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




 





 

















 


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

  



 


i

















 


	
  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

  



 


ii

















 


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.


 


1

















 


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:


 


2

















 


(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, 


 


3

















 


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.


 


4

















 


(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).


 


5
















 


(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.


 


6

















 


(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


 


7

















 


(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.


 


8

















 


(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.


 


9

















 


(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;


 


10

















 


(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).


 


11

















 


(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 


 


12

















 


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:


 


13

















 


	
  (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:


 


14
















 


(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

  



 


15

















 


	
  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


 


16

















 


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 


 


17

















 


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.  


 


18

















 


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.


 


19

















 


(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;


 


20

















 


(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;


 


21

















 


(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;


 


22

















 


(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);


 


23

















 


(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:


 


24
















 


(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


 


25

















 


(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.  


 


26

















 


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.


 


27

















 


(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

















 


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.


 


29

















 


(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 


 


30

















 


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; 


 


31

















 


(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.


 


32
















 


(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.


 


33

















 


(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


 


34

















 


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 


 


35

















 


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.


 


36

















 


(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.


 


37

















 


(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:


 


38
















 


(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.


 


39

















 


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


 


40

















 


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


 


41

















 


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.


 


42

















 


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;


 


43

















 


(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 


 


44

















 


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.


 


45

















 


(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.


 


46

















 


(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 


 


47

















 


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”).


 


48
















 


(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.


 


49

















 


(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.


 


50

















 


(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 


 


51

















 


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.


 


52

















 


(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.


 


53

















 


(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 


54

















 


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


 


55
















 


	
  (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.

  



 


56

















 


(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 


 


57

















 


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 


 


58

















 


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.


 


59

















 


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.


 


60

















 


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.


 


61

















 


(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.


 


62

















 


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 


 


64

















 


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.


 


65

















 


(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.


 


66

















 


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.


 


67
















 


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.


 


68

















 


(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.


 


69

















 


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


 


70

















 


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;


 


71

















 


(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”);


 


72

















 


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


 


73

















 


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


 


74

















 


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.


 


[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


 


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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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