject to the terms and
conditions of this Agreement, the aggregate purchase price of US$17,000,000.00
(the “Initial Purchase Price”) shall be paid on the Closing Date by the
Purchaser to (a) Honda for the Purchased Shares in HondaSub in an amount equal
to the Initial Purchase Price less US$2.00, (b) to Honda for the Purchased
Shares in the Corporation in the amount of US $1.00, (c) to the FM Trust for the
Purchased Shares in the Corporation in the amount of US $1.00, and (d) to Vendor
for the covenant not to compete contained in Section 6.4(1) in the amount of
nil.

 

2.3                               Withholding Matters.

 

(a)                                  Subject to this Section 2.3, Honda will
deliver to the Purchaser on the Closing Date the Section 116 Certificate (as
defined below) issued pursuant to Section 116 of the Tax Act in respect of the
sale of the Purchased Shares previously owned by Honda (the “Honda Purchased
Shares”) to the Purchaser.

 

(b)                                 If a certificate issued by the Minister of
National Revenue pursuant to Section 116 of the Tax Act in respect of the sale
of the Honda Purchased Shares to the Purchaser, specifying a certificate limit
in an amount which is not less than the

 

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Initial Purchase Price (the “Section 116 Certificate”), is not delivered to the
Purchaser on or before the Closing Date, the Purchaser will be entitled to
withhold from the Initial Purchase Price and shall pay to Honda’s Solicitors, as
escrow agent (the “Tax Escrow Agent”), pursuant to an escrow agreement to be
agreed upon by the parties, acting reasonably, an amount equal to 25% of the
Initial Purchase Price in respect of the sale of the Honda Purchased Shares (the
“Remittance Amount”), which the Purchaser may be required to remit pursuant to
Section 116 of the Tax Act in connection with such purchase.

 

(c)                                  If Honda obtains and delivers to the
Purchaser a letter from the Canada Revenue Agency (the “CRA”) authorizing the
Purchaser to retain the Remittance Amount pending the completion of the CRA’s
review of the application for the Section 116 Certificate (the “Letter”), the
Purchaser shall direct the Tax Escrow Agent to continue to hold the Remittance
Amount until either:  (1) the CRA subsequently notifies the Purchaser that it
may no longer rely upon the Letter in order to validly refrain from remitting
the Remittance Amount to the CRA; or (2) the CRA issues the Section 116
Certificate and Honda delivers such certificate to the Purchaser.

 

(d)                                 If the Purchaser has withheld an amount
pursuant to Section 2.3(b) and Honda does not deliver to the Purchaser, prior to
the 25th day after the end of the month in which the Closing Date occurs, the
Section 116 Certificate or the Letter, the Purchaser may direct the Tax Escrow
Agent to remit to the Receiver General for Canada, on its behalf, the Remittance
Amount pursuant to Section 116 of the Tax Act and the amount so remitted shall
be credited to the Purchaser as payment of the amount owing to Honda in respect
of the Initial Purchase Price.

 

(e)                                  If the Letter is delivered by Honda to the
Purchaser, but the CRA subsequently notifies the Purchaser that it may no longer
rely upon the Letter in order to validly refrain from remitting the Remittance
Amount to the CRA, the Purchaser may direct the Tax Escrow Agent to remit to the
Receiver General for Canada, on its behalf, the Remittance Amount pursuant to
Section 116 of the Tax Act and the amount so remitted shall be credited to the
Purchaser as payment of the amount owing to Honda in respect of the Initial
Purchase Price.

 

(f)                                    If Honda delivers the Section 116
Certificate to the Purchaser at a time when amounts continue to be held in
escrow by the Tax Escrow Agent, the Purchaser will promptly direct the Tax
Escrow Agent to pay to Honda the Remittance Amount withheld pursuant to
Section 2.3(b), plus any accrued interest in respect of such withheld amounts,
less any amounts remitted out of the Remittance Amount to the Receiver General
for Canada pursuant to this Section 2.3.  Any amounts released by the Tax Escrow
Agent to Honda shall be credited to the Purchaser as payment of the amount owing
to Honda in respect of the Initial Purchase Price.

 

(g)                                 If, following the Closing, yet prior to the
delivery of the Section 116 Certificate, the CRA indicates that the Section 116
Certificate will be issued upon the payment of an amount (the “Tax Amount”) that
does not exceed the Remittance

 

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Amount, the Tax Escrow Agent will remit the Tax Amount to the Receiver General
for Canada as payment of the Tax Amount (and the amount so remitted will be
credited to the Purchaser as payment of the amount owing to Honda in respect of
the Initial Purchase Price).  Upon delivery of such certificate, the Tax Escrow
Agent shall disburse the remaining portion of the Remittance Amount, if any, to
Honda (plus any interest or other income earned thereon, net of any applicable
Taxes) and the amount so distributed will be credited to the Purchaser as
payment of the amount owing to Honda in respect of the Initial Purchase Price.

 

(h)                                 Subject to this Section 2.3, the Initial
Purchase Price, and any positive adjustments thereto, shall be paid to Honda
free and clear of, and without deduction in respect of, any Taxes, charges or
other levies.

 

2.4                               Purchase Price Adjustment.

 

(a)                                  The Initial Purchase Price shall be
increased or decreased, as the case may be, by any difference between the
Working Capital at the time of Closing (the “Closing Working Capital”) and the
Base Working Capital.  If the Closing Working Capital is less than the Base
Working Capital, the Initial Purchase Price shall be decreased dollar-for-dollar
by the difference.  If the Closing Working Capital is greater than the Base
Working Capital, the Initial Purchase Price shall be increased dollar-for-dollar
by the difference.  The Closing Working Capital shall be determined and
calculated using the same principles, practices and methods as were used in
determining the Base Working Capital based thereon.

 

(b)                                 Within 45 days after the Closing Date, the
Purchaser shall prepare and deliver to Vendors a written statement (the
“Statement”) setting forth in reasonable detail its calculation of Closing
Working Capital.

 

(c)                                  During the 20-day period following the
receipt by Vendors of the Statement, Vendors and their respective
Representatives shall be permitted to review during normal business hours and
make copies reasonably required of (i) the working papers of the Purchaser, the
Corporation and, if relevant, its independent auditors relating to the
preparation of the Statement and (ii) any supporting schedules, supporting
analyses and other supporting documentation relating to the preparation of the
Statement.  The Statement shall become final and binding upon the parties on the
20th day following delivery thereof, except to the extent that Honda gives
written notice of disagreement with the Statement (the “Notice of Disagreement”)
to the Purchaser prior to such date.  Any Notice of Disagreement shall
(A) specify in reasonable detail the nature of any disagreement so asserted (any
such disagreement to be limited to whether such calculation of Closing Working
Capital is mathematically correct and/or have been prepared in accordance with
the definitions of Closing Working Capital, and the definition included in such
definitions) and (B) if independent auditors are engaged by Honda in connection
with the preparation of the Notice of Disagreement, be accompanied by a
certificate of the independent auditors of Honda that they concur with each of
the positions taken by Honda in the Notice of Disagreement. 

 

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If a Notice of Disagreement complying with the preceding sentence is received by
the Purchaser in a timely manner, then the Statement (as revised in accordance
with clause (I) or (II) below) shall become final and binding upon the Parties
on the earlier of (I) the date the Purchaser and Honda resolve in writing any
differences they have with respect to the matters specified in the Notice of
Disagreement or (II) the date any disputed matters are finally resolved in
writing by the Accounting Firm.

 

(d)                                 During the 20-day period following the
delivery of a Notice of Disagreement that complies with Section 2.4(c), the
Purchaser and Honda shall seek in good faith to resolve in writing any
differences which they may have with respect to the matters specified in the
Notice of Disagreement.  During such period, the Purchaser and its independent
auditors shall be permitted to review and make copies reasonably required of
(i) the working papers of Honda’s accountants relating to the preparation of the
Notice of Disagreement and (ii) any supporting schedules, supporting analyses
and other supporting documentation relating to the preparation of the Notice of
Disagreement.  If, at the end of such 20-day period, the differences as
specified in the Notice of Disagreement are not resolved, Honda and the
Purchaser shall promptly select PricewaterhouseCoopers LLP (the “Accounting
Firm”) and submit to the Accounting Firm for review and resolution of any and
all matters which remain in dispute and which are properly included in the
Notice of Disagreement.  In resolving any disputed item, the Accounting Firm
shall:  (i) be bound by the provisions of this Section 2.4 and the definition of
Closing Working Capital and the definition included in such definitions;
(ii) limit its review to matters still in dispute as specifically set forth in
the Notice of Disagreement (and only to the extent such matters are still in
dispute following such 20-day period); and (iii) further limit its review solely
to whether the Statement has been prepared in accordance with this Section 2.4. 
The determination of any item that is a component of Closing Working Capital and
is the subject of a dispute cannot, however, be in excess of, or less than, the
greatest or lowest value, respectively, claimed for any particular item in the
Statement or the Notice of Disagreement (or, if different, the value claimed by
the relevant Party at the end of such 20-day period).  Honda and the Purchaser
shall use commercially reasonable efforts to cause the Accounting Firm to render
a decision resolving the matters in dispute within 30 days following the
submission of such matters to the Accounting Firm.  Honda and the Purchaser
agree that judgment may be entered upon the determination of the Accounting Firm
in any court having jurisdiction over the Party against which such determination
is to be enforced.  Except as specified in the following sentence, the fees and
expenses of the Accounting Firm in connection with the Accounting Firm’s
determination of Closing Working Capital pursuant to this Section 2.4 shall be
borne, in its entirety, by the Party whose calculation of the Final Purchase
Price based upon its calculation of Closing Working Capital as initially
submitted to the Accounting Firm) is furthest away from the Final Purchase Price
based upon the Closing Working Capital as determined by the Accounting Firm. 
The fees and expenses of the Purchaser’s independent auditors (if any) incurred
in connection with the issuance of the Statement shall be borne by the
Purchaser, and the fees and expenses of the independent auditors of Honda
incurred in connection with its review of the Statement shall be borne by Honda.

 

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(e)                                  If the Closing Working Capital is greater
than the Base Working Capital, the Purchaser shall, within five Business Days
after the final determination of Closing Working Capital, make payment to Honda
by wire transfer of immediately available funds of the amount of such excess,
together with interest thereon at the rate of 6% per annum (the “Rate”),
calculated on the basis of the actual number of days elapsed, from the Closing
Date to the date of actual payment, compounded annually.  If the Closing Working
Capital is less than the Base Working Capital, Honda shall, within five Business
Days after the final determination of Closing Working Capital, make payment to
the Purchaser by wire transfer of immediately available funds of the amount of
such excess, together with interest thereon at the Rate, calculated on the basis
of the actual number of days elapsed, from the Closing Date to the date of
actual payment, compounded annually.

 

(f)                                    Any payment required to be made under
this Section 2.4 shall be deemed an adjustment to the Initial Purchase Price.

 

(g)                                 For the purposes of this Agreement, any
monetary conversion from the currency of Canada (or any other foreign country)
to United States currency shall be calculated using the applicable noon exchange
rate posted on the website of the Bank of Canada
(http://www.bank-banque-canada.ca) as of the applicable measurement date.

 

ARTICLE 3

CLOSING ARRANGEMENTS

 

3.1                               Closing.  Subject to satisfaction or waiver of
the conditions set forth in Article 4, the Closing shall take place on the
Closing Date at the offices of Honda’s Solicitors in Toronto, Ontario or at such
other place as may be agreed to by Honda and the Purchaser.

 

3.2                               Vendors’ Closing Deliveries.  At the Closing,
the Vendors shall deliver or cause to be delivered to the Purchaser the
following:

 

(a)                                  certificates representing the Purchased
Shares, accompanied by stock transfer powers duly executed in blank or duly
executed instruments of transfer, and all such other assurances, consents and
other documents as the Purchaser may reasonably request to effectively transfer
to the Purchaser title to the Purchased Shares free and clear of all
Encumbrances;

 

(b)                                 a certified copy of a resolution of the
board of directors and/or shareholders of the each Target Company consenting to
the transfer of the Purchased Shares from the Vendors to the Purchaser as
contemplated by this Agreement and authorizing the execution, delivery and
performance of all contracts, agreements, instruments, certificates and other
documents required by this Agreement to be delivered by the Target Companies;

 

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(c)                                  the technology agreement among Honda,
HondaSub and the Purchaser substantially in the form of Schedule 3.2(c),
executed by HondaSub and Honda;

 

(d)                                 a sublicense of the Greenfield  License
Agreement by HondaSub to Honda, substantially in the form of Schedule 3.2(c),
with any necessary changes, including any changes reasonably required by
Greenfield, executed by HondaSub and Honda (the “Greenfield/Honda Sublicense”);

 

(e)                                  in respect of each of the Corporation and
HondaSub:

 

(i)            a certificate of status or its equivalent under the laws of the
jurisdiction governing its corporate existence;

 

(ii)           a certificate of incumbency; and

 

(iii)          that number of copies reasonably required by the Purchaser,
certified by one of its senior officers, of its Constating Documents, and in the
case of HondaSub, of the resolutions of the board of directors of HondaSub
authorizing the execution, delivery and performance of this Agreement and of all
contracts, agreements, instruments, certificates and other documents required by
this Agreement to be delivered by HondaSub;

 

(f)                                    in respect of Honda:

 

(i)            a certificate of status or its equivalent under the laws of the
jurisdiction governing its corporate existence;

 

(ii)           a certificate of incumbency; and

 

(iii)          that number of copies reasonably required by the Purchaser,
certified by one of its senior officers, of its Constating Documents;

 

(g)                                 a certificate of each Vendor and the
Corporation in respect of its representations and warranties set out in
Section 5.1, 5.2 and 5.3, as the case may be, substantially in the form of
Schedule 3.2(g);

 

(h)                                 a certificate of Honda in respect of its
covenants and other obligations set out in this Agreement substantially in the
form of Schedule 3.2(h);

 

(i)                                     a certified copy of the Declaration;

 

(j)                                     agreements in form reasonably acceptable
to the Purchaser establishing that the following agreements have been
terminated:

 

(i)                                     the Enabling License Agreement made as
of May 6, 2004 between the Corporation, HondaSub and Honda;

 

(ii)                                  the IP and Support Agreement;

 

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(iii)          the Unanimous Shareholders Agreement made as of October 12, 2000
in respect of the affairs of the Corporation, as amended by Amendment No. 1
thereto made as of July 23, 2004 between 1141258 Ontario Inc., 1249077 Ontario
Inc., the Trustee, HondaSub, Honda, John L. Lyon, Ralph Rackham, Gunter Stefan
and the Corporation; and

 

(iv)          the Amended and Restated Development Agreement between the
Corporation, HondaSub and Honda dated July 23, 2004;

 

(k)                                  agreements in form reasonably acceptable to
the Purchaser under which Honda assigns to the Purchaser its interest in the
following agreements:

 

(i)            the Assignment of License Agreement as Amended between the
Corporation, HondaSub and Honda dated May 6, 2004 in respect of the Greenfield
License Agreement;

 

(ii)           the amendment to the Greenfield License Agreement, styled as
“Amendment #3”, entered into by Greenfield, HondaSub and Honda dated March 18,
2008;

 

(iii)          the Greenfield Sublicense Agreement; and

 

(iv)          the IP License Agreement;

 

(l)                                     general releases, in the form attached
hereto as Schedule 3.2(l), executed by each of the Vendors, which Release by
Honda will include cancellation of any and all debt owed by the Corporation or
HondaSub to Honda;

 

(m)                               Financial Statements audited by KPMG LLP in
accordance with GAAP; and

 

(n)                                 At Honda’s option, RC Elections in
accordance with Section 6.4(7).

 

3.3                               The Purchaser’s Closing Deliveries.  At the
Closing, the Purchaser shall deliver or cause to be delivered to the Vendors the
following:

 

(a)                                  payment of the amounts required to be paid
under Section 2.2;

 

(b)                                 receipts for the certificates representing
the Purchased Shares;

 

(c)                                  the technology agreement contemplated in
Section 3.2(c), executed by the Purchaser;

 

(d)                                 the Greenfield/Honda Sublicense, executed by
the Purchaser;

 

(e)                                  in respect of the Purchaser:

 

(i)                                     a certificate of status or its
equivalent under the laws of the jurisdiction governing its corporate existence;

 

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(ii)                                  a certificate of incumbency; and

 

(iii)                               that number of copies reasonably required by
the Vendors, certified by one of its senior officers, of its Constating
Documents and of the resolutions of the board of directors and shareholders of
the Purchaser authorizing its execution, delivery and performance of this
Agreement and of all contracts, agreements, instruments, certificates and other
documents required by this Agreement to be delivered by the Purchaser;

 

(f)                                    agreements in form reasonably acceptable
to Honda under which the Purchaser assumes from Honda Honda’s obligations under
the following agreements:

 

(i)            the Assignment of License Agreement as Amended between the
Corporation, HondaSub and Honda dated May 6, 2004 in respect of the Greenfield
License Agreement;

 

(ii)           the amendment to the Greenfield License Agreement, styled as
“Amendment #3”, entered into by Greenfield, HondaSub and Honda dated March 18,
2008; and

 

(iii)          the Greenfield Sublicense Agreement; and

 

(iv)          the IP License Agreement;

 

(g)                                 a certificate of the Purchaser in respect of
its representations and warranties set out in Section 5.4 substantially in the
form of Schedule 3.3(g)(i) and a certificate of the Purchaser in respect of its
covenants and other obligations set out in this Agreement substantially in the
form of Schedule 3.3(g)(ii); and

 

(h)                                 At Honda’s option, RC Elections in
accordance with Section 6.4(7).

 

ARTICLE 4                               
CONDITIONS OF CLOSING

 

4.1                               The Purchaser’s Conditions.

 

(1)                                  The Purchaser shall be obliged to complete
the Transactions only if each of the following conditions precedent has been
satisfied in full at or before the Closing Time (each of which conditions
precedent is acknowledged to be for the exclusive benefit of the Purchaser):

 

(a)                                  all of the representations and warranties
of each of the Vendors and the Corporation made in this Agreement shall be true
and correct in all material respects as at the Closing Time with the same effect
as if made at and as of the Closing Time (except as those representations and
warranties may be affected by events or transactions (i) expressly permitted by
or resulting from the entering of this Agreement or (ii) approved in writing by
the Purchaser);

 

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(b)                                 the Vendors shall have complied with or
performed in all material respects all of the obligations, covenants and
agreements under this Agreement to be complied with or performed by the Vendors
or any of them at or before the Closing Time, including the Vendors’ Closing
deliveries specified in Section 3.2;

 

(c)                                  all Approvals described in
Schedule 4.2(1)(c) shall have been obtained, in each case in form and substance
satisfactory to the Purchaser, acting reasonably;

 

(d)                                 Honda, HondaSub and the Purchaser shall have
entered into a technology agreement substantially in the form of the draft
agreement attached as Schedule 3.2(c) and the Greenfield/Honda Sublicense;

 

(e)                                  there shall be no injunction or restraining
order issued preventing, and no pending or threatened Claim, against any Party,
for the purpose of enjoining or preventing, the completion of the Transactions
or otherwise claiming that this Agreement or the completion of the Transactions
is improper or would give rise to a Claim under any Applicable Law;

 

(f)                                    the following agreements have been
terminated:

 

(i)                                     the Enabling License Agreement made as
of May 6, 2004 between the Corporation, HondaSub and Honda;

 

(ii)                                  the IP and Support Agreement made as of
July 23, 2004 between the Corporation, HondaSub and Honda;

 

(iii)                               the Unanimous Shareholders Agreement made as
of October 12, 2000 in respect of the affairs of the Corporation, as amended by
Amendment No. 1 thereto made as of July 23, 2004 between 1141258 Ontario Inc.,
1249077 Ontario Inc., the FM Trust, HondaSub, Honda, John L. Lyon, Ralph
Rackham, Gunter Stefan and the Corporation; and

 

(iv)                              the Amended and Restated Development Agreement
between the Corporation, HondaSub and Honda dated July 23, 2004.

 

(g)                                 the Financial Statements have been delivered
and the Purchaser shall have had four Business Days thereafter to consider the
reconciliation of the Financial Statements with United States generally accepted
accounting principles prepared by KPMG, LLP; and

 

(h)                                 there shall have been no Material Adverse
Change between the date of this Agreement and the Closing Date.

 

(2)                                  If any of the conditions in
Section 4.1(1) shall not be satisfied or fulfilled in full at or before the
Closing Time to the satisfaction of the Purchaser acting reasonably, the
Purchaser in its sole discretion may, without limiting any rights or remedies
available to the Purchaser at law or in equity, either:

 

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(a)                                  terminate this Agreement by notice in
writing to the Vendors, except with respect to the obligations contained in
Sections 6.7, 7.1, 7.2, 7.9 and 7.10 which shall survive that termination; or

 

(b)                                 waive compliance with any such condition in
whole or in part by notice in writing to the Vendors, except that no such waiver
shall operate as a waiver of any other condition.

 

4.2                               Vendors’ Conditions.

 

(1)                                  The Vendors shall be obliged to complete
the Transactions only if each of the following conditions precedent has been
satisfied in full at or before the Closing Time (each of which conditions
precedent is acknowledged to be for the exclusive benefit of Honda):

 

(a)                                  all of the representations and warranties
of the Purchaser made in this Agreement shall be true and correct as at the
Closing Time with the same effect as if made at and as of the Closing Time
(except as those representations and warranties may be affected by events or
transactions expressly permitted by or resulting from the entering of this
Agreement);

 

(b)                                 the Purchaser shall have complied with or
performed in all material respects all of the obligations, covenants and
agreements under this Agreement to be complied with or performed by the
Purchaser at or before the Closing Time, including the Purchaser’s Closing
deliveries specified in Section 3.3;

 

(c)                                  all Approvals described in
Schedule 4.2(1)(c) shall have been obtained, in each case in form and substance
satisfactory to Honda, acting reasonably;

 

(d)                                 Honda, HondaSub and the Purchaser shall have
entered into a technology agreement substantially in the form of the draft
agreement attached as Schedule 3.2(c) and the Greenfield/Honda Sublicense;

 

(e)                                  there shall be no injunction or restraining
order issued preventing, and no pending or threatened Claim against any Party
for the purpose of enjoining or preventing, the completion of the Transactions
or otherwise claiming that this Agreement or the completion of the Transactions
is improper or would give rise to a Claim under any Applicable Law; and

 

(f)                                    the agreements referred to in
Section 4.1(1)(f) have been terminated.

 

(2)                                  If any of the conditions in
Section 4.2(1) shall not be satisfied or fulfilled in full at or before to the
Closing Time to the satisfaction of Honda, acting reasonably, Honda in its sole
discretion may, without limiting any rights or remedies available to the Vendors
at law or in equity, either:

 

(a)                                  terminate this Agreement by notice in
writing to the Purchaser, except with respect to the obligations contained in
Sections 6.7, 7.1, 7.2, 7.9 and 7.10 which shall survive that termination; or

 

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(b)                                 waive compliance with any such condition in
whole or in part by notice in writing to the Purchaser, except that no such
waiver shall operate as a waiver of any other condition.

 

4.3                               Termination.  This Agreement (other than the
obligations set out in Sections 6.7, 7.1, 7.2, 7.9 and 7.10, which shall survive
termination) may be terminated by the Purchaser or by Honda, without any
obligation or liability hereunder if the Closing shall not have occurred on or
prior to October 17, 2008, unless extended by mutual agreement of the Purchaser
and Honda.

 

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

 

5.1                               Representations and Warranties of FM Trust. 
FM Trust represents and warrants to the Purchaser as to itself (and not as to
Honda) as follows and acknowledges that the Purchaser is relying on these
representations and warranties in connection with its completion of the
Transactions:

 

(1)                                  Status.  The FM Trust is a legal, valid and
subsisting inter vivos trust under the laws of the Province of Ontario and has
full power and authority under the Declaration to enter into this Agreement and
the contracts, agreements and instruments required by this Agreement to be
delivered by it, and to perform its obligations hereunder and thereunder.  The
Trustee has been validly appointed as the sole trustee of the FM Trust and has
the requisite power and authority to act on behalf of the FM Trust and to enter
into this Agreement and the contracts, agreements and instruments required by
this Agreement to be delivered by the FM Trust, and to perform the obligations
of the FM Trust hereunder and thereunder.  The Declaration has not been
modified, amended or supplemented, and a true and complete copy of the
Declaration has been provided to the Purchaser.

 

(2)                                  Due Authorization. The execution and
delivery of this Agreement by the FM Trust and the contracts, agreements and
instruments required by this Agreement to be delivered by the FM Trust, and the
performance of its obligations hereunder and thereunder do not violate
Applicable Law and have been duly and validly authorized by all necessary action
on the part of the Trustee, as trustee the FM Trust and no other proceedings on
the part of the FM Trust or the Trustee are necessary to authorize the
foregoing.

 

(3)                                  Enforceability.  This Agreement has been
duly executed and delivered by the Trustee as sole trustee of the FM Trust and
is a legal, valid and binding obligation of the FM Trust and/or the Trustee
enforceable against the FM Trust and/or the Trustee in accordance with its
terms.  Each of the contracts, agreements and instruments required by this
Agreement to be executed and delivered by the FM Trust will at the time of the
sale of the Purchased Shares owned by the FM Trust on the Closing Date have been
duly executed and delivered by the Trustee as sole trustee of the FM Trust and
will be enforceable against it in accordance with its terms.

 

(4)                                  Ownership of Purchased Shares.  The FM
Trust is the registered owner of its Purchased Shares, with good and marketable
title thereto, free and clear of all Encumbrances, and has the exclusive right
to dispose of its Purchased Shares as provided in this Agreement. 

 

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None of its Purchased Shares is subject to (i) any Contract or restriction which
in any way limit or restrict the transfer to the Purchaser of its Purchased
Shares other than the transfer restrictions in the Corporation’s Constating
Documents or (ii) any voting trust, pooling agreement, shareholder agreement,
voting agreement or other Contract, arrangement or understanding with respect to
the voting of its Purchased Shares (or any of them) other than the Unanimous
Shareholders Agreement referred to in Section 3.2(j)(iii), true, accurate and
complete copies of which have been provided to the Purchaser.  At or prior to
the sale of the FM Trust’s Purchased Shares on the Closing Date, all those
Contracts and restrictions will have been complied with or terminated and
evidence of that compliance or termination in form and substance satisfactory to
the Purchaser will have been provided to the Purchaser.  On completion of the
Transactions, neither the Trustee nor the FM Trust will have any ownership
interest in the Corporation, HondaSub or any Target Intellectual Property
transferred to the Purchaser hereby, whether direct or indirect, actual or
contingent, and the Purchaser shall have good and marketable title to its
Purchased Shares, free and clear of all Encumbrances.

 

(5)                                  Absence of Conflict.  The execution,
delivery and performance of this Agreement by the FM Trust and the Trustee and
the completion of the Transactions will not (whether after the passage of time
or notice or both), result in:

 

(a)                                  the breach or violation of any of the
provisions of, or constitute a default under, or conflict with or cause the
acceleration of any of its obligations under:

 

(i)            any contract to which FM Trust is a party or by which any of FM
Trust’s Assets is bound or affected;

 

(ii)           any provision of the Declaration;

 

(iii)          any judgment, decree, order or award of any Governmental
Authority having jurisdiction over FM Trust; or

 

(iv)          any Applicable Law; or

 

(b)                                 the creation or imposition of any
Encumbrance over any of the Assets of FM Trust.

 

(6)                                  Residency.           The FM Trust is not
and, at the Closing Time will not be, a non-resident of Canada within the
meaning of the Tax Act.

 

5.2                               Representations and Warranties of Honda. 
Honda represents and warrants to the Purchaser as follows and acknowledges that
the Purchaser is relying on these representations and warranties in connection
with its completion of the Transactions:

 

(1)                                  Organization and Status.  Honda is a
corporation duly incorporated, and is validly subsisting and in good standing
under the laws of the State of California.  HondaSub is a corporation duly
incorporated and is validly subsisting and in good standing under the laws of
the Province of Ontario.

 

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(2)                                  Corporate Power.  Honda has all necessary
corporate power and authority to own or lease or dispose of its undertakings,
property and assets (including its Purchased Shares), to enter into this
Agreement and the contracts, agreements and instruments required by this
Agreement to be delivered by it, and to perform its obligations hereunder and
thereunder.

 

(3)                                  Authorization.  All necessary corporate
action has been taken by Honda or on its part to authorize its execution and
delivery of this Agreement and the contracts, agreements and instruments
required by this Agreement to be delivered by it and the performance of its
obligations hereunder and thereunder.

 

(4)                                  Enforceability.  This Agreement has been
duly executed and delivered by Honda and is a legal, valid and binding
obligation of Honda enforceable against it in accordance with its terms.  Each
of the contracts, agreements and instruments required by this Agreement to be
delivered by Honda and HondaSub will at the Closing Time have been duly executed
and delivered by Honda and HondaSub and will be enforceable against Honda and
HondaSub in accordance with its terms.

 

(5)                                  Ownership of Purchased Shares.  Honda is
the registered and beneficial owner of its Purchased Shares, with good and
marketable title thereto, free and clear of all Encumbrances, and has the
exclusive right to dispose of its Purchased Shares as provided in this
Agreement.  None of the Purchased Shares held by Honda is subject to (i) any
Contract or restriction which in any way limits or restricts the transfer to the
Purchaser of its Purchased Shares other than the transfer restrictions in the
articles of incorporation of HondaSub or the Corporation or (ii) any voting
trust, pooling agreement, shareholder agreement, voting agreement or other
Contract, arrangement or understanding with respect to the voting of its
Purchased Shares (or any of them) other than the Unanimous Shareholders
Agreement referred to in Section 3.2(j)(iii), true, accurate and complete copies
of which have been provided to the Purchaser.  At or prior to the Closing Time,
all those Contracts and restrictions will have been complied with or terminated
and evidence of that compliance or termination in form and substance
satisfactory to the Purchaser will have been provided to the Purchaser.  On
completion of the Transactions, Honda will have no ownership interest in the
Target Companies, whether direct or indirect, actual or contingent, and the
Purchaser shall have good and marketable title to its Purchased Shares, free and
clear of all Encumbrances.

 

(6)                                  Title to Assets.  HondaSub has good and
marketable title to all of its Assets, free and clear of any and all
Encumbrances other than Permitted Encumbrances.

 

(7)                                  Authorized and Issued Capital.  The
authorized capital of HondaSub consists of an unlimited number of common shares,
of which 26,235,528 common shares are issued and outstanding.  At Closing Date,
the paid-up capital of the Purchased Shares in HondaSub for both Canadian legal
and tax purposes is at least the sum of the Initial Purchase Price of such
shares and any adjustment to the Initial Purchase Price of such shares pursuant
to Section 2.4.  Honda is shown on the securities register of HondaSub as the
holder of all of such shares.  All of such shares indicated have been issued and
outstanding, are validly issued and are outstanding as fully paid and
non-assessable shares and were not issued in violation of the pre-emptive rights
of any Person or any Contract or Applicable Law by

 

28

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which HondaSub was bound at the time of the issuance.  There is no security,
option, warrant, right, call, subscription, agreement, commitment or
understanding of any nature whatsoever, fixed or contingent, that directly or
indirectly (i) calls for the issuance, redemption, sale, pledge or other
disposition of any securities of HondaSub or any securities convertible into, or
other rights to acquire, any securities of HondaSub, (ii) obligates HondaSub to
grant, offer or enter into any of the foregoing or (iii) relates to the voting
or control of such interests, securities or rights.  HondaSub has not created
any “phantom interests,” appreciation rights or other similar rights, the value
of which is related to or based upon the price or value of any class or series
of securities of HondaSub.  HondaSub does not have outstanding securities debt
or debt instruments providing for voting rights with respect to HondaSub to the
holders thereof.  There are no shareholders agreements, voting trusts, pooling
agreements or other Contracts, arrangements or understandings in respect of the
voting of any of the shares of HondaSub.  True, accurate and complete copies of
the Constating Documents and other organizational documents of HondaSub have
been provided to the Purchaser.

 

(8)                                  Options.  No Person has any Contract or any
right or privilege (whether by law, pre-emptive or contractual) capable of
becoming a Contract, including convertible securities, warrants, options or
convertible obligations of any nature, for the purchase, subscription, allotment
or issuance of any issued or un-issued shares or other securities of HondaSub.

 

(9)                                  Absence of Conflict.  The execution,
delivery and performance of this Agreement by Honda and the completion of the
Transactions will not (whether after the passage of time or notice or both),
result in:

 

(a)           the breach or violation of any of the provisions of, or constitute
a default under, or conflict with or cause the acceleration of any of its
obligations under:

 

(i)            any Contract to which HondaSub is a party or by which any of
HondaSub’s Assets is bound or affected;

 

(ii)           any provision of the Constating Documents or resolutions of the
board of directors (or any committee thereof) or shareholders of HondaSub;

 

(iii)          any judgment, decree, order or award of any Governmental
Authority having jurisdiction over HondaSub;

 

(iv)          any Approval issued to or held by, HondaSub or held for the
benefit of or necessary to the operation of, HondaSub; or

 

(v)           any Applicable Law; or

 

(b)           the creation or imposition of any Encumbrance over any of
HondaSub’s Assets.

 

(10)                            Conduct of Business.  HondaSub is in compliance
with all Applicable Laws, except such non-compliance as would not reasonably be
expected to cause a Material Adverse Effect.  The only business carried on by
HondaSub is with the Corporation.

 

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(11)                            No Subsidiaries.  HondaSub does not own and does
not have any Contracts of any nature to acquire, directly or indirectly, any
Equity Interests in any Person other than the Corporation, and HondaSub does not
have any Contracts to acquire by any manner whatsoever or lease any other
business operations.

 

(12)                            Bankruptcy.  HondaSub has not made an assignment
in favor of its creditors or a proposal in bankruptcy to its creditors or any
class thereof, and no petition for a receiving order has been presented in
respect of it.  HondaSub has not initiated proceedings with respect to a
compromise or arrangement with its creditors or for its winding up, liquidation
or dissolution.  No receiver or interim receiver has been appointed in respect
of HondaSub or any of HondaSub’s Assets and no execution or distress has been
levied on any of its Assets, nor have proceedings been commenced in connection
with any of the foregoing.

 

(13)                            Leased Property.  HondaSub has no leases nor
agreements in the nature of a lease in respect of any real property, whether as
lessor or lessee.  HondaSub is not the beneficial or registered owner of or the
lessor or lessee of, and has not agreed to acquire or lease any real property or
appurtenances or any interest in, any real property or appurtenances.  HondaSub
is not a party to, and has not agreed to enter into, any lease or agreement in
the nature of a lease in respect of any real property, whether as lessor or
lessee.

 

(14)                            HondaSub Intellectual Property.

 

(a)                                  Schedule 5.2(14) is a true, accurate and
complete list of (i) all the HondaSub Intellectual Property that is registered
or for which a pending application for registration exists, (ii) all Contracts
pursuant to which HondaSub has the right to use any Target Intellectual Property
not owned by HondaSub (other than commercial off-the-shelf application
software), and (iii) all Contracts pursuant to which third parties are granted
the right to use any Target Intellectual Property owned by HondaSub
(collectively, the Contracts identified under (ii) and (iii) comprising
“HondaSub IP Contracts”).  Unless otherwise noted, all HondaSub IP Contracts are
in full force and effect.  HondaSub is in compliance with, and has not breached
any term of any HondaSub IP Contract, and to the knowledge of HondaSub, all
other parties to the HondaSub IP Contracts are in compliance in all respects
with, and have not breached any term of, the HondaSub IP Contracts.

 

(b)                                 Except as set out in Schedule 5.2(14),
HondaSub has not granted any Person any interest in or right to use all or any
portion of the Target Intellectual Property that is owned by or licensed
exclusively to HondaSub, other than the Corporation.

 

(c)                                  HondaSub has not interfered with, infringed
upon or misappropriated any Intellectual Property rights of any other Person,
and has not received any written claim, notice or threat that any conduct of the
Business, including its use of any Target Intellectual Property, infringes on or
breaches any Intellectual Property rights of any other Person.

 

(d)                                 HondaSub has used commercially reasonable
efforts to protect the HondaSub Intellectual Property against infringement and
misappropriation by third parties

 

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and to preserve HondaSub’s rights therein.  To Honda’s knowledge, no Person has
interfered with, infringed upon or misappropriated any of the rights of HondaSub
in the HondaSub Intellectual Property, and HondaSub knows of no threat by any
Person to do so.

 

(e)                                  HondaSub has in its possession or control,
and has made available to the Purchaser, correct, accurate, complete,
fully-executed copies of all HondaSub IP Contracts (as amended to date) set out
in Schedule 5.2(14).  HondaSub has made available to Purchaser correct, accurate
and complete copies of all material documents that it has in its possession or
control relating to each item of the HondaSub Intellectual Property, including
all material documents submitted to or received from any Governmental Authority
worldwide.

 

(f)                                    HondaSub has taken all reasonable
measures to maintain the validity and effectiveness of all HondaSub Intellectual
Property, and all documents, recordations and certificates necessary to be filed
by HondaSub to maintain the effectiveness of the HondaSub Intellectual Property
have been filed with the relevant Governmental Authorities listed in
Schedule 5.2(14), so that all items required to be listed in Schedule 5.2(14)
are valid and in full force and effect, and no item required to be listed in
Schedule 5.2(14) has lapsed, expired or been abandoned or canceled in any
jurisdiction listed in Schedule 5.2(14).

 

(g)                                 HondaSub has the exclusive right to file,
prosecute and maintain any applications for the HondaSub Intellectual Property
indicated as wholly owned by HondaSub in Schedule 5.2(14).  HondaSub has taken
all reasonable and necessary steps (based on standard industry practice and in
accordance with all Applicable Law) to diligently and appropriately prosecute
all applications listed in Schedule 5.2(14) as pending patent applications
wholly owned by HondaSub and all such pending applications are in good standing.

 

(h)                                 HondaSub has received no written demand,
claim, notice or inquiry from any third party in respect of the HondaSub
Intellectual Property that challenges, threatens to challenge, or inquires as to
whether there is any basis to challenge, the validity or the rights of HondaSub
in or to the HondaSub Intellectual Property, and HondaSub knows of no basis for
any such challenge.

 

(i)                                     Except as set out in Schedule 5.2(14): 
(i) HondaSub owns all right, title and interest in, or has a valid and binding
license to make, have made, use, sell, distribute, prepare derivative works of,
and otherwise exploit any products and/or processes covered by the HondaSub
Intellectual Property and the HondaSub IP Contracts to the extent required for
the present conduct of the Business and the proposed conduct of the Business as
contemplated as of the Closing Date; (ii) to Honda’s knowledge, the Target
Intellectual Property comprises all of the Intellectual Property necessary for
the conduct of the Business as it is currently conducted or proposed to be
conducted as contemplated as of the Closing Date; (iii) there are no
restrictions on the change of control of HondaSub contained in any license held
by HondaSub related to the Target Intellectual Property;

 

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(iv) HondaSub has never received written notice that it is in default (or
without the giving of notice or lapse of time or both, would be in default)
under any license with respect to any HondaSub Intellectual Property or HondaSub
IP Contracts; and (v) no licensing fees, royalties, or payments are due or
payable by HondaSub in connection with HondaSub Intellectual Property or
HondaSub IP Contracts.

 

(j)                                     No approval or consent of any Person is
necessary for the interest of HondaSub in the HondaSub Intellectual Property or
the HondaSub IP Contracts to continue to be in full force and effect following
the Transactions, and HondaSub is not subject to any restriction that would be
violated or breached by the consummation of the Transactions or that may affect
the validity, use or enforceability of the HondaSub Intellectual Property or the
HondaSub IP Contracts.

 

(k)                                  HondaSub has taken reasonable measures to
protect the confidentiality and value of each item of the Target Intellectual
Property (other than Patents and other Target Intellectual Property that are
filed with any Government Authority as contemplated at Section 5.2(14)(f) and
are at a stage of such filing where they have been made publicly available) that
it owns or is obligated to protect, in accordance with protection procedures
believed by HondaSub to be adequate for protection customarily used in the
industry to protect rights of like importance.  All current and former HondaSub
employees, agents and independent contractors who have materially contributed to
or participated in the conception and development of Target Intellectual
Property (“HondaSub IP Participant”) have executed and delivered to HondaSub a
proprietary information agreement, pursuant to which, inter alia, such HondaSub
IP Participant has assigned all of his rights in such Intellectual Property to
HondaSub and has agreed not to disclose such Intellectual Property for any
purpose unrelated to his work for HondaSub.  No former or current HondaSub IP
Participant (i) has filed or threatened any written claim against HondaSub
related to Target Intellectual Property; or (ii) to Honda’s knowledge has any
Patents issued or pending for any invention used or needed by HondaSub which
have not been assigned to HondaSub.

 

(l)                                     No employee of HondaSub is in default
under, and the Transactions will not result in a default of, any term of any
employment contract, noncompetition arrangement or other agreement relating to
the HondaSub Intellectual Property or the HondaSub IP Contracts.  No employee,
agent or independent contractor of HondaSub, nor any third party (i) is entitled
to compensation by HondaSub for any development or exploitation of HondaSub
Intellectual Property or (ii) has been granted any right to develop or exploit
any HondaSub Intellectual Property.

 

(15)                            No Expropriation.  None of HondaSub’s Assets
have been taken or expropriated by any Governmental Authority nor has any
expropriation or similar notice or proceeding in respect of any of HondaSub’s
Assets been given or commenced and, to the knowledge of Honda, there is not any
intent or proposal to give any such notice or commence any such proceeding.

 

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(16)         Material Contracts and Other Contracts.  Except as set out in
Schedule 5.2(16), HondaSub is not a party to or bound by any of the following
(each a “Material Contract”):

 

(a)                                  distributor, dealer, sales, advertising,
agency or manufacturer’s representative or similar Contract;

 

(b)                                 continuing Contract for the purchase of
materials, supplies, equipment or services from a Person other than the
Corporation;

 

(c)                                  employment or consulting Contract or any
other written Contract with any officer, employee or consultant;

 

(d)                                 trust indenture, mortgage, hypothec,
promissory note, debenture, loan agreement, guarantee or other Contract for the
borrowing of money or a leasing transaction of the type required to be
capitalized in accordance with GAAP;

 

(e)                                  equipment leases, rental agreements,
conditional sales agreements or similar agreements relating to any of HondaSub’s
Assets;

 

(f)                                    agreement of guarantee, support,
indemnification, assumption or endorsement of, or any other similar commitment
with respect to, the liabilities, obligations, indebtedness or commitments
(whether accrued, absolute, contingent or otherwise) or indebtedness of any
other Person (except for checks endorsed for collection and customary
indemnification provisions included in HondaSub agreements with the
Corporation);

 

(g)                                 Contract for capital expenditures;

 

(h)                                 Contract for the sale of any of HondaSub’s
Assets;

 

(i)                                     confidentiality, secrecy or
non-disclosure Contract (whether the Corporation is a beneficiary or obligor
thereunder) relating to any proprietary or confidential information (other than
pursuant to agreements with the Corporation) or any non-competition or similar
Contract; or

 

(j)                                     Contract to which HondaSub is a party or
by which HondaSub or any of HondaSub’s Assets are bound or attached made in the
Ordinary Course which involves or may reasonably involve the payment to or by
HondaSub in excess of $25,000 over the term of the Contract.

 

A list of all Material Contracts of HondaSub is set forth in Schedule 5.2(16). 
True, accurate and complete copies of all Contracts set out in Schedule 5.2(16),
or where those Contracts are oral, true, accurate and complete written summaries
of their terms, have been provided to the Purchaser.

 

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(17)         No Default Under Contracts.  HondaSub has performed, in all
material respects, all of the obligations required to be performed by it and is
entitled to all benefits under, and is not in default or alleged to be in
default in respect of, any Contract relating to its Assets (including the
Contracts referred to in any Schedule to this Agreement), to which it is a party
or by which it is bound or affected, except such non-performance or default as
could not reasonably be expected to cause a Material Adverse Effect.  To the
knowledge of Honda, all such Contracts are in good standing and in full force
and effect, and no event, condition or occurrence exists that, after notice or
lapse of time or both, would constitute a default under any such Contract,
except such as would not reasonably be expected to cause a Material Adverse
Effect.

 

(18)         Permits.  HondaSub is in compliance with all Applicable Law, except
for such non-compliance as would not reasonably be expected to cause a Material
Adverse Effect.  There are no material Permits issued to or held by or for the
benefit of HondaSub, and there are no other Permits necessary to own, lease or
operate any of HondaSub’s Assets.  To the knowledge of Honda, each such material
Permit is valid, subsisting and in good standing.

 

(19)         Regulatory and Third Party Approvals.  There is no requirement for
Honda or HondaSub to make any filing with or give any notice to a Governmental
Authority or other Person, or obtain any Permit or consent from any Person as a
condition to the lawful completion of the Transactions.

 

(20)         Financial Statements.  The Financial Statements of HondaSub present
fairly, in all material respects, the financial condition of HondaSub as at the
respective dates indicated and the results of operations of HondaSub for the
periods indicated.  The audited Financial Statements of HondaSub to be delivered
on the Closing Date will be prepared in accordance with GAAP consistently
applied throughout the periods indicated, subject to routine year-end
adjustments.

 

(21)         Books and Records.  All material financial transactions of HondaSub
have been accurately recorded in its Books and Records.

 

(22)         Corporate Records.  The minute books of HondaSub contain true,
accurate and complete records of all of its Constating Documents and, of every
meeting, resolution and corporate action taken by the shareholders, the board of
directors and every committee of the board.  No meeting of shareholders, the
board of directors or any committee of the board, has been held for which
minutes have not been prepared and are not contained in those minute books.  The
share certificate book, register of shareholders, register of directors and
officers, securities register and register of transfers of HondaSub, as provided
to the Purchaser and/or the Purchaser’s counsel, are true, accurate and complete
in all material respects.

 

(23)         Undisclosed Liabilities.  HondaSub has no liabilities, obligations,
indebtedness or commitments, whether accrued, absolute, contingent or otherwise,
and is not a party to or bound by any agreement of guarantee, support,
indemnification, assumption or endorsement of, or any other similar commitment
with respect to the liabilities, obligations, indebtedness or commitments
(whether accrued, absolute, contingent or otherwise) of any Person, that are not
disclosed in its Financial Statements or disclosed in

 

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the Schedules to this Agreement, other than (a) liabilities, obligations,
indebtedness and commitments in respect of trade or business obligations
incurred after the Financial Statements Date in the Ordinary Course that have no
Material Adverse Effect on the Business or the Corporation, and (b) liabilities
or obligations that are not required by GAAP to be reflected on the balance
sheet forming part of HondaSub’s Financial Statements and that are not material
either individually or in the aggregate.

 

(24)         Taxes.

 

(a)           Except as provided for in Section 6.3, HondaSub has filed all Tax
Returns required to be filed by it in all applicable jurisdictions on or before
the Closing Date and has paid or fully accrued all amounts, if any, shown as due
thereon.  The Tax indicated as payable, or as refundable (to the extent actually
refunded), as the case may be, on such Tax Returns (adjusted to account for any
losses that could be, or could have been, absent designation or election by
HondaSub not approved by Honda, deducted in any such previous taxation periods)
is correct and complete in all material respects;

 

(b)           Canadian federal and provincial income Tax assessments have been
issued to HondaSub covering all periods up to and including its fiscal year
ended March 31, 2006.  No Governmental Authority has challenged or disputed in
writing a filing position taken by HondaSub in any Tax Return;

 

(c)           To Honda’s knowledge, there are no audits of HondaSub by a
Governmental Authority currently in progress in respect of any Taxes and there
are no material reassessments which have been issued by any Governmental
Authority to HondaSub relating to any Taxes that have yet to be paid or in
respect of which HondaSub has yet to file an objection or an appeal.  HondaSub
has not received any written notice from any Governmental Authority that a
reassessment for Taxes, which has yet to be issued, will be issued as a result
of an audit;

 

(d)           There are no operative agreements, waivers or other arrangements
with any Governmental Authority providing for an extension of time with respect
to the issuance of any assessment or reassessment, the filing of any Tax Return
or the payment of any Taxes by HondaSub;

 

(e)           HondaSub has withheld and remitted proper non-resident withholding
tax and payroll remittances as required by the Tax Act;

 

(f)            HondaSub has maintained and continues to maintain at its place of
business all books and records required to be maintained under the Tax Act, the
Excise Tax Act (Canada), and any comparable law of any province or territory in
Canada, including laws relating to sales and use taxes; and

 

(g)           HondaSub is not party to or bound by any Tax sharing agreement,
Tax indemnity obligation in favor of any Person or similar agreement in favor of
any Person with respect to Taxes (including any advance pricing agreement or
other similar agreement relating to Taxes with any Governmental Authority).
 Without limiting

 

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the generality of the foregoing, HondaSub has not entered into an agreement
contemplated in Section 80.04, Section 191.3 or subsection 18(2.3), 127(13) to
(17), 127(20) or 125(3) of the Tax Act or any comparable law of any province or
territory of Canada.

 

(25)         Product Warranties.  HondaSub has received no written notice nor,
to its knowledge, oral notice, from any customer alleging any breach of warranty
in respect of any product, component or other item sold prior to the Closing by,
or service rendered prior to the Closing by or on behalf of, HondaSub.

 

(26)         Litigation.  There are no material Claims (whether or not
purportedly on behalf of HondaSub) pending or, to the knowledge of Honda,
threatened against or affecting, HondaSub or its Assets.

 

(27)         Accounts and Attorneys.  Schedule 5.2(27) is a true, accurate and
complete list of the accounts of HondaSub and of Persons holding general or
special powers of attorney from HondaSub and sets out:

 

(a)

the name of each bank, trust company or similar institution in which HondaSub
has accounts, the number or designation of each such account and the names of
all Persons authorized to draw thereon or to have access thereto; and

 

 

(b)

the name of each Person holding a general or special power of attorney from
HondaSub and a summary of the terms thereof.

 

True, accurate and complete copies of all general or special powers of attorney
set out in Schedule 5.2(27) have been provided to the Purchaser.

 

(28)         Environmental.  To the knowledge of Honda:

 

(a)

HondaSub has been and is in compliance with all Environmental Laws;

 

 

(b)

HondaSub has not used or permitted to be used, except in compliance with all
Environmental Laws, any of its Assets or facilities or any property or facility
that it has at any time owned, occupied, managed, or controlled or in which it
has at any time had a legal or beneficial interest to generate, manufacture,
process, distribute, use, treat, store, dispose of, transport or handle any
Hazardous Substance; and

 

 

(c)

HondaSub has never received any notice of, nor been prosecuted for an offence
alleging non-compliance with any Environmental Laws.  There are no orders or
directions relating to environmental matters requiring any work, repairs,
construction or capital expenditures with respect to any of HondaSub’s Assets,
nor has HondaSub received notice of any of such orders or directions.

 

(29)         Employee Plans.  There are no Employee Plans that are maintained,
contributed to, or required to be maintained or contributed to, by HondaSub, or
to which HondaSub is a party, or bound by, or under which HondaSub has any
liability or contingent liability for the benefit of directors, officers,
shareholders, consultants, independent contractors and employees or former
employees of HondaSub and their dependents.

 

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(30)         Labor Matters.

 

(a)           HondaSub has not entered into or is a party to, either directly or
by operation of law, any collective agreement, letters of understanding, letters
of intent or other written communication with any trade union or employee
association or organization that may qualify as a trade union or employee
association, contingent or otherwise, which would cover any employees or
dependent contractors of HondaSub; and

 

(b)           HondaSub has no employees.

 

(31)         No Competing Products.  To Honda’s knowledge, neither Honda, nor
any Affiliate of Honda, has designed, developed or manufactured a product, nor
is it in the process of doing any of the foregoing or causing others to do so on
its behalf, that if offered for sale to an end user would be competitive with
any of the natural gas refueling systems for automobiles, fork lift trucks or
ice resurfacers in residential or commercial use currently being manufactured by
the Corporation. For greater certainty, in this Section 5.2(31):  (a) hydrogen
or gasoline refueling systems shall not be considered competitive with any
systems manufactured by the Corporation; and (b) motor vehicle dealers or
distributors of Honda, or any of its Affiliates, shall be excluded from Honda’s
Affiliates, provided that any competing product was acquired from a source other
than Honda.

 

(32)         Brokers.  Neither HondaSub nor any director, officer or employee of
HondaSub has employed any broker or finder, or incurred or will incur any
broker’s, finder’s or similar fees, commissions or expenses, in each case in
connection with the Transactions or any other transaction document, that would
cause the Purchaser, HondaSub or the Corporation to become liable therefor.

 

5.3          Representations and Warranties of the Corporation.  The Corporation
represents and warrants to the Purchaser as follows and acknowledges that the
Purchaser is relying on these representations and warranties in connection with
its completion of the Transactions:

 

(1)           Organization and Status.  The Corporation is duly incorporated,
and is validly subsisting and in good standing under the laws of Canada, other
than with respect to its obligations under the Canada Business Corporations Act
in respect of a board of directors.

 

(2)           Corporate Power.  The Corporation has all necessary corporate
power and authority to own or lease its Assets and to carry on the Business as
now being conducted by it.

 

(3)           Authorization.  All necessary corporate action has been taken by
the Corporation or on its part to authorize its execution and delivery of this
Agreement and the contracts, agreements and instruments required by this
Agreement to be delivered by it and the performance of its obligations hereunder
and thereunder.

 

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(4)           Enforceability.  This Agreement has been duly executed and
delivered by the Corporation and is a legal, valid and binding obligation of it
enforceable against it in accordance with its terms.  Each of the contracts,
agreements and instruments required by this Agreement to be delivered by the
Corporation will at the Closing Time have been duly executed and delivered by it
and will be enforceable against it in accordance with its terms.

 

(5)           Authorized and Issued Capital.  Schedule 5.3(5) sets out the
authorized and issued shares of the Corporation, the names of the Persons who
are shown on the securities register of the Corporation as the holder of any of
the shares, and the number and class of shares held or owned, as the case may
be, by each Person.  All of the shares indicated in Schedule 5.3(5) as being
issued and outstanding have been validly issued and are outstanding as fully
paid and non-assessable shares, and were not issued in violation of the
pre-emptive rights of any Person or any Contract or Applicable Law by which the
Corporation was bound at the time of the issuance.  There is no security,
option, warrant, right, call, subscription, agreement, commitment or
understanding of any nature whatsoever, fixed or contingent, that directly or
indirectly (i) calls for the issuance, redemption, sale, pledge or other
disposition of any securities of the Corporation or any securities convertible
into, or other rights to acquire, any securities of the Corporation,
(ii) obligates the Corporation to grant, offer or enter into any of the
foregoing or (iii) relates to the voting or control of such interests,
securities or rights.  The Corporation has not created any “phantom interests,”
appreciation rights or other similar rights, the value of which is related to or
based upon the price or value of any class or series of securities of the
Corporation.  The Corporation does not have outstanding securities debt or debt
instruments providing for voting rights with respect to the Corporation to the
holders thereof.  Other than as set out on Schedule 5.3(5), to the knowledge of
the Corporation, there are no shareholders agreements, voting trusts, pooling
agreements or other Contracts, arrangements or understandings in respect of the
voting of any of the shares of the Corporation.  True, accurate and complete
copies of the Constating Documents (including all Contracts, arrangements and
understandings set out in Schedule 5.3(5)) and other organizational documents of
the Corporation, or where those Contracts, arrangements or understandings are
oral, true, accurate and complete written summaries of their terms, have been
provided to the Purchaser.

 

(6)           Options.  No Person has any Contract or any right or privilege
(whether by law, pre-emptive or contractual) capable of becoming a Contract,
including convertible securities, warrants, options or convertible obligations
of any nature, for the purchase, subscription, allotment or issuance of any
issued or un-issued shares or other securities of the Corporation.

 

(7)           Absence of Conflict.  The execution, delivery and performance of
this Agreement by the Vendors and the completion of the Transactions will not
(whether after the passage of time or notice or both), result in:

 

(a)           the breach or violation of any of the provisions of, or constitute
a default under, or conflict with or cause the acceleration of any of the
Corporation’s obligations under:

 

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(i)            to the knowledge of the Corporation, any Contract to which the
Corporation is a party or by which the Business or any of its Assets is bound or
affected;

 

(ii)           any provision of the Constating Documents or resolutions of the
board of directors (or any committee thereof) or shareholders of the
Corporation;

 

(iii)          to the knowledge of the Corporation, any judgment, decree, order
or award of any Governmental Authority having jurisdiction over the Corporation;

 

(iv)          to the knowledge of the Corporation, any Approval issued to or
held by, the Corporation or held for the benefit of or necessary to the
operation of, the Corporation or the Business; or

 

(v)           any Applicable Law, as it relates to the Corporation; or

 

(b)           the creation or imposition of any Encumbrance over any of its
Assets.

 

(8)           Conduct of Business.  The Corporation has complied with, and has
conducted and is conducting the Business in compliance with, all Applicable
Laws, except such non-compliance as would not reasonably be expected to cause a
Material Adverse Effect.  The Business is the only business carried on by the
Corporation and, to the knowledge of the Corporation, other than with respect to
the Corporation’s cash and cash equivalents, its Assets are sufficient to permit
the continued operation of the Business in substantially the same manner as
conducted in the one year preceding the date of this Agreement.

 

(9)           No Subsidiaries.  The Corporation does not own and does not have
any Contracts of any nature to acquire, directly or indirectly, any Equity
Interests in any Person, and the Corporation does not have any Contracts to
acquire by any manner whatsoever or lease any other business operations.

 

(10)         Bankruptcy.  The Corporation has not made an assignment in favor of
its creditors or a proposal in bankruptcy to its creditors or any class thereof,
and no petition for a receiving order has been presented in respect of it.  The
Corporation has not initiated proceedings with respect to a compromise or
arrangement with its creditors or for its winding up, liquidation or
dissolution.  No receiver or interim receiver has been appointed in respect of
the Corporation or any of its Assets and no execution or distress has been
levied on any of its Assets, nor have proceedings been commenced in connection
with any of the foregoing.

 

(11)         Leased Property.  Schedule 5.3(11) is a true, accurate and complete
list of all real property leased by the Corporation (the “Leased Property”), and
all leases and agreements in the nature of a lease (including all renewals,
assignments and subleases and agreements to lease in respect of any real
property to which the Corporation is a party (the “Leases”)), whether as lessor
or lessee.  Schedule 5.3(11) sets out, in respect of each Lease, the parties
thereto, its dates of execution and expiry, any options to renew, the locations
of the leased lands and premises and the rent payable, and identifies those
Leases that require the consent of the lessor on a change of control of the
Corporation.

 

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The Corporation is not the beneficial or registered owner of or the lessor or
lessee of, and has not agreed to acquire or lease any real property or
appurtenances or any interest in, any real property or appurtenances other than
the Leased Property.   The Corporation is not a party to, and has not agreed to
enter into, any lease or agreement in the nature of a lease in respect of any
real property, whether as lessor or lessee, other than the Leases.  The Leased
Property and its condition are suitable for their current use by the
Corporation.  All buildings, structures, improvements, fixtures, building
systems and equipment, and all components thereof, included in the Leased
Property are in good condition, ordinary wear and tear excepted and are suitable
for their current use.  With respect to the Leased Property, all options to
renew, rights of first offer and rights of first refusal exercisable prior to
the date of this Agreement have been properly exercised.  With respect to each
Lease (i)  all rents and additional rents have been paid, (ii) no waiver,
indulgence or postponement of the lessee’s obligations has been granted by the
lessor, and (iii) and to the knowledge of the Corporation, all of the covenants
to be performed by any other party under the Lease have been fully performed. 
The Corporation has adequate rights of ingress and egress into each of the
Leased Properties for the operation of the Business in the Ordinary Course.

 

(12)         Title to Other Property.  The Corporation has good and marketable
title to all its Assets (other than the Leased Property), free and clear of any
and all Encumbrances other than Permitted Encumbrances. To the knowledge of the
Corporation, all of the Corporation’s Assets (other than the Leased Property)
are free of defects (patent or latent), in good operating condition and in a
state of good repair and maintenance, except such as would not reasonably be
expected to materially interfere with the continued operation of the Business in
substantially the same manner as conducted in the one year preceding the date of
this Agreement.

 

(13)         Personal Property.  Schedule 5.3(13) is a true, accurate and
complete list of each item of machinery, equipment, furniture, motor vehicles
and other personal property owned or leased by the Corporation (including those
in possession of third parties) which had a book value in the accounting records
of the Corporation, as of April 30, 2008, of more than $25,000 or is otherwise
material to the Business (the “Personal Property”).

 

(14)         Personal Property Leases.  Schedule 5.3(14) is a true, accurate and
complete list of all material equipment leases, rental agreements, conditional
sales agreements and similar agreements relating to any of the Corporation’s
Assets (the “Personal Property Leases”).

 

(15)         Accounts Receivable.  All Accounts Receivable of the Corporation
are bona fide and good and have been incurred in the Ordinary Course.  Subject
to an allowance for doubtful accounts that has been reflected on the books of
the Corporation, all Accounts Receivable of the Corporation are as of the date
of this Agreement collectible in the Ordinary Course.

 

(16)         Inventories.  All inventories, net of reserves, reflected on the
Corporation’s Balance Sheet or arising since the date of the Balance Sheet, are
currently marketable and are good and usable in connection with the business of
the Corporation as presently conducted.  The value of all inventory used or held
for use by the Corporation that is obsolete or of below-standard

 

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quality has been written down to net realizable value or adequate reserves have
been provided therefor. The amount and mix of items in the inventories of
supplies, in process and finished products are consistent with the business
practice of the Corporation.

 

(17)         Corporation Intellectual Property.

 

(a)           The Corporation owns no Intellectual Property included in the
Target Intellectual Property.  All Target Intellectual Property (other than
commercial off-the-shelf application software) is either owned by or licensed to
HondaSub, which is then licensed or sub-licensed by HondaSub to the Corporation.

 

(b)           Schedule 5.3(17) is a true, accurate and complete list of (i) all
Contracts pursuant to which the Corporation has the right to use any Target
Intellectual Property not owned by the Corporation (other than commercial
off-the-shelf application software), and (ii) all Contracts pursuant to which
third parties are granted the right to use any Target Intellectual Property
owned by the Corporation (collectively, the Contracts identified under (i) and
(ii) comprising “Corporation IP Contracts”).  Unless otherwise noted, all
Corporation IP Contracts are in full force and effect.  The Corporation is in
compliance with, and has not breached any term of, any Corporation IP Contract,
and, to the knowledge of the Corporation, all other parties to the Corporation
IP Contracts are in compliance in all respects with, and have not breached any
term of, the Corporation IP Contracts.

 

(c)           Except as set out in Schedule 5.3(17), the Corporation has not
granted any Person any interest in or right to use all or any portion of the
Target Intellectual Property that is owned by or licensed exclusively to the
Corporation, other than pursuant to agreements with the Corporation’s customers
entered into in the Ordinary Course.

 

(d)           The Corporation has not interfered with, infringed upon or
misappropriated any Intellectual Property rights of any other Person, and has
not received, within six years prior to the date hereof, any written claim,
notice or threat that any conduct of the Business, including its use of any
Target Intellectual Property, infringes on or breaches any Intellectual Property
rights of any other Person.

 

(e)           The Corporation has used commercially reasonable efforts to
protect the Target Intellectual Property against infringement and
misappropriation by third parties and to preserve the Corporation’s rights
therein.  To the Corporation’s knowledge, no Person has interfered with,
infringed upon or misappropriated any of the rights of the Corporation in the
Target Intellectual Property, and the Corporation knows of no threat by any
Person to do so.

 

(f)            The Corporation has in its possession or control, and has made
available to the Purchaser, correct, accurate, complete, fully-executed copies
of all Corporation IP Contracts (as amended to date) set out in Schedule
5.3(17).  The Corporation has made available to Purchaser correct, accurate and
complete copies of all material

 

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documents that it has in its possession or control relating to each item of the
Target Intellectual Property, including all material documents submitted to or
received from any Governmental Authority worldwide.

 

(g)           The Corporation has taken reasonable measures to maintain the
validity and effectiveness of all Target Intellectual Property.

 

(h)           The Corporation has received, within six years prior to the date
hereof, no written demand, claim, notice or inquiry from any third party in
respect of the Target Intellectual Property that challenges, threatens to
challenge, or inquires as to whether there is any basis to challenge, the
validity or the rights of the Corporation in or to the Target Intellectual
Property, and the Corporation knows of no basis for any such challenge.

 

(i)            Except as set out in Schedule 5.3(17):  (i) the Corporation owns
all right, title and interest in, or has a valid and binding license to make,
have made, use, sell, distribute, prepare derivative works of, and otherwise
exploit any products and/or processes covered by the Target Intellectual
Property and the Corporation IP Contracts to the extent required for the present
conduct of the Business and the proposed conduct of the Business as contemplated
as of the Closing Date; (ii) the Target Intellectual Property comprises all of
the Intellectual Property necessary for the conduct of the Business as it is
currently conducted; (iii) the rights of the Corporation to the Target
Intellectual Property are free and clear of all Encumbrances except Encumbrances
in favor of HondaSub; (iv) there are no restrictions on the change of control of
the Corporation contained in any license held by the Corporation related to the
Target Intellectual Property; and (v) the Corporation has not, within six years
prior to the date hereof, received written notice that it is in default (or
without the giving of notice or lapse of time or both, would be in default)
under any license with respect to any Target Intellectual Property; and (vi) no
licensing fees, royalties, or payments are due or payable by the Corporation in
connection with the Target Intellectual Property other than to HondaSub.

 

(j)            No approval or consent of any Person is necessary for the
interest of the Corporation in the Target Intellectual Property to continue to
be in full force and effect following the Transactions, and the Corporation is
not subject to any restriction that would be violated or breached by the
consummation of the Transactions or that may affect the validity, use or
enforceability of the Target Intellectual Property.

 

(k)           The Corporation has taken reasonable measures to protect the
confidentiality and value of each item of the Target Intellectual Property
(other than Patents and other Target Intellectual Property that is filed with
any Government Authority as contemplated at Section 5.2(14)(f) and are at a
stage of such filing where they have been made publicly available) that it owns
or is obligated to protect, in accordance with protection procedures believed by
the Corporation to be adequate for protection customarily used in the industry
to protect rights of like importance.

 

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All current and former Corporation employees, agents and independent contractors
who have materially contributed to or participated in the conception and
development of Target Intellectual Property (“Corporation IP Participant”) have
executed and delivered to the Corporation a proprietary information agreement,
pursuant to which, inter alia, such Corporation IP Participant has assigned all
of his rights in such Intellectual Property to the Corporation and has agreed
not to disclose such Intellectual Property for any purpose unrelated to his work
for the Corporation.  No former or current Corporation IP Participant (i) has,
within six years prior to the date hereof, filed or threatened any written claim
against the Corporation related to Target Intellectual Property; or (ii) to the
Corporation’s knowledge has any Patents issued or pending for any invention used
or needed by the Corporation which have not been assigned to the Corporation.

 

(l)            No employee of the Corporation is in default under, and the
Transactions will not result in a default of, any term of any employment
contract, noncompetition arrangement or other agreement relating to Target
Intellectual Property.  No employee, agent or independent contractor of the
Corporation, nor any third party (i) is entitled to compensation by the
Corporation for any development or exploitation of Target Intellectual Property
or (ii) has been granted any right to develop or exploit any Target Intellectual
Property.

 

(18)         Insurance.  Schedule 5.3(18) sets out true, accurate and complete
particulars of all insurance policies maintained by the Corporation (the
“Insurance Policies”), specifying in each case, the name of the insurer, the
risks insured against, the amount of the coverage, the policy number and any
pending Claims thereunder.

 

(19)         No Expropriation.  None of the Corporation’s Assets have been taken
or expropriated by any Governmental Authority nor has any expropriation or
similar notice or proceeding in respect of any of the Corporation’s Assets
thereof been given or commenced, and, to the knowledge of the Corporation, there
is not any intent or proposal to give any such notice or commence any such
proceeding.

 

(20)         Material Contracts and Other Contracts.  Except as set out in
Schedule 5.3(20), the Corporation is not a party to or bound by any of the
following (each a “Material Contract”):

 

(a)           distributor, dealer, sales, advertising, agency or manufacturer’s
representative or similar Contract;

 

(b)           continuing Contract for the purchase of materials, supplies,
equipment or services which involves payment under that Contract in an amount in
excess of $25,000 in any period of 12 months after the date of this Agreement,
except for purchases of Inventories in the Ordinary Course;

 

(c)           employment or consulting Contract or any other written Contract,
including any change of control or retention Contract, with any officer,
employee or consultant other than oral Contracts of indefinite hire terminable
by the employer without cause on reasonable notice;

 

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(d)           trust indenture, mortgage, hypothec, promissory note, debenture,
loan agreement, guarantee or other Contract for the borrowing of money or a
leasing transaction of the type required to be capitalized in accordance with
GAAP;

 

(e)           agreement of guarantee, support, indemnification, assumption or
endorsement of, or any other similar commitment with respect to, the
liabilities, obligations, indebtedness or commitments (whether accrued,
absolute, contingent or otherwise) or indebtedness of any other Person (except
for checks endorsed for collection and customary indemnification provisions
included in the Corporation’s agreements with customers entered into in the
Ordinary Course);

 

(f)            Contract for capital expenditures in excess of $30,000;

 

(g)           Contract for the sale of any of the Corporation’s Assets or any
part of the Business, other than sales of Inventories to customers in the
Ordinary Course;

 

(h)           confidentiality, secrecy or non-disclosure Contract (whether the
Corporation is a beneficiary or obligor thereunder) relating to any proprietary
or confidential information (other than pursuant to agreements with the
Corporation’s customers and licensors of Target Intellectual Property entered
into in the Ordinary Course) or any non-competition or similar Contract; or

 

(i)            Contract to which the Corporation is a party or by which the
Corporation or any of its Assets are bound or attached made in the Ordinary
Course which involves or may reasonably involve the payment to or by the
Corporation in excess of $50,000 over the term of the Contract.

 

A list of all Material Contracts of the Corporation is set forth in
Schedule 5.3(20).  True, accurate and complete copies of all Contracts set out
in Schedule 5.3(20), or where those Contracts are oral, true, accurate and
complete written summaries of their terms, have been provided to the Purchaser
and Honda.

 

(21)         No Default Under Contracts.  To the knowledge of the Corporation,
the Corporation has performed, in all material respects, all of the obligations
required to be performed by it and is entitled to all benefits under, and is not
in material default or alleged to be in material default in respect of, any
Contract relating to the Business or the Corporation’s Assets (including the
Contracts referred to in any Schedule to this Agreement), to which it is a party
or by which it is bound or affected.  To the knowledge of the Corporation, all
such Contracts are in good standing and in full force and effect, and no event,
condition or occurrence exists that, after notice or lapse of time or both,
would constitute a material default under any such Contract.

 

(22)         Permits.  To the knowledge of the Corporation, the Corporation is
in all material respects in compliance with all Applicable Law in respect of the
Business or the Corporation.  Schedule 5.3(22) sets out a true, accurate and
complete list of all material Permits issued

 

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to or held by or for the benefit of the Corporation, and there are no other
Permits necessary to conduct the Business or to own, lease or operate any of the
Corporation’s Assets.  To the knowledge of the Corporation, each such Permit is
valid, subsisting and in good standing.  To the knowledge of the Corporation,
the Corporation is not in default or in breach of the terms of any Permit and no
Claim is pending or, to the knowledge of the Corporation, threatened to revoke
or limit any Permit.

 

(23)         Regulatory and Third Party Approvals.  There is no requirement for
the Corporation to make any filing with or give any notice to a Governmental
Authority or other Person, or obtain any Permit or consent from any Person as a
condition to the lawful completion of the Transactions or to permit the
Corporation to conduct the Business after Closing as the Business is currently
conducted by the Corporation, except for the filings, notifications, Permits and
consents described in Schedule 5.3(23).

 

(24)         Financial Statements.  The Financial Statements of the Corporation
present fairly, in all material respects, the financial condition of the
Corporation as at the respective dates indicated and the results of operations
of the Corporation for the periods indicated. The audited Financial Statements
of the Corporation to be delivered on the Closing Date will be prepared in
accordance with GAAP consistently applied throughout the periods indicated,
subject to routine year-end adjustments.

 

(25)         Books and Records.  All material financial transactions of the
Corporation have been accurately recorded in the Books and Records.

 

(26)         Corporate Records.  To the knowledge of the Corporation, the minute
books of the Corporation contain true, accurate and complete records of all of
its Constating Documents and of every meeting, resolution and corporate action
taken by the shareholders, the board of directors and every committee of the
board.  To the knowledge of the Corporation, no meeting of shareholders or the
board of directors or any committee of the board, has been held for which
minutes have not been prepared and are not contained in those minute books.  The
share certificate book, register of shareholders, register of directors and
officers, securities register and register of transfers of the Corporation, as
provided to the Purchaser and/or the Purchaser’s counsel, are true, accurate and
complete in all material respects.

 

(27)         Undisclosed Liabilities.  The Corporation has no liabilities,
obligations, indebtedness or commitments, whether accrued, absolute, contingent
or otherwise, and is not a party to or bound by any agreement of guarantee,
support, indemnification, assumption or endorsement of, or any other similar
commitment with respect to the liabilities, obligations, indebtedness or
commitments (whether accrued, absolute, contingent or otherwise) of any Person,
that are not disclosed in the Financial Statements or disclosed in the
Schedules to this Agreement, other than (a) liabilities, obligations,
indebtedness and commitments in respect of trade or business obligations
incurred after the Financial Statements Date in the Ordinary Course that have no
Material Adverse Effect on the Business or the Corporation, and (b) liabilities
or obligations that are not required by GAAP to be reflected on the balance
sheet forming part of the Corporation’s Financial Statement and that are not
material either individually or in the aggregate.

 

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(28)         Absence of Changes.  Since the date of the Interim Financial
Statements, except as set out in Schedule 5.3(28), the Corporation has carried
on the Business and conducted its operations and affairs only in the Ordinary
Course and the Corporation has not:

 

(a)           made or suffered any Material Adverse Change;

 

(b)           suffered any material damage, destruction or loss (whether or not
covered by insurance) affecting the Corporation’s Assets;

 

(c)           incurred any liability, obligation, indebtedness or commitment
(whether accrued, absolute, contingent or otherwise, and whether due or to
become due), other than unsecured current liabilities, obligations, indebtedness
and commitments incurred in the Ordinary Course;

 

(d)           paid, discharged or satisfied any Encumbrance, liability,
obligation, indebtedness or commitment of the Corporation (whether accrued,
absolute, contingent or otherwise, and whether due or to become due) other than
payment of accounts payable and Tax liabilities incurred in the Ordinary Course;

 

(e)           declared, set aside or paid any dividend or made any other
distribution with respect to any shares in the capital of the Corporation or
redeemed, repurchased or otherwise acquired, directly or indirectly any such
shares;

 

(f)            issued or sold or entered into any Contract for the issuance or
sale of any shares in the capital of or securities convertible into or
exercisable for shares in the capital of the Corporation;

 

(g)           suffered any labor trouble or disruption, including any strike or
lock out, adversely affecting the Corporation;

 

(h)           made or granted any license, sale, assignment, transfer,
disposition, pledge, mortgage, hypothec or security interest or other
Encumbrance on or over any of the Corporation’s Assets, other than sales of
Inventories to customers in the Ordinary Course;

 

(i)            made any capital expenditures or commitments of the Corporation
in excess of $25,000 in the aggregate;

 

(j)            terminated, cancelled or modified in any material respect or
received any written notice of a request for termination, cancellation or
modification in any material respect of any Material Contract; or

 

(k)           authorized or agreed to or otherwise committed to do any of the
foregoing.

 

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(29)         Taxes.

 

(a)           Except as provided for in Section 6.3, the Corporation has filed
all Tax Returns in respect of the past four taxation years required to be filed
by it in all applicable jurisdictions on or before the Closing Date, and has
paid or fully accrued all amounts, if any, shown as due thereon.  To the
knowledge of the Corporation, the Tax indicated as payable (expressly including
any refundable investment tax credit recorded as receivable, to the extent
actually received) on such Tax Returns (adjusted to account for any losses that
could be, or could have been, absent designation or election by the Corporation
not approved by Honda, deducted in any such previous taxation periods) is
correct and complete in all material respects;

 

(b)           The Corporation was a “Canadian-controlled private corporation” as
defined in the Tax Act throughout the most recent four taxation years in respect
of which it received any “refundable investment tax credit” as defined in
Section 127.1(2) of the Tax Act;

 

(c)           Canadian federal and provincial income Tax assessments have been
issued to the Corporation covering all periods up to and including its fiscal
year ended December 31, 2006. To the Corporation’s knowledge, no Governmental
Authority has challenged or disputed in writing a filing position taken by the
Corporation in any Tax Return;

 

(d)           To the Corporation’s knowledge, there are no audits of the
Corporation by a Governmental Authority currently in progress in respect of any
Taxes, and there are no material reassessments which have been issued by any
Governmental Authority to the Corporation relating to any Taxes that have yet to
be paid or in respect of which the Corporation has yet to file an objection or
an appeal. The Corporation has not received any written notice from any
Governmental Authority that a reassessment for Taxes, which has yet to be
issued, will be issued as a result of an audit;

 

(e)           There are no operative agreements, waivers or other arrangements
with any Governmental Authority providing for an extension of time with respect
to the issuance of any assessment or reassessment, the filing of any Tax Return
or the payment of any Taxes by the Corporation;

 

(f)            To the Corporation’s knowledge, the Corporation has withheld and
remitted proper non-resident withholding tax and payroll remittances as required
by the Tax Act;

 

(g)           The Corporation has maintained and continues to maintain at its
place of business in Canada all books and records required to be maintained
under the Tax Act, the Excise Tax Act (Canada), and any comparable law of any
province or territory in Canada, including laws relating to sales and use taxes;
and

 

(h)           The Corporation is not party to or bound by any Tax sharing
agreement, Tax indemnity obligation in favor of any Person or similar agreement
in favor of any Person with respect to Taxes (including any advance pricing
agreement or other similar agreement relating to Taxes with any Governmental
Authority). Without

 

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limiting the generality of the foregoing, the Corporation has not entered into
an agreement contemplated in Section 80.04, Section 191.3 or subsection 18(2.3),
127(13) to (17), 127(20) or 125(3) of the Tax Act or any comparable law of any
province or territory of Canada.

 

(30)         Product Warranties.

 

(a)           Schedule 5.3(30) is a true, accurate and complete list of the
standard terms and conditions of sale or lease for each of the products or
services of the Corporation, including applicable guarantee, warranty and
indemnity provisions.

 

(b)           Except as set out in Schedule 5.3(30), to the knowledge of the
Corporation, the Corporation has, within 36 months from the date hereof,
received no written notice from any customer alleging any breach of warranty in
respect of any product, component or other item sold prior to the Closing by, or
service rendered prior to the Closing by or on behalf of, the Corporation.

 

(31)         Litigation.  Except as described in Schedule 5.3(31), there are no
material Claims (whether or not purportedly on behalf of the Corporation)
pending or, to the knowledge of the Corporation, threatened against or
affecting, the Corporation or the Corporation’s Assets.

 

(32)         Accounts and Attorneys.  Schedule 5.3(32) is a true, accurate and
complete list of the accounts of the Corporation and of Persons holding general
or special powers of attorney from the Corporation and sets out:

 

(a)           the name of each bank, trust company or similar institution in
which the Corporation has accounts, the number or designation of each such
account and the names of all Persons authorized to draw thereon or to have
access thereto; and

 

(b)           the name of each Person holding a general or special power of
attorney from the Corporation and a summary of the terms thereof.

 

True, accurate and complete copies of all general or special powers of attorney
set out in Schedule 5.3(32) have been provided to the Purchaser.

 

(33)         Environmental.  To the knowledge of the Corporation:

 

(a)           except as described in Schedule 5.3(33), the Corporation has been
and is in all material respects in compliance with all Applicable Law, including
orders, directives and decisions rendered by any Governmental Authority (the
“Environmental Laws”) relating to the protection of the environment,
occupational health and safety or the manufacture, processing, distribution,
use, treatment, storage, disposal, discharge, transport or handling of any
deleterious substances or good, hazardous, corrosive or toxic substances or
materials, special wastes, wastes or any other substances, the storage,
disposal, discharge, treatment, remediation or release into the environment of
which is prohibited, controlled or regulated (“Hazardous Substances”).

 

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(b)                                except as described in Schedule 5.3(33), the
Corporation has not used or permitted to be used, except in compliance with all
Environmental Laws, any of its Assets (including the Leased Property) or
facilities or any property or facility that it has at any time owned, occupied,
managed, or controlled or in which it has at any time had a legal or beneficial
interest to generate, manufacture, process, distribute, use, treat, store,
dispose of, transport or handle any Hazardous Substance.

 

(c)                                 the Corporation has never received any
notice of, nor been prosecuted for, an offence alleging non-compliance with any
Environmental Laws.  There are no orders or directions relating to environmental
matters requiring any work, repairs, construction or capital expenditures with
respect to the Business or any of the Corporation’s Assets, nor has the
Corporation received notice of any of such orders or directions.

 

(d)                                except as described in Schedule 5.3(33), to
the knowledge of the Corporation, there are no contaminants located on, at or
under the Leased Property.

 

(e)                                 except as described in Schedule 5.3(33), the
Leased Property (i) has never been used by any Person as a waste disposal site
or as a licensed landfill, or (ii) has never had asbestos, asbestos-containing
materials, PCBs, radioactive substances or aboveground or underground storage
systems, active or abandoned, located on, at or under it.

 

(f)                                   except as described in Schedule 5.3(33),
to the knowledge of the Corporation, no properties adjacent to the Leased
Property are contaminated where such contamination could, if it migrated to a
Leased Property, have a Material Adverse Effect on the Leased Property.

 

(g)                                except as described in Schedule 5.3(33), the
Corporation has not transported, removed or disposed of any waste to a location
outside of Canada.

 

(h)                                except as described in Schedule 5.3(33), the
Corporation has not been required by any Governmental Authority to (i) alter the
Leased Property in a material way in order to be in compliance with
Environmental Laws, or (ii) perform any environmental closure, decommissioning,
rehabilitation, restoration or post-remedial investigations, on, about, or in
connection with any real property.

 

(i)                                    the Corporation’s Assets are capable of,
and are not restricted by any Permit or Contract from, being operated at maximum
daily and annual production capacity while remaining in compliance with
Environmental Laws.

 

(j)                                    Schedule 5.3(33) lists all reports and
documents relating to the environmental matters affecting the Corporation or the
Leased Property which are in the possession or under the control of the
Corporation. Copies of all such reports and documents have been provided to the
Purchaser. To the knowledge of the Corporation, there are no other reports or
documents relating to environmental matters affecting the Corporation or the
Leased Property which have not been made available to the Purchaser whether by
reason of confidentiality restrictions or otherwise.

 

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(34)                           Employee Plans.

 

(a)                                 Schedule 5.3(34) identifies each non-salary
plan, program or arrangement including deferred compensation, bonus
compensation, change of control, retention incentive or other compensation,
share option or purchase, severance, termination pay, hospitalization or other
medical benefit, life or other insurance, vision, dental, drug, sick leave,
disability, salary continuation, vacation, supplemental unemployment benefits,
profit sharing, mortgage assistance, pension or supplemental pension, retirement
compensation, group registered retirement savings, deferred profit sharing,
employee profit sharing, savings, retirement or supplemental retirement, and any
other similar plan, program or arrangement, whether funded or unfunded, formal
or informal, that is maintained, contributed to, or required to be maintained or
contributed to, by the Corporation, or to which the Corporation is a party, or
bound by, or under which the Corporation has any liability or contingent
liability for the benefit of directors, officers, shareholders, consultants,
independent contractors and employees or former employees of the Corporation and
their dependents (the “Employee Plans”).

 

(b)                                All Employee Plans have been established,
registered, administered and invested in accordance with Applicable Law.  No
fact or circumstance exists which could adversely affect the registered status
of any such Employee Plan.

 

(c)                                 The Corporation has made all contributions
and paid all premiums in respect of each of the Employee Plans in a timely
fashion in accordance with the terms of the respective Employee Plans and
Applicable Law.

 

(d)                                Except as described in Schedule 5.3(34), the
Corporation does not and has never sponsored or participated in a pension plan.

 

(e)                                 Other than routine claims for benefits, no
Employee Plan is subject to any pending action, investigation, examination,
claim (including Taxes) or any other proceeding initiated by any Person, and
there exists no state of facts which could reasonably be expected to give rise
to any such action, investigation, examination, claim or other proceeding.

 

(f)                                   None of the Employee Plans provide for
retiree benefits or for benefits to retired employees or to the beneficiaries or
dependants of retired employees.

 

(35)         Labor Matters.  Except as set forth in Schedule 5.3(35):

 

(a)                                 The Corporation has not entered into or is a
party to, either directly or by operation of law, any collective agreement,
letters of understanding, letters of intent or other written communication with
any trade union or employee association or organization that may qualify as a
trade union or employee association, contingent or otherwise, which would cover
any employees or dependent contractors of the Corporation.

 

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(b)                                The employees of the Corporation are not
subject to any collective agreements or letters of understanding, letters of
intent or other written communication with any trade union or employee
association or organization that may qualify as a trade union or employee
association, contingent or otherwise, and are not, in their capacities as
employees, represented by any trade union or employee association or
organization that may qualify as a trade union or employee association.

 

(c)                                 To the knowledge of the Corporation,
(i) there are no threatened or pending union organizing activities involving the
employees and no collective agreement is currently being negotiated by the
Corporation or any other Person in respect of the employees of the Corporation
and (ii) there is no labor strike, dispute, work slowdown or stoppage pending or
involving the employees or threatened and no such event has occurred within the
last five years.

 

(d)                                To the knowledge of the Corporation, no trade
union has applied to have the Corporation declared a related employer pursuant
to the Labour Relations Act (Ontario).

 

(e)                                 All amounts due or accrued due for all
salary, wages, bonuses, commissions, vacation with pay, and benefits under the
Employee Plans have either been paid or are accurately reflected in the Books
and Records or, in the case of vacation with pay, are or will be included in the
calculation of Base Working Capital and/or Closing Working Capital.

 

(f)                                   The Purchaser has been provided with a
correct and complete list of each employee, director, independent contractor,
consultant and agent of the Corporation, whether actively at work or not, their
salaries, wage rates, commissions and consulting fees, bonus arrangements,
benefits, positions, ages, status as full-time or part-time employees, location
of employment and length of service.  In addition, with respect to the
employees, such list contains for each employee their annual vacation
entitlement in days, vacation days taken and vacation days remaining; and lists
any employee currently on leave and in receipt of disability benefits,
applicable workplace safety and insurance legislation benefits and those
employees currently on pregnancy or parental leave or other leave approved by
the Corporation together with the type of leave and their expected date of
return to work if known.

 

(36)                           OHSA Matters.

 

(a)                                 The Corporation is in compliance with the
applicable requirements of the Occupational Health and Safety Act (Ontario) and
the regulations promulgated thereunder and any similar Applicable Law of any
provincial, state or local jurisdiction (“OHSA”).  The Corporation has not
received any citation or order from the Occupational Health and Safety
Administration or any comparable

 

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administration of any province, state or local jurisdiction (an
“Administration”) or any Administration inspector setting forth any respect in
which the facilities or operations of the Corporation are not in compliance with
OHSA, or the regulations under such Act.  Schedule 5.3(36) lists all charges and
orders heretofore issued to the Corporation under OHSA and correspondence and
inspection reports from and to such Administration and any Administration
inspectors during the past three (3) years.  There are no orders or appeal of
any orders under OHSA currently outstanding.

 

(b)                                There are no outstanding assessments,
penalties, fines, liens, charges, surcharges, or other amounts due or owing
pursuant to any workplace safety and insurance/workers’ compensation legislation
in respect of the Corporation and the Corporation has not been reassessed in any
material respect under such legislation during the past three (3) years.  To the
knowledge of the Corporation, no audit is currently being performed pursuant to
any applicable workplace safety and insurance/workers’ compensation legislation
and there are no claims or potential claims which may have a Material Adverse
Effect on the Corporation’s accident cost experience.

 

(37)                           Suppliers and Customers.  The Corporation is not
required to provide bonding or any other security arrangements in connection
with any transactions with any of its customers, suppliers and creditors. 
Schedule 5.3(37) lists the top 20 customers (by dollar volume of business
received from such customers) of the Corporation for the fiscal year ended
December 31, 2007 and the six-month period ended June 30, 2008.  To the
Corporation’s knowledge, the Corporation has not received any written or oral
notice from any of the customers listed in Schedule 5.3(37) to the effect that,
and the Corporation has no reason to believe that, any customer, including any
distributor, will stop, materially decrease the rate of, or materially change
the terms (whether related to payment, price or otherwise) with respect to
purchasing services from the Corporation (whether as a result of the
consummation of the Transactions or otherwise).

 

(38)                           Brokers.  Neither the Corporation nor any
director, officer or employee of the Corporation has employed any broker or
finder, or incurred or will incur any broker’s, finder’s or similar fees,
commissions or expenses, in each case in connection with the Transactions or any
other transaction document, that would cause the Purchaser or the Corporation to
become liable therefor.

 

5.4          Representations and Warranties of the Purchaser.  The Purchaser
represents and warrants to each Vendor as follows and acknowledges that each
Vendor is relying on these representations and warranties in connection with the
completion by the Vendors of the Transactions:

 

(1)                                 Organization and Corporate Power.  The
Purchaser is a corporation duly incorporated, and is validly subsisting, under
the laws of the State of Delaware.  The Purchaser has all necessary corporate
power and authority to acquire the Purchased Shares, to enter into this
Agreement and to perform its obligations hereunder.

 

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(2)                                 Authorization.  All necessary corporate
action has been taken by or on the part of the Purchaser to authorize its
execution and delivery of this Agreement and the contracts, agreements and
instruments required by this Agreement to be delivered by it and the performance
of its obligations hereunder and thereunder.

 

(3)                                 Enforceability.  This Agreement has been
duly executed and delivered by the Purchaser and is a legal, valid and binding
obligation of the Purchaser enforceable against it in accordance with its
terms.  Each of the contracts, agreements and instruments required by this
Agreement to be delivered by the Purchaser will at the Closing Time have been
duly executed and delivered by it and will be enforceable against it in
accordance with its terms.

 

(4)                                 Bankruptcy.  The Purchaser has not made an
assignment in favor of its creditors or a proposal in bankruptcy to its
creditors or any class thereof, and no petition for a receiving order has been
presented in respect of it.  The Purchaser has not initiated proceedings with
respect to a compromise or arrangement with its creditors or for its winding up,
liquidation or dissolution.  No receiver or interim receiver has been appointed
in respect of it or any of its undertakings, property or assets and no execution
or distress has been levied on any of its undertakings, property or assets, nor
have any proceedings been commenced in connection with any of the foregoing.

 

(5)                                 Consents and Approvals.  Except as set out
in Schedule 5.4(5), there is no requirement for the Purchaser to make any filing
with or give any notice to any Governmental Authority or to obtain any Permit,
as a condition to the lawful completion of the Transactions.

 

(6)                                 Absence of Conflict.  The execution,
delivery and performance by the Purchaser of this Agreement and the completion
of the Transactions will not, (whether after the passage of time or notice or
both), result in:

 

(a)                                 the breach or violation of any of the
provisions of, or constitute a default under, or conflict with or cause the
acceleration of any of its obligation, under:

 

(i)                                   any Contract to which it is a party or by
which any of its undertakings, property or assets is bound or affected;

 

(ii)                                any provision of its Constating Documents or
resolutions of its board of directors (or any committee thereof) or
shareholders;

 

(iii)                             any Approval issued to, held by or for the
benefit of, the Purchaser;

 

(iv)                            any Applicable Law; or

 

(b)                                the requirement for any Approval from any
creditor of the Purchaser.

 

(7)                                 No Finder’s Fees.  The Purchaser has not
taken, and will not take, any action that would cause any Vendor to become
liable to any Claim for a brokerage commission, finder’s fee or other similar
arrangement.

 

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(8)                                 Funding. The Purchaser has and shall have,
on Closing, sufficient funds to enable it to consummate the Transactions,
including payment of the Initial Purchase Price and all fees and expenses of the
Purchaser relating to the Transactions.

 

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

 

5.5                               Survival of Representations, Warranties and
Covenants of the Vendors and the Corporation.

 

(1)                                 The representations and warranties of the
Vendors and the Corporation contained in this Agreement and in any contract,
agreement, instrument, certificate or other document executed or delivered
pursuant to this Agreement (a “Transaction Document”) shall survive Closing and
shall continue for the benefit of the Purchaser notwithstanding the Closing, any
investigation made by or on behalf of the Purchaser or any knowledge of the
Purchaser, except that:

 

(a)                                  the representations and warranties set out
in Sections 5.1, 5.2(1), 5.2(2), 5.2(3), 5.2(4), 5.2(5), 5.2(7), 5.2(8),
5.2(12), 5.3(1), 5.3(2), 5.3(4), 5.3(5), 5.3(6) and 5.3(10) (collectively the
“Specified Representations and Warranties”) shall survive and continue in full
force and effect for the longest period permitted under Applicable Law;

 

(b)                                 the representations and warranties set out
in Sections 5.2(24) and 5.3(29) shall survive Closing and continue in full force
and effect until, but not beyond, ninety (90) days after the expiration of the
period, if any, during which an assessment, reassessment or other form of
recognized document assessing liability for Taxes under applicable Tax
legislation in respect of any taxation year to which those representations and
warranties extend could be issued under that Tax legislation to the Corporation
or HondaSub, provided the Corporation or HondaSub, as the case may be, did not
file any waiver or other document extending that period;

 

(c)                                  the remainder of the representations and
warranties set out in Sections 5.1, 5.2 and 5.3 (and the corresponding
representations and warranties set out in the Closing certificates) shall
survive Closing and continue in full force and effect for a period of eighteen
(18) months after the Closing Date; and

 

(d)                                 the representations and warranties and the
applicable indemnity obligations for breach thereof that terminate pursuant to
this Section 5.5, and the liability of any party to this Agreement with respect
thereto pursuant to this Article 5, shall not terminate with respect to any
Claim, whether or not fixed as to liability or liquidated as to amount, with
respect to which the Indemnifying Party has been given written notice from the
Indemnified Party setting forth in reasonable detail the facts upon which the
claim for indemnification is based prior to the expiration of the applicable
survival period set forth in this Section 5.5.  The filing of a lawsuit within
such survival period is not required. Subject to the foregoing, after the expiry
of such survival period, none of the Vendors shall have any liability or

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obligations to any other Party in respect of any inaccuracy in or breach of any
representation or warranty contained in this Agreement or any contract,
agreement, instrument, certificate or other document executed or delivered
pursuant to this Agreement.

 

(2)                                 Notwithstanding Section 5.5(1), a Claim for
any breach of any of the representations and warranties contained in this
Agreement or in any contract, agreement, instrument, certificate or other
document executed or delivered pursuant hereto involving fraud, willful
concealment or willful misleading may be made at any time following the Closing
Date, subject only to applicable limitation periods imposed by Applicable Law.

 

5.6                              Survival of the Representations, Warranties and
Covenants of the Purchaser.

 

(1)                                 The representations and warranties of the
Purchaser contained in this Agreement and in any contract, agreement,
instrument, certificate or other document executed or delivered pursuant to this
Agreement shall survive Closing and continue in full force and effect for a
period of eighteen (18) months after the Closing Date.

 

(2)                                 Notwithstanding Section 5.6(1), a Claim for
any breach of any of the representations and warranties contained in this
Agreement or in any contract, agreement, instrument, certificate or other
document executed or delivered pursuant hereto involving fraud, willful
concealment or willful misleading may be made at any time following the Closing
Date, subject only to applicable limitation periods imposed by Applicable Law.

 

5.7                              Indemnification; Limitations on Liability.

 

(1)                                 Indemnification by Honda. Subject to the
provisions of Section 5.5 and the other provisions of this Section 5.7, Honda
shall indemnify and save harmless the Purchaser from and against any and all
Loss suffered or incurred by it, as a result of:

 

(a)                                 any inaccuracy, misrepresentation or breach
of warranty made or given by Honda in Section 5.2;

 

(b)                                any inaccuracy, misrepresentation or breach
of warranty made or given by the Corporation in Section 5.3;

 

(c)                                 any failure by Honda to observe or perform
any covenant or obligation contained in this Agreement to be observed or
performed by it; or

 

(d)                                any failure of FM Trust to perform or satisfy
its indemnification obligations contained in this Article 5.

 

(2)                                 Indemnification by FM Trust. Subject to the
provisions of Section 5.5 and the other provisions of this Section 5.7, FM Trust
shall indemnify and save harmless the Purchaser from and against any and all
Loss suffered or incurred by it, as a result of:

 

(a)                                 any misrepresentation or breach of warranty
made or given by the Trustee or FM Trust in Section 5.1; or

 

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(b)

any failure by FM Trust to observe or perform any covenant or obligation
contained in this Agreement to be observed or performed by it.

 

(3)                                Indemnification by the Purchaser.  Subject to
the provisions of Section 5.6, the Purchaser shall indemnify and save harmless
the Vendors from and against any and all Loss suffered or incurred by any one or
more of them, as a result of:

 

(a)

any misrepresentation or breach of warranty made or given by the Purchaser in
Section 5.4; or

 

 

(b)

any failure by the Purchaser to observe or perform any covenant or obligation
contained in this Agreement to be observed or performed by it.

 

(4)                                Threshold and Limitations.

 

(a)

The Purchaser shall not be entitled to recover any Loss for or arising out of
any breach of the representations, warranties or covenants of the Vendors or the
Corporation in this Agreement  (the “Purchaser Claims”) unless, and only to the
extent that, the aggregate Purchaser Claims exceed US $100,000 (the
“Threshold”).  Notwithstanding the foregoing, the Purchaser shall be entitled to
recover for any Purchaser Claim based upon a claim of fraud, willful concealment
or willful misleading or any breach of the Specified Representations and
Warranties, without regard to the Threshold.

 

 

(b)

The aggregate liability of the FM Trust and/or the Trustee with respect to any
Claim (including the Purchaser Claims based on a claim of fraud, willful
concealment or willful misleading or any breach of the Specified Representations
and Warranties) shall be limited to the amount of US $1.00, provided, however,
that the foregoing clause in no way limits Honda’s liability for any such
Claims.  Except for the Purchaser Claims based upon a Claim of fraud, willful
concealment or willful misleading or any breach of the Specified Representations
and Warranties, the aggregate liability of Honda for actual damages shall be
limited to the amount of US $2,550,000 (the “Cap”).  With respect to any Claim
based on a claim of fraud or willful concealment or willful misleading or any
breach of the Specified Representations and Warranties, the liability of Honda
for actual damages shall be limited to the amount of the Final Purchase Price
actually received by Honda; provided, that the representations of each Vendor in
Sections 5.1, 5.2 and 5.3 and covenants of each Vendor in this Agreement are
several and not joint, such that (except as expressly stated in
Sections 5.7(1)(b) and 5.7(1)(d)) no Vendor shall be liable for the breach of
any such representation, warranty or covenant other than those made by such
Vendor, as the case may be.

 

 

(c)

If a payment is received by the Purchaser hereunder, and Purchaser or the
Corporation later receives insurance proceeds in respect of the related damages,
Purchaser shall return to the Vendors within 10 days of the receipt of such
insurance proceeds net of expenses related to obtaining such proceeds, the
lesser of (A) the actual amount of insurance proceeds net of such expenses, and
(B) the actual amount previously paid by the Vendors with respect to such
damages.

 

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(d)                               Notwithstanding anything in this Agreement to
the contrary:  (a) each Vendor acknowledges and agrees that it does not have any
right of indemnification, contribution or reimbursement from or remedy against
the Corporation  as a result of any indemnification it is required to make under
or arising out of the breach or inaccuracy of any representation, warranty,
covenant or other obligation of such Vendor in this Agreement or in any
certificate, document or other instrument delivered in connection herewith; and
(b) each Vendor hereby releases, waives and forever discharges any right to
indemnification, contribution or reimbursement that it may have at any time
against the Corporation under or arising out of the breach or inaccuracy of any
representation, warranty, covenant or other obligation of such Vendor in this
Agreement or in any certificate, document or other instrument delivered in
connection herewith.

 

(5)                                Exclusive Remedy.  Except as otherwise
expressly provided in this Agreement, the rights of indemnity as set forth and
limited in this Section 5.7 are the sole and exclusive remedy of each Party in
respect of any inaccuracy, misrepresentation, breach of warranty or breach of
covenant by another Party hereunder.  This Section 5.7 shall remain in full
force and effect in all circumstances and shall not be terminated by any breach
(fundamental, negligent or otherwise) by any Party of its representations,
warranties or covenants hereunder or under any documents delivered pursuant
hereto or by any termination or rescission of this Agreement by any Party
hereof.

 

5.8                             Indemnification Procedures.

 

(a)                                If the Purchaser, on the one hand, or either
Vendor, on the other hand (the “Indemnified Party”), has a Claim or receives
actual notice of any Claim, or the commencement of any Claim that could give
rise to an obligation on the part of a Vendor, on the one hand, or the
Purchaser, on the other hand, other than a Third Party Claim, as hereinafter
defined, to provide indemnification (the “Indemnifying Party”) pursuant to this
Article 5, the Indemnified Party shall promptly give the Indemnifying Party
notice thereof (the “Indemnification Claim Notice”); provided, however, that the
failure to give such prompt notice shall not prevent any Indemnified Party from
being indemnified hereunder for any Losses, except to the extent that the
failure to so promptly notify the Indemnifying Party, actually materially
damages the Indemnifying Party.

 

(b)                               Upon an Indemnified Party obtaining actual
knowledge of a Claim, or the commencement of any Claim by a third party (a
“Third Party Claim”) that could give rise to an obligation to provide
indemnification pursuant to this Article 5, the Indemnified Party will give the
Indemnifying Party prompt written notice thereof (the “Third Party
Indemnification Claim Notice”); provided, however, that the failure of the
Indemnified Party to so promptly notify the Indemnifying Party shall not prevent
the Indemnified Party from being indemnified for any Losses, except to the
extent that the failure to so promptly notify the Indemnifying Party

 

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actually materially damages the Indemnifying Party or materially prejudices the
Indemnifying Party’s ability to object to, appeal or defend against such Third
Party Claim. For greater certainty, a Third Party Indemnification Claim Notice
or Indemnification Claim Notice in respect of a Loss relating to Taxes must be
delivered to the Indemnifying Party no later than 30 days prior to the expiry of
the period during which the Indemnified Party may object to or appeal the
assessment giving rise to the relevant Tax liability.

 

(c)                                Any Indemnification Claim Notice or Third
Party Indemnification Claim Notice must describe the Claim and the facts
underlying the Claim in reasonable detail.  The Indemnifying Party shall confirm
in writing to the Indemnified Party within 15 days after a receipt of a Third
Party Indemnification Claim Notice that the Indemnifying Party accepts
responsibility to indemnify and hold harmless the Indemnified Party therefor and
demonstrates to the Indemnified Party’s reasonable satisfaction that, as of such
time, the Indemnifying Party has sufficient financial resources in order to
indemnify for the full amount of the potential liability in connection with such
Claim.  The Indemnifying Party may elect to assume control over the compromise
or defense of such Third Party Claim (including, for greater certainty, a Claim
in respect of Taxes) at the expense of the Indemnifying Party and by counsel
selected by the Indemnifying Party and reasonably satisfactory to the
Indemnified Party.  If the Indemnifying Party elects to assume control over the
defense of such Third Party Claim, the Indemnifying Party shall within such
15 days (or sooner, if the nature of the asserted Third Party Claim so requires)
notify the Indemnified Party of the intent of the Indemnifying Party to do so,
and the Indemnified Party shall cooperate, at the expense of the Indemnifying
Party, in the compromise of, or defense against, such Third Party Claim;
provided, however, that:  (i) the Indemnified Party may employ counsel at such
Indemnified Party’s own expense to assist in the handling (but not control the
defense) of any Third Party Claim; (ii) the Indemnifying Party shall keep the
Indemnified Party advised of all material events with respect to any Third Party
Claim; (iii) the Indemnifying Party shall obtain the prior written approval of
the Indemnified Party before ceasing to defend against any Third Party Claim or
entering into any settlement, adjustment or compromise of such Third Party Claim
involving injunctive or similar equitable relief being asserted against any
Indemnified Party or any of its or his Affiliates; and (iv) no Indemnifying
Party will, without the prior written consent of such Indemnified Party, settle
or compromise or consent to the entry of any judgment in any pending or
threatened Claim in respect of which indemnification is sought hereunder
(whether or not any such Indemnified Party is a party to such action), unless
such settlement, compromise or consent involves no payment on the part of the
Indemnified Party and includes an unconditional release of the Indemnified Party
from all liability arising out of such Third Party Claim.

 

(d)                               Notwithstanding anything contained herein to
the contrary, the Indemnified Party shall have sole control over the defense,
settlement, adjustment or compromise of (but the Indemnifying Party shall,
subject always to the Threshold and the Cap,  nevertheless be required to pay
all Losses incurred by the Indemnified Party in

 

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connection with such defense, settlement or compromise):  (i) any Third Party
Claim that seeks an order, injunction or other equitable relief against any
Indemnified Party or any of its Affiliates; (ii) any Third Party Claim in which
both the Indemnifying Party and the Indemnified Party are named as parties and
either the Indemnifying Party or the Indemnified Party determines with advice of
counsel that there may be one or more legal defenses reasonably available to it
that are different from or additional to those available to the other Party or
that a conflict of interest between such Parties may exist in respect thereto;
(iii) any Third Party Claim pursuant to Section 5.7 prior to such time as the
aggregate amount of the Purchaser’s Losses pursuant to such Third Party Claim
and all prior Claims pursuant to Section 5.7 are not reasonably expected to
exceed the Threshold (as applicable) or after such time as the aggregate amount
of the Losses of the Purchaser pursuant to such Third Party Claim and all prior
Claims pursuant to Section 5.7 are reasonably expected to exceed the Cap; and
(iv) any Third Party Claim relating to Taxes of the Corporation or HondaSub for
periods after the Closing Date; provided, however, that with respect to any such
Third Party Claim relating to Taxes, Honda may participate in the conduct
thereof and the Corporation or HondaSub shall not settle or compromise such
Third Party Claim without the consent of Honda, such consent not to be
unreasonably withheld, conditioned or delayed.

 

(e)                                If the Indemnifying Party (A) elects not to
assume the defense, settlement, adjustment or compromise of an asserted
liability, fails to timely and properly notify the Indemnified Party of its
election as herein provided, or, at any time after assuming such defense, fails
to diligently defend against such Third Party Claim in good faith, fails to have
sufficient financial resources to pay the full amount of such potential
liability in connection with such Third Party Claim or (B) if the Indemnified
Party is otherwise entitled pursuant to this Agreement to have control over the
defense, settlement or compromise of any Claim, the Indemnified Party may, at
the Indemnifying Party’s expense, pay, defend, settle, adjust or compromise such
asserted liability (provided the Indemnifying Party shall nevertheless be
required to pay all Losses up to the Cap incurred by the Indemnified Party in
connection with such payment, defense, settlement, adjustment or compromise). 
In connection with any defense of a Third Party Claim (whether by the
Indemnifying Party or the Indemnified Party), all of the Parties shall, and
shall cause their respective Affiliates to, cooperate in the defense or
prosecution thereof and to in good faith retain and furnish such records,
information and testimony, and attend such conferences, discovery proceedings,
hearings, trials and appeals, as may be reasonably requested by a Party in
connection therewith.

 

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5.9                             Payment of Indemnification Claims.

 

(a)

If any Indemnified Party is entitled to indemnification from an Indemnifying
Party pursuant to this Agreement, such indemnification payment will be made in
accordance with Section 1.7(b) upon demand.

 

 

(b)

Any payment made by the Vendors pursuant to this Article 5 will be deemed an
adjustment to the Final Purchase Price.

 

5.10       Taxes.  To the extent the provisions of Section 5.7 are inconsistent
with the provisions of Section 6.3, the provisions of Section 6.3 shall control
as to Losses with respect to Taxes that are subject to Section 6.3.  Section 5.7
shall otherwise apply to Losses resulting from the inaccuracy or breach as of
the date of this Agreement or the Closing Date of any covenant of the Vendors,
any representation or warranty of the Vendors and/or the Corporation contained
in Section 5.1, 5.2 and 5.3 or any representation, warranty or statement made in
any schedule, certificate, document or instrument delivered by the Vendors or
the Corporation in connection therewith at or in connection with the Closing, or
any third party allegation or Claim based upon facts that, if true, would
constitute such an inaccuracy or breach.

 

ARTICLE 6

COVENANTS

 

6.1                             Transfer of Documentation.

 

(1)                                Except as otherwise provided in Section 3.2,
on the Closing Date, the Corporation shall deliver, and shall cause to be
delivered, the Books and Records to the Purchaser or make them available to the
Purchaser at the Corporation’s premises.  The Purchaser shall preserve all such
documents delivered to it in accordance with the Purchaser’s document retention
procedures, or such longer period as is required by Applicable Law, and shall
permit the Vendors or their authorized Representatives reasonable access thereto
while those documents are in the possession or control of the Purchaser solely
to the extent that such access is required by the Vendors to perform their
obligations under this Agreement or under Applicable Law, but the Purchaser
shall not be responsible or liable to any Vendor for, or as a result of any loss
or destruction of or damage to, any such documents and other data unless such
destruction, loss or damage is caused by the Purchaser’s negligence or willful
misconduct.  All reasonable out-of-pocket costs and expenses in connection with
any access contemplated by this Section 6.1(1) shall be borne by the Party
seeking access.

 

(2)                                Notwithstanding Section 6.1(1), the Vendors
shall be entitled to retain copies of any documents or other data delivered to
the Purchaser pursuant to Section 6.1(1) provided that those documents or data
are reasonably required by the Vendors to perform their obligations hereunder or
under Applicable Law.

 

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6.2                             Support of Products.  The Purchaser shall assume
and agree to perform and discharge when due all obligations of the Corporation
in respect of product warranties related to products sold before the Closing
Time.

 

6.3                             Tax Matters.

 

(1)                                During the Interim Period, HondaSub and the
Corporation each shall:

 

(a)                                prepare, in the Ordinary Course consistent
with past practice (except as otherwise required by law), and timely file all
Tax Returns required to be filed by it on or before the Closing Date in respect
of periods ending in the Interim Period (“Post-Signing Returns”);

 

(b)                               fully and timely pay all Taxes due and payable
as indicated in such Post-Signing Returns that are so filed;

 

(c)                                promptly notify the Purchaser of any federal,
state, local or foreign income or franchise and any other Claim or audit pending
against it in respect of any Tax matter, including Tax liabilities and refund
claims, and shall not settle or compromise any such Tax matter or Claim or audit
without the Purchaser’s prior written consent;

 

(d)                               not make or revoke any material election in a
Post-Signing Return with regard to Taxes;

 

(e)                                not make any material change in any Tax
methods or systems of internal accounting controls, except as may be appropriate
to conform to Applicable Law; and

 

(f)                                  terminate all Tax sharing agreements to
which it is a party such that there is no further liability.

 

(2)                                HondaSub and the Corporation shall each
prepare, consistent with past practice, subject, for greater certainty, to the
right of Honda to direct that HondaSub, or the right of the Corporation to,
elect to treat bad debts as having been disposed of (unless otherwise required
by Applicable Law), and timely file or cause to be prepared consistent with past
practice (unless otherwise required by Applicable Law) and timely filed, all Tax
Returns required to be filed by each of them after the Closing Date for any
period ending on or prior to the Closing Date (“Pre-Closing Date Tax Returns”)
and shall pay (or cause to be paid) any Taxes due in respect of such Pre-Closing
Date Tax Returns. HondaSub and the Corporation shall deliver any Pre-Closing
Date Tax Returns to Honda for its review and approval at least thirty (30) days
prior to the date such Pre-Closing Date Tax Return is required to be filed.  If
Honda disputes any item on a Pre-Closing Date Tax Return, it shall notify
HondaSub, the Corporation and the Purchaser of such disputed item (or items) and
the basis for its objection.  The Parties shall act in good faith to resolve any
such dispute prior to the date on which the Pre-Closing Date Tax Return is
required to be filed.  If the Parties cannot resolve any disputed item, the item
in question shall be resolved by the Accounting Firm.  The fees and expenses of
the Accounting Firm shall be borne equally by Honda and the Purchaser.

 

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(3)                                If Honda disputes any item on a Pre-Closing
Date Tax Return and Honda and the Purchaser are not able to resolve their
dispute prior to the applicable filing deadline, the following additional
procedures shall apply.  If an extension of the period for filing is not
permitted under Applicable Law, the Purchaser shall file the Pre-Closing Date
Tax Return consistent with HondaSub’s or the Corporation’s position on any
outstanding disputed items.  If HondaSub’s or the Corporation’s overall Tax
obligation with respect to such Tax Return would have been modified had the Tax
Return been prepared consistent with the position determined through the
Accounting Firm determination described in Section 6.3(2), the Purchaser shall
cause the filing of an amended Tax Return consistent with such determination to
the extent permitted under Applicable Law.

 

(4)                                If, for any United States federal, state,
local or foreign Tax purposes, the taxable period of HondaSub or the
Corporation, as the case may be, does not terminate at the Closing Date, Taxes
and Canadian investment tax credits (federal and provincial), if any,
attributable to any taxable period that begins before the Closing Date and ends
after the Closing Date (the “Straddle Period”) shall be allocated to
(i) HondaSub or the Corporation, as the case may be, for the period up to and
including the Closing Date and (ii) the Purchaser for the period subsequent to
the Closing Date (“Post-Closing Taxes”).  For purposes of the preceding
sentence, Taxes and Canadian investment tax credits (federal and provincial) for
the period up to and including the Closing Date and for the period subsequent to
the Closing Date shall be determined on the basis of an interim closing of the
books as of the close of business at the date immediately preceding the Closing
Date as if such taxable period consisted of one taxable period ending
immediately before the Closing Date followed by a taxable period beginning on
the Closing Date except that (i) ad valorem and property Taxes and (ii) capital,
franchise or excise taxes not based on income shall not be determined on the
basis of an interim closing of the books, but rather on a pro rata daily basis
of the reporting period on which the Tax is calculated.  For purposes of this
Section 6.3(4), exemptions, allowances or deductions that are calculated on an
annual basis, such as the deduction for depreciation, shall be apportioned on a
daily basis, and any Tax payments made on or before the Closing Date with
respect to the Straddle Period shall be credited against HondaSub’s or the
Corporation’s Taxes, as the case may be.

 

(5)                                After the Closing Date, each of the
Purchaser, HondaSub and the Corporation shall furnish or cause to be furnished
to Honda, upon request, as promptly as reasonably practicable, such information
(including access to books, records and personnel) and assistance as is
reasonably requested in connection with the preparation and filing of any
Pre-Closing Date Tax Return or related document, the preparation for any Tax
audit or the prosecution or defense of any Claim relating to liability for
Taxes.  The Purchaser shall retain and provide Honda with access to all books
and records relevant to the liability of HondaSub or the Corporation for Taxes
for any periods ending on or prior to Closing until the seventh anniversary of
the Closing Date.  Before destroying any such books and records, the Purchaser
shall notify Honda and give Honda the opportunity to retrieve such books and
records.

 

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6.4                             Covenant Not to Compete; Non-Solicitation;
Confidentiality.

 

(1)                                Beginning on the date of the Closing and for
the following respective periods of restriction (each a “Restricted Period”) and
restricted territory (the “Restricted Territory”):

 

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Restricted Period

 

Restricted Territory

 

 

 

 

 

 

 

Closing Date through March 31, 2011

 

Any country where the Corporation is currently carrying on business, including:

 

 

 

 

 

 

 

 

 

Argentina

 

Malaysia

 

 

 

Armenia

 

Mexico

 

 

 

Austria

 

The Middle East

 

 

 

Australia

 

Moldova

 

 

 

Azerbaijan

 

New Zealand

 

 

 

Barbados

 

The Netherlands

 

 

 

Bangladesh

 

Norway

 

 

 

Belgium

 

Pakistan

 

 

 

Bolivia

 

Panama

 

 

 

Brazil

 

Peru

 

 

 

Bulgaria

 

Philippines

 

 

 

Canada

 

Poland

 

 

 

Chile

 

Portugal

 

 

 

China

 

Romania

 

 

 

Columbia

 

Russia

 

 

 

Croatia

 

Serbia

 

 

 

Czech Republic

 

Slovakia

 

 

 

Dominican Republic

 

South Africa

 

 

 

Egypt

 

Spain

 

 

 

Equator

 

Singapore

 

 

 

Estonia

 

Sweden

 

 

 

Finland

 

Switzerland

 

 

 

France

 

Thailand

 

 

 

Germany

 

Tunisia

 

 

 

Greece

 

Turkey

 

 

 

Hungary

 

The United Kingdom

 

 

 

India

 

The United States

 

 

 

Indonesia

 

Ukraine

 

 

 

Italy

 

Uruguay

 

 

 

Japan

 

Uzbekistan

 

 

 

Latvia

 

Venezuela

 

 

 

Lithuania

 

Vietnam

 

 

 

 

 

 

 

April 1, 2011 through January 31, 2012

 

All of Canada, the United States and Mexico

 

 

Honda will not, and Honda will cause its Affiliates not to, directly or
indirectly, anywhere in the applicable Restricted Territory, engage or
participate in (whether as owner, operator, member, interest holder, trustee,
manager, consultant, strategic partner, through the control of product
development of an entity or otherwise) the business of manufacturing,
distributing or selling compressed natural gas refueling systems for motor

 

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vehicles in residential and commercial markets (a “Competing Business”) so long
as the Purchaser or any Person deriving title to all, but not less than all, of
the goodwill or ownership interest in the Corporation or its assets from the
Purchaser carries on a like business within such Restricted Territory.
Notwithstanding any other provision of this Section 6.4, Honda will not be in
breach of this Section 6.4(1) or (2) by reason (a) of its beneficial ownership,
together with that of its Affiliates, of one percent or less of a Competing
Business’ voting capital if such Competing Business is publicly traded, (b) of
its beneficial ownership, management or operation, together with that of its
Affiliates, of the business of manufacturing, distributing or selling hydrogen
or gasoline refueling systems, (c) that it, or any of its Affiliates, provides
specifications other than specifications of the Refueling Technology to any
Competing Business, (d) that any of the motor vehicle dealers or distributors of
Honda or its Affiliates distributes, sells, installs or services natural gas
refueling systems, which natural gas systems are acquired from a Person other
than Honda, (e) of the exercise of rights granted to Honda under the technology
agreement referred to in Section 3.2(c) or the Greenfield/Honda Sublicense
referred to in Section 3.2(d); or (f) of the ownership by Honda or its
Affiliates of an interest in a Competing Business that is not an Affiliate of
Honda, unless Honda or its Affiliates control the product development of such
Competing Business.

 

(2)                                At all times before February 1, 2012, Honda
will not, and Honda will cause its Affiliates not to, directly or indirectly,
solicit for employment or recruit, either as an employee or a consultant, any
employee, consultant or independent contractor of the Corporation or the
Purchaser or any of its Affiliates who was an employee, consultant or
independent contractor of the Corporation or the Purchaser or any of its
Affiliates as of the date of this Agreement or at any time thereafter and prior
to the expiration of such period to become an employee or consultant of, or
otherwise provide services to, any Competing Business (except, however, that a
general advertisement in any medium to hire employees, or the hiring of any such
employee, consultant or independent contractor, shall not be a solicitation or
recruitment for the purposes of this Section 6.4(2)).

 

(3)                                Honda shall, and shall cause its Affiliates
and Representatives to, keep confidential and not disclose to any other Person
or use for the benefit of any other Person, any Refueling Technology, customer
lists and other customer information, confidential pricing information,
know-how, trade secrets, product formulas, franchises, inventions or other
proprietary property (other than Patents) in Honda’s possession or control
regarding the Corporation  or the Business (unless and to the extent compelled
to disclose by judicial, administrative or arbitral process or, in the opinion
of its counsel, by other Applicable Laws).  The obligations of Honda under this
Section 6.4(3) shall not apply to information (i) that is obtained from public
information, (ii) that is received from a third party not, to the knowledge of
Honda, subject to any obligation of confidentiality with respect to such
information, (iii) that  is or becomes known to the public, other than through a
breach of this Agreement, (iv) that is the subject of the technology agreement
referred to in Section 3.2(c) or the Greenfield/Honda Sublicense referred to in
Section 3.2(d), provided that Honda complies with the terms of such agreements,
or (v) the disclosure of which is required pursuant to a requirement of a
Governmental Authority or Applicable Law, provided that Honda gives the
Purchaser not less than 10 Business Days prior written notice of such disclosure
and cooperates with the Purchaser in seeking a protective order or taking any
other reasonable steps to limit the disclosure of such information.

 

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(4)                                Honda will not, and will cause its Affiliates
not to, make or cause to be made or condone the making of any statement, comment
or other communication, written or otherwise, that could constitute
disparagement or criticism of, or that could otherwise be considered to be
derogatory or detrimental to, or otherwise reflect adversely on, harm the
reputation of, or encourage any adverse action against, the Corporation or the
Purchaser or any of the products or services of the Corporation or the
Purchaser.  The obligations of Honda under this Section 6.4(4) shall not apply
to statements, comments or other communications that (a) Honda in good faith
believes are fair comment on the products or services of the Corporation or the
Purchaser, that further public health or safety or that are justified under
Applicable Law or (b) are made after January 31, 2012.

 

(5)                                The parties acknowledge and agree that the
restrictions contained in Sections 6.4(1), (2), (3) or (4) are a reasonable and
necessary protection of the immediate interests of the Purchaser, and any
violation of these restrictions would cause substantial injury to the Purchaser
and that the Purchaser would not have entered into this Agreement and the other
Transaction Documents without receiving the additional consideration offered by
Honda in binding itself to these restrictions.  In the event of a breach or a
threatened breach by Honda or any Affiliate of Honda of these restrictions, the
Purchaser will be entitled to seek an injunction restraining Honda or its
Affiliates, as applicable, from such breach or threatened breach (without the
necessity of proving the inadequacy as a remedy of money damages or the posting
of a bond); provided, however, that the right to seek injunctive relief will not
be construed as prohibiting the Purchaser from pursuing any other available
remedies, whether at law or in equity, for such breach or threatened breach.

 

(6)                                Honda understands California law regarding
the enforceability of covenants not to compete.  Honda acknowledges and agrees
that the covenants contained in this Section 6.4 would be enforceable
thereunder.

 

(7)                                To the extent required to preclude the
application of proposed subsection 56.4(2) or paragraph 68(c) of the Tax Act (or
any successor or replacement provisions thereto), Honda and the Purchaser agree
that they shall execute and file such election or elections under proposed
Section 56.4 of the Tax Act (the “RC Election”) in respect of the covenants
contained in this Section 6.4.  The RC Election will be executed on a timely
basis and filed with the Minister of National Revenue (Canada) prior to the
applicable filing deadline set out in proposed subsection 56.4(14) of the Tax
Act (or any successor or replacement provisions thereto). Honda shall be
responsible for preparing the requisite forms and, following execution by the
Purchaser, for filing such forms in the specified manner.

 

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6.5                             Investigation.

 

(1)                                Before Closing, the Purchaser and its
authorized Representatives shall be permitted to make such investigations,
inspections, surveys or tests of the Target Companies, the Business and the
Assets, and of their respective financial and legal condition as the Purchaser
deems necessary or desirable to familiarize itself with the Business, the Assets
and other matters. Without limiting the generality of the foregoing, the
Purchaser shall, during normal business hours, be permitted reasonable access
including physical access (to the extent within the control of Honda, the
Corporation or any of their representatives) to (i) all documents relating to
information scheduled or required to be disclosed under this Agreement, (ii) the
Books and Records, (iii) the Contracts, (iv) the Leased Property, (v) records
regarding suppliers, customers and regulators, (vi) environmental reports,
surveys, inspection reports, internal audits, manifests, incident reports and
any and all correspondence with Governmental Authorities or third parties in
respect of environmental matters, and (vii) all other reports prepared by
advisors of the Target Companies and their Affiliates, and the Corporation shall
provide photocopies to the Purchaser of all such written information and
documents as may be reasonably requested by the Purchaser.

 

(2)                                At the request of the Purchaser, the
Corporation shall execute or cause to be executed such consents, authorizations
and directions as may be necessary to permit any inspection of the Corporation,
the Business and any of the Assets or to enable the Purchaser or its authorized
Representatives to obtain full access to all files and records relating to the
Corporation or relating to any of the Assets maintained by Governmental
Authorities.

 

(3)                                At the Purchaser’s request, the Corporation
shall co-operate and assist the Purchaser in arranging any meetings as the
Purchaser should reasonably request with:

 

(a)                                management of the Corporation;

 

(b)                               customers, suppliers, distributors or others
who have or have had a business relationship with the Corporation; and

 

(c)                                auditors, solicitors or any other Persons
engaged or previously engaged to provide services to the Corporation who have
knowledge of matters relating to the Corporation and the Business.

 

(4)                                The Corporation shall conduct, in cooperation
with the Representatives or consultants of the Purchaser, such physical review
of the equipment of the Business as is necessary so as to enable the
confirmation of the values carried on the balance sheet of the Corporation in
respect of such Assets, to the reasonable satisfaction of the Purchaser. The
exercise of any rights of inspection by or on behalf of the Purchaser under this
Section 6.5 shall not mitigate or otherwise affect the representations and
warranties of the Vendors under this Agreement, which shall continue in full
force and effect as provided in Section 5.5.

 

6.6                             Risk of Loss.  Before Closing, the Corporation
shall maintain in force all the policies of business interruption insurance and
of property damage insurance under which any of the Assets or the Business are
insured.  If before the Closing any of the Assets or part of the Business is
lost, damaged or destroyed and the loss, damage or destruction constitutes a
Material Adverse Change, then the Purchaser at its sole discretion may terminate
this Agreement in accordance with the provisions of Section 4.1.

 

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6.7                               Personal Information.  The Purchaser shall at
all times comply with all applicable protection of Personal Information
legislation, federal or provincial, with respect to Personal Information
disclosed or otherwise provided, including any access provided to such Personal
Information by the Vendors, HondaSub or the Corporation under this Agreement. 
The Purchaser shall only use or disclose such Personal Information for the
purposes of reasonably investigating the affairs of the Business as contemplated
in Section 6.5 and completing the Transactions. The Purchaser shall safeguard
all Personal Information collected from the Vendors, HondaSub or the Corporation
in a manner consistent with the degree of sensitivity of the Personal
Information and, furthermore, maintain at all times the security and integrity
of the Personal Information.  The Purchaser covenants and agrees that it will
not make any copies of the Personal Information or any excerpts thereof or in
any way re-create the substance or contents of the Personal Information if the
Transactions are not completed for any reason, and that any and all Personal
Information will be returned to the Corporation or destroyed upon the request of
Honda or the Corporation.

 

6.8                               Operation of Business.  The Corporation
represents and warrants to, and agrees with, the Purchaser that commencing on
the date hereof and ending on the Closing Date (the “Interim Period”):

 

(1)                                 The Business will be conducted in the
Ordinary Course, the books and records of the Corporation will be regularly kept
and maintained, and the Corporation, with respect to the Business, will use its
commercially reasonable efforts to preserve the Business intact and preserve for
the benefit of the Purchaser the present relationships and goodwill of
employees, suppliers, customers and others having business relations with the
Corporation.

 

(2)                                 The Corporation will maintain its corporate
existence and good standing in its jurisdiction of incorporation and in the
jurisdictions in which it is required to be qualified or licensed to conduct the
Business.

 

(3)                                 The Corporation shall not enter into any
contract or commitment or engage in any transaction not in the Ordinary Course
and consistent with its past business practices, and shall not enter into any
contract or commitment or engage in any transaction not in the Ordinary Course
involving more than $25,000, without the prior written consent of the Purchaser.

 

(4)                                 All buildings, offices, plants and other
structures, and all the Corporation’s Assets and other property owned, leased,
occupied or used by the Corporation, will be kept and maintained in as good
condition, repair and working order as exists on the date hereof, reasonable
wear and tear excepted, and the Purchaser will in all material respects, duly
observe and conform to all terms and conditions upon or under which any of its
properties are held.

 

(5)                                 The Vendors and the Corporation will not
knowingly do any act or omit to do any act, or knowingly permit any act or
omission to act, which will cause a material breach or default of any contracts,
commitments or obligations with respect to the Business.

 

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(6)                                 The Vendors and the Corporation will not
knowingly take nor cause to be taken any action which would make any of the
representations or warranties made by them in this Agreement untrue or incorrect
as of the Closing Date.

 

Honda represents and warrants and agrees with the Purchaser that it will not
take any action that could cause the Corporation to be in breach of the
covenants contained in this Section 6.8.

 

6.9                               Cooperation.  Each Party hereto covenants
during the Interim Period (and subject to the other terms of this Agreement):

 

(1)                                 To cooperate with each other in determining
whether filings are required to be made with or consents required to be obtained
from any Governmental Authority in any jurisdiction in connection with the
consummation of the Transactions and in making or causing to be made any such
filings promptly and to obtain timely any such consents (each Party hereto shall
furnish to the other Parties and to their respective counsel all such
information as may be reasonably required in order to effectuate the foregoing
action).

 

(2)                                 To keep the other Parties informed of any
significant communications received by such Party from, or given by such Party
to, any Governmental Authority and to consult with the other Parties in advance
of any meeting or conference with any Governmental Authority.

 

(3)                                 To use commercially reasonable efforts, and
cooperate with the other Parties hereto, to obtain all consents required from
third persons, whose consent or approval is required pursuant to any contract or
otherwise to consummate the Transactions and to take all other steps necessary
to complete the Transactions prior to the Closing Date.

 

(4)                                 Without limiting the specific obligations of
any Party hereto under any covenant or agreement hereunder, to use commercially
reasonable efforts to take all action and do all things necessary in order to
promptly consummate the Transactions, including, satisfaction, but not waiver,
of the Closing conditions set forth in Article 4.

 

6.10                        FM Trust Change of Name.  Immediately following the
Closing, the Trustee will dissolve the FM Trust or effect a change of the name
of the FM Trust to eliminate the words “FuelMaker” and thereafter neither Honda
nor the FM Trust, nor any of their respective Affiliates, shall have any right
to use the name “FuelMaker” or any confusingly similar trade name or trade mark.

 

ARTICLE 7
GENERAL

 

7.1                               Public Announcements.  No Party shall make any
public statement or issue any press release concerning the Transactions except
as agreed by Honda and the Purchaser acting reasonably or as may be necessary,
in the opinion of counsel to the Party making that disclosure, to comply with
the requirements of Applicable Law.  If any public statement or release is so
required, the Party making the disclosure shall consult with Honda and the
Purchaser before making that statement or release, and Honda and the Purchaser
shall use all reasonable efforts, acting in good faith, to agree on a text for
the statement or release that is satisfactory to them.

 

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Nothing herein contained, however, shall prevent a Party from complying with the
requirements of United States securities laws or the requirements of any stock
exchange.  A draft press release is attached hereto as Schedule 7.1. 
Notwithstanding the foregoing, in the event that the Purchaser or its counsel
(i) determines that, as a result of the parties hereto entering into this
Agreement, or the commencement of the Transactions, a filing on Form 8-K (or any
similar or successor form) is required under applicable securities laws,
including the Securities Exchange Act of 1934 (“SEC Requirements”) or (ii) the
Purchaser is intending to file a registration statement under the Securities Act
of 1933 covering certain of its securities, and the Purchaser or its counsel
believes that a copy of this Agreement, or a description of the Transactions, is
necessary to complete such registration statement or otherwise comply with
applicable SEC Requirements, the Purchaser shall be entitled to make such filing
and shall advise Vendors of same in advance of such filing.

 

7.2                               Expenses.  The Purchaser shall pay all
expenses (including Taxes imposed on those expenses) it incurs in the
authorization, negotiation, preparation, execution and performance of this
Agreement and the Transactions, including all fees and expenses of its legal
counsel.  Honda shall pay all expenses (including Taxes imposed on those
expenses) the Vendors incur in the authorization, negotiation, preparation,
execution and performance of this Agreement and the Transactions, including all
fees and expenses of Honda’s legal counsel.  Honda and the Purchaser shall each
share 50% of the cost of auditing the Financial Statements of the Corporation
and HondaSub, except that the Purchaser shall bear all of the costs relating to
reconciling such Financial Statements to generally accepted accounting
principles established by the Financial Accounting Standards Board of the United
States, as amended from time to time, and otherwise conforming the Financial
Statements with SEC Requirements.

 

7.3                               Commercially Reasonable Efforts.  In this
Agreement, unless specified otherwise, an obligation of any Party to use its
commercially reasonable efforts to obtain any Approval shall not require the
Party to make any payment to any Person for the purpose of procuring the
Approval, except for payments for amounts due and payable to that Person,
payments for incidental expenses incurred by that Person and payments required
by any Applicable Law or to commence any Claim.

 

7.4                               No Third Party Beneficiary.  This Agreement is
solely for the benefit of the Parties and no third parties shall accrue any
benefit, Claim or right of any kind pursuant to, under, by or through this
Agreement.

 

7.5                               Entire Agreement.  This Agreement together
with the other agreements to be entered into as contemplated by this Agreement
(the “Other Agreements”) constitute the entire agreement between the Parties
pertaining to the subject matter of this Agreement and the Other Agreements and
supersede all prior correspondence, agreements, negotiations, discussions and
understandings, written or oral.  Except as specifically set out in this
Agreement or the Other Agreements, there are no representations, warranties,
conditions or other agreements or acknowledgements, whether direct or
collateral, express or implied, written or oral, statutory or otherwise, that
form part of or affect this Agreement or the Other Agreements or which induced
any party to enter into this Agreement or the Other Agreements.  No reliance is
placed on any representation, warranty, opinion, advice or assertion of fact
made either prior to, concurrently with, or after entering into, this Agreement
or any Other Agreement, or any amendment or

 

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supplement thereto, by any Party to this Agreement or any Other Agreement or its
Representatives, to any other Party or its Representatives, except to the extent
the representation, warranty, opinion, advice or assertion of fact has been
reduced to writing and included as a term in this Agreement or that Other
Agreement, and none of the Parties to this Agreement or any Other Agreement has
been induced to enter into this Agreement or any Other Agreement or any
amendment or supplement by reason of any such representation, warranty, opinion,
advice or assertion of fact.  There shall be no liability, either in tort or in
contract, assessed in relation to the representation, warranty, opinion, advice
or assertion of fact, except as contemplated in this Section.

 

7.6                               Time of Essence.  Time is of the essence of
this Agreement.

 

7.7                               Amendment.  This Agreement may be
supplemented, amended, restated or replaced only by written agreement signed by
each Party.

 

7.8                               Waiver of Rights.  Any waiver of, or consent
to depart from, the requirements of any provision of this Agreement shall be
effective only if it is in writing and signed by the Party giving it, and only
in the specific instance and for the specific purpose for which it has been
given.  No failure on the part of any Party to exercise, and no delay in
exercising, any right under this Agreement shall operate as a waiver of that
right.  No single or partial exercise of any such right shall preclude any other
or further exercise of that right or the exercise of any other right.

 

7.9                               Jurisdiction.  Each Party irrevocably and
unconditionally:

 

(a)                                  (i) agrees that any suit, action or
proceeding instituted against it by any other party with respect to this
Agreement or (unless expressly set forth therein) any Other Agreement may be
instituted, and that any suit, action or proceeding by it against any other
Party with respect to this Agreement or any Other Agreement shall be instituted,
only in the courts of the County of Los Angeles of the State of California, or
the United States District Court for the Central District of California (and
appellate courts from any of the foregoing) as the party instituting such suit,
action or proceeding may in its sole discretion elect, (ii) consents and
submits, for itself and its property, to the jurisdiction of such courts for the
purpose of any such suit, action or proceeding instituted against it by the
other Party and (iii) that a final judgment in any such suit, action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by Applicable Law;

 

(b)                                 agrees that service of all writs, process
and summonses in any suit, action or proceeding pursuant to Section 7.9(a) may
be effected by the mailing of copies thereof by certified mail, return receipt
requested, postage prepaid, to any Party at the addresses for notices pursuant
to Section 7.11 hereof (with copies to such other Persons as specified therein);
provided, however, that nothing contained in this Section 7.9 shall affect the
right of any Party to serve process on any other Party (including the Trustee)
in any other manner permitted by Applicable Law;

 

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(c)                                  (i) waives any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any Other Agreement brought in any court
specified in Section 7.9(a), (ii) waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum
and (iii) agrees not to plead or claim either of the foregoing; and

 

(d)                                 (i) WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF
ACTION ARISING UNDER THIS AGREEMENT OR ANY OTHER AGREEMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN
RESPECT OF THIS AGREEMENT OR ANY OTHER AGREEMENT OR ANY OF THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE AND (II) AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT
MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.

 

7.10                        Governing Law.  This Agreement and any dispute
arising from or in relation to this Agreement shall be governed by, and
interpreted and enforced in accordance with, the law of the State of California.

 

7.11                        Notices.

 

(1)                                 Any notice, demand or other communication
(in this Section 7.11, a “Notice”) required or permitted to be given or made
under this Agreement must be in writing and is sufficiently given or made if:

 

(a)                                  delivered in Person and left with a
receptionist or other responsible employee of the relevant Party at the
applicable address set forth below;

 

(b)                                 sent by prepaid courier service or (except
in the case of actual or apprehended disruption of postal service) mail; or

 

(c)                                  sent by facsimile transmission, with
confirmation of transmission by the transmitting equipment (a “Transmission”);

 

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in the case of a Notice to Honda, addressed to it at:

 

American Honda Motor Co., Inc.
1919 Torrance Blvd.
Torrance, California 90501-2746
Attn.:  Dan Bonawitz, Vice President, Corporate Planning & Logistics
Facsimile No. (310) 783-3263

 

with copies (not constituting Notice) to:

 

Honda North America, Inc.
700 Van Ness Avenue
Torrance, California 90501-2206
Attn.:  Don Woods, Senior Corporate Counsel
Facsimile No. (310) 781-4970

 

McMillan LLP
44th Floor, 181 Bay Street
Toronto, Ontario
Canada  M5J 2T3
Attn.:  Bruce McWilliam
Facsimile No. (416) 865-7048

 

and in the case of a Notice to FM Trust, addressed to it at:

 

Mr. John G. Armstrong, trustee of The FuelMaker Trust
16 King Georges Road
Toronto, Ontario
Canada  M8X 1K7

 

with a copy (not constituting Notice) to:

 

McMillan LLP
44th Floor, 181 Bay Street
Toronto, Ontario
Canada  M5J 2T3
Attention:  Bruce McWilliam
Facsimile No.:  (416) 865-7048

 

and in the case of a Notice to the Corporation, addressed to it at:

 

FuelMaker Corporation
70 Worcester Road
Toronto, Ontario
Canada  M9W 5X2
Attn.:  Don Jevons, Vice President, Finance
Facsimile No.:  (416) 674-3042

 

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and in the case of a Notice to the Purchaser, addressed to it at:

 

Clean Energy Fuels Corp.
Suite 200
3020 Old Ranch Parkway
Seal Beach, CA 90740
Attention:  Clay Corbus, Senior Vice President, Strategic Development and
Harrison Clay, Corporate Counsel
Facsimile No.: (562) 493-4532

 

with a copy (not constituting Notice) to:

 

Sheppard Mullin Richter Hampton LLP
Four Embarcadero Center
17th Floor
San Francisco, CA  94111
Attention:  James J. Slaby, Esq.
Facsimile No.:                      (415) 403-6074

 

(2)                                  Any Notice sent in accordance with this
Section 7.11 shall be deemed to have been received:

 

(a)                                  if delivered prior to or during normal
business hours on a Business Day in the place where the Notice is received, on
the date of delivery;

 

(b)                                 if sent by mail, on the fifth Business Day
in the place where the Notice is received after mailing, or, in the case of
disruption of postal service, on the fifth Business Day after cessation of that
disruption;

 

(c)                                  if sent by facsimile during normal business
hours on a Business Day in the place where the Transmission is received, on the
same day that it was received by Transmission, on production of a Transmission
report from the machine from which the facsimile was sent which indicates that
the facsimile was sent in its entirety to the relevant facsimile number of the
recipient; or

 

(d)                                 if sent in any other manner, on the date of
actual receipt;

 

except that any Notice delivered in person or sent by Transmission not on a
Business Day or after normal business hours on a Business Day, in each case in
the place where the Notice is received, shall be deemed to have been received on
the next succeeding Business Day in the place where the Notice is received.

 

(3)                                  Any Party may change its address for Notice
by giving Notice to the other Parties.

 

7.12                        Assignment.  Except as otherwise provided in this
Section 7.12, no Party may assign or transfer, whether absolutely, by way of
security or otherwise, all or any part of its rights or obligations under this
Agreement to any Person. The Purchaser may, at any time prior to the Closing
Time, assign all (but not less than all) of its rights and benefits under this
Agreement to

 

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any wholly-owned subsidiary of the Purchaser if such subsidiary delivers to the
Vendors and the Corporation an instrument in writing executed by such subsidiary
confirming that it is bound by and shall perform all of the obligations of the
Purchaser under this Agreement as if it were an original signatory hereto,
provided that no assignment contemplated in this Section 7.12 shall relieve the
assignor of its obligations under this Agreement.

 

7.13                        Further Assurances.  Each Party shall promptly do,
execute, deliver or cause to be done, executed or delivered all further acts,
documents and matters in connection with this Agreement that any other Party may
reasonably require, for the purposes of giving effect to this Agreement.

 

7.14                        Severability.  If, in any jurisdiction, any
provision of this Agreement or its application to any Party or circumstance is
restricted, prohibited or unenforceable, that provision shall, as to that
jurisdiction, be ineffective only to the extent of that restriction, prohibition
or unenforceability without invalidating the remaining provisions of this
Agreement, without affecting the validity or enforceability of that provision in
any other jurisdiction and, if applicable, without affecting its application to
the other Parties or circumstances.

 

7.15                        Successors.  This Agreement shall be binding on, and
shall enure to the benefit of, the Parties and their respective successors and
permitted assigns.

 

7.16                        Counterparts.  This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which taken together shall constitute one agreement.  To evidence the fact
that it has executed this Agreement, a Party may send a copy of its executed
counterpart to all other Parties by Transmission and the signature transmitted
by Transmission shall be deemed to be its original signature for all purposes.

 

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IN WITNESS WHEREOF, the Parties have duly executed this Agreement on the date
first above written.

 

 

AMERICAN HONDA MOTOR CO., INC.

 

 

 

 

 

By:

  /s/ Anthony P. Piazza

 

 

  Name: 

Anthony P. Piazza

 

 

  Title:  

Vice President Corporate

 

 

  Procurement

 

 

 

 

  /s/ John G. Armstrong

 

 

  JOHN G. ARMSTRONG,

 

 

  SOLE TRUSTEE OF THE
  FUELMAKER TRUST

 

 

 

FUELMAKER CORPORATION

 

 

 

 

 

By:

  /s/ John Lyon

 

 

  Name: 

John Lyon

 

 

  Title:  

President & CEO

 

 

 

CLEAN ENERGY FUELS CORP.

 

 

 

 

 

By:

  /s/ Barclay Corbus

 

 

  Name: 

Barclay Corbus

 

 

  Title:  

Senior Vice President

 

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