Covenants of the Vendor 7.1 The Vendor hereby covenants that, during the Interim Period, the Vendor will, and will cause the Corporation to:
(a) carry on the Business in the ordinary course and use its best efforts to preserve the assets, the Business and the clients, customers and suppliers connected therewith;
(b) give the Purchaser, the Purchaser's Solicitors and the Purchaser's representatives full access during normal business hours to the properties, books, contracts, commitments and records of the Corporation;
(c) furnish the Purchaser with all information concerning the affairs of the Corporation as the Purchaser may reasonably request;
(d) do all things and cause all things to be done to ensure that all of the representations and warranties of the Vendor contained in this agreement remain true and correct throughout the Interim Period as if such representations and warranties were continuously made throughout such period;
(e) not enter into any contracts, commitments or transactions pertaining to the Business, or incur any indebtedness, obligations or liability or make any payment in respect thereof, except in the ordinary course of business;
(f) not incur any capital expenditures, or acquire or agree to acquire additional assets, or enter into any forward commitments for inventories, supplies or services (whether or not there are any contracts in writing with respect thereto), except in the ordinary course of business;
(g) not increase the wages or salaries or any other form of remuneration, direct or indirect, of any of the employees, officers or directors of the Corporation;
(h) not sell, agree to sell or otherwise dispose of any of the assets of the Corporation except in the ordinary course of business;
(i) pay, satisfy and discharge its obligations and liabilities in the ordinary course of business;
(j) obtain all necessary consents and approvals to the transaction herein contemplated required pursuant to the terms of any leases, contracts or rights of the Corporation or to which it is a party or to which any of the property or assets may be subject to or bound;
(k) not declare, pay or authorize dividends or other distributions on any shares of the Corporation or purchase or redeem any shares of the Corporation;
(l) not amend the Articles (as defined in the Business Corporations Act (Ontario)) of the Corporation, amalgamate or merge with any other corporation, or issue any securities (as defined in the Business Corporations Act (Ontario)) or redeem or purchase any issued securities;
(m) use their reasonable best efforts to ensure that the Corporation's bank operating line of credit from the Bank of Montreal shall remain in place with the Corporation immediately following the Closing Date, provided that Bank of Montreal fully releases any guarantees for that line of credit; and
(n) not increase the Shareholder's Loan amount nor shall any Shareholder's Loan related payments be made by the Corporation to the Vendor prior to the Time of Closing.
7.2 The Vendor hereby covenants that, at the Time of Closing, the Vendor will:
(a) furnish the Purchaser with a certificate of the Vendor stating that the representations and warranties of the Vendor contained in this agreement are true at the Time of Closing, as though then made, and that the covenants of the Vendor to be complied with at or prior to the Time of Closing have been complied with, provided that the receipt of such evidence and the closing of the transaction contemplated herein shall not be a waiver of the representations, warranties and covenants of the Vendor which are contained in this agreement;
(b) deliver to the Purchaser evidence reasonably satisfactory to the Purchaser's Solicitors that all necessary corporate authorizations authorizing and approving the transaction contemplated herein have been obtained in respect of the Corporation;
(c) deliver to the Purchaser a written acknowledgement from the lessor of any leased premises, in a form reasonably satisfactory to the Purchaser's Solicitors, acknowledging that the lease in respect thereof is in good standing, that all rents, additional rents and other amounts due and payable by the Corporation pursuant to such lease have been paid in full to the Effective Date, and that the Corporation is not in breach of its obligations under such lease, together with the unconditional written consent of the said lessor to the sale of the Purchased Shares to the Purchaser, if required under the terms of such lease;
(d) provide the Purchaser with evidence reasonably satisfactory to the Purchaser that the Vendor is not then a "non-resident" of Canada within the meaning of the Income Tax Act (Canada);
(e) provide the Purchaser with the favourable opinion of the Vendor's Solicitors in a form reasonably satisfactory to the Purchaser's Solicitors, acting reasonably:
(i) as to the authorized and issued capital of the Corporation and the shareholder and shareholdings in the Corporation;
(ii) that all issued and outstanding shares in the capital of the Corporation are issued and outstanding as fully paid and non-assessable; Page 38 of 75 - Share Purchase Agreement Initial -----------
(iii) that the Corporation has been duly amalgamated and organized and is a valid and subsisting corporation under the laws of the Province of Ontario;
(iv) that all necessary actions and proceedings have been taken to authorize and permit the due and valid transfer of the Purchased Shares at the Time of Closing from the Vendor to the Purchaser; and
(v) that this agreement has been duly executed and delivered by the Vendor and constitutes a valid and binding obligation of the Vendor, enforceable against her in accordance with its terms (subject to bankruptcy laws and the availability of equitable remedies) and, to the knowledge of the Vendor's Solicitors, does not violate the provisions of any indenture or agreement to which the Vendor or the Corporation or either of them are a party or by which either of them are bound;
(f) cause all necessary steps and proceedings as may reasonably be approved by the Purchaser's Solicitors to be taken so that the Purchased Shares may be properly transferred to the Purchaser at the Time of Closing; and in that regard, deliver to the Purchaser at the Time of Closing certificates representing all of the Purchased Shares, such certificates being duly endorsed for transfer to the Purchaser, and cause transfers of all the Purchased Shares to be duly and regularly recorded in the name of the Purchaser or as it may in writing direct;
(g) cause all of the directors and officers of the Corporation as are specified by the Purchaser to resign in favour of nominees of the Purchaser. All shareholder's and director's resolutions required to cause the actions of this Section 7.2(g) shall be approved at the Time of Closing;
(h) deliver and cause to be delivered by all of the directors and officers of the Corporation and by the Vendor, as shareholder of the Corporation, a complete release, with effect from the Time of Closing, of all claims against the Corporation of any and all matters whatsoever in a form satisfactory to the Purchaser's Solicitors, acting reasonably;
(i) deliver and cause to be delivered to the Purchaser the corporate seal, minute books, share certificates, share certificate books, share transfers, share register books, directors' register and any and all documents, records, books, instruments and agreements of or pertaining or relating to the Corporation and its Business, property and assets;
(j) deliver to the Purchaser a release executed by the Vendor with respect to all payroll and severance related obligations of the Corporation;
(k) deliver and cause to be delivered to the Purchaser the Escrow Agreement, duly executed by the Vendor;
(l) deliver and cause to be delivered to the Purchaser a release executed by Xxxx Xxxxx with respect to all obligations of the Corporation;
(m) pay to the Corporation $273,884 for the purchase as of the Effective Date of the Cash Value Of Life Insurance and the respective insurance policy from the Corporation; Page 39 of 75 - Share Purchase Agreement Initial -----------
(n) deliver and cause to be delivered to the Purchaser a non-competition covenant from Xxxx Xxxxx in the form attached hereto as Schedule "7.2(n)";
(o) deliver and cause to be delivered to the Purchaser the New Lease between Alpen and the Corporation to become effective on September 1, 2004 (the day immediately following the last day of the Corporation's current lease agreement with Alpen);
(p) pay all the non-arms length expenses, accounts payable and accrued liabilities of the Corporation, excluding any ordinary course lease payments and payroll related transactions, from the date of this Agreement to the Time of Closing, and release the Corporation from the obligation to repay the Vendor for these payments; and
(q) shall release, and cause the Vendor's affiliates, including any of the Vendor's family that is or has been employed by the Corporation, or the Vendor shall indemnify the Purchaser and the Corporation from any and all severance obligations related to their employment by the Corporation, and any other contractual obligations of the Corporation to the Vendor and her affiliates.
7.3 The Vendor hereby covenants that, subsequent to the Date of Closing, the Vendor will:
(a) at the request and expense of the Purchaser, execute and deliver such additional conveyances, transfers and other assurances as may, in the reasonable opinion of the Purchaser's Solicitors, be required to carry out the intent of this agreement and to transfer the Purchased Shares to the Purchaser;
(b) only discharge the Security Interests when the payments of Sections 3.2(a), 3.2(b), 3.2(c), 3.2(d) and 3.2
Covenants of the Sponsor The Sponsor agrees and covenants for the benefit of each Residual Certificateholder, the Insurer and the Owner Trustee, during the term of this Agreement, and to the fullest extent permitted by applicable law, that:
(a) it shall not create, incur or suffer to exist any indebtedness or engage in any business, except, in each case, as permitted by its certificate of formation, its operating agreement and the Basic Documents;
(b) it shall not, for any reason, institute proceedings for the Trust to be adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against the Trust, or file a petition seeking or consenting to reorganization or relief under any applicable federal or state law relating to the bankruptcy of the Trust, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Trust or a substantial part of the property of the Trust or cause or permit the Trust to make any assignment for the benefit of creditors, or admit in writing the inability of the Trust to pay its debts generally as they become due, or declare or effect a moratorium on the debt of the Trust or take any action in furtherance of any such action;
(c) it shall obtain from each counterparty to each Basic Document to which it or the Trust is a party and each other agreement entered into on or after the date hereof to which it or the Trust is a party, an agreement by each such counterparty that prior to the occurrence of the event specified in Section 10.1(e) such counterparty shall not institute against, or join any other Person in instituting against, it or the Trust, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceedings under the laws of the United States or any state of the United States; and
(d) it shall not, for any reason, withdraw or attempt to withdraw from this Agreement, dissolve, institute proceedings for it to be adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition seeking or consenting to reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of it or a substantial part of its property, or make any assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or declare or effect a moratorium on its debt or take any action in furtherance of any such action.
