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Exhibit 10c
IMPARK INVESTMENTS INC.
AND
FIRST UNION REAL ESTATE
EQUITY AND MORTGAGE INVESTMENTS
----------------------------------------
SHARE PURCHASE AGREEMENT
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February 18, 1997
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TABLE OF CONTENTS
Page
1. Interpretation..................................................................................2
1.1 Defined Terms..........................................................................2
1.2 Currency..............................................................................10
1.3 Sections and Headings.................................................................10
1.4 Number and Gender.....................................................................11
1.5 Entire Agreement......................................................................11
1.6 Time of Essence.......................................................................11
1.7 Applicable Law........................................................................11
1.8 Severability..........................................................................11
1.9 Amendment and Waivers.................................................................11
1.10 Knowledge.............................................................................11
1.11 Best Efforts..........................................................................12
1.12 Documents Made Available for Review...................................................12
1.13 References to Contracts and Statutes..................................................12
1.14 Deposit...............................................................................12
1.15 Schedules.............................................................................12
2. Purchase and Sale of Purchased Shares..........................................................13
2.1 Purchase and Sale of Purchased Shares.................................................13
2.2 Purchase Price........................................................................13
2.3 Payment of Purchase Price.............................................................13
2.4 Working Capital Adjustment............................................................14
2.5 Amounts Held by Escrow Agent..........................................................16
3. Representations and Warranties of the Vendors..................................................16
3.1 Representations and Warranties Relating to the Vendors................................16
4. General Representations and Warranties of the Vendors..........................................17
4.1 Organization..........................................................................18
4.2 Authorization; No Violation...........................................................18
4.3 Authorized and Issued Capital of Holdco and the Company...............................18
4.4 Authorized and Issued Capital of Subsidiaries.........................................19
4.5 No Options, Etc.......................................................................19
4.6 Title to Property.....................................................................19
4.7 Accounts Receivable...................................................................19
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4.8 Intellectual Property.................................................................19
4.9 Insurance.............................................................................20
4.10 Material Contracts....................................................................20
4.11 Compliance with Laws; Permits.........................................................21
4.12 Consents and Approvals................................................................22
4.13 Financial Statements..................................................................22
4.14 Corporate Records.....................................................................22
4.15 Absence of Changes....................................................................22
4.16 Taxes.................................................................................23
4.17 Litigation............................................................................24
4.18 Non-Arm's Length Transactions.........................................................25
4.19 Environmental.........................................................................25
4.20 Employee Plans........................................................................27
4.21 Union Contracts.......................................................................28
4.22 Employees.............................................................................29
4.23 Location of Real Property.............................................................29
4.24 Real Property.........................................................................29
4.25 No Expropriation......................................................................31
4.26 Leased Property.......................................................................31
4.27 Commissions...........................................................................31
4.28 GST Registration......................................................................31
4.29 Bank Accounts. ......................................................................31
4.30 Condition and Status of Assets........................................................32
4.31 Joint Venture Interest................................................................32
4.32 Holdco................................................................................32
5. Representations and Warranties of the Purchaser................................................32
5.1 Organization..........................................................................32
5.2 Authorization; No Violation...........................................................32
5.3 Consents and Approvals................................................................33
5.4 Sources of Funds......................................................................33
6. Survival of Representations and Warranties.....................................................33
6.1 Survival of Representations and Warranties of the Vendors.............................33
6.2 Survival of Representations and Warranties of the Purchaser...........................34
7. Covenants......................................................................................34
7.1 Access................................................................................34
7.2 Curative Efforts......................................................................35
7.3 Delivery of Books and Records.........................................................35
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7.4 Conduct Prior to Closing..............................................................36
7.5 Covenants of the Purchaser Prior to Closing...........................................37
7.6 Regulatory Filings....................................................................38
7.9 Purchaser's Knowledge.................................................................40
7.10 Tail Directors' and Officers' Insurance...............................................40
8. Conditions of Closing in Favour of the Purchaser...............................................40
8.1 Representations and Warranties........................................................40
8.2 Covenants.............................................................................41
8.3 Regulatory Consents...................................................................41
8.4 Other Consents. The .................................................................41
8.5 Material Adverse Change...............................................................41
8.6 No Action or Proceeding...............................................................41
8.7 Shareholders' Agreement, Etc..........................................................41
8.8 Options...............................................................................41
8.9 Legal Matters.........................................................................41
8.10 Legal Opinion.........................................................................42
8.11 Resignations..........................................................................42
8.12 Section 116 Certificates..............................................................42
8.13 Non-Performance.......................................................................42
9. Conditions of Closing in Favour of the Vendors.................................................42
9.1 Representations and Warranties........................................................42
9.2 Covenants.............................................................................43
9.3 Regulatory Consents...................................................................43
9.4 No Action or Proceeding...............................................................43
9.5 Legal Matters.........................................................................43
9.6 Legal Opinion.........................................................................43
9.7 Non-Performance.......................................................................43
10. Closing Arrangements...........................................................................44
10.1 Place of Closing......................................................................44
10.2 Implementation........................................................................44
10.3 Further Assurances....................................................................44
10.4 Early Termination.....................................................................44
10.5 Non-Competition Agreement.............................................................45
11. Indemnification................................................................................46
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11.1 Indemnification by the Vendors........................................................46
11.2 Indemnification by the Purchaser......................................................47
11.3 Notice of Claim.......................................................................48
11.4 Direct Claims.........................................................................49
11.5 Third Party Claims....................................................................49
11.6 Settlement of Third Party Claims......................................................50
11.7 Co-operation..........................................................................50
11.8 Limitations...........................................................................50
11.9 Indemnity Payment Adjustments.........................................................50
11.11 Exclusivity...........................................................................51
11.12 Mitigation............................................................................51
11.13 Liquidated Damages....................................................................51
12. Miscellaneous..................................................................................52
12.1 Authority of Investco.................................................................52
12.2 Management............................................................................52
12.3 Notices...............................................................................53
12.4 Transaction Costs.....................................................................54
12.5 Consultation..........................................................................54
12.6 Disclosure............................................................................55
12.7 Assignment and Enforceability.........................................................55
12.8 Onex Corporation......................................................................55
12.9 Management Vendors....................................................................55
12.10 Construction..........................................................................56
12.11 Counterparts..........................................................................56
12.12 Restriction on Liability..............................................................57
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SHARE PURCHASE AGREEMENT
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THIS AGREEMENT made the 18th day of February, 0000,
X X X X X X X:
IMPARK INVESTMENTS INC.,
a corporation existing under the laws of the
Province of Ontario,
(hereinafter referred to as "Investco"),
OF THE FIRST PART,
- and -
THE PERSONS LISTED ON SCHEDULE 1 HERETO WHO
HEREAFTER BECOME VENDORS HEREUNDER,
OF THE SECOND PART,
- and -
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE
INVESTMENTS, a business trust existing under the
laws of the State of Ohio,
(hereinafter referred to as the "Purchaser"),
OF THE THIRD PART.
THIS AGREEMENT WITNESSES THAT in consideration of the
respective covenants, agreements, representations, warranties and indemnities of
the parties hereinafter contained and for other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged by each party),
the parties hereby agree as follows:
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1. Interpretation
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1.1 DEFINED TERMS. For the purposes of this Agreement, unless the
context otherwise requires, the following terms shall have the respective
meanings set out below and grammatical variations of such terms shall have
corresponding meanings:
(1) "ACT" means the Business Corporations Act (Ontario), as in effect
on the date hereof;
(2) "AFFILIATE" has the meaning attributed to that term in the Act;
(3) "ASSOCIATE" has the meaning attributed to that term in the Act;
(4) "AUDITED FINANCIAL STATEMENTS" means the audited consolidated
financial statements of Holdco as at and for the nine month period
ended December 31, 1996, including the notes thereto and the reports of
Holdco's auditors thereon, a copy of which is annexed hereto as
Schedule 1.1(e);
(5) "BUSINESS" means the businesses carried on, directly or indirectly,
by Holdco, the Company and its Subsidiaries consisting of the operation
of parking facilities on the Real Properties or under management
contracts and/or leases, valet parking, providing services ancillary to
the operation of parking facilities such as maintenance, ticketing,
security, collection and consulting, the distribution and manufacture
of parking lot and parking garage equipment and the ownership of real
property for purposes relating to the parking business;
(6) "BUSINESS DAY" means any day other than a Saturday or a Sunday on
which banks generally are open for business in Xxxxxxx, Xxxxxxx;
(7) "CLAIM" has the meaning set out in Section 11.3;
(8) "CLOSING" means the completion of the transactions contemplated by
Section 2;
(9) "CLOSING DATE" means the date on which all the conditions set out
in Sections 8 and 9 are satisfied or waived in writing by the Vendors
or the Purchaser, as the case may be, but in any event not later than
April 2, 1997;
(10) "CLOSING DEBT" means the aggregate indebtedness, as at the close
of business on the earlier of March 31, 1997 and the day immediately
preceding the Closing Date, of Holdco, the Company and the
Subsidiaries, on a consolidated basis, to the creditors identified in
Schedule 1.1(j), including the current portion thereof and all accrued
and unpaid interest on the principal amount thereof, less the amount
(up to
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a maximum of the sum of "A" and "B", where "A" is $1,000,000 and "B" is
the aggregate amount received by Holdco in respect of the subscription
price for the common shares to be issued to Investco or the Management
Vendors at or prior to the Time of Closing) of cash balances and short
term deposits or depositary instruments held by Holdco, the Company or
the Subsidiaries with Canadian chartered banks or other financial
institutions on the Closing Date;
(11) "CLOSING DEBT CERTIFICATE" means a certificate of the Chief
Financial Officer of the Company as to the amount of the Closing Debt
in the form attached hereto as Schedule 1.1(l) to be delivered at the
Time of Closing;
(12) "CODE" means the United States Internal Revenue Code of 1986, as
amended;
(13) "COMPANY" means Imperial Parking Limited;
(14) "CONTRACT" means any agreement, indenture, contract, lease, deed
of trust, licence (excluding a Permit), option or instrument;
(15) "DIRECT CLAIM" has the meaning set out in Section 11.3;
(16) "EMPLOYEE PLANS" means all bonus, deferred compensation, incentive
compensation, share purchase, share appreciation and share option,
severance or termination pay, hospitalization or other medical
benefits, life or other insurance, dental, disability, salary
continuation, vacation, supplemental unemployment benefits,
profit-sharing, mortgage assistance, employee loan, employee
assistance, pension, retirement or supplemental retirement plan or
agreement (including any defined benefit or defined contribution
pension plan and any group registered retirement savings plan), and
each other employee benefit plan or agreement (whether oral or written,
formal or informal, funded or unfunded, registered or unregistered)
sponsored, maintained or contributed to or required to be contributed
to by Holdco, the Company or any of the Subsidiaries for the benefit of
any of the present or former employees, officers or directors of
Holdco, the Company, any of the Subsidiaries or any of their respective
ERISA Affiliates in such capacities whether or not insured and whether
or not subject to any applicable law, and includes an employee benefit
plan as defined in section 3(3) of ERISA except that the term "Employee
Plans" shall not include any statutory plans with which Holdco, the
Company or any Subsidiary is required to comply, including the
Canada/Quebec Pension Plan or plans administered pursuant to applicable
Employment Legislation;
(17) "EMPLOYMENT LEGISLATION" means, collectively, the Canada Labour
Code, the Labour Relations Act (Ontario), the Canada Human Rights Act,
the Employment
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Standards Act (Ontario), the Workers' Compensation Act (Ontario), the
Pay Equity Act (Ontario), the Pension Benefits Act (Ontario), the Human
Rights Code (Ontario), the Occupational Health and Safety Act
(Ontario), the Employment Equity Act (Canada), the Pension Benefits
Standards Act (Canada), the Pension Benefits Standards Act (British
Columbia), the Workers= Compensation Act (British Columbia), the
Workplace Act (British Columbia), the Unemployment Insurance Act
(Canada) and the respective regulations and orders promulgated
thereunder and any similar federal, provincial, state or other
legislation applicable in any province of Canada or in any other
jurisdiction in which the Business is conducted;
(18) "ENCUMBRANCE" means any encumbrance, lien, charge, hypothec,
pledge, mortgage, title retention agreement, security interest of any
nature, reservation, easement, right of occupation or usage, option,
pre-emptive right or privilege;
(19) "ENVIRONMENTAL AUTHORITIES" means governmental or regulatory
authorities having jurisdiction over Holdco, the Company, the
Subsidiaries or their assets under any Environmental Laws, including
any department, commission, bureau, board, administrative agency or
body of any of the foregoing and including, without limitation, the
British Columbia Ministry of Environment, Lands and Parks (and the
ministry, government department or agency having similar
responsibilities in any other jurisdiction in which the Business is
conducted);
(20) "ENVIRONMENTAL LAWS" means all applicable federal, provincial,
state, municipal and local treaties, conventions, laws, statutes,
by-laws, regulations and all policies, guidelines, standards, orders,
directives, decisions and the like rendered or promulgated by any
ministry, department or administrative or regulatory agency to the
extent relating to the protection or preservation of the environment
(or any part thereof) including the treatment, storage, disposal or
discharge Hazardous Substances in force as at the date hereof,
including the Resource Conservation and Recovery Act (U.S.A.), the
Comprehensive Environmental Response Compensation and Liability Act
(U.S.A.), any so-called "Superfund" or "Superlien" law and the Toxic
Substances Control Act (U.S.A.);
(21) "ENVIRONMENTAL PERMITS" means all Permits required under
Environmental Laws;
(22) "ERISA" means the Employee Retirement Income Security Act of 1974;
(23) "ERISA AFFILIATE" means, with respect to any person, any
corporation, trade or business which, together with such person, is a
member of a controlled group of corporations or a group of trades or
businesses under common control within the meaning of sections 414(b)
or (c) of the Code.
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(24) "ESCROW AGENT" means Xxxxx Xxxxxxx Xxxxxx or their successor under
the Escrow Agreement;
(25) "ESCROW AGREEMENT" means the agreement dated the date of this
Agreement between Investco, the Purchaser and the Escrow Agent;
(26) "ESCROW AMOUNT" means the amount of money delivered by or on
behalf of the Escrow Agent at the Time of Closing to the Vendors
representing the principal amount deposited by the Purchaser with the
Escrow Agent pursuant to Section 1.14, together with all interest or
other income earned thereon to but excluding the date on which such
amount is released to the Vendors in accordance with the terms of the
Escrow Agreement upon the closing of the purchase and sale of the
Purchased Shares;
(27) "ETA" means the Excise Tax Act (Canada), as amended from time to
time;
(28) "FORECAST WORKING CAPITAL STATEMENT" means the document attached
hereto as Schedule 1.1(bb);
(29) "GAAP" means generally accepted accounting principles which have
been established in Canada, including those approved from time to time
by the Canadian Institute of Chartered Accountants or any successor
body thereto; and, for the purposes hereof in respect of Holdco, the
Company and the Subsidiaries, it is agreed that all amounts shall be
determined on a basis consistent with that used in the preparation of
the Audited Financial Statements (except for changes made with the
prior written consent of the parties hereto and which are also
certified by the auditors of Holdco to be consistent with generally
accepted accounting principles as recommended in the Handbook of the
Canadian Institute of Chartered Accountants);
(30) "GROSS MARGIN CONTRIBUTION" means, with respect to any Operating
Agreement, the gross revenues attributable to such Operating Agreement
less direct operating expenses (including Taxes) incurred in the
performance of the obligations of the Company or the relevant
Subsidiary thereunder or, in the case of management contracts,
management fees;
(31) "GST" means any Taxes payable under Part IX of the ETA or under
any provincial legislation similar to or integrated with Part IX of the
ETA;
(32) "HAZARDOUS SUBSTANCES" means any waste, hazardous substance,
contaminant, toxic substance, special waste, dangerous good,
deleterious substance or pollutant regulated or controlled pursuant to
any Environmental Law;
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(33) "HOLDCO" means Imperial Holdings No. 2 Inc.;
(34) "INCLUDING" and "INCLUDES" shall be deemed to be followed by the
statement "without limitation" and neither of such terms shall be
construed to limit any word or statement which it follows to the
specific or similar items or matters immediately following it;
(35) "INDEMNIFIED PARTY" has the meaning set out in Section 11.3;
(36) "INSTRUMENT OF ADHESION" has the meaning set out in Section 12.9;
(37) "INTELLECTUAL PROPERTY" means, collectively, all trade marks,
trade names, business names, patents, service marks, brand marks,
copyrights, industrial designs, trade secrets and other industrial or
intellectual property owned or used under licence or Contract by
Holdco, the Company or the Subsidiaries and all applications therefor
and all goodwill of Holdco, the Company or the Subsidiaries connected
therewith, including all licences or similar rights used by or granted
to Holdco, the Company or any of the Subsidiaries in connection with
the Business as now carried on;
(38) "LEASE" means any lease, agreement to lease, licence or similar
agreement in respect of any office premises to which the Company or any
of the Subsidiaries is a party (excluding ticketing offices leased
pursuant to any lease that constitutes an Operating Agreement);
(39) "LEASED PROPERTY" means all premises leased by the Company or any
of the Subsidiaries pursuant to a Lease;
(40) "LOSSES" means, in respect of any matter, all claims, demands,
proceedings, losses, damages (other than special, indirect or
consequential damages), liabilities, costs and expenses arising
directly or indirectly as a consequence of such matter;
(41) "MAJOR ACCOUNTING FIRM" means any of Price Xxxxxxxxxx, Xxxxx &
Young, Coopers & Xxxxxxx, Xxxxxx Xxxxxxxx or Deloitte & Touche;
(42) "MANAGEMENT VENDORS" means all persons who are directors or
employees of Holdco, the Company or the Subsidiaries and who hereafter
become holders of shares in the capital of Holdco in accordance and
compliance with Section 12.9 on or before February 21, 1996;
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(43) "MATERIAL ADVERSE EFFECT" means a material adverse effect on any
of the Business, operations or financial condition of the Company and
the Subsidiaries taken as a whole;
(44) "MATERIAL CONTRACT" has the meaning given to such term in Section
4.10;
(45) "NET WORKING CAPITAL DEFICIENCY" means the amount reflected on the
Working Capital Statement as the excess of current liabilities,
excluding the current portion of long term debt over current assets (as
such terms are used therein, which shall be consistent with the manner
in which they are used in the Audited Financial Statements);
(46) "ONEX ASSOCIATES" means each of the persons listed in paragraph 1
of Schedule 3.1(b) and in Schedule 3.2;
(47) "OPERATING AGREEMENTS" means all parking management agreements and
licences and leases of real property entered into by the Company or any
of the Subsidiaries for the purpose of providing parking services to
the public;
(48) "PENSION PLAN" means an Employee Plan that is a "Registered
Pension Plan" as that term is defined in subsection 248(1) of the Tax
Act or an Employee Plan which is an employee pension benefit plan
within the meaning of section 3(2) of ERISA;
(49) "PERMIT" means any licence, permit, approval, consent,
certificate, registration or authorization issued by any governmental
or regulatory authority;
(50) "PERMITTED ENCUMBRANCES" means, collectively:
(1) Encumbrances for Taxes, assessments and governmental charges due
and being contested in good faith and diligently by appropriate
proceedings (and for the payment of which adequate provision has been
made and provided that such contestation effectively postpones
enforcement of any such Encumbrances);
(2) servitudes, easements, restrictions, rights-of-way and other
similar rights in real property or any interest therein, provided the
same are not of such nature as to materially detract from the value of
the real property or materially impair its use in the operation of the
Business as now carried on and do not have a Material Adverse Effect;
(3) Encumbrances for Taxes or public utility charges not due and
payable or delinquent;
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(4) undetermined or inchoate Encumbrances or charges in respect of real
property or any interest therein that are incidental to current
construction or current operations and statutory Encumbrances in
respect of real property or any interest therein claimed or held by any
governmental authority which have not at the time been filed or
registered against the title to the property or interest or served upon
Holdco, the Company or any of the Subsidiaries pursuant to law and
which relate to obligations not due and payable or delinquent;
(5) assignments of insurance provided to landlords (or their
mortgagees) pursuant to the terms of any Lease and liens or rights
reserved in any Lease or available to landlords at law for rent or for
compliance with the terms of such Lease;
(6) security given in the ordinary course of the Business to any public
utility, municipality or government or to any statutory or public
authority in connection with the provision of power, water or similar
services consumed in the operation of the Business (excluding, for
greater certainty, security for borrowed money);
(7) the reservations in any original grants from the Crown of any real
property or interest therein;
(8) purchase money security interests and other vendor security for the
unpaid purchase price of goods acquired in the ordinary course of the
Business;
(9) carriers', warehousemen's, mechanics', materialmens', repairmens',
or other like liens arising in the ordinary course of the Business in
respect of liabilities not yet due or that are due but are being
contested in good faith, if adequate provision has been made therefor;
(10) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of the Business;
(11) zoning and building by-laws and ordinances, municipal by-laws
(including site specific by-laws) and regulations and restrictive
covenants which will not materially and adversely affect the ability to
use the real property in the operation of the Business as now used;
(12) title defects or irregularities in respect of any real property
that is of a minor nature and in the aggregate does not materially
adversely affect the value of any such
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real property or materially impair its use in the operation of the
Business as now used;
(13) subdivision, site plan control, development or similar agreements
entered into from time to time in respect of any real property and
which have been complied with to date;
(14) statutory exceptions to title which do not individually or in the
aggregate materially detract from the value of the real property or
materially impair its use in the operation of the Business; and
(15) the Encumbrances identified as Permitted Encumbrances on Schedule
1.1(xx);
(51) "PERSON" shall be broadly interpreted and includes an individual,
a corporation, a limited liability company, a partnership, a trust, a
joint venture, an association, an unincorporated organization, the
government of a country or any subdivision thereof, any agency or
department of any such government, any regulatory agency or any other
juridical entity and the heirs, executors, administrators or legal
representatives of an individual;
(52) "PRO RATA SHARE" means, at any time in respect of any Vendor, the
percentage obtained by multiplying by 100 the quotient obtained by
dividing the number of common shares of Holdco held by such Vendor by
the total number of common shares of Holdco issued and outstanding at
such time; provided that for the purpose of determining, at any time,
the Pro Rata Share of Investco, Investco shall be deemed to hold all
common shares of Holdco other than those held by the Management
Vendors, and further provided that at and after the Time of Closing the
Pro Rata Share of any Vendor shall be that Vendor's Pro Rata Share as
at the Time of Closing, determined as aforesaid;
(53) "PURCHASE PRICE" has the meaning ascribed thereto in Section 2.2;
(54) "PURCHASED SHARES" means, at any time, all the issued and
outstanding shares in the capital of Holdco;
(55) "REAL PROPERTY" means all real property owned by the Company or
any of the Subsidiaries;
(56) "SUBSIDIARIES" means, collectively, the corporations and companies
identified as Subsidiaries in Schedule 4.4;
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(57) "TAX" or "TAXES" means all taxes, charges, fees, levies, imposts
and other assessments, including all income, sales, use, goods and
services, value added, capital, capital gains, alternative, net worth,
transfer, profits, withholding, payroll, employer health, excise,
franchise, real property and personal property taxes, and any other
taxes, customs duties, fees, assessments, royalties, duties, fees,
deductions, compulsory loans or similar charges, including Canada
Pension Plan and provincial pension plan contributions, employment and
unemployment insurance payments, health insurance premiums and workers
compensation premiums, together with any instalments with respect
thereto, and any interest, fines and penalties, imposed by any
governmental authority (including federal, state, provincial, municipal
and foreign governmental authorities (or any agency or political
subdivision thereof)), and whether disputed or not;
(58) "TAX ACT" means the Income Tax Act (Canada), as amended from time
to time;
(59) "THIRD PARTY" has the meaning set out in Section 11.3;
(60) "THIRD PARTY CLAIM" has the meaning set out in Section 11.3;
(61) "TIME OF CLOSING" means 9:30 a.m. (Toronto time) on the Closing
Date, or such other time on the Closing Date as the Vendors and the
Purchaser may mutually determine;
(62) "VENDORS" means, collectively, the Management Vendors and Investco
(or any Affiliate of Investco to which the rights, benefits,
liabilities and obligations of Investco hereunder are assigned pursuant
to Section 12.7); and
(63) "WORKING CAPITAL STATEMENT" has the meaning given to such term in
Section 2.4(a).
1.2 CURRENCY. Unless otherwise indicated, all dollar amounts referred
to in this Agreement are expressed in Canadian funds.
1.3 SECTIONS AND HEADINGS. The division of this Agreement into Sections
and the insertion of headings are for reference purposes only and shall not
affect the interpretation of this Agreement. Unless otherwise indicated, any
reference in this Agreement to a Section or Schedule refers to the specified
Section of or Schedule to this Agreement.
1.4 NUMBER AND GENDER. In this Agreement, words importing the singular
number only shall include the plural and vice versa and words importing gender
shall include all genders.
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1.5 ENTIRE AGREEMENT. This Agreement together with the documents
contemplated hereby to be executed by the parties hereto constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings, negotiations and discussions,
whether written or oral except for the confidentiality agreement dated February
7, 1997 between Investco, Impark Holdings Inc., Holdco, the Company, the
Purchaser and First Union Management, Inc., and a Confidentiality and Standstill
Agreement dated January 30, 1997 between the Company and the Purchaser. Investco
agrees to be bound by such Confidentiality and Standstill Agreement on the same
basis as the Company. There are no conditions, covenants, agreements,
representations, warranties or other provisions, express or implied, collateral,
statutory or otherwise, relating to the subject matter hereof except as provided
herein or in any other agreement referred to in this Section 1.5. For greater
certainty, upon the execution and delivery of this Agreement by the Purchaser
and the Vendors, the letter of intent dated February 5, 1997 between the
Purchaser and Onex Corporation shall be terminated and of no further force or
effect.
1.6 TIME OF ESSENCE. Time shall be of the essence of this Agreement.
1.7 APPLICABLE LAW. This Agreement shall be construed, interpreted and
enforced in accordance with, and the respective rights and obligations of the
parties shall be governed by, the laws of the Province of Ontario and the
federal laws of Canada applicable in such province, and each party hereby
irrevocably and unconditionally submits to the non-exclusive jurisdiction of the
courts of such province and all courts competent to hear appeals therefrom.
1.8 SEVERABILITY. If any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is hereby
declared to be separate, severable and distinct.
1.9 AMENDMENT AND WAIVERS. No amendment or waiver of any provision of
this Agreement shall be binding on any party unless consented to in writing by
such party. No waiver of any provision of this Agreement shall constitute a
waiver of any other provision, nor shall any waiver constitute a continuing
waiver unless otherwise specified in such waiver.
1.10 KNOWLEDGE. Where any representation and warranty is expressed to
be given by the Vendors hereunder to their knowledge or is otherwise expressed
to be limited in scope to matters known to the Vendors, the knowledge of the
Vendors shall be comprised solely of those matters actually known to the Chief
Executive Officer, the President and the Chief Financial Officer of the Company.
The Vendors hereby represent and warrant that each such individual has made
appropriate enquiries of such other officers of Holdco, the Company and the
Subsidiaries who would reasonably be expected to have responsibility for or
knowledge of the matters relevant to such representation and warranty.
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1.11 BEST EFFORTS. For all purposes of this Agreement, an obligation on
the part of any party to use its best efforts to obtain any waiver, consent,
approval, permit, licence or other document or to do any other act or thing
shall not require such party to make any payment to any person for the purpose
of procuring the same, other than payments for amounts due and payable to such
person, payments for incidental expenses incurred by such person and payments
required by any applicable law or regulation.
1.12 DOCUMENTS MADE AVAILABLE FOR REVIEW. For the purposes of the
representations and warranties set out in Sections 3 and 4, a document shall be
considered to have been made available by the Vendors to the Purchaser if the
original or a copy of such document was included in the materials made available
for review by representatives of the Purchaser.
1.13 REFERENCES TO CONTRACTS AND STATUTES. All references contained in
this Agreement to any Contract or statute shall be taken, unless otherwise
indicated herein, to be references to such Contract or statute, as the same may
be amended, supplemented or replaced from time to time.
1.14 DEPOSIT. Immediately upon the execution and delivery of this
Agreement by the Vendors and the Purchaser, the Purchaser shall deliver to the
Escrow Agent a certified cheque or bank draft in, or shall pay to the Escrow
Agent by wire transfer of immediately available funds (to the account specified
by the Escrow Agent), the amount of $2,000,000, which amount shall be held by
the Escrow Agent pursuant to and in accordance with the terms of the Escrow
Agreement.
1.15 SCHEDULES. The following Schedules are attached to and form part
of this Agreement:
Schedule 1 - Vendors
Schedule 1.1(e) - Audited Financial Statements
Schedule 1.1(j) - Closing Debt
Schedule 1.1(l) - Closing Debt Certificate
Schedule 1.1(bb) - Forecast Working Capital Statement
Schedule 1.1(xx) - Additional Permitted Encumbrances
Schedule 3.1(a) - Ownership of Purchased Shares at Closing
Schedule 3.1(b) - Options on Holdco Shares
Schedule 3.2 - Current Ownership of Purchased Shares
Schedule 4.2 - Violations
Schedule 4.4 - Subsidiaries
Schedule 4.5 - Options
Schedule 4.8 - Intellectual Property
Schedule 4.9 - Insurance Policies
Schedule 4.10 - Material Contracts
Schedule 4.12(a) - Regulatory Consents
Schedule 4.12(b) - Contractual Consents
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Schedule 4.16 - Tax Matters
Schedule 4.17 - Litigation
Schedule 4.18 - Related Party Transactions
Schedule 4.19 - Environmental Matters
Schedule 4.20 - Employee Plans
Schedule 4.21 - Collective Agreements
Schedule 4.22(a) - Employees
Schedule 4.22(b) - Employment Agreements
Schedule 4.23 - Real Property
Schedule 4.24 - Required Repairs and Maintenance
Schedule 4.26 - Leased Real Property
Schedule 4.28 - GST Registrations
Schedule 4.29 - Bank Account
Schedule 4.31 - Joint Venture Interests
Schedule 10.6 - Form of Acknowledgement
Schedule 10.7 - Form of CIBC Purchase Agreement
Schedule 12.9 - Instrument of Adhesion
2. Purchase And Sale Of Purchased Shares
-------------------------------------
2.1 PURCHASE AND SALE OF PURCHASED SHARES. At the Time of Closing, the
Vendors shall sell, assign and transfer to the Purchaser, and the Purchaser
shall purchase from the Vendors, the Purchased Shares then owned by the Vendors
as set out in Schedule 3.1(a).
2.2 PURCHASE PRICE. Subject to any other adjustment made in accordance
with the terms of this Agreement, the aggregate price payable for the Purchased
Shares (the "Purchase Price") shall be $105,000,000 less the amount of the
Closing Debt (as shown in the Closing Debt Certificate).
2.3 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid and
satisfied at the Time of Closing by:
(1) the delivery by the Escrow Agent to or to the order of each Vendor
of a certified cheque or bank draft, in either case drawn on a Canadian
chartered bank in immediately available funds, payable to the order of
such Vendor in the amount of such Vendor's Pro Rata Share of the Escrow
Amount, and
(2) the delivery to or to the order of each Vendor by the Purchaser of
a certified cheque or bank draft, in either case drawn on a Canadian
chartered bank in immediately available funds, payable to the order of
such Vendor in the amount of such Vendor's Pro Rata Share of the
difference between the Purchase Price and the aggregate amount paid
under Section 2.3(a) or, in the case of Investco, by the wire
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transfer of immediately available funds in the amount of Investco's Pro
Rata Share of such difference to such account as may be specified by
Investco (subject, in the case of Vendors that are non-residents of
Canada within the meaning of the Tax Act and who have not delivered to
the Purchaser a certificate meeting the requirements of Section 8.12,
to any withholdings required to be made under the Tax Act),
against delivery to the Purchaser of a certificate or certificates representing
the Purchased Shares duly endorsed for transfer to the Purchaser or as it may
direct.
2.4 WORKING CAPITAL ADJUSTMENT.
(1) The Vendors and the Purchaser agree to use all reasonable efforts
to cause the Chief Financial Officer of the Company to prepare and
deliver to the Purchaser and the Vendors, as soon as reasonably
practicable after March 31, 1997, a statement of the consolidated
working capital of the Company as at March 31, 1997 (the "Working
Capital Statement"). The Working Capital Statement shall be prepared
substantially in the form of the Forecast Working Capital Statement and
shall be prepared on a basis consistent with the basis on which the
Forecast Working Capital Statement was prepared (including that each
line item of the Working Capital Statement reflects the same ledger
accounts used to calculate the corresponding line item in the Forecast
Working Capital Statement, with no changes to accruals or reserves
other than in the normal course for Taxes relating to periods after
December 31, 1996 and with no inclusion of cash received by Holdco on
or prior to March 31, 1997 in respect of the subscription price for the
common shares to be issued to Investco or the Management Vendors).
(2) If the Net Working Capital Deficiency as reflected in the Working
Capital Statement prepared in accordance with Section 2.4(a), (i)
exceeds $8,989,000, each Vendor shall pay its Pro Rata Share of the
amount of such excess to the Purchaser or (ii) is less than $7,989,000,
the Purchaser shall pay to each Vendor that Vendor's Pro Rata Share of
the amount by which the Net Working Capital Deficiency is less than
$7,989,000. Any payment required by this Section 2.4 shall be deemed to
be an adjustment to the Purchase Price and shall be made promptly
following finalization of the Working Capital Statement (taking into
account the resolution of any objection made in accordance with the
following provisions of this Section 2.4) by delivery to the party
entitled thereto of a certified cheque or bank draft, drawn on a
Canadian chartered bank in immediately available funds, payable to such
party.
(3) The Purchaser and Investco shall have a period of 10 days following
the date of receipt of the Working Capital Statement to review and
raise any objection to the same. For the purposes of such review, the
Purchaser and Investco and their authorized representatives shall have
full access to the Chief Financial Officer of the
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Company and all working papers, ledgers, schedules and other
documentation that were used or relied upon in connection with the
preparation of the Working Capital Statement. If no objection to the
Working Capital Statement is given by either such party within such
10-day period, the Working Capital Statement shall be deemed to have
been approved by each party as of the last day of such period.
(4) If either such party (the "Objecting Party") objects to any aspect
of the Working Capital Statement within such 10-day period by giving
notice to the Company and the other such party setting out in
reasonable detail the nature of such objection, the Objecting Party
shall have the right to engage within 14 days after the receipt of the
Working Capital Statement any Major Accounting Firm (the "First
Reviewing Firm") to review and prepare, within 30 days after the
commencement of their engagement, a written report on the basis of the
preparation of the Working Capital Statement and, if the First
Reviewing Firm determines that there has been an error in the original
preparation of the Working Capital Statement, the First Reviewing Firm
shall provide a revised Working Capital Statement on the basis set out
in Section 2.4(a) which, subject to the following sentence, shall be
binding on the parties hereto. If the Purchaser or Investco (whichever
is not the Objecting Party) objects to any aspect of the report or the
revised Working Capital Statement by the First Reviewing Firm, then
such party (the "Second Objecting Party") may engage, within 14 days
after the receipt of the report and revised Working Capital Statement
prepared by the First Reviewing Firm, any other Major Accounting Firm
(the "Second Reviewing Firm") to review the report and Working Capital
Statement prepared by the First Reviewing Firm. The Second Reviewing
Firm shall consult with the First Reviewing Firm with a view to
settling a final Working Capital Statement on the basis set out in
Section 2.4(a). If the First Reviewing Firm and the Second Reviewing
Firm cannot agree within 14 days after the engagement of the Second
Reviewing Firm on the basis upon which the Working Capital Statement
should be prepared, the matter shall be referred to a third Major
Accounting Firm (the "Arbitrating Firm") selected by mutual agreement
of the First Reviewing Firm and the Second Reviewing Firm (and failing
any such agreement within such 14-day period, either such party may
make application to the Ontario Court (General Division) on not less
than three days= notice to the other party for the appointment of the
Arbitrating Firm). The Arbitrating Firm shall prepare a Working Capital
Statement on the basis set out in Section 2.4(a) which shall be final,
conclusive and binding upon the parties hereto. For greater certainty,
no Vendor other than Investco shall be entitled to raise any objection
under Section 2.4(c) or this Section 2.4(d).
(5) For the purposes of this Section 2.4(e), the Vendors shall be
considered collectively as a single party, any objection to any Working
Capital Statement made by Investco shall be considered to have been
made on behalf of all the Vendors, and any amount required to be paid
under this Section 2.4(e) by the Vendors shall be paid
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by the Vendors in their Pro Rata Shares. The Objecting Party shall pay
all fees and expenses of the First Reviewing Firm and the Second
Objecting Party shall pay all fees and expenses of the Second Reviewing
Firm. The Objecting Party and the Second Objecting Party shall each pay
50% of the fees and expenses of the Arbitrating Firm.
2.5 AMOUNTS HELD BY ESCROW AGENT. Unless (a) otherwise dealt with by
the Escrow Agent in accordance with section 3.2 of the Escrow Agreement, (b)
applied in partial satisfaction of the Purchase Price in accordance with Section
2.3(a) hereof, or (c) applied in accordance with Section 11.13 hereof, all
amounts held by the Escrow Agent upon the termination pursuant to Section 8.12
or 9.7 of the parties' obligations under this Agreement (other than under
Sections 12.2, 12.3, 12.4 or 12.5 hereof) shall forthwith be paid to (x) the
Vendors in their Pro Rata Shares if the proximate cause of the non-performance
or non-fulfilment of the condition giving rise to the right of termination under
Section 8.12 or 9.7 was any inaccuracy in any representation or warranty of the
Purchaser made herein or any breach by the Purchaser in the performance of any
of its obligations hereunder, and (y) the Purchaser in any other case.
3. Representations and Warranties of the Vendors
---------------------------------------------
3.1 REPRESENTATIONS AND WARRANTIES RELATING TO THE VENDORS. Each of the
Vendors represents and warrants to the Purchaser in respect of itself as follows
and acknowledges that the Purchaser is relying on such representations and
warranties in connection with the transactions contemplated hereby:
(1) at the Time of Closing, such Vendor will be the registered and
beneficial owner of that number of the Purchased Shares as is set out
opposite such Vendor's name in Schedule 3.1(a) and such Vendor will
have good and marketable title thereto, free and clear of all
Encumbrances;
(2) except as set out in Schedule 3.1(b), no person (other than the
Purchaser) has any Contract or option, or any right or privilege
(whether by law, pre-emptive or contractual) capable of becoming a
Contract or option, for the purchase or the acquisition of any of the
Purchased Shares which will be at the Time of Closing held by such
Vendor and no such Purchased Shares are or will be at any time after
the date hereof and prior to the Time of Closing, subject to any
shareholders' agreement, voting trust or similar arrangement except as
described in Schedule 3.1(b);
(3) the execution and delivery of this Agreement by such Vendor and the
consummation of the transactions contemplated hereby will not, with or
without the giving of notice, lapse of time or both, (i) breach or
violate any of the provisions of, constitute a default under, or
conflict with or cause the acceleration of any obligation of such
Vendor under: (A) any Contract to which such Vendor is a party or by
which
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such Vendor is bound; (B) any judgment, decree, order or award of any
court, governmental body or arbitrator having jurisdiction over such
Vendor; (C) any Permit held by such Vendor; or (D) any applicable law,
statute, ordinance, regulation or rule; or (ii) create or impose any
Encumbrance on any of the Purchased Shares which are or will be at the
Time of Closing owned by such Vendor;
(4) this Agreement has been duly executed and delivered by such Vendor
and is a legal, valid and binding obligation of such Vendor,
enforceable against such Vendor by the Purchaser in accordance with its
terms; and
(5) except as set out in an Instrument of Adhesion delivered by any
Vendor, such Vendor is not a non-resident of Canada within the meaning
of the Tax Act.
3.2 ADDITIONAL REPRESENTATIONS BY INVESTCO. Investco hereby represents
and warrants to the Purchaser as follows and acknowledges that the Purchaser is
relying on such representations and warranties in connection with the
transactions contemplated hereby:
(1) the Purchased Shares outstanding on the date hereof are, as at the
date of this Agreement, held of record as set out in Schedule 3.2;
(2) Investco has the right to purchase, and to cause each of the Onex
Associates to sell to it, the Purchased Shares beneficially owned by
such Onex Associates;
(3) Investco is a corporation validly existing under the laws of the
Province of Ontario and has all necessary corporate power and authority
to enter into this Agreement and to perform its obligations hereunder;
and
(4) all necessary proceedings of the directors and shareholders of
Investco have been taken to enable Investco to enter into this
Agreement and to perform its obligations hereunder.
4. General Representations and Warranties of the Vendors
-----------------------------------------------------
The Vendors represent and warrant to the Purchaser as follows and
acknowledge that the Purchaser is relying on such representations and warranties
in connection with the transactions contemplated hereby:
4.1 ORGANIZATION. Holdco is a corporation duly incorporated and
organized and existing under the laws of the Province of Ontario and has all
necessary corporate power and authority to own or lease its property, to carry
on its business as now being conducted by it and to enter into and perform its
obligations under this Agreement. The Company is a company duly incorporated and
organized and validly existing and in good standing under the laws of the
Province
23
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of British Columbia and has all necessary corporate power and authority to own
or lease its property and to carry on the Business as now being conducted by it.
Each of the Subsidiaries is a corporation duly incorporated or amalgamated and
organized and validly existing and in good standing under the laws of its
jurisdiction of incorporation as set out in Schedule 4.4 and has all necessary
corporate power and authority to own or lease its property and to carry on its
business as now being conducted by it. Each of Holdco, the Company and the
Subsidiaries is duly registered or qualified to carry on business in each
jurisdiction in which the nature of its business or the property and assets
owned or leased by it makes such registration or qualification necessary, except
to the extent that the absence of any such registration or qualification does
not have a Material Adverse Effect.
4.2 AUTHORIZATION; NO VIOLATION. Except as disclosed in Schedule 4.2,
the execution and delivery of this Agreement and the performance by the Vendors
of their covenants under this Agreement and the consummation of the transactions
contemplated hereby will not, with or without the giving of notice, lapse of
time or both, (i) breach or violate any of the provisions of, constitute a
default under, conflict with or cause the acceleration or modification of any
obligation or the termination or modification, in any material respect, of any
right of Holdco, the Company or any of the Subsidiaries (or entitle any other
person to accelerate or modify any such obligation or terminate or modify any
such right) under (A) the constating or organizational documents of Holdco, the
Company or any of the Subsidiaries or any resolution of the shareholders or
directors (or any committee thereof) of Holdco, the Company or any of the
Subsidiaries, (B) any Material Contract, (C) any judgment, decree, order or
award of any court, governmental body or arbitrator having jurisdiction over
Holdco, the Company or any of the Subsidiaries, (D) any material Permit held by
Holdco, the Company or any of the Subsidiaries or (E) any applicable law,
statute, ordinance, regulation or rule (except, as regards this subclause (E),
with respect to the occurrence of a taxation year-end consequent upon a change
of control of Holdco, the Company and the Subsidiaries); or (ii) create or
impose any Encumbrance on any material property or asset of Holdco, the Company
or any of the Subsidiaries.
4.3 AUTHORIZED AND ISSUED CAPITAL OF HOLDCO AND THE COMPANY. The
authorized capital of Holdco consists of and is limited to an unlimited number
of common shares and an unlimited number of preference shares, of which
33,580,000 (and no more) common shares and no preference shares are outstanding
as fully paid and non-assessable. The authorized capital of the Company consists
of and is limited to 150,000,000 shares divided into 100,000,000 common shares
and 50,000,000 Class A preferred shares, issuable in series, of which 11,970,269
common shares and no Class A preferred shares (and no more) are outstanding as
fully paid and non-assessable. All the issued and outstanding common shares of
the Company are owned beneficially by Holdco and held of record by Canadian
Imperial Bank of Commerce, as agent.
4.4 AUTHORIZED AND ISSUED CAPITAL OF SUBSIDIARIES. Neither Holdco nor
the Company owns, directly or indirectly, any equity securities or ownership
interests in any person, except as set out in Schedule 4.4 and except for
Holdco's ownership of common shares of the Company. The authorized and issued
capital of each of the Subsidiaries is as set out on Schedule 4.4. All issued
and
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outstanding shares of the Subsidiaries have been duly issued and are validly
outstanding as fully paid and non-assessable. Except as set out in Schedule 4.4,
all of such issued and outstanding shares are owned by the Company, whether
directly or indirectly through one or more other Subsidiaries, as the beneficial
owner with a good and marketable title thereto, free and clear of all
Encumbrances.
4.5 NO OPTIONS, ETC. Except as disclosed in Schedule 4.5, no person has
any Contract or option, or any right or privilege (whether by law, pre-emptive
or contractual) capable of becoming a Contract or option, including convertible
securities, warrants or convertible obligations of any nature, for the purchase,
subscription, allotment or issuance of any unissued shares or other securities
of Holdco, the Company or any of the Subsidiaries.
4.6 TITLE TO PROPERTY. The property and assets reflected in the Audited
Financial Statements are owned beneficially by the Company and the Subsidiaries,
except such as may have been disposed of in the ordinary course of business
since the date of the Audited Financial Statements, free and clear of all
Encumbrances other than Permitted Encumbrances and other than Encumbrances
relating to Taxes (which are addressed in Section 4.16). The aggregate book
value of the property and assets of Holdco, the Company and the Subsidiaries
located in the United States is less than U.S. $15,000,000 and Holdco, the
Company and the Subsidiaries have not made aggregate sales in or into the United
States of U.S. $25,000,000 or more in the most recent calendar year.
4.7 ACCOUNTS RECEIVABLE. All material accounts receivable, accounts,
book debts and other debts due or accruing to Holdco, the Company and the
Subsidiaries are bona fide, have arisen in the normal course of the Business,
and are not subject to set-off or counterclaim.
4.8 INTELLECTUAL PROPERTY. Schedule 4.8 sets out a complete and
accurate list, in all material respects, of all Intellectual Property and
includes particulars that are complete and accurate in all material respects of
all registrations or applications for registration of any Intellectual Property
made by Holdco, the Company or any Subsidiary and of all licences of
Intellectual Property to which Holdco, the Company or any Subsidiary is a party.
The Company (or a Subsidiary) is the beneficial owner of the rights constituting
the Intellectual Property, free and clear of all Encumbrances. Except as set out
on Schedule 4.8, no person other than Holdco or a Subsidiary has been granted
any interest in or right to use all or any of the Company's or any Subsidiary's
rights to the Intellectual Property. The Vendors have no knowledge of any claim
of infringement or breach by Holdco, the Company or any of the Subsidiaries of
any industrial or intellectual property rights of any other person or of any
basis on which such a claim may reasonably be made. The Vendors have no
knowledge of any person that is now infringing the Intellectual Property.
4.9 INSURANCE. Schedule 4.9 sets out all insurance policies (specifying
the insurer, the amount of coverage, the type of insurance, the deductible, and,
if available, the policy number) maintained by Holdco, the Company and the
Subsidiaries on their respective properties and assets or personnel. The Vendors
have provided or made available to the Purchaser a true copy of each
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insurance policy referred to in Schedule 4.9 or a certificate of insurance
relating thereto. Holdco, the Company and the Subsidiaries are in compliance in
all material respects with such insurance policies, have paid all premiums when
due and have not failed to give any notice or present any material claim under
any such insurance policy in a due and timely fashion.
4.10 MATERIAL CONTRACTS. Except for Contracts disclosed in Schedule
1.1(xx), 4.9, 4.10, 4.20, 4.21, 4.22(b), 4.26 and 4.31 (collectively, the
"Material Contracts"), none of Holdco, the Company or any of the Subsidiaries is
a party to or bound by any of the following:
(1) any Contract for the purchase of materials, supplies, inventory,
equipment or services (other than parking lot services) for aggregate
consideration of more than $250,000 in respect of any one Contract or
creating ongoing obligations to purchase for a term in excess of three
years;
(2) any Operating Agreement to which there was attributable in the 1996
calendar year a Gross Margin Contribution of $45,000 or more (as
reflected in the books and records of the Company, consistent with past
practice, and determined on a consistent basis as between Operating
Agreements);
(3) any trust indenture, mortgage, promissory note, loan agreement,
debenture, security agreement or other Contract relating to the
borrowing of money or any security therefor, or a leasing transaction
of the type required to be capitalized in accordance with GAAP;
(4) any Contract for capital expenditures, excluding Contracts for
capital expenditures not exceeding $250,000 in the case of any such
Contract or $1,000,000 in the aggregate in the case of all such
Contracts;
(5) any Contract for the sale of any assets material to the Company and
the Subsidiaries taken as a whole, other than inventory in the ordinary
course of business;
(6) any Contract pursuant to which Holdco, the Company or any of the
Subsidiaries is a lessor or lessee of any machinery, equipment or
assets having a value in excess of $250,000; or
(7) any agreement of guarantee, support, indemnification, assumption or
endorsement of, or any other similar commitment with respect to, the
obligations, liabilities (whether accrued, absolute, contingent or
otherwise) or indebtedness of any person other than Holdco, the Company
and the Subsidiaries.
Holdco, the Company and the Subsidiaries have complied in all material
respects with all of their respective material obligations and are entitled to
all material benefits under, and
26
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are not in material default or breach and have not received notice of any
alleged material default or breach in respect of, any Material Contract. All
Material Contracts are, to the Vendors' knowledge, in good standing and in full
force and effect, and no event, condition, circumstance or occurrence exists
which would constitute a material default or breach under any Material Contract.
As soon as practicable following the date hereof, and in any event by February
17, 1997, the Vendors will have provided or made available to the Purchaser a
copy of each written Contract. Except as otherwise disclosed in this Agreement
(including the Schedules hereto), the execution and delivery of this Agreement,
and the performance by the Vendors of their obligations hereunder and the
consummation of the transactions contemplated hereby will not, with or without
the giving of notice, lapse of time or both, breach or violate any of the
provisions of, constitute a default under, conflict with or cause the
acceleration or modification of any obligation or the termination or
modification, in any material respect, of any right of Holdco, the Company or
any of the Subsidiaries (or entitle any other person to accelerate or modify any
such right) under, and Holdco, the Company and the Subsidiaries have complied
with their obligations and are entitled to all benefits under, and are not in
default or breach and have not received notice of any cancellation or
termination or intention to cancel or terminate (whether or not arising from a
default or breach) or alleged default or breach in respect of any Contract, to
the extent that any of the same individually or in the aggregate would cause a
Material Adverse Effect.
4.11 COMPLIANCE WITH LAWS; PERMITS.
(1) Holdco, the Company and each of the Subsidiaries have complied in
all material respects with all applicable laws, statutes, ordinances,
regulations, rules, judgments, decrees and orders (other than Environmental Laws
which are addressed in Section 4.19) in each jurisdiction in which the Business
is carried on, except for violations which would not have a Material Adverse
Effect.
(2) The Company and the Subsidiaries have all material Permits (other
than Environmental Permits which are addressed in Section 4.19) required to own
or lease their assets and carry on the Business. Each Permit (other than
Environmental Permits which are addressed in Section 4.19) held by the Company
or any Subsidiary is valid, subsisting and in good standing and the Company or
the Subsidiary which holds such Permit, as the case may be, is in substantial
compliance with the terms thereof, except for violations which would not have a
Material Adverse Effect. Neither the Company nor any of the Subsidiaries has
received written notice that any proceeding is pending or threatened to revoke
or limit any such Permit.
4.12 CONSENTS AND APPROVALS. There is no requirement to make any filing
with, give any notice to or obtain any licence, permit, certificate,
registration, authorization, consent or approval of, any governmental or
regulatory authority (other than Environmental Authorities which are addressed
in Section 4.19) as a condition to the lawful consummation of the transactions
contemplated by this Agreement, except for those requirements described in
Schedule 4.12(a). Except as described in Schedule 4.12(b), there is no
requirement under any Material Contract or
27
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material Permit to which Holdco, the Company or any of the Subsidiaries is a
party or by which any of their respective assets are bound to give any notice
to, or to obtain the consent or approval of, any party to such Contract or
Permit (other than Environmental Permits which are addressed in Section 4.19) in
connection with the completion of the transactions contemplated by this
Agreement.
4.13 FINANCIAL STATEMENTS. The Audited Financial Statements have been
prepared in accordance with GAAP and present fairly in all material respects the
assets, liabilities and financial condition of the Company on a consolidated
basis, as at the respective dates thereof and the sales, earnings and results of
operations of the Company for the period covered thereby. The Vendors have
provided the Purchaser with a copy of the management representation letter
delivered by the Company to its auditors in connection with the Audited
Financial Statements.
4.14 CORPORATE RECORDS. The minute books and corporate records of
Holdco, the Company and the Subsidiaries contain complete and accurate minutes
(or copies thereof) of all meetings and proceedings of the shareholders and
directors (or any committee thereof) of Holdco, the Company and the Subsidiaries
and the share certificate books, registers of transfers, registers of
shareholders and registers of directors of the Holdco, Company and the
Subsidiaries are complete and accurate in all material respects.
4.15 ABSENCE OF CHANGES. Since December 31, 1996, Holdco, the Company
and the Subsidiaries have carried on the Business and conducted their operations
and affairs only in the ordinary and normal course, consistent with past
practice, and, except as disclosed in the Audited Financial Statements there has
not been:
(1) any material adverse change in any of the Business, operations or
financial condition of Holdco, the Company and the Subsidiaries taken
as a whole;
(2) any material damage, destruction or loss (whether or not covered by
insurance) affecting any property or asset material to Holdco, the
Company and the Subsidiaries taken as a whole;
(3) any declaration or payment of any dividend or other distribution in
respect of any securities of Holdco, the Company or any of the
Subsidiaries or any direct or indirect redemption, purchase or other
acquisition of any such securities;
(4) any write-down of the value of inventory or any other property or
asset of the Company or any of the Subsidiaries or any write-off as
uncollectible of any accounts or notes receivable of the Company or any
of the Subsidiaries, and no events have occurred which could reasonably
be expected to result in such a write-down or write-off, except for
write-downs and write-offs and expected write-downs and write-offs
that, in the aggregate, do not exceed $500,000;
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(5) any cancellation or compromise of any debts or claims, or any
amendment, termination or waiver of any rights (including rights under
any Contracts or Permits), of the Company or any of the Subsidiaries in
amounts involving in excess of $200,000 in the aggregate or, if a
monetary value for the same is not readily ascertainable, that do not
have, in the aggregate, a Material Adverse Effect;
(6) any general increase in the compensation of employees of Holdco,
the Company or any of the Subsidiaries (including any increase pursuant
to any Employee Plan) or any material increase in the compensation or
bonus payable to any officer, employee, consultant or agent of Holdco,
the Company or any of the Subsidiaries, other than increases in the
ordinary and normal course of the Business consistent with past
practice;
(7) any material change in the accounting or Tax practices followed by
the Company or any of the Subsidiaries; or
(8) any incurrence of indebtedness, liability or obligation, in any
case for borrowed money, other than for working capital purposes in the
ordinary course of business under credit facilities existing on
December 31, 1996.
4.16 TAXES. Except as set out in Schedule 4.16, Holdco, the Company and
each of the Subsidiaries have duly filed or caused to be filed on a timely basis
all Tax returns required to be filed by them in all relevant jurisdictions, all
of which were true, correct and complete in all material respects, and have paid
all Taxes due and payable by them. Holdco, the Company and each of the
Subsidiaries have made provision for Taxes payable by them for all periods for
which Tax returns are not yet required to be filed or payments are not yet
required to be made. Except as set out in Schedule 4.16, there are no actions,
suits, proceedings, investigations or claims pending or, to the knowledge of the
Vendors, threatened against Holdco, the Company or any of the Subsidiaries in
respect of Taxes. Holdco, the Company and each of the Subsidiaries have withheld
or collected all amounts required to be withheld or collected by them on account
of Taxes and have remitted all such amounts to the appropriate Tax authority
when required by law to do so. There are no Encumbrances for unpaid Taxes, other
than Permitted Encumbrances. The Canadian and United States federal income and
capital Tax liability of Holdco, the Company and each of the Subsidiaries has
been assessed by Revenue Canada and the United States Internal Revenue Service,
as applicable, and any Canadian provincial income and capital Tax liability of
Holdco, the Company and each of the Subsidiaries has been assessed by the
appropriate taxing authority, for all taxation periods ending on or prior to the
dates set out in Schedule 4.16, and, except as described in Schedule 4.16, there
are no agreements, waivers or other arrangements (collectively, "waivers")
providing for an extension of time with respect to the filing of any Tax return
by, the payment of any Tax, governmental charge or deficiency by, or the
issuance of an assessment or reassessment against, Holdco, the Company or any of
the Subsidiaries. There are no circumstances existing other than in the ordinary
course of business which could result in the application of section 78 of the
Tax Act or any equivalent
29
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provincial provision to Holdco, the Company of any of the Subsidiaries. None of
sections 80 through to and including section 80.04 of the Tax Act, or any
equivalent provincial provision, have applied to Holdco, the Company or any of
the Subsidiaries. None of Holdco, the Company or any of the Subsidiaries has
acquired an asset from a person with which it deals at non-arm's length for
consideration greater than the fair market value of such asset at the time of
its acquisition. None of Holdco, the Company or any Subsidiary has entered into
an agreement contemplated by section 191.3 of the Tax Act or any equivalent
provincial provision. Neither Holdco, the Company nor any Subsidiary has agreed,
or is required, to make any adjustment in a post-Closing period under section
481(a) of the Code by reason of a change in the accounting method or otherwise.
None of Holdco, the Company or any Subsidiary has entered into a transaction
which is being accounted for as an instalment obligation under section 453 of
the Code nor is Holdco, the Company nor any Subsidiary party to an interest rate
swap, currency swap or other similar transaction. None of Holdco, the Company or
any of the Subsidiaries is subject to any material liability for Taxes of any
person (other than Holdco, the Company or any Subsidiary) including, without
limitation, liability arising from the application of U.S. Treasury Regulation
section 1.1502-6 or any analogous provision of state, local or foreign law. None
of Holdco, the Company or any of the Subsidiaries is or has been a party to any
tax sharing agreement which is binding and in effect on the date hereof. No
material claim has ever been made by an authority in a jurisdiction where
Holdco, the Company or any Subsidiary does not file Tax returns that it is or
may be subject to taxation by that jurisdiction.
4.17 LITIGATION. Except as described in Schedule 4.17, and except for
such claims, demands, actions, suits, proceedings, investigations or grievances
arising after the date hereof for which there is no reasonable basis in fact,
law or equity, there are no claims, demands, actions, suits, proceedings,
investigations or grievances underway, pending or, to the knowledge of the
Vendors, threatened in writing against the Company or any of the Subsidiaries at
law or in equity or before or by any federal, provincial, municipal or other
governmental department, court, commission, board, bureau, agency or
instrumentality, domestic or foreign, or by or before any arbitrator or
arbitration board which, if adversely determined, would have a Material Adverse
Effect.
4.18 NON-ARM'S LENGTH TRANSACTIONS. Since the date of the last Audited
Financial Statements, none of Holdco, the Company or any of the Subsidiaries has
made any payment or loan to, or borrowed any monies from, any officer, director,
employee, shareholder or any other person not dealing at arm=s length (within
the meaning of the Tax Act) with Holdco, the Company, the Subsidiaries and the
Vendors, except as disclosed in Schedule 4.18 and except for usual employee
reimbursements and compensation paid in the ordinary and normal course of the
Business. Except as described in Schedule 4.18 and except for Contracts of
employment, none of Holdco, the Company or any of the Subsidiaries is a party to
any material Contract with any officer, director, employee, shareholder or any
other person not dealing at arm's length with Holdco, the Company and the
Subsidiaries (within the meaning of the Tax Act).
4.19 ENVIRONMENTAL. Except as described in Schedule 4.19:
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(1) Holdco, the Company and the Subsidiaries have complied and are in
compliance with all applicable Environmental Laws other than violations which
would not have a Material Adverse Effect and there is no past or present fact,
condition or circumstance that, to the Vendors' knowledge, could result in any
liability of Holdco, the Company or any of the Subsidiaries under any applicable
Environmental Laws which would have a Material Adverse Effect;
(2) Holdco, the Company and the Subsidiaries have obtained all material
Environmental Permits required for the operation of the Business, all of which
are described in section (b) of Schedule 4.19. Each such Environmental Permit is
valid, subsisting and in good standing and none of Holdco, the Company or any of
the Subsidiaries is in default or breach of any Environmental Permit, other than
defaults or breaches that would not have a Material Adverse Effect, and no
proceeding is pending or, to the Vendors' knowledge, threatened to revoke, amend
or limit any material Environmental Permit;
(3) none of Holdco, the Company or any of the Subsidiaries has used or
permitted to be used any of its past or present properties (including the Real
Property and the Leased Property) or facilities to generate, use, dispose of or
handle any material quantities of Hazardous Substance except in compliance with
Environmental Laws or where non-compliance would not have a Material Adverse
Effect;
(4) none of Holdco, the Company or any of the Subsidiaries has received
in the three years preceding the date hereof any written notice of, or been
prosecuted for an offence alleging, non-compliance with any Environmental Law.
In the ten years preceding the date of this Agreement: (i) none of Holdco, the
Company or any of the Subsidiaries has been required to pay any amount, whether
in respect of a fine, penalty, damages or otherwise, in respect of any
proceeding or prosecution for or allegation of non-compliance with any
Environmental Law, (ii) there have been no orders or directions of Environmental
Authorities communicated in writing to Holdco, the Company or any of the
Subsidiaries relating to environmental matters requiring any work, repairs,
construction or capital expenditures to be made with respect to the Business or
any property of the Company or any of the Subsidiaries and (iii) none of Holdco,
the Company or any of the Subsidiaries has made any material expenditure to
remediate any contamination caused by the release into the environment of any
Hazardous Substance;
(5) except in compliance with Environmental Laws or as would not have a
Material Adverse Effect, none of Holdco, the Company or any of the Subsidiaries
has caused, allowed or permitted, or has any knowledge of, the release into the
environment, in any manner whatsoever, or the presence of any Hazardous
Substance on, under, around or from any of its past or present properties
(including the Real Property and the Leased Property), assets or facilities. All
Hazardous Substances used in whole or in part by Holdco, the Company or any of
the Subsidiaries or resulting from the Business have been disposed of, treated
and stored in compliance with all Environmental Laws, other than for violations
that would not have a Material Adverse Effect. Section (e) of Schedule 4.19
identifies, to the knowledge of the Vendors, all of the locations where
Hazardous
31
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Substances used in whole or in part by Holdco, the Company or any of the
Subsidiaries are being stored or disposed of. No Hazardous Substances used in
whole or in part by Holdco, the Company or any of the Subsidiaries has been
disposed of at any location in the United States other than as identified in
section (e) of Schedule 4.19;
(6) there is no requirement to make any filing with, give any notice to
or obtain any Environmental Permit as a condition to the lawful consummation of
the transactions contemplated by this Agreement, except for those requirements
described in section (f) of Schedule 4.19. Except as described in section (f) of
Schedule 4.19, there is no requirement under any material Environmental Permit
to which Holdco, the Company or any of the Subsidiaries is a party or by which
they are bound to give any notice to, or to obtain the consent or approval of,
any party to such Environmental Permit in connection with the completion of the
transactions contemplated by this Agreement; and
(7) the Vendors have provided or made available (or will have as soon
as practicable after the date hereof and, in any event by February 17, 1997) to
the Purchaser copies of all written environmental audits, evaluations,
assessments, studies or tests relating to the Real Property and the Leased
Property in their possession or under their control.
4.20 EMPLOYEE PLANS.
(1) Except as set forth in Schedule 4.20, none of Holdco, the Company,
any of the Subsidiaries or any of their respective ERISA Affiliates is
a party to or bound by, nor does Holdco, the Company, any of the
Subsidiaries or any of their respective ERISA Affiliates have any
liability or contingent liability with respect to, any Employee Plans
that are material to the Business and that impose any binding legal
obligation on Holdco, the Company, any Subsidiary or any of their
respective ERISA Affiliates. Schedule 4.20 contains a true and complete
list of each such Employee Plan. None of the Employee Plans is a
Pension Plan or a multiemployer plan (within the meaning of Section
3(37) of ERISA). None of Holdco, the Company or any Subsidiary has a
formal plan or commitment, whether legally binding or not, to create
any additional Employee Plan or to modify or change in any material
respect any existing Employee Plan that would affect any employee or
former employee of the Business, except such modification or amendment
as may be required to secure the continued registration of any existing
Employee Plan with each applicable governmental authority.
(2) A copy of each of the following documents will be delivered to the
Purchaser as soon as practicable and, in any event, by February 17,
1997;
(1) each Employee Plan (including all amendments thereto);
32
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(2) subject to applicable law, all general employee communications
since January 1, 1996 relating to the Employee Plans, whether or not
such communications have been, or are required to be, filed with any
applicable governmental authority;
(3) if the Employee Plan is funded through a trust or any third party
funding arrangement, a copy of the trust or other funding agreement
(including all amendments thereto); and
(4) all material contracts relating to the Employee Plans with respect
to which Holdco, the Company or any Subsidiary may have any liability,
including insurance contracts, investment management agreements,
monitoring agreements, subscription and participation agreements and
record keeping agreements.
(3) There are no pending or, to the Vendors' knowledge, threatened
claims by or on behalf of any person regarding the non-compliance by
Holdco, the Company, any Subsidiary or any of their respective ERISA
Affiliates with its material obligations under or relating to any
Employee Plan.
(4) All contributions to, and payments from, each Employee Plan which
may have been required to be made in accordance with the terms of any
such Employee Plan and applicable laws have been made in a timely
manner and in accordance in all material respects with the terms of the
Employee Plan and applicable laws.
(5) There are no pending or, to the Vendors' knowledge, threatened
investigations by any governmental or regulatory agency or authority
involving or relating to any Employee Plan or the assets thereof.
(6) The consummation of the transactions contemplated by this Agreement
will not constitute an event under any Employee Plan or individual
agreement with any present or former employee that will or may in
itself result in any severance or other payment or in the acceleration,
vesting or increase in benefits with respect to any present or former
employee.
(7) All Employee Plans are in compliance in all material respects with
all applicable laws and have been administered in form and in operation
in compliance in all material respects with all applicable laws.
(8) There have been no non-exempt "prohibited transactions" (as
described in section 406 of ERISA or section 4975 of the Code) with
respect to any Employee Plan and none of Holdco, the Company, any
Subsidiary or any of their respective ERISA Affiliates has engaged in
any non-exempt prohibited transaction with respect to any Employee
Plan.
33
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(9) None of Holdco, the Company or any of the Subsidiaries has incurred
any liability or taken any action or has any knowledge of any action or
event that could cause any one of them to incur any liability with
respect to any employee benefit plan as defined in Section 3(3) of
ERISA maintained, sponsored or contributed to by any of their
respective ERISA Affiliates, other than the Employee Plans.
4.21 UNION CONTRACTS. Except as described in Schedule 4.21, neither the
Company nor any of the Subsidiaries has entered into any collective agreement or
voluntary recognition agreement or accreditation orders with any labour union or
employee association or made any commitments to or conducted any negotiations
with any labour union or employee association with respect to any future
collective agreement. Except as set out in Schedule 4.21, the Vendors have no
knowledge of any current attempts to organize, establish or certify any labour
union or employee association with respect to any employees of the Company or
any of the Subsidiaries or of any contractor or agency with which the Company or
any of the Subsidiaries has a contract for the provision of personnel or the
services of personnel, nor is any such union or association presently certified
with regard to a bargaining unit. There are no grievances, outstanding
complaints before any board or tribunal, applications, proceedings or orders
against the Company or any of the Subsidiaries of which such party has received
written or other formal notice under any collective agreement which could,
individually or collectively, have a Material Adverse Effect. There are no
arbitration proceedings or awards pending against the Company or any of the
Subsidiaries under any collective agreement.
4.22 EMPLOYEES. Schedule 4.22(a) contains a complete and accurate list
of all individuals who are full-time employees or individuals engaged on
Contract to provide personal services to the Company or any of the Subsidiaries
or other agents or representatives of the Company and the Subsidiaries (in this
Section 4.22, "employees") whose annual salaries (excluding bonuses) exceed
$100,000, excluding unionized employees. Holdco does not have and has never had
any employees. If requested by the Purchaser, the Vendors shall cause the
Company to provide to the Purchaser a complete and accurate list of all
employees, specifying the salary or hourly wages, length of hire and title or
classification of each employee (but which may exclude, prior to March 3, 1997,
the names of such employees) and, in the case of each non-active employee, the
reason they are non-active, whether they are expected to return to work and, if
so, during which month, and any benefits to which they are entitled (except, as
regards non-active employees, to the extent such disclosure may be prohibited by
applicable law). Except for the collective agreements described in Schedule 4.21
and the employment agreements described in Schedule 4.22(b), neither the Company
nor any of the Subsidiaries is a party to any Contract with any employee other
than oral Contracts of indefinite duration which are terminable by the employer
without cause on reasonable notice as determined in accordance with applicable
law. Except as described in Schedule 4.17 and except for claims by employees
under Workers Compensation Legislation which, if adversely determined, would
not, either individually or in the aggregate, have a Material Adverse Effect,
there are no appeals, complaints, claims or charges pending or outstanding or,
to the knowledge of the Vendors,
34
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anticipated, nor are there any orders, decisions, directions, investigations,
applications, proceedings or convictions currently registered or
outstanding by any tribunal or agency against or in respect of the Company or
any of the Subsidiaries under or in respect of any Employment Legislation.
4.23 LOCATION OF REAL PROPERTY. Schedule 4.23 sets forth the municipal
addresses of the Real Property (complete and accurate legal descriptions of
which are to be delivered in accordance with Section 7.7). Except as disclosed
in Schedule 4.23 and except for leasehold interests under Leases and Operating
Agreements, none of Holdco, the Company or any of the Subsidiaries owns, or has
agreed to acquire, any real property or interest in real property other than the
Real Property.
4.24 REAL PROPERTY. The Company and the Subsidiaries have the exclusive
right to possess, use and occupy, and have good and marketable title in fee
simple to, all the Real Property, free and clear of all Encumbrances other than
Permitted Encumbrances. Except as set out in Schedule 4.24, all buildings,
structures, improvements and appurtenances situated on the Real Property (and
all equipment necessary for the operation thereof as operated on the date
hereof) are in reasonable operating condition and in a state of good maintenance
and repair having regard to their age, normal wear and tear and the uses to
which they are put, are adequate and suitable for the purposes for which they
are currently being used and the Company and the Subsidiaries have adequate
rights of ingress and egress for the operation of the Business in the ordinary
course. Except as set out in Schedule 4.24, none of such buildings, structures,
improvements or appurtenances (or any equipment therein), nor the operation or
maintenance thereof, violates in any material respect any restrictive covenant
or any provision of any federal, provincial or municipal law, ordinance, rule,
regulation or by-law, or encroaches in any material respect on any property
owned by others. Without limiting the generality of the foregoing:
(1) the Real Property, the current uses thereof and the conduct of the
Business comply in all material respects with all regulations,
statutes, enactments, laws and by-laws (excluding Environmental Laws
which are dealt with in Section 4.19) and there are no outstanding
applications for a re-zoning of any Real Property which could have a
Material Adverse Effect;
(2) no material alteration, repair, improvement or other work has been
ordered, directed or requested in writing to be done or performed to or
in respect of the Real Property or to any of the plumbing, heating,
elevating, water, drainage or electrical systems, fixtures or works by
any municipal, provincial or other competent authority, which
alteration, repair, improvement or other work has not been completed or
will be completed in accordance with the regular maintenance program of
the Company, and the Vendors have no knowledge of any notification
having been given to the Company or any of the Subsidiaries of any such
outstanding work being ordered, directed or requested, other than those
which have been complied with;
35
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(3) all material accounts for work and services performed and materials
placed or furnished upon or in respect of the Real Property at the
request of the Company or any of the Subsidiaries have been or will be
fully paid and satisfied in the ordinary course of the Business and no
person is entitled to claim a lien under the Construction Lien Act
(Ontario) or similar legislation in any other jurisdiction in which the
Business is conducted against the Real Property or any part thereof,
other than current accounts payable in respect of which the payment due
date has not yet passed and other than such as are Permitted
Encumbrances;
(4) the Real Property is fully serviced and has suitable access to
public roads, and there are no outstanding material levies, charges or
fees assessed against the Real Property by any public authority
(including development or improvement levies, charges or fees) and
other than such as are Permitted Encumbrances; and
(5) neither the Company nor any of the Subsidiaries has entered into
any agreement to sell, transfer, encumber or otherwise dispose of or
impair such party's right, title and interest in and to the Real
Property or the air, density and easement rights relating thereto
(except for Permitted Encumbrances).
4.25 NO EXPROPRIATION. No property or assets of Holdco, the Company or
any of the Subsidiaries have been taken or expropriated by any federal,
provincial, state, municipal or other authority within the past three years nor
has any notice or proceeding in respect thereof been given or, to the knowledge
of the Vendors, commenced and the Vendors have no knowledge of any intent or
proposal to give any such notice or commence any such proceeding.
4.26 LEASED PROPERTY. Schedule 4.26 sets forth the municipal address or
the location of all the Leased Property and a list of all Leases. Except as
disclosed in Schedule 4.26, all buildings, structures, improvements and
appurtenances situated on the Leased Property are in reasonable operating
condition and in a state of good maintenance and repair having regard to their
age, normal wear and tear and the uses to which they are put, are adequate and
suitable for the purposes for which they are currently being used and the
Company (or the relevant Subsidiary) has adequate rights of ingress and egress
for the operation of the Business in the ordinary course. Except as so disclosed
in Schedule 4.26, to the knowledge of the Vendors, the Leased Property
(including all buildings, improvements and fixtures thereon) is fit for its
present use, and there are no material structural repairs or replacements which
are necessary for such use and there are no material repairs to, or replacements
of, the roof or the mechanical, electrical, heating, ventilating,
air-conditioning, plumbing or drainage equipment or systems which are necessary
for such use and for which the Company or any Subsidiary is responsible, and the
Leased Property is not currently undergoing any material alteration or
renovation nor is any such alteration or renovation contemplated. Neither of the
Company nor any of the Subsidiaries is a party to any Lease, whether as lessor
or lessee, other than the Leases described in Schedule 4.26 relating to the
Leased Property. Each of the Leases is in good standing and in full force and
effect without amendment thereto, and none of the Company,
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the Subsidiaries or, to the knowledge of the Vendors, any other party thereto
has failed to perform any obligation that constitutes, or with the giving of
notice or the lapse of time or both would constitute, a material breach thereof.
4.27 COMMISSIONS. No commission, finder's fee, consulting fees or other
similar payment is payable by Holdco, the Company or any Subsidiaries to any
broker, agent or other intermediary acting or purporting to act on behalf of
them or the Vendors in connection with the transactions contemplated by this
Agreement.
4.28 GST REGISTRATION. The Company and those Subsidiaries carrying on
business in Canada are registrants for the purposes of the ETA with the
registration numbers set out in Schedule 4.28.
4.29 BANK ACCOUNTS. Schedule 4.29 sets forth a true and complete list
showing the name of each bank, trust company or similar institution in which
Holdco, the Company or any Subsidiary has accounts or safe deposit boxes, the
number or designation of each such account and safe deposit box and the names of
all persons authorized to draw thereon or to have access thereto.
4.30 CONDITION AND STATUS OF ASSETS. All material tangible personal
property of the Company and the Subsidiaries is in good working condition and
good repair having regard to its age, normal wear and tear and the uses to which
it is put, consistent with past practice.
4.31 JOINT VENTURE INTEREST. Schedule 4.31 set forth the details of all
partnerships, joint ventures and co-tenancies in or to which any of Holdco, the
Company or any Subsidiary is a partner, joint venturer, member or party.
4.32 HOLDCO. The sole business of Holdco is to hold and deal with its
shares in the capital of the Company. Holdco does not now and will not between
the date hereof and the Closing Date carry on any active business, employ any
individuals, hold any other assets or rights or have any liabilities except as
relate to the acquisition, pledge or disposition of such shares and neither
Holdco nor any of its predecessors has carried on any active business, employed
any individuals, held any other assets or rights or had any other liabilities in
the past, except, in each case, as disclosed in this Agreement.
5. Representations and Warranties of the Purchaser
--------------------------------------------------
The Purchaser represents and warrants to the Vendors as
follows and acknowledges and confirms that the Vendors are relying on such
representations and warranties in connection with the transactions contemplated
hereby:
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5.1 ORGANIZATION. The Purchaser is a business trust duly formed and
validly existing under the laws of the State of Ohio and has all necessary power
and authority to own or lease its property and to enter into this Agreement and
perform its obligations hereunder.
5.2 AUTHORIZATION; NO VIOLATION.
(1) All necessary proceedings have been taken by the Purchaser to
enable it to enter into this Agreement and to perform its obligations hereunder.
(2) The execution and delivery of this Agreement by the Purchaser and
the consummation of the transactions contemplated hereby will not, with or
without the giving of notice, lapse of time or both, breach or violate any of
the provisions of, constitute a default under, conflict with or cause the
acceleration of any obligation of the Purchaser under (A) the Declaration of
Trust, as amended, of the Purchaser or any exercise of authority by the
securityholders thereunder or any resolution of the board of trustees (or any
committee thereof) of the Purchaser, (B) any Contract to which the Purchaser is
a party or by which it is bound, (C) any judgment, decree, order or award of any
court, governmental body or arbitrator having jurisdiction over the Purchaser,
(D) any Permit held by the Purchaser or (E) any applicable law, statute,
ordinance, regulation or rule.
(3) This Agreement has been duly executed and delivered by the
Purchaser and is a legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser by the Vendors in accordance with its terms.
5.3 CONSENTS AND APPROVALS. Except for requirements under the
Competition Act and the Investment Canada Act, there is no requirement for the
Purchaser to make any filing with, give any notice to or obtain any licence,
permit, certificate, registration, authorization, consent or approval of, any
government or regulatory authority nor is the consent or approval of any other
third party required as a condition to the lawful consummation by the Purchaser
of the transactions contemplated by this Agreement.
5.4 SOURCES OF FUNDS. The Purchaser has cash balances, short-term
deposits and/or amounts presently available for drawdown under existing credit
facilities which in the aggregate exceed the amount of the Purchase Price and,
accordingly, does not require additional financing in order to complete the
transactions contemplated hereby.
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6. Survival of Representations and Warranties
---------------------------------------------
6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE VENDORS. The
representations and warranties of the Vendors contained in this Agreement and in
any certificate delivered pursuant hereto shall survive the closing of the
transactions contemplated for a period of thirteen months following the Closing
Date and, notwithstanding such closing or any investigation made by or on behalf
of the Purchaser, shall continue in full force and effect for the benefit of the
Purchaser during such period, except that:
(1) the representations and warranties set out in Sections 3.1(a) and
(b) and Sections 4.3 and 4.5 (and the corresponding representations and
warranties set out in the certificates to be delivered pursuant to
Section 8.1) shall survive the closing of the transactions contemplated
hereby and continue in full force and effect until the lapse of
applicable limitation periods;
(2) the representations and warranties set out in Section 4.19 (and the
corresponding representations and warranties set out in the certificate
to be delivered pursuant to Section 8.1) shall survive the closing of
the transactions contemplated hereby and continue in full force and
effect for a period of four years following the Closing Date;
(3) the representations and warranties set out in Section 4.16 in
respect of a particular taxation year, period or event (and the
corresponding representations and warranties set out in the
certificates to be delivered pursuant to Section 8.1) shall survive the
closing of the transactions contemplated hereby and continue in full
force and effect until 90 days after the expiration of the period, if
any, during which an assessment, reassessment or other form of
recognized document assessing liability for Tax under applicable Tax
legislation in respect of such taxation year, period or event could be
issued under such Tax legislation, taking into account any waivers or
similar documents extending such period given by the Company or any of
the Subsidiaries prior to (but not after) the Time of Closing; and
(4) a claim for breach of any of the representations and warranties
made by the Vendors in this Agreement or in any certificate delivered
pursuant hereto involving fraud or fraudulent misrepresentation on the
part of the Vendors may be made against the Vendors at any time
following the Closing Date, subject only to applicable limitation
periods imposed by law.
6.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
representations and warranties of the Purchaser contained in this Agreement and
in any certificate delivered pursuant hereto shall survive the closing of the
transactions contemplated hereby for a period of one year and, notwithstanding
such closing or any investigation made by or on behalf of the Vendors, shall
continue in full force and effect for the benefit of the Vendors during such
period.
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7. Covenants
---------
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7.1 ACCESS. The Vendors shall forthwith make available to the Purchaser
and its authorized representatives and, if requested by the Purchaser, acting
reasonably, provide a copy to the Purchaser of all documents, books and records
relating to Holdco, the Company and the Subsidiaries, including title documents,
written environmental compliance reviews and site assessments that are in the
possession or under the control of the Vendors, Holdco, the Company or any
Subsidiary, Contracts, financial statements, minute books, share certificate
books, share registers, plans, orders, books of account, accounting records and
constating documents relating to Holdco, the Company and the Subsidiaries. The
Vendors shall cause the Company and the Subsidiaries to afford the Purchaser and
its authorized representatives access on reasonable notice to the Business and
the property, assets, undertaking, records and documents of the Company and the
Subsidiaries for the purpose of reviewing the same. The foregoing access shall
be at any times selected by the Purchaser until March 3, 1997 and thereafter
shall be restricted to during normal business hours. The Vendors shall also
cause the Company and the Subsidiaries to use their reasonable best efforts to
arrange meetings prior to March 3, 1997 with current and past major customers of
the Company and the Subsidiaries; provided, however, that Investco shall be
notified at least two Business Days prior to any meeting between representatives
of the Purchaser and such customers (whether or not arranged by the Vendors or
the Company) and a representative of Investco shall be entitled to attend any
such meeting. The Vendors shall cause the Company and the Subsidiaries, as
appropriate, forthwith following a request therefor from the Purchaser, to
deliver to all applicable governmental authorities having jurisdiction over the
Real Property and the Leased Property a request substantially in the form
prepared or described by the Purchaser that such authorities release to the
Company or any such Subsidiary any information held by such authorities in
respect to such property, upon receipt of which by the Company or any such
Subsidiary, the Vendors shall cause the recipient to make the same available to
the Purchaser. In addition, the Purchaser shall be entitled to conduct such
environmental inspections and investigations, including intrusive testing, as
the Purchaser, acting reasonably, shall deem appropriate, subject to the
execution and delivery by the Purchaser of an indemnity in respect of the same
in favour of the Vendors, Holdco, the Company and the Subsidiaries, in form and
substance acceptable to the Vendors, acting reasonably, which shall provide that
the Purchaser will be responsible for any Losses caused by or reasonably
attributable to the activities of the Purchaser and its representatives during
such investigations. The Vendors shall cause the Company and the Subsidiaries to
cooperate in assisting investigations by the Purchaser as provided in the
foregoing. Notwithstanding any other provision of this Agreement, until 9:00
a.m. (Toronto time) on March 3, 1997 the Vendors shall be entitled to mask or
delete from any Contract, Permit or other document required to be provided or
made available to the Purchaser pursuant to the terms of this Agreement any
information ("Identifying Information") which may identify the municipal address
or location of any real property which is the subject of any Operating
Agreement; provided, however, that if this Agreement has not been terminated by
the Purchaser pursuant to Section 10.4 on or before March 3, 1997, the Vendors
shall cause the Company to provide to the Purchaser the Identifying Information
as soon as is reasonably practicable thereafter.
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7.2 CURATIVE EFFORTS. The Vendors or any of their Affiliates (other
than Holdco, the Company or any Subsidiary if to do so would render any
representation or warranty made herein to be or become untrue other than with
the Purchaser's consent, not to be unreasonably withheld) shall be entitled to
do any act or thing, including by making any payment or satisfying any
obligation that is otherwise owing by Holdco, the Company or any Subsidiary or
by acquiring common shares of Holdco (so long as the same are Purchased Shares
to be purchased and sold hereunder without any increase in the aggregate
Purchase Price, ignoring for this purpose the effect of Article 11) as may be
necessary to cure or remedy prior to the Time of Closing, any inaccuracy in any
representation or warranty or any breach of covenant made or contained herein
provided that no such curative or remedial act or thing shall have a Material
Adverse Effect.
7.3 DELIVERY OF BOOKS AND RECORDS. The Vendors shall deliver or cause
to be delivered to the Purchaser, at the Time of Closing, all of the books and
records of and relating to Holdco, the Company, the Subsidiaries and the
Business. The Purchaser agrees that it will preserve the books and records so
delivered to it for a period of six years from the Closing Date, or for such
longer period as is required by any applicable law, and will permit the Vendors
or their authorized representatives reasonable access thereto in connection with
the affairs of such Vendor relating to Tax or other appropriate matters. The
Vendors and the Purchaser agree to furnish or cause to be furnished to the other
after the Closing, upon request, as promptly as practicable, such information
(including access to books and records) and assistance relating to Holdco, the
Company or any Subsidiary as is reasonably necessary for the filing of any Tax
return, the preparation for any Tax audit, the prosecution or defence of any
claim, suit or proceeding relating to any proposed Tax adjustment for which the
Vendors or the Purchaser retains liability and for the performance by the
Vendors and the Purchaser of their respective obligations under this Agreement.
The Vendors and the Purchaser shall keep all such information and documents
received by them confidential unless otherwise required by law.
7.4 CONDUCT PRIOR TO CLOSING. Without in any way limiting any other
obligations of the Vendors hereunder, during the period from the date hereof
until the earlier of the termination of the parties' obligations under this
Agreement (other than those set forth in Sections 12.2, 12.3, 12.4 and 12.5) and
the Time of Closing:
(1) the Vendors shall cause Holdco, the Company and the Subsidiaries
to:
(1) conduct the Business and the operations and affairs of Holdco, the
Company and the Subsidiaries only in the ordinary and normal course of
business, consistent with past practice;
(2) not enter into any transaction or take any action which, if
effected before the date of this Agreement, would constitute a breach
of any representation, warranty, covenant or other obligation of the
Vendors contained herein, without the prior written consent of the
Purchaser;
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(3) not enter into any material supply arrangements or enter into any
Contract which is material to the Company and the Subsidiaries taken as
a whole without the prior written consent of the Purchaser;
(4) not acquire or dispose of any material property other than
inventories and equipment purchased or disposed of in the ordinary and
normal course of the conduct of the Business, consistent with past
practice;
(5) not terminate, amend, supplement or otherwise alter the terms of
any material Lease or make any material improvement or other material
changes to any Leased Property or Real Property except as may be
approved by the Purchaser in writing;
(6) use its best efforts to maintain in full force and effect (and, if
applicable, to renew on substantially the same terms) all material
policies of insurance now in effect;
(7) not purchase or acquire any real property or sell or dispose of any
of the Real Property;
(8) pay and discharge the liabilities and obligations of the Company
and the Subsidiaries in the ordinary and normal course in accordance
and consistent with the past practice of the Company and the
Subsidiaries, except those contested in good faith; and
(9) not grant any general increase in the compensation of the employees
of Holdco, the Company or any of the Subsidiaries (including any
increase pursuant to any Employee Plan) or any material increase in the
compensation or bonus payable to any officer, employee, consultant or
agent of Holdco, the Company or any of the Subsidiaries, other than
increases in the ordinary and normal course of the Business consistent
with past practice; and
(2) the Vendors shall use, and shall cause the Company and the
Subsidiaries to use, their respective best efforts to:
(1) obtain, at or prior to the Time of Closing, from all appropriate
federal, provincial, state, municipal or other governmental or
regulatory bodies, the licences, permits, consents, approvals,
certificates, registrations and authorizations described in Schedule
4.12(a);
(2) give or obtain the notices, consents and approvals described in
Schedule 4.12(b);
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(3) preserve intact the Business and the property, assets,
operations and affairs of the Company and the Subsidiaries and carry on
the Business and the affairs of the Company and the Subsidiaries as
currently conducted;
(4) take all necessary action, steps and proceedings to approve or
authorize, validly and effectively, the completion of the transactions
contemplated hereby; and
(5) satisfy the conditions set out in Sections 8 and 9.
7.5 COVENANTS OF THE PURCHASER PRIOR TO CLOSING. Without in any way
limiting any other obligations of the Purchaser hereunder, during the period
from the date hereof until the earlier of the termination of the parties
obligations under this Agreement (other than those set forth in Sections 12.2,
12.3, 12.4 and 12.5) and the Time of Closing, the Purchaser shall use its
best efforts to:
(1) take all necessary action, steps and proceedings to approve or
authorize the completion of the transactions contemplated hereby; and
(2) satisfy the conditions set out in Sections 8 and 9.
7.6 REGULATORY FILINGS. Each of the parties hereto shall, and shall
cause each of their respective subsidiaries and affiliates, if any, and as
applicable, to, use its best efforts to effect as soon as practicable all
necessary applications, registrations and filings under the Competition Act and
the Investment Canada Act in connection with the completion of the transactions
contemplated herein or any agreement, instrument or other document contemplated
hereby and to obtain any and all consents and approvals required thereunder.
7.7 TITLE REPORTS AND SURVEYS. The Vendors shall, at their own expense,
deliver to the Purchaser within five days after the date of this Agreement the
Company's most current certified building location surveys, title certificates
and copies of matters of record reflected in the title certificates or title
opinions with respect to each parcel of Real Property (except that such surveys,
certificates and opinions need not be provided for any two parcels of Real
Property having, in each case, an agreed (as between the Vendors and the
Purchaser, each acting reasonably) market value of less than $250,000). Subject
to the exceptions as to delivery set out above, the Vendors shall deliver to the
Purchaser, at or prior to the Time of Closing, updated certified building
location surveys, title certificates and copies of matters of record reflected
in the title certificates or title opinions with respect to each parcel of Real
Property, in each case dated no more than 30 days prior to the Closing Date.
7.8 SOLICITATION OF OFFERS. The Vendors may solicit and entertain
offers from persons other than the Purchaser to acquire the Purchased Shares and
may engage in communications in that regard provided that:
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(1) nothing in this Section 7.8 shall derogate from any obligation of
the Vendors to comply with any other covenant set forth in this
Agreement or from any liability the Vendors may have under Section
11.13;
(2) in exercising its rights under this Section 7.8, the Vendors shall
not disclose the name, identity or nature of the Purchaser to any
prospective purchaser of or offeror for the Purchased Shares, or
provide such information regarding the Purchaser as would constitute
disclosure of the Purchaser's identity;
(3) officers and employees of the Company and the Subsidiaries
(excepting those who are also officers or employees of Onex
Corporation) shall not participate in any meetings or conversations
with any such prospective purchaser or offeror or their representatives
(provided that if any such officer or employee receives an unsolicited
communication from any prospective purchaser or offeror, such officer
or employee shall be permitted to redirect the call to Investco or its
representatives);
(4) no such prospective purchaser or offeror or its representatives
shall be permitted by the Vendors or the Company to be present during
the term of this Agreement at the head office of the Company, other
than in the ordinary course of the Business, consistent with past
practice, and not for any purpose related to a possible purchase of
Purchased Shares;
(5) the Vendors' representatives engaged in any such solicitation or
entertainment of offers may be present at the Company's head office
only in a manner that does not, in the reasonable judgement of the
Purchaser, materially impede the due diligence investigations of the
Purchaser and its authorized representatives, provided that Investco
and its representatives may be present at all meetings between the
Purchaser and its authorized representatives and the management or
other representatives of Holdco, the Company and the Subsidiaries and,
in any event, may be present at the Company's head office without
restriction after the earlier of (i) March 3, 1997, and (ii) the
termination of the parties' obligations under this Agreement (other
than those set forth in Sections 12.2, 12.3, 12.4 and 12.5);
(6) on March 3, 1997, if the Purchaser has not exercised any right by
that time to terminate the parties obligations under this Agreement
(other than those set forth in Sections 12.2, 12.3, 12.4 and 12.5),
Investco shall advise the Purchaser of those prospective purchasers or
offerors with which it has communicated with respect to a possible sale
of the Purchased Shares; and
(7) until the termination of the parties' obligations under this
Agreement (other than those set forth in Sections 12.2, 12.3, 12.4 and
12.5), the Vendors shall not provide
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to any person other than the Purchaser and other than in the ordinary
course of the Business in accordance with past practice information
concerning Holdco, the Company or the Subsidiaries that is confidential
or proprietary and the disclosure of which would be materially adverse
to Holdco, the Company and the Subsidiaries or to the Purchaser
(assuming for this purpose that the Purchaser would thereafter acquire
the Purchased Shares), including details of the Leases, Operating
Agreements or other Material Contracts to which Holdco, the Company or
any Subsidiary is a party. For greater certainty, the Purchaser
acknowledges that the Vendors may provide to prospective purchasers or
offerors a confidential offering memorandum substantially in the form
previously provided to it.
7.9 PURCHASERS KNOWLEDGE. To the Purchaser's knowledge, there are no
facts, circumstances, events or conditions that it reasonably believes would
render any of the representations or warranties of the Vendors contained in this
Agreement untrue in any material respect and the Purchaser hereby agrees that if
at time prior to the Time of Closing it obtains knowledge of any such fact,
circumstance, event or condition, it shall soon as practicable thereafter advise
the Vendors of the particulars thereof, provided that:
(1) the knowledge of the Purchaser shall be comprised solely of those
matters actually known to the Chief Investment Officer or the Senior
Vice President, General Counsel and Secretary of the Purchaser and the
Purchaser hereby represents and warrants that each such individual has
made appropriate enquiries of such officers of the Purchaser and First
Union Management, Inc. who would reasonably be expected to have
responsibility for or knowledge of such matters; and
(2) the provision of any notice or advice by the Purchaser to the
Vendor pursuant to this Section 7.9 shall not constitute a waiver of
the Purchaser's rights and remedies hereunder with respect to the
information set out in such notice or advice.
7.10 TAIL DIRECTORS' AND OFFICERS' INSURANCE. The Purchaser shall cause
Holdco and the Company to maintain for a period of not less than six years
following the Closing Date liability insurance for the benefit of the current
officers and directors of Holdco and the Company. Such insurance policy shall at
all times provide coverage in the aggregate amount of not less than $15,000,000.
8. CONDITIONS OF CLOSING IN FAVOUR OF THE PURCHASER
---------------------------------------------------
The completion of the transactions contemplated by this Agreement is
subject to the following conditions for the exclusive benefit of the Purchaser,
to be fulfilled or performed at or prior to the Time of Closing:
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8.1 REPRESENTATIONS AND WARRANTIES. Except for the representation and
warranty contained in Section 3.2(a), the representations and warranties of the
Vendors contained in this Agreement shall be true and correct in all material
respects at the Time of Closing with the same force and effect as if such
representations and warranties were made at and as of such time and a
certificate dated the Closing Date of each of the Vendors to that effect shall
have been delivered to the Purchaser, such certificates to be in form and
substance satisfactory to the Purchaser, acting reasonably.
8.2 COVENANTS. All of the terms, covenants and conditions of this
Agreement to be complied with or performed by the Vendors, Holdco, the Company
or the Subsidiaries at or before the Time of Closing shall have been complied
with or performed in all material respects and certificates dated the Closing
Date of Investco to that effect shall have been delivered to the Purchaser, such
certificates to be in form and substance satisfactory to the Purchaser, acting
reasonably.
8.3 REGULATORY CONSENTS. There shall have been obtained, from all
appropriate federal, provincial, state, municipal or other governmental or
administrative bodies, such licences, permits, consents, approvals,
certificates, registrations and authorizations as are required to be obtained to
permit the completion of the transactions contemplated hereby, including those
described in Schedule 4.12(a), all of which shall be in form and substance
satisfactory to the Purchaser, acting reasonably, and any applicable waiting
period under the Competition Act shall have expired, provided that the Purchaser
shall not be entitled to rely on this condition with respect to any such matter
that was not obtained as a result of any breach by the Purchaser of its
obligations under Section 7.5.
8.4 OTHER CONSENTS. The Vendors shall have given or obtained the
notices, consents and approvals described in Schedule 4.12(b), in each case in
form and substance satisfactory to the Purchaser, acting reasonably.
8.5 MATERIAL ADVERSE CHANGE. There shall not have occurred since
December 31, 1996 any material adverse change in any of the Business, operations
or financial condition of Holdco, the Company and the Subsidiaries, taken as a
whole.
8.6 NO ACTION OR PROCEEDING. At the Time of Closing, no legal or
regulatory action or proceeding shall be pending or threatened in writing by any
person to enjoin, restrict or prohibit the consummation of any of the
transactions contemplated hereby.
8.7 SHAREHOLDERS' AGREEMENT, ETC. At the Time of Closing, all
shareholders' agreements, voting trusts or similar agreements described in
Schedule 3.1(b) shall have been terminated.
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8.8 OPTIONS. At the Time of Closing, all options or similar rights
described in Schedule 3.1(b) or Schedule 4.5 shall have expired or terminated or
been exercised (in which latter case, all shares issued upon the exercise
thereof shall be included as Purchased Shares hereunder).
8.9 LEGAL MATTERS. All actions, proceedings, instruments and documents
required to implement this Agreement shall have been approved as to form and
legality by counsel for the Purchaser, acting reasonably.
8.10 LEGAL OPINION. The Vendors shall have delivered to the Purchaser a
favourable opinion of counsel to the Vendors, in form satisfactory to the
Purchaser, acting reasonably.
8.11 RESIGNATIONS. The directors of Holdco, the Company and the
Subsidiaries (other than Xxxx Xxxxxx) shall have tendered written resignations.
8.12 SECTION 116 CERTIFICATES. Each Vendor that is a non-resident of
Canada within the meaning of the Tax Act shall have delivered a certificate
obtained under section 116 of the Tax Act with a "certificate limit" not less
than that Vendor's Pro Rata Share of the Purchase Price or a direction to the
Purchaser to withhold from the Purchase Price otherwise payable to such Vendor
any amount required to be withheld under the Tax Act.
8.13 NON-PERFORMANCE. If any of the conditions contained in Sections
8.1 through 8.12 is not performed or fulfilled at or prior to the Time of
Closing to the satisfaction of the Purchaser, acting reasonably, the Purchaser
may by notice to the Vendors terminate this Agreement and the obligations of the
parties under this Agreement (other than the obligations contained in Sections
12.2, 12.3, 12.4 and 12.5), provided that the Purchaser may also bring an action
pursuant to Section 11 against the Vendors for damages suffered by the Purchaser
where the non-performance or non-fulfilment of the relevant condition is as a
result of a breach of covenant within the control of the Vendors, Holdco, the
Company or a Subsidiary and the Vendors, Holdco, the Company or such Subsidiary
fails to use reasonable commercial efforts to comply with such covenant or cure
such breach or is as a result of a breach of representation or warranty by the
Vendors and provided further that the Vendors may bring an action pursuant to
Section 11 against the Purchaser for damages suffered by the Vendors where the
non-performance or non-fulfilment of the relevant condition is as a result of a
breach of covenant within the control of the Purchaser and the Purchaser fails
to use reasonable commercial efforts to comply with such covenant or cure such
breach. Any such condition may be waived in whole or in part by the Purchaser
without prejudice to any claims it may have for breach of covenant,
representation or warranty.
9. CONDITIONS OF CLOSING IN FAVOUR OF THE VENDORS
-------------------------------------------------
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The completion of the transactions contemplated by this Agreement is
subject to the following terms and conditions for the exclusive benefit of the
Vendors, to be fulfilled or performed at or prior to the Time of Closing:
9.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Purchaser contained in this Agreement shall be true and correct in all
material respects at the Time of Closing with the same force and effect as if
such representations and warranties were made at and as of such time and a
certificate dated the Closing Date of a duly authorized officer of the Purchaser
to that effect shall have been delivered to the Vendors, such certificate to be
in form and substance satisfactory to the Vendors, acting reasonably.
9.2 COVENANTS. All of the terms, covenants and conditions of this
Agreement to be complied with or performed by the Purchaser at or before the
Time of Closing shall have been complied with or performed in all material
respects and a certificate dated the Closing Date of a duly authorized officer
of the Purchaser to that effect shall have been delivered to the Vendors, such
certificate to be in form and substance satisfactory to the Vendors, acting
reasonably.
9.3 REGULATORY CONSENTS. There shall have been obtained, from all
appropriate federal, provincial, state, municipal or other governmental or
administrative bodies, such licences, permits, consents, approvals,
certificates, registrations and authorizations as are required by law to be
obtained to permit the completion of the transactions contemplated hereby, and
any applicable waiting period under the Competition Act shall have expired,
provided that the Vendors shall not be entitled to rely on this condition with
respect to any such matter that was not obtained as a result of any breach by
the Vendors of their obligations under Section 7.4(b)(iv) or (v).
9.4 NO ACTION OR PROCEEDING. No legal or regulatory action or
proceeding shall be pending or threatened by any person to enjoin, restrict or
prohibit the completion of the transactions contemplated hereby.
9.5 LEGAL MATTERS. All actions, proceedings, instruments and documents
required to implement this Agreement shall have been approved as to form and
legality by counsel to the Vendors, acting reasonably.
9.6 LEGAL OPINION. The Purchaser shall have delivered to the Vendors a
favourable opinion of counsel to the Purchaser, in form satisfactory to the
Vendors, acting reasonably.
9.7 NON-PERFORMANCE. If any of the conditions contained in Sections 9.1
through 9.6 is not performed or fulfilled at or prior to the Time of Closing to
the satisfaction of the Vendors, acting reasonably, the Vendors may terminate
this Agreement and the obligations of the parties under this Agreement (other
than the obligations contained in Sections 12.2, 12.3, 12.4 and 12.5) by giving
written notice to the Purchaser, provided that the Vendors may also bring an
action pursuant to Section 11 against the Purchaser for damages suffered by the
Vendors where the non-performance
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or non-fulfilment of the relevant condition is as a result of a breach of a
covenant within the control of the Purchaser and the Purchaser fails to use
reasonable commercial efforts to comply with such covenant or cure such breach
or is a result of a breach of representation or warranty by the Purchaser and
provided further that the Purchaser may bring an action pursuant to Section 11
against the Vendors for damages suffered by the Purchaser where the
non-performance or non-fulfilment of the relevant condition is as a result of a
breach of covenant within the control of the Vendors and the Vendors fail to use
reasonable commercial efforts to comply with such covenant or cure such breach.
Any such condition may be waived in whole or in part by the Vendors without
prejudice to any claims the Vendors may have for breach of covenant,
representation or warranty.
10. CLOSING ARRANGEMENTS
------------------------
10.1 PLACE OF CLOSING. The closing shall take place at the Time of
Closing at the offices of Xxxxxx, Xxxx & Xxxx, 0 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxx X0X 0X0 or at such other place as the Vendors and the Purchaser may
mutually determine.
10.2 IMPLEMENTATION. At the Time of Closing, upon fulfilment of all the
conditions set out in Sections 8 and 9 which have not been waived in writing by
the Vendors or the Purchaser, as the case may be, the parties shall execute all
documents and do all other acts and things necessary or advisable to implement
and give effect fully to each of the transactions contemplated hereby and,
without limitation:
(1) the Vendors shall deliver or cause to be delivered to the Purchaser
certificates representing the Purchased Shares, duly endorsed for
transfer to the Purchaser, together with all other agreements,
instruments, certificates, share certificates, directions, opinions and
other documents contemplated to be delivered to the Purchaser by the
Vendors hereunder; and
(2) the Purchaser shall deliver or cause to be delivered to the Vendors
the certified cheques or bank drafts contemplated by Section 2.3
together with all other agreements, instruments, certificates, share
certificates, receipts, opinions and other documents contemplated to be
delivered to the Vendors by or on behalf of the Purchaser.
10.3 FURTHER ASSURANCES. Each party to this Agreement agrees that, from
time to time subsequent to the Closing Date, such party will, at the request and
expense of any other party, execute and deliver all such documents, including,
without limitation, all such additional conveyances, transfers, consents and
other assurances and do all such other acts and things as any other party,
acting reasonably, may from time to time request be executed or done in order to
better evidence or perfect or effectuate any provision of this Agreement or of
any agreement or other document executed pursuant to this Agreement or any of
the respective obligations intended to be created hereby or thereby.
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1.4 EARLY TERMINATION. The Purchaser may, by written notice delivered
to the Vendors at or prior to 9:00 a.m. (Toronto time) on March 3, 1997,
terminate the obligations of both parties under this Agreement (other than those
set forth in Sections 12.2, 12.3, 12.4 and 12.5) by reason of:
(1) the Purchaser's non-satisfaction, in its sole and absolute
discretion, with the result of its due diligence investigations
conducted pursuant to Section 7.1 (including the Purchaser's
investigation of any of the contracts, disclosures or other matters
referred to in any of the Schedules to this Agreement);
(2) the failure to execute and deliver the non-competition agreements
and confidentiality agreements described in Section 10.5.
The termination of such obligations pursuant to this Section 10.4 shall relieve
both parties of all liabilities relating hereto, other than those set forth in
Sections 12.2, 12.3, 12.4 and 12.5 and in the confidentiality agreements
referred to in Section 1.5 and other than those provisions of the Escrow
Agreement relating to the disposition of the funds then held by the Escrow
Agent.
10.5 NON-COMPETITION AGREEMENT. Onex Corporation ("Onex") and the
Purchaser shall use their best efforts to execute and deliver by February 24,
1997 (but to have effect only if and when the Closing occurs):
(1) a form of a non-competition agreement in form and substance
mutually satisfactory to Onex and the Purchaser which shall provide
that Onex will not, directly or indirectly, engage or participate in
North America for a period of five years after the date hereof in any
business substantially the same as or similar to the Business (except
any such engagement or participation in a similar business which is
incidental to the operations of Onex or any of its Affiliates where
such business constitutes less than 5% of the assets or revenues of
Onex or such Affiliate); and
(2) a confidentiality agreement in form and substance mutually
satisfactory to Onex and the Purchaser wherein Onex will agree that:
(1) it will not, directly or indirectly, use other than as may be
reasonably necessary in connection with its rights, remedies,
obligations and liabilities under this Agreement or to make such
disclosure as may be required by law any confidential information,
trade secrets or proprietary data of Holdco, the Company or the
Subsidiaries (including lists of customers of the Business and its
Intellectual Property); and
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(2) it will not disclose, divulge or communicate, orally, in writing or
otherwise, any such confidential information, trade secrets or
proprietary data to any other person other than as may be reasonably
necessary in connection with its rights, remedies, obligations and
liabilities under this Agreement or to make such disclosure as may be
required by law.
Each Vendor who is not an employee of the Company or any of its
Subsidiaries and the Purchaser shall use their best efforts to enter into
separate non-competition agreements and confidentiality agreements substantially
on the terms and by the date described above.
For greater certainty, the failure of any party to enter into at or
prior to the Time of Closing a non-competition agreement and confidentiality
agreement as provided in this Section 10.5 shall not constitute a breach by any
party hereto of any term or provision of this Agreement nor shall such failure
be considered to constitute non-performance or non-fulfilment of any condition
to the closing of the transactions contemplated hereby, whether set out in
Section 8, Section 9 or otherwise, and the sole remedy of any party with respect
to any such failure shall be the entitlement of the Purchaser to exercise its
rights under Section 10.4 within the time period provided for such exercise.
10.6 ONEX ASSOCIATES. Investco covenants and agrees to (a) purchase, at
or before the Time of Closing, all of the Purchased Shares now held, or which
may hereafter be held, by any Onex Associate and (b) to obtain from each of the
Onex Associates, and to deliver to the Purchaser, on or before February 21,
1997, an acknowledgement in the form of Schedule 10.6.
10.7 CIBC WARRANT. Investco covenants to obtain from Canadian Imperial
Bank of Commerce ("CIBC") and to deliver to the Purchaser, on or before February
21, 1997, an agreement substantially in the form of the agreement set out as
Schedule 10.7, pursuant to which CIBC will (a) consent to the redemption, on or
before the Closing Date, of the common stock warrant granted by Holdco to CIBC
dated the 13th day of November, 1996 and the termination of the Shareholders'
Agreement among Impark Holdings Inc., CIBC, Holdco and Onex dated the 13th day
of November, 1996 and (b) confirm that it does not now hold any shares in the
capital of Holdco and that it will not exercise any right to acquire any shares
in the capital of Holdco between the date of such agreement and the Closing
Date.
11. INDEMNIFICATION
-------------------
11.1 INDEMNIFICATION BY THE VENDORS. The Vendors hereby agree to
indemnify and save harmless the Purchaser from all Losses suffered or incurred
by the Purchaser (or, if the Closing has occurred, the Purchaser, Holdco, the
Company or any Subsidiary) as a result of or arising directly or indirectly out
of or in connection with:
(1) any breach by the Vendors of or any inaccuracy of any of the
representations and warranties of the Vendors set out in this Agreement
(other than in Section 4.16,
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which are covered by Section 11.1(c)) or any of the corresponding
representations and warranties set out in any certificate to be
delivered by the Vendors pursuant to this Agreement or in any
agreement, instrument or other document delivered pursuant to this
Agreement (provided that the indemnity provided for in this Section
11.1(a) shall not apply in the case of a breach or inaccuracy of any
representation or warranty unless the Indemnified Party shall have
provided notice to the Indemnifying Party in accordance with Section
11.3 on or prior to the expiration of such representation and warranty
as provided in Section 6.1);
(2) any breach or non-performance by the Vendors of any covenant to be
performed by the Vendors under this Agreement or under any agreement,
instrument, certificate or other document delivered pursuant hereto;
(3) Taxes of Holdco, the Company or any of the Subsidiaries (i) in
respect of any period ending before 12:00 a.m. on the Closing Date in
the case of Taxes imposed under the Tax Act, the Code or any equivalent
provincial, state or municipal laws and (ii) in respect of a time prior
to the Time of Closing in the case of other Taxes, including, without
limitation, any assessment or reassessment in respect of any of the
matters disclosed in Schedule 4.16 to the extent such Taxes exceed the
amount reserved for current taxes in respect thereof in the Audited
Financial Statements or in the Forecast Working Capital Statement;
PROVIDED that any Tax refund received by Holdco, the Company or any of
the Subsidiaries (or any successor thereto on or after the Closing
Date) in respect of any such period or time shall, to the extent not
recorded as an asset or a reduction in liabilities in the Audited
Financial Statements or in the Forecast Working Capital Statement, be
set off against any Losses referred to in this Section 11.1(c) or, if
received when no amount is payable by the Vendors under Section 11.1 or
after an indemnity payment has been made in respect of any relevant
Loss, shall forthwith be paid to the Vendors,
provided that the liability of any Vendor to indemnify the Purchaser in respect
of any such Loss shall be limited to such Vendor's Pro Rata Share of such Loss.
11.2 INDEMNIFICATION BY THE PURCHASER. The Purchaser agrees to
indemnify and save harmless the Vendors from all Losses suffered or incurred by
the Vendors as a result of or arising directly or indirectly out of or in
connection with:
(1) any breach by the Purchaser of or any inaccuracy of any
representation or warranty of the Purchaser contained in this Agreement
or in any agreement, instrument, certificate or other document
delivered pursuant to this Agreement (provided that the Purchaser shall
not be required to indemnify or save harmless the Vendors in respect of
any breach or inaccuracy of any representation or warranty unless the
Vendors shall have provided notice to the Purchaser in accordance with
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-48-
Section 11.3 on or prior to the expiration of such representation and
warranty as provided in Section 6.2);
(2) any breach or non-performance by the Purchaser of any covenant to
be performed by it under this Agreement or under any agreement,
instrument, certificate or other document delivered pursuant hereto;
and
(3) any Tax imposed or sought to be imposed on income of Holdco, the
Company, or any Subsidiary earned after the Closing Date except to the
extent such Tax is exigible as a result of any breach by the Vendors of
or any inaccuracy of any of the representations and warranties of the
Vendors set out in Section 4.16 or any of the corresponding
representations and warranties set out in any certificate to be
delivered by the Vendors pursuant to this Agreement.
11.3 NOTICE OF CLAIM.
(1) In the event that any person (the "Indemnified Party") shall become
aware of any claim, proceeding or other matter involving any Loss (a "Claim") in
respect of which another person (the "Indemnifying Party") is required to
indemnify the Indemnified Party pursuant to this Agreement, the Indemnified
Party shall promptly give written notice thereof to the Indemnifying Party. Such
notice shall specify whether the Claim arises as a result of a claim by a person
(a "Third Party") against the Indemnified Party (a "Third Party Claim") or
whether the Claim does not involve a Third Party (a "Direct Claim"), and shall
also specify with reasonable particularity (to the extent that the information
is available) the factual basis for the Claim and the amount of the Claim, if
known.
(2) If after the Time of Closing the Purchaser, Holdco, the Company or
any Subsidiary or any agent or representative of any of them (the "Recipient")
receives any written request for information, notice of intention to assess,
assessment, reassessment, confirmation of assessment or reassessment,
determination of loss or any similar communication (a "Communication") from any
governmental authority in connection with any matter relating to any Tax in
respect of which a Claim pursuant to Section 11.1 may result, the Recipient
shall forthwith and in any event not more than 10 Business Days after receipt
thereof by the Recipient deliver to the Vendors a copy of such Communication and
shall take all action necessary to preserve any rights to object to, dispute or
contest any matter to which such Communication relates. If the Purchaser,
Holdco, the Company or any Subsidiary, as the case may be, shall fail to comply
with the foregoing, the liability of the Vendors in connection with the Tax to
which such Communication relates shall be extinguished to the extent any Vendor
suffers a Loss as result of or reasonably attributable to such failure to
comply.
(3) If, through the fault of the Indemnified Party, the Indemnifying
Party does not receive notice of any Claim in time to contest effectively the
determination of any liability
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-49-
susceptible of being contested, the Indemnifying Party shall be entitled to set
off against the amount claimed by the Indemnified Party the amount of any Losses
incurred by the Indemnifying Party resulting from the Indemnified Party's
failure to give such notice on a timely basis.
(4) The Purchaser, Holdco, the Company and each Subsidiary agree that,
15 days prior to filing any Tax return for any taxable period ending on or
before the Closing Date, the Vendors or Investco shall have the right to review
and to approve the preparation of such Tax return, which approval may not be
unreasonably withheld provided that in any such Tax return all discretionary
deductions or other amounts in computing income or taxable income shall be
claimed to the greatest extent possible and no election shall be made not to
have subsection 256(9) of the Tax Act or any equivalent provincial provision
apply.
11.4 DIRECT CLAIMS. With respect to any Direct Claim, following receipt
of notice from the Indemnified Party of the Claim, the Indemnifying Party shall
have 90 days to make such investigation of the Claim as it considers necessary
or desirable. For the purpose of such investigation, the Indemnified Party shall
make available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both parties
agree at or prior to the expiration of such 90-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the amount of
the Loss suffered or incurred by the Indemnified Party with respect to the
Claim, failing which the matter shall be referred to binding arbitration in such
manner as the parties may agree or shall be determined by a court of competent
jurisdiction.
11.5 THIRD PARTY CLAIMS. With respect to any Third Party Claim, the
Indemnifying Party shall have the right, at its expense, to participate in or
assume control of the negotiation, settlement or defence of the Claim and, in
such event, the Indemnifying Party shall reimburse the Indemnified Party for all
the Indemnified Party's reasonable out-of-pocket expenses as a result of such
participation or assumption. If the Indemnifying Party elects to assume such
control, the Indemnified Party shall have the right to participate in the
negotiation, settlement or defence of such Third Party Claim and to retain
counsel to act on its behalf, provided that the fees and disbursements of such
counsel shall be paid by the Indemnified Party unless the Indemnifying Party
consents to the retention of such counsel or unless the named parties to any
action or proceeding include both the Indemnifying Party and the Indemnified
Party and a representation of both the Indemnifying Party and the Indemnified
Party by the same counsel would be inappropriate due to actual or potential
differing interests between them (such as the availability of different
defences). If the Indemnifying Party, having elected to assume such control,
thereafter fails to defend the Third Party Claim within a reasonable time, the
Indemnified Party shall be entitled to assume such control, and the Indemnifying
Party shall be bound by the results obtained by the Indemnified Party with
respect to such Third Party Claim. If any Third Party Claim is of a nature such
that the Indemnified Party is required by applicable law to make a payment to a
Third Party before the completion of settlement negotiations or related legal
proceedings, the Indemnified Party may make such payment and the
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Indemnifying Party shall, forthwith after demand by the Indemnified Party,
reimburse the Indemnified Party for such payment. If the amount of any Loss
suffered or incurred by the Indemnified Party in respect of a Third Party Claim
in respect of which such payment was made, as finally determined, is less than
the amount which was paid by the Indemnifying Party to the Indemnified Party,
the Indemnified Party shall, forthwith after receipt of the difference from the
Third Party, pay the amount of such difference to the Indemnifying Party. If the
amount of any Loss suffered or incurred by the Indemnified Party in respect of a
Third Party Claim in respect of which such payment was made, as finally
determined, is greater than the amount which was paid by the Indemnifying Party
to the Indemnified Party, the Indemnifying Party shall, forthwith following such
final determination, pay the amount of such difference to the Indemnified Party.
11.6 SETTLEMENT OF THIRD PARTY CLAIMS. If the Indemnifying Party fails
to assume control of the defence of any Third Party Claim within 30 days after
its receipt of notice thereof pursuant to Section 11.5, the Indemnified Party
shall have the exclusive right to contest, settle or pay the amount claimed.
Whether or not the Indemnifying Party assumes control of the negotiation,
settlement or defence of any Third Party Claim, the Indemnifying Party shall not
settle any Third Party Claim without the written consent of the Indemnified
Party, which consent shall not be unreasonably withheld or delayed.
11.7 CO-OPERATION. The Indemnified Party and the Indemnifying Party
shall co-operate fully with each other with respect to Third Party Claims, and
shall keep each other fully advised with respect thereto (including supplying
copies of all relevant documentation promptly as it becomes available).
11.8 LIMITATIONS. The Vendors shall not be liable for any Losses
referred to in Section 11.1 ("Warranty Claims") until the aggregate of all
Warranty Claims exceeds $1,050,000, after which amount the Purchaser shall be
entitled to indemnification by each Vendor, and each Vendor shall be liable, for
its Pro Rata Share of the full amount of all Warranty Claims. Notwithstanding
any other provision hereof, the maximum liability of any Vendor under Section
11.1 shall be an amount equal to the such Vendor's Pro Rata Share of
$10,500,000, except with respect to the breach of any of the representations and
warranties referred to in section 6.1(a), in which case the maximum liability of
any Vendor shall be an amount equal to such Vendor's Pro Rata Share of the
Purchase Price.
11.9 INDEMNITY PAYMENT ADJUSTMENTS. For greater certainty, the amount
of any payment required to be made by an Indemnifying Party to an Indemnified
Party pursuant to this Section 11 shall be (i) reduced by the amount of any
insurance proceeds actually received by the Indemnified Party in respect of the
Loss or Losses to which the payment relates, (ii) increased to take account of
any net Tax cost incurred by the Indemnified Party arising from the receipt of
the payment and the incurrence or payment of the Loss or Losses (including any
net Tax cost resulting from such increase), (iii) reduced to take account of any
net Tax benefit realized by the Indemnified Party arising from the receipt of
the payment and the incurrence or payment of the Loss or Losses, and (iv)
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deemed to constitute an adjustment to the Purchase Price. For greater certainty,
the adjustments provided for in this Section 11.9 shall not be made to the
extent they have been taken into account in calculating the amount of the
relevant Loss.
1.10 TAX COMPUTATION. For purposes of computing indemnification for
Taxes, in the case of any Taxes that are imposed on a periodic basis and are
payable for a tax period that includes (but does not end on) the Closing Date,
the portion of such Tax period ending on the day prior to the Closing Date shall
(x) in the case of any Taxes other than gross receipts, sales or use Taxes and
Taxes based upon or related to income, be deemed to be the amount of such Tax
for the entire Tax period multiplied by a fraction the numerator of which is the
number of days in the Tax period ending on the day prior to the Closing Date and
the denominator of which is the number of days in the entire Tax period, and (y)
in the case of any Tax based upon or related to income and any gross receipts,
sales or use Tax, be deemed equal to the amount which would be payable if the
relevant Tax period ended on the day prior to the Closing Date. The portion of
any credits relating to a Tax period that begins before and ends after the
Closing Date shall be determined as though the relevant Tax period ended on the
day prior to the Closing Date. All determinations necessary to give effect to
the foregoing allocations shall be made in a manner consistent with prior
practice of Vendor, Holdco, the Company and the Subsidiaries.
11.11 EXCLUSIVITY. The provisions of this Section 11 shall apply to any
Claim for breach of any covenant, representation, warranty or other provision of
this Agreement or any agreement, certificate or other document delivered
pursuant hereto to the exclusion of other relief or remedies therefor (other
than a claim for specific performance or injunctive relief), with the intent
that all such Claims shall be subject to the limitations and other provisions
contained in this Section 11.
11.12 MITIGATION. Nothing in this Section 11 shall derogate from any
party's obligation at law to mitigate any damage suffered or incurred by that
party, or any rule regarding the calculation of damages that takes into account
the ability of any party to mitigate the same.
11.13 LIQUIDATED DAMAGES. In the event that the Vendors:
(1) wilfully fail to use their best efforts to satisfy the closing
conditions in favour of the Purchaser set forth in Section 8 that are
within the Vendors' ability to satisfy;
(2) wilfully make a material misrepresentation in Sections 3 or 4
hereof or in any certificate delivered pursuant to Section 8 relating
thereto; or
(3) commit fraud with respect to any material representation and
warranty made in Sections 3 or 4 hereof or in any certificate delivered
pursuant to Section 8 relating thereto,
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and if the Vendors fail to cure such wilful failure, material misrepresentation
or fraud prior to the Time of Closing with the effect that the Purchaser
exercises its right not to close the acquisition of the Purchased Shares, then
(the Vendors acknowledge) the Purchaser will suffer damages that are and will be
difficult to ascertain with certainty. In such circumstances, the Purchaser may,
by written notice delivered to the Vendors at or prior to the Time of Closing,
elect to exercise any rights it may have under Section 8 as a consequence
thereof not to complete the purchase and sale transaction contemplated hereby.
If the Purchaser properly makes such election, each Vendor shall pay to the
Purchaser such Vendor's Pro Rata Share of $5,000,000 by way of liquidated
damages for such wilful failure, material misrepresentation or fraud, which
amount constitutes the parties= good faith pre-estimate of the actual damages
that the Purchaser will suffer in such circumstances and is not to be construed
as a penalty, provided that Investco shall have no liability under this Section
11.13 arising out of any voluntary resignation by any or all of the individuals
named in Schedule 4.22(b) and Xx. Xxxx Xxxxxx from their employment and/or
offices with Holdco, the Company and/or the Subsidiaries. The payment by each
Vendor of its Pro Rata Share of such amount shall extinguish all other liability
of such Vendor in connection therewith (including any other liability under this
Section 11, but excluding any obligation to obtain the appropriate disposition
of funds held by the Escrow Agent pursuant to the Escrow Agreement), and shall
constitute full and final satisfaction of the Purchaser=s claims relating
thereto against such Vendor, and against receipt of such amount the Purchaser
shall deliver to such Vendor a full and final written release to that effect.
Investco acknowledges and agrees that any failure by it to purchase at or before
the Time of Closing the Purchased Shares now or hereafter held by any Onex
Associate and to tender the same as and when required hereby shall constitute an
event described in Section 11.13(a). Nothing in this Section 11.13 shall
derogate from any right that the Purchaser may have under this Agreement, at law
or in equity to seek specific performance by the Vendors of their obligations
hereunder.
12. MISCELLANEOUS
12.1 AUTHORITY OF INVESTCO. Each of the Vendors hereby irrevocably
appoints Investco as such Vendor's agent and attorney for the purpose of
executing and delivering any amendment, waiver, notice, direction or other
document or taking any other action required or permitted to be taken by or on
behalf of the Vendors pursuant to this Agreement or in connection with the
transactions contemplated hereby. Any such amendment, waiver, notice, direction
or other document or any such other action shall be deemed to have been
effectively given or taken on behalf of the Vendors and shall be binding upon
each of the Vendors as if each of them had executed and delivered such document
or taken such other action, as the case may be.
12.2 MANAGEMENT. The Purchaser intends that the Company continue the
employment of Xxxx X. Xxxxxx and Xxxx X. Xxxxxx (collectively, the "Managers")
and the current senior management team of the Company after the Time of Closing.
The Vendors agree to cooperate in good faith prior to the Time of Closing with
the Purchaser to retain the Managers and such senior management team in place
after the Time of Closing.
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12.3 NOTICES.
(1) Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be delivered in person, transmitted by
telecopy or similar means of recorded electronic communication or sent by
registered mail, charges prepaid, addressed as follows:
(1) If to Investco: Impark Investments Inc.
c/o Onex Corporation
000 Xxx Xxxxxx
00xx Xxxxx, X.X. Xxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx X. Xxxxxx or
Xxxxxxx Xxxx
Fax: (000) 000-0000
(2) If to the Management Imperial Parking Limited
Vendors: Xxxxx 000
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: Xxxx X. Xxxxxx
Fax: (000) 000-0000
(3) If to the Purchaser: First Union Real Estate Equity
and Mortgage Investments
00 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxx 00000-0000
Attention: Senior Vice President,
General Counsel and Secretary
Fax: (000) 000-0000
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with copies to: Fasken Xxxxxxxx Xxxxxxx
Xxx 00, Xxxxx 0000
Xxxxxxx Xxxxxxxx Xxxx Xxxxx
Xxxxxxx-Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: J. Xxxxx Xxxxxxxx
Fax: (000) 000-0000
(2) Any such notice or other communication shall be deemed to have been
given and received on the day on which it was delivered personally or by
reputable overnight courier or transmitted by facsimile (or, if such day is not
a Business Day, on the next following Business Day) or, if mailed, on the third
Business Day following the date of mailing; provided, however, that if at the
time of mailing or within three Business Days thereafter there is or occurs a
labour dispute or other event which might reasonably be expected to disrupt the
delivery of documents by mail, any notice or other communication hereunder shall
be delivered or transmitted by means of recorded electronic communication as
aforesaid.
(3) Any party may at any time change its address for service from time
to time by giving notice to the other parties in accordance with this Section
12.3.
12.4 TRANSACTION COSTS. Each of the Purchaser and the Vendors shall
bear their own expenses and fees incurred with respect to this Agreement and the
transactions contemplated hereby.
12.5 CONSULTATION. The parties shall consult with each other before
issuing any press release or making any other public announcement with respect
to this Agreement or the transactions contemplated hereby and, except as
required by any applicable law or regulatory requirement or by any stock
exchange on which the shares of the Purchaser or Investco or any of its
Affiliates are then listed and posted for trading, neither the Vendors nor the
Purchaser shall issue any such press release or make any such public
announcement without the prior written consent of the other, which consent shall
not be unreasonably withheld or delayed.
60
12.6 DISCLOSURE. Prior to any public announcement of the transaction
contemplated hereby pursuant to Section 12.5, none of the parties shall disclose
this Agreement or any aspect of such transaction except to its board of
directors, its senior management, its legal, accounting, financial or other
professional advisors, any financial institution contacted by it with respect to
any financing required in connection with such transaction and counsel to such
institution, or as may be required by any applicable law or any regulatory
authority or stock exchange having jurisdiction.
12.7 ASSIGNMENT AND ENFORCEABILITY.
(1) This Agreement shall be binding upon and enforceable by the parties
and their respective successors and permitted assigns. No party may assign any
of its rights or benefits under this Agreement, or delegate any of its duties or
obligations under this Agreement, to any person without the prior written
consent of the other parties hereto.
(2) Notwithstanding Section 12.7(a), Investco may assign all of its
rights, benefits, liabilities and obligations under this Agreement to any
Affiliate to which the Purchased Shares owned by it are transferred or assigned
prior to the Time of Closing and such Affiliate may effect such further
transfers and assignments as it may in its sole discretion determine; provided,
however, that any such assignment or transfer shall not relieve Investco from
its liabilities and obligations pursuant to this Agreement. In the event of any
such transfer or assignment, the Affiliate to which such transfer or assignment
is made shall be for all purposes considered to be a Vendor hereunder and shall
be entitled to enforce against the Purchaser all of the rights and benefits of
Investco hereunder.
(3) Notwithstanding Section 12.7(a), the Purchaser may assign all of
its rights, benefits, liabilities and obligations under this Agreement to any
corporation which is a subsidiary of or controlled by the Purchaser or to First
Union Management, Inc. or any Affiliate of First Union Management, Inc.;
provided, however, that any such assignment or transfer shall not relieve the
Purchaser from its liabilities and obligations pursuant to this Agreement. In
the event of any such transfer or assignment, the person to which such
assignment is made shall be for all purposes considered to be the Purchaser
hereunder and shall be entitled to enforce against the Vendors all of the rights
and benefits of the Purchaser hereunder.
12.8 ONEX CORPORATION. Onex Corporation hereby covenants and agrees that if
Investco or any of its permitted assigns hereunder fails to pay any amount as
and when owing by it under Section 11.1, then Onex Corporation shall forthwith
pay or cause to be paid such amount, failing which, Onex Corporation shall be
liable therefor as a primary obligor, and not merely as surety.
2.9 MANAGEMENT VENDORS. The Vendors represent and warrant and covenant
to the Purchaser that at the Time of Closing the Purchased Shares shall be held
beneficially and of record
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by Investco and directors or employees of Holdco, the Company or the
Subsidiaries, but only if each such director or employee has executed and
delivered by February 21, 1997 an instrument (an "Instrument of Adhesion")
substantially in the form annexed hereto as Schedule 12.9, and in any case only
if the number of Purchased Shares held in the aggregate by such directors and
employees does not exceed 3,358,000 and further provided that there shall be two
such employees whose holdings of Purchased Shares, in aggregate, equal the
combined holdings of all other such directors and employees.
12.10 CONSTRUCTION. The parties hereto acknowledge that their
respective legal counsel have reviewed and participated in settling the terms of
this Agreement and that any rule of construction to the effect that any
ambiguity is to be resolved against the drafting party shall not be applicable
in the interpretation of this Agreement.
12.11 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall constitute an original and all of which taken together shall
constitute one and the same instrument. Delivery of this Agreement may be
effected by facsimile transmission.
62
12.12 RESTRICTION ON LIABILITY. Notwithstanding anything herein to the
contrary contained, this Agreement is made and executed on behalf of the
Purchaser, a business trust organized under the laws of the State of Ohio, by
its officers on behalf of the trustees thereof, and none of the trustees or any
additional or successor trustee hereafter appointed, or any beneficiary,
officer, employee or agent of the Purchaser shall have any liability in his
personal or individual capacity but instead, all parties shall look solely to
the property and assets of the Purchaser for satisfaction of claims of any
nature arising under or in connection with this Agreement.
IN WITNESS WHEREOF this Agreement has been executed
by the parties as of the date first above written.
IMPARK INVESTMENTS INC.
by /s/ Authorized Signer
------------------------------
C.S.
------------------------------
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
by /s/ Authorized Signer
------------------------------
------------------------------
----------------------------
63
The undersigned has executed this
Agreement as of the date first above
written to take notice of the provisions
hereof, to bind itself to Sections 10.5
and 12.8 and to take any benefit
associated with its obligations in
Sections 10.5 and 12.8, and not for any
other reason.
ONEX CORPORATION
by /s/ Authorized Signer
-----------------------------
------------------------------
64
SHARE PURCHASE AMENDING AGREEMENT
REFERENCE is made to the share purchase agreement made the
18th day of February, 1997 (the "Share Purchase Agreement") between Impark
Investments Inc. ("Investco") and First Union Real Estate Equity and Mortgage
Investments (the "Purchaser"), to which the following persons (the "Management
Vendors") became parties in accordance therewith pursuant to instruments of
adhesion dated February 21, 1997: Xxxx X.X. Xxxxxx, Xxxxxxx X. Xxxxxx, J. Xxxxx
Xxxxxxx (and Laurentian Bank of Canada in trust for account no. V002679, a
registered retirement savings plan trust of which J. Xxxxx Xxxxxxx is the sole
beneficiary), Xxxxxxx X. Xxxxxxx (and RBC Dominion Securities Inc. in trust for
account no. 000-00000-00, a registered retirement savings plan trust of which
Xxxxxxx X. Xxxxxxx is the sole beneficiary), J. Xxxxx Xxxxxxx (and Gundyco in
trust for account no. 000-00000-00, a registered retirement savings plan trust
of which J. Xxxxx Xxxxxxx is the sole beneficiary), Xxxxx XxxXxx, Xxxxxxx X.
Xxxxxxx, Xxxxxx X. Xxxxxx (and Gundyco in trust for account no. 000-00000-00, a
registered retirement savings plan trust of which Xxxxxx X. Xxxxxx is the sole
beneficiary), Xxxxx X. Xxxxxx (and Midland Xxxxxx Capital Inc. in trust for
account no. 8RABNQS, a registered retirement savings plan trust of which Xxxxx
X. Xxxxxx is the sole beneficiary), Xxxxxx X. XxxXxxxxx (and Gundyco in trust
for account no. 000-00000-00, a registered retirement savings plan trust of
which Xxxxxx X. XxxXxxxxx is the sole beneficiary), Xxxxxx Xxxxxxx, Xxxxxx
Xxxxxxxx and Xxxxx Xxxxxx.
WHEREAS the Purchaser terminated the obligations of the
parties to the Share Purchase Agreement (other than those set forth in Sections
12.2, 12.3, 12.4 and 12.5) by written notice (the "Notice") delivered to
Investco on February 24, 1997;
NOW THEREFORE in consideration of the premises and the
respective covenants set forth below, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each of the parties hereto, the parties hereby agree as follows:
1. Capitalized terms that are used herein without other definition and
that are defined in the Share Purchase Agreement shall have the
respective meanings herein that are ascribed thereto in the Share
Purchase Agreement, unless the context otherwise requires. References
herein to Sections mean Sections of the Share Purchase Agreement.
2. The Notice is hereby revoked with effect as if it had never been
given and as if the rights and obligations of the parties to the
Share Purchase Agreement had not been affected by the execution and
delivery of the Notice, and the Share Purchase Agreement is hereby
deemed to have been in full force and effect from and after its
execution and delivery by Investco and the Purchaser on February
18, 1997.
3. The Share Purchase Agreement is hereby amended as follows:
(a) Section 1.1(y) is deleted in its entirety and the following is
substituted therefor:
65
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"(y) "ESCROW AGREEMENT" means the agreement dated as of
February 26, 1997 between Investco, the Purchaser and
the Escrow Agent;"
(b) Section 7.1 is amended by deleting the date "March 3, 1997" each
time it appears in the final sentence of such section and substituting
therefor the date "March 7, 1997".
(c) Each of Section 4.22, 7.8(e) and 7.8(f) is amended by deleting the
date "March 3, 1997" where it appears therein and substituting
therefor the date "March 7, 1997".
(d) Section 10.4 is amended by deleting the time "9:00 a.m." where it
appears therein and substituting therefor the time "5:00 p.m." and by
deleting the date "March 3, 1997" where it appears therein and
substituting therefor the date "March 7, 1997".
(e) Section 12.4 is amended by adding the following sentence to the
end of such section:
"Notwithstanding the preceding sentence, in the event that the
Purchaser terminates the obligations of the parties under this
Agreement (other than those set forth in Sections 12.2, 12.3, 12.4 and
12.5) by exercising its rights under Section 10.4, then the Purchaser
shall pay to Investco, forthwith after such termination, the amount of
U.S. $10,000 in partial reimbursement of Investco's legal fees and
expenses incurred in connection with the negotiation and settlement of
this Agreement."
(f) Schedule 1 is amended by adding the phrase "(and registered
retirement savings plan trusts of which they are the sole
beneficiaries)" after the word "individuals" in the first line thereof
and by deleting therefrom the name "Xxxxxx X. Xxxxxxx" and
substituting therefor "Xxxxxx X. XxxXxxxxx".
4. The Purchaser acknowledges and agrees that Onex has executed and
delivered a non-competition and confidentiality agreement as described
in Section 10.5 in accordance with such section and that the Purchaser
may not rely on any alleged failure by Onex to do the same in
giving any notice referred to in Section 10.4.
5. Notwithstanding Section 7.6, Investco and the Purchaser agree to file
by fax (with originals to follow by courier or delivery as soon as
practicable thereafter) with the Director of Investigation and Research
appointed under the Competition Act (Canada) (the "Competition Act"),
by not later than 5:30 p.m. (Toronto time) on March 7, 1997,
the information set out in section 121 of the Competition Act, certified
in accordance with section 118 of the Competition Act, and such other
documents as may be required to constitute a complete short form
notification under the Competition Act relating to the transactions
contemplated by the Share Purchase Agreement.
66
- 3 -
6. Investco and the Purchaser agree that neither of them shall, without
the prior written consent of the other, make any public disclosure of the
existence of or the terms and conditions of the Share Purchase Agreement
prior to March 15, 1997 unless compelled to do so by formal order of a
court or regulatory authority having jurisdiction in the premises or
required to do so by law or by the rules of any stock exchange on which
securities of Onex or the Purchaser are listed (and neither of them shall
make such disclosure on or after that date until the Closing Date unless
the party making disclosure determines in good faith and after
consultation with its legal counsel that such disclosure has been so
compelled or is so required), it being agreed that disclosure to the
legal, accounting, financial, other professional advisors and the
employees of either party who have a need to know about the transaction
does not and will not constitute public disclosure. Investco and the
Purchaser shall provide prior notice to each other and shall use their
best efforts to consult with each other before making any public
disclosure of the existence of or the terms and conditions of the Share
Purchase Agreement, with a view to making such disclosure in time, manner
and content mutually satisfactory to them. No Management Vendor shall
make any public disclosure of the existence of or the terms and
conditions of the Share Purchase Agreement unless and until public
disclosure of the same has been made by Investco or the Purchaser.
7. The Share Purchase Agreement remains in full force and effect, unamended
except as specifically provided for in paragraphs 2, 3 and 5 above.
8. This agreement may be executed in any number of counterparts, each
of which shall constitute an original and all of which taken together
shall constitute one and the same instrument, and this agreement shall be
effective as of the latest date on which any counterpart is shown to have
been executed. Delivery hereof and of any counterpart to any party may be
effected by facsimile transmission made to that party.
IN WITNESS WHEREOF this amending agreement has been executed
by the parties as of the 26th day of February, 1997.
IMPARK INVESTMENTS INC. FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
by /s/ Authorized Signer by /s/ Authorized Signer
---------------------------- -----------------------------------
/s/ Xxxx X. X. Xxxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------------ -----------------------------------
Xxxx X. X. Xxxxxx Xxxxxxx X. Xxxxxx
67
- 4 -
/S/ J. Xxxxx Xxxxxxx /S/ Xxxxxxx Xxxxxxx
------------------------------ ------------------------------
J. Xxxxx Xxxxxxx Xxxxxxx X. Xxxxxxx
(for himself and as sole beneficiary (for himself and as sole beneficiary
of RRSP trust account no. V002679 of RRSP trust account no. 000-00000-00
with Laurentian Bank of Canada) with RBC Dominion Securities Inc.)
/S/ J. Xxxxx Batement /S/ Xxxxxx Xxxxxx
------------------------------ ------------------------------
J. Xxxxx Xxxxxxx Xxxxxx X. Xxxxxx
(for himself and as sole beneficiary (for himself and as sole beneficiary
of RRSP trust account no. 000-00000-00 of RRSP trust account no. 000-00000-00
with Gundyco) with Gundyco)
/S/ Xxxxx XxxXxx /S/ Xxxxxxx X. Xxxxxxx
------------------------------ ------------------------------
Xxxxx XxxXxx Xxxxxxx X. Xxxxxxx
/S/ Xxxxx X. Xxxxxx /S/ Xxxxxx XxxXxxxxx
------------------------------ ------------------------------
Xxxxx X. Xxxxxx Xxxxxx X. XxxXxxxxx
(for himself and as sole beneficiary (for himself and as sole beneficiary
of RRSP trust account no. 8RABNQS of RRSP trust account no. 000-00000-00
with Midland Xxxxxx Capital Inc.) with Gundyco)
/S/ Xxxxxx Xxxxxxx /S/ Xxxxx Xxxxxxxx
------------------------------ ------------------------------
Xxxxxx Xxxxxxx Xxxxxx Xxxxxxxx
/S/ Jonas Price
------------------------------
Xxxxx Xxxxxx
------------------------------
The undersigned acknowledges and consents to
the foregoing as of the 26th day of February, 1997
ONEX CORPORATION
by /S/ Authorized Signature
---------------------------
68
SHARE PURCHASE SECOND AMENDING AGREEMENT
REFERENCE is made to the share purchase agreement made the
18th day of February, 1997 (the "Share Purchase Agreement") between Impark
Investments Inc. ("Investco") and First Union Real Estate Equity and Mortgage
Investments (the "Purchaser"), to which the following persons (the "Management
Vendors") became parties in accordance therewith pursuant to instruments of
adhesion dated February 21, 1997: Xxxx X.X. Xxxxxx, Xxxxxxx X. Xxxxxx, J. Xxxxx
Xxxxxxx (and Laurentian Bank of Canada in trust for account no. V002679, a
registered retirement savings plan trust of which J. Xxxxx Xxxxxxx is the sole
beneficiary), Xxxxxxx X. Xxxxxxx (and RBC Dominion Securities Inc. in trust for
account no. 000-00000-00, a registered retirement savings plan trust of which
Xxxxxxx X. Xxxxxxx is the sole beneficiary), J. Xxxxx Xxxxxxx (and Gundyco in
trust for account no. 000-00000-00, a registered retirement savings plan trust
of which J. Xxxxx Xxxxxxx is the sole beneficiary), Xxxxx XxxXxx, Xxxxxxx X.
Xxxxxxx, Xxxxxx X. Xxxxxx (and Gundyco in trust for account no. 000-00000-00, a
registered retirement savings plan trust of which Xxxxxx X. Xxxxxx is the sole
beneficiary), Xxxxx X. Xxxxxx (and Midland Xxxxxx Capital Inc. in trust for
account no. 8RABNQS, a registered retirement savings plan trust of which Xxxxx
X. Xxxxxx is the sole beneficiary), Xxxxxx X. XxxXxxxxx (and Gundyco in trust
for account no. 000-00000-00, a registered retirement savings plan trust of
which Xxxxxx X. XxxXxxxxx is the sole beneficiary), Xxxxxx Xxxxxxx, Xxxxxx
Xxxxxxxx and Xxxxx Xxxxxx.
WHEREAS the Share Purchase Agreement was amended by a share
purchase amending agreement made as of the 26th day of February, 1997 (the Share
Purchase Agreement as so amended being referred to herein as the "Amended Share
Purchase Agreement");
NOW THEREFORE in consideration of the premises and the
respective covenants set forth below, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each of the parties hereto, the parties hereby agree as follows:
1. Capitalized terms that are used herein without other definition and that
are defined in the Amended Share Purchase Agreement shall have the
respective meanings herein that are ascribed thereto in the Amended
Share Purchase Agreement, unless the context otherwise requires.
References herein to Sections mean Sections of the Amended Share
Purchase Agreement.
2. The Amended Share Purchase Agreement is hereby amended as follows:
(a) Section 1.1 is amended by:
(i) deleting the word "and" at the end of Section 1.1(jjj);
(ii) deleting the period at the end of Section 1.1(kkk) and
substituting therefor ";and"; and
(iii) adding to the end thereof a new Section 1.1(lll) as
follows:
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"(lll) "SECOND AMENDING AGREEMENT" means the
agreement dated as of March 3, 1997 between
Investco, the Purchaser and the Management
Vendors.
(b) Section 10.4 is amended by:
(i) deleting the period at the end of Section 10.4(b) and
substituting therefor ";and"; and
(ii) inserting immediately following Section 10.4(b) thereof a new
Section 10.4(c) as follows:
"(c) the failure by 3:00 p.m. (Toronto time) on March
7, 1997: (i) to obtain the consent, on terms and
conditions acceptable to the Purchaser, of
Canadian Imperial Bank of Commerce and Hong Kong
Bank of Canada referred to in paragraph 3 of the
Second Amending Agreement; and (ii) to execute and
deliver, and to obtain the execution and delivery
by Investco (in its own capacity and as agent and
attorney of the Management Vendors under Section
12.1) of, an amendment to this Agreement as
contemplated by paragraph 4 of the Second Amending
Agreement."
3. The Purchaser and the Vendors acknowledge that the Purchaser wishes to
have the Company and its Affiliates implement a reorganization (the
"Reorganization") of the Company and certain of its Affiliates and
that such Reorganization cannot be implemented without the consent of
Canadian Imperial Bank of Commerce and Hong Kong Bank of Canada
pursuant to the credit agreement dated as of November 13, 1996 as
described in Schedule 4.2 to the Amended Share Purchase Agreement.
Investco and the Purchaser agree to use their best efforts (as such
term is construed under Section 1.11) to obtain the consent of such
banks to the Reorganization.
4. Investco and the Purchaser agree to use their best efforts (as such
term is construed under Section 1.11) to execute and deliver an
agreement to further amend the Amended Share Purchase Agreement to
provide for: (i) the Reorganization; (ii) the subscription by Investco
or an Affiliate of it (and/or the Vendors) for preferred shares of the
Company or an Affiliate of it; and (iii) an exchange agreement to be
entered into between the Purchaser and Investco or an Affiliate of it
(and/or the Vendors) relating to such preferred shares.
5. The Amended Share Purchase Agreement remains in full force and effect,
unamended except as specifically provided for in paragraph 2 above.
70
- 3 -
6. This agreement may be executed in any number of counterparts, each of
which shall constitute an original and all of which taken together
shall constitute one and the same instrument, and this agreement shall
be effective as of the latest date on which any counterpart is shown
to have been executed. Delivery hereof and of any counterpart to any
party may be effected by facsimile transmission made to that party.
IN WITNESS WHEREOF this amending agreement has been executed
by the parties as of the 2nd day of March, 1997.
IMPARK INVESTMENTS INC. FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
by /s/ Authorized Signer by
---------------------------- -----------------------------
IMPARK INVESTMENTS INC., /s/ Xxxx X.X. Xxxxxx
as agent and attorney for each of the -------------------------------
Management Vendors pursuant to Xxxx X.X. Xxxxxx
Section 12.1 of the Amended Share /s/ Xxxxxxx X. Xxxxxx
Purchase Agreement -------------------------------
Xxxxxxx X. Xxxxxx
by /s/ Authorized Signer
----------------------------------------
------------------------------------------
The undersigned acknowledges and consents
to the foregoing as of the 2nd day of
March, 1997.
ONEX CORPORATION
by /s/ Authorized Signer
--------------------------------------------
71
ESCROW AMENDING AGREEMENT
REFERENCE is made to the escrow agreement made as of the 26th day of
February, 1997 (the "Escrow Agreement") between Impark Investments Inc.
("Investco"), First Union Real Estate Equity and Mortgage Investments (the
"Purchaser") and Xxxxx Xxxxxxx Xxxxxx (the "Escrow Agent")
IN CONSIDERATION of the premises and the respective covenants set forth
below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto,
the parties hereby agree as follows:
1. The Escrow Agreement is hereby amended as follows:
(a) deleting the date "March 7, 1997" from Section 3.2(a) each time it
appears therein and substituting therefor in each case the date
"March 7, 1997";
(b) deleting the ";and" from the end of Section 3.2(a) and substituting a
period therefor;
(c) deleting therefrom Section 3.2(b); and
(d) deleting the term "Final Termination Time" from Section 3.3 and
substituting therefor the term "Early Termination Time".
2. The Escrow Agreement remains in full force and effect, unamended except as
specifically provided for in paragraph 1 above.
3. This agreement may be executed in any number of counterparts, each of which
shall constitute an original and all of which taken together shall
constitute one and the same instrument, and this agreement shall be
effective as of the latest date on which any counterpart is shown to have
been executed. Delivery hereof and of any counterpart to any party may be
effected by facsimile transmission made to that party.
IN WITNESS WHEREOF this amending agreement has been executed by the
parties as of the 2nd day of March, 1997.
IMPARK INVESTMENTS INC. FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
by /s/ Authorized Signer by /s/ Authorized Signer
---------------------------- ---------------------------
XXXXX XXXXXXX XXXXXX
by /s/ Authorized Signer
---------------------------
Name:
72
SHARE PURCHASE THIRD AMENDING AGREEMENT
REFERENCE is made to the share purchase agreement made the
18th day of February, 1997 (the "Share Purchase Agreement") between Impark
Investments Inc. ("Investco") and First Union Real Estate Equity and Mortgage
Investments (the "Purchaser"), to which the following persons (the "Management
Vendors") became parties in accordance therewith pursuant to instruments of
adhesion dated February 21, 1997: Xxxx X.X. Xxxxxx, Xxxxxxx X. Xxxxxx, J. Xxxxx
Xxxxxxx (and Laurentian Bank of Canada in trust for account no. V002679, a
registered retirement savings plan trust of which J. Xxxxx Xxxxxxx is the sole
beneficiary), Xxxxxxx X. Xxxxxxx (and RBC Dominion Securities Inc. in trust for
account no. 000-00000-00, a registered retirement savings plan trust of which
Xxxxxxx X. Xxxxxxx is the sole beneficiary), J. Xxxxx Xxxxxxx (and Gundyco in
trust for account no. 000-00000-00, a registered retirement savings plan trust
of which J. Xxxxx Xxxxxxx is the sole beneficiary), Xxxxx XxxXxx, Xxxxxxx X.
Xxxxxxx, Xxxxxx X. Xxxxxx (and Gundyco in trust for account no. 000-00000-00, a
registered retirement savings plan trust of which Xxxxxx X. Xxxxxx is the sole
beneficiary), Xxxxx X. Xxxxxx (and Midland Xxxxxx Capital Inc. in trust for
account no. 8RABNQS, a registered retirement savings plan trust of which Xxxxx
X. Xxxxxx is the sole beneficiary), Xxxxxx X. XxxXxxxxx (and Gundyco in trust
for account no. 000-00000-00, a registered retirement savings plan trust of
which Xxxxxx X. XxxXxxxxx is the sole beneficiary), Xxxxxx Xxxxxxx, Xxxxxx
Xxxxxxxx and Xxxxx Xxxxxx.
WHEREAS the Share Purchase Agreement was amended by a share
purchase amending agreement made as of the 26th day of February, 1997 (the
"First Amending Agreement") and a share purchase amending agreement made as of
the 2nd day of March, 1997 (the "Second Amending Agreement") (the Share Purchase
Agreement as so amended being referred to herein as the "Amended Share Purchase
Agreement");
NOW THEREFORE in consideration of the premises and the
respective covenants set forth below, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each of the parties hereto, the parties hereby agree as follows:
1. Capitalized terms that are used herein without other
definition and that are defined in the Amended Share Purchase
Agreement shall have the respective meanings herein that are
ascribed thereto in the Amended Share Purchase Agreement, unless
the context otherwise requires. References herein to Sections mean
Sections of the Amended Share Purchase Agreement.
2. The Amended Share Purchase Agreement is hereby amended as follows:
(a) Section 1.1(lll) is amended by deleting the date "March 3,
1997" therein and substituting therefore the date "March 2,
1997";
(b) Section 10.4 is amended by:
73
- 2 -
(i) deleting the time "9:00 a.m." where it appears therein and
substituting therefore the time "12:00 p.m.";
(ii) deleting the time "3:00 p.m." where it appears therein and
substituting therefore the time "12:00 p.m."; and
(iii) deleting the date "March 7, 1997" where it appears therein
and substituting therefor the date "March 11, 1997".
3. Section 5 of the First Amending Agreement is hereby deleted.
4. The Amended Share Purchase Agreement remains in full force and effect,
unamended except as specifically provided for in paragraph 2 above. The
First Amending Agreement remains in full force and effect, unamended
except as specifically provided for in the Second Amending Agreement
and in paragraphs 2 and 3 above.
5. This agreement may be executed in any number of counterparts, each of
which shall constitute an original and all of which taken together
shall constitute one and the same instrument, and this agreement shall
be effective as of the latest date on which any counterpart is shown
to have been executed. Delivery hereof and of any counterpart to any
party may be effected by facsimile transmission made to that party.
IN WITNESS WHEREOF this amending agreement has been executed
by the parties as of the 7th day of March, 1997.
IMPARK INVESTMENTS INC. FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
by /s/ Authorized Signer by /s/ Authorized Signer
---------------------------- -----------------------------
IMPARK INVESTMENTS INC.,
as agent and attorney for each of the
Management Vendors pursuant to
Section 12.1 of the Amended Share
Purchase Agreement
by /s/ Authorized Signer
----------------------------
--------------------------------
74
-3-
The undersigned acknowledges and consents to
the foregoing as of the 7th day of March, 1997.
ONEX CORPORATION
by /s/ Authorized Signer
__________________________
75
ESCROW AMENDING AGREEMENT
REFERENCE is made to the escrow agreement made as of the 26th day of
February, 1997 between Impark Investments Inc. ("Investco"), First Union Real
Estate Equity and Mortgage Investments (the "Purchaser") and Xxxxx Xxxxxxx
Xxxxxx (the "Escrow Agent"), as amended by an agreement made by such parties as
of March 2, 1997 (as so amended, the "Escrow Agreement").
IN CONSIDERATION of the premises and the respective covenants set forth
below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto,
the parties hereby agree as follows:
1. The Escrow Agreement is hereby amended as follows:
(a) deleting the date "March 7, 1997" from Section 3.2(a) each time it
appears therein and substituting therefore in each case the date
"March 11, 1997"; and
(b) deleting the time "5:00 p.m." in the first line of Section 3.2(a) and
substituting therefor the time "12:00 p.m. (Toronto time)".
2. The Escrow Agreement remains in full force and effect, unamended except as
specifically provided for in paragraph 1 above.
3. This agreement may be executed in any number of counterparts, each of which
shall constitute an original and all of which taken together shall
constitute one and the same instrument, and this agreement shall be
effective as of the latest date on which any counterpart is shown to have
been executed. Delivery hereof and of any counterpart to any party may be
effected by facsimile transmission made to that party.
IN WITNESS WHEREOF this amending agreement has been executed by the
parties as of the 7th day of March, 1997.
IMPARK INVESTMENTS INC. FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
by /s/ Authorized Signer by /s/ Authorized Signer
---------------------------- ---------------------------
XXXXX XXXXXXX XXXXXX
by /s/ Authorized Signer
---------------------------
Name:
76
SHARE PURCHASE FOURTH AMENDING AGREEMENT
REFERENCE is made to the share purchase agreement made the
18th day of February, 1997 between Impark Investments Inc. ("Investco") and
First Union Real Estate Equity and Mortgage Investments (the "Purchaser"), to
which the following persons (the "Management Vendors") became parties in
accordance therewith pursuant to instruments of adhesion dated February 21,
1997: Xxxx X.X. Xxxxxx, Xxxxxxx X. Xxxxxx, J. Xxxxx Xxxxxxx (and Laurentian
Bank of Canada in trust for account no. V002679, a registered retirement
savings plan trust of which J. Xxxxx Xxxxxxx is the sole beneficiary), Xxxxxxx
X. Xxxxxxx (and RBC Dominion Securities Inc. in trust for account no.
000-00000-00, a registered retirement savings plan trust of which Xxxxxxx X.
Xxxxxxx is the sole beneficiary), J. Xxxxx Xxxxxxx (and Gundyco in trust for
account no. 000-00000-00, a registered retirement savings plan trust of which
J. Xxxxx Xxxxxxx is the sole beneficiary), Xxxxx XxxXxx, Xxxxxxx X. Xxxxxxx,
Xxxxxx X. Xxxxxx (and Gundyco in trust for account no. 000-00000-00, a
registered retirement savings plan trust of which Xxxxxx X. Xxxxxx is the sole
beneficiary), Xxxxx X. Xxxxxx (and Midland Xxxxxx Capital Inc. in trust for
account no. 8RABNQS, a registered retirement savings plan trust of which Xxxxx
X. Xxxxxx is the sole beneficiary), Xxxxxx X. XxxXxxxxx (and Gundyco in trust
for account no. 000-00000-00, a registered retirement savings plan trust of
which Xxxxxx X. XxxXxxxxx is the sole beneficiary), Xxxxxx Xxxxxxx, Xxxxxx
Xxxxxxxx and Xxxxx Xxxxxx, as amended by an amending agreement (the "First
Amending Agreement") made as of February 26, 1997 by the foregoing parties and
by further amending agreements made as of March 2, 1997 and as of March 7, 1997
between the Purchaser and Investco (both in its own capacity and as agent and
attorney for the Management Vendors (such agreement, as so amended, being
hereinafter referred to as the "Share Purchase Agreement").
WHEREAS the parties to the Share Purchase Agreement wish to
amend such agreement on the terms set out herein;
NOW THEREFORE in consideration of the premises and the
respective covenants set forth below, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each of the parties hereto, the parties hereby agree as follows:
1. DEFINED TERMS AND REFERENCES. Capitalized terms that are used herein
without other definition and that are defined in the Share Purchase Agreement
shall have the respective meanings herein that are ascribed thereto in the Share
Purchase Agreement, unless the context otherwise requires. References herein to
Sections mean Sections of the Share Purchase Agreement.
2. AMENDMENTS TO SECTION 1.1. Section 1.1 of the Share Purchase Agreement
is hereby amended as follows:
(a) by adding immediately after paragraph (f) the following:
"(f.1) 'Canadian Dollar Equivalent' means, with respect to any
amount of United States dollars, the amount of Canadian
dollars that would be received upon the purchase by the holder
of such United States dollars of Canadian dollars at an
77
- 2 -
exchange rate equal to the noon (12:00 p.m.) United
States/Canadian dollar exchange rate quoted by the Bank of
Canada on the Business Day prior to the Closing Date;
(f.2) 'Canco 1' has the meaning ascribed thereto in Section
2.7 and includes the successors of such corporation;";
(b) by adding immediately after paragraph (g) the following:
"(g.1) 'Class A Common Shares' means Class A Non-Voting Common
Shares in the capital of Canco 1 or any successor;
(g.2) 'Class A Preferred Shares' means Class A Preferred
Shares in the capital of Canco 1 or any successor; ";
(c) by deleting paragraph (i) and substituting therefor the
following:
"(i) 'Closing Date' means the date on which all the
conditions set out in Sections 8 and 9 are satisfied or
waived in writing by the Vendors or the Purchaser, as the
case may be, but in any event not later than April 11, 1997,
except that if the Purchaser determines in good faith and so
notifies Investco in writing prior to 11:00 a.m. (Toronto
time) on April 11, 1997 that it does not have reasonable
assurance that a wire transfer of funds can be commenced on
April 11, 1997 from an account in the United States and
completed to an account in Canada of a different entity
before 11:00 a.m. (Toronto time) on April 11, 1997, then the
latest date by which the conditions set out in Sections 8 and
9 are to be satisfied shall be April 15, 1997;"
(d) by amending paragraph (j) by adding the following
immediately after the word "less" in the fifth line thereof:
"(i) $250,000 and (ii)";
(e) by adding immediately after paragraph (l) the following:
"(l.1) 'Common Share Allocation Amount' means the Canadian
Dollar Equivalent of U.S. $11.6 million;";
(f) by adding immediately after paragraph (tt) the following:
"(tt.1) 'Onex Vendor' means an Onex Associate that has
executed and delivered a notice substantially in the form of
Schedule 10.6(b) in accordance with Section 10.6 during the
time limit specified for such notice by such section;
78
- 3 -
(tt.2) 'Opco Subsidiaries' means, collectively, City
Collection Company Ltd., Impark Management Ltd., Inner-Tec
Security Consultants Ltd., Compupark Systems Corporation and
Park-Ur-Self (Canada) Ltd.;";
(g) by deleting paragraph (zz) and substituting the following
therefor:
"(zz) 'Pro Rata Share' means, at any time in
respect of any Vendor, the percentage obtained by
multiplying by 100 the quotient obtained by dividing
the number of common shares of Holdco held by such
Vendor by the total number of common shares of Holdco
issued and outstanding at such time; provided that
for the purpose of determining, at any time, the Pro
Rata Share of Investco, Investco shall be deemed to
hold all common shares of Holdco other than those
held by the Management Vendors and the Onex Vendors
and further provided that, for all purposes of
Article 11, (i) the Pro Rata Share of Investco shall
be determined on the basis that Investco is deemed to
hold all common shares of Holdco other than those
held by the Management Vendors and (ii) at and after
the Time of Closing, the Pro Rata Share of any Vendor
shall be that Vendor's Pro Rata Share as at the Time
of Closing, determined as aforesaid;" and
(h) by inserting the following immediately following the term
"Management Vendors" where it appears in paragraph
(jjj):
", the Onex Vendors (if any)".
3. AMENDMENTS TO SECTION 2.3. Section 2.3 of the Share Purchase Agreement
is hereby amended by deleting that portion of Section 2.3 that follows Section
2.3(a) and substituting the following therefor:
"(b) the issuance and delivery to each Vendor by Canco 1 of Class A
Common Shares on the basis that each Vendor shall be entitled
to one Class A Common Share for each $1.00 of such Vendor's
Pro Rata Share of the Common Share Allocation Amount; and
(c) the delivery to or to the order of each Vendor by the
Purchaser of a certified cheque or bank draft, in either case
drawn on a Canadian chartered bank in immediately available
funds, payable to the order of such Vendor (or, in the case of
Investco, by the wire transfer of immediately available funds
to such account as may be specified by Investco) in the amount
of such Vendor's Pro Rata Share of the excess of the Purchase
Price over the aggregate of (i) the Escrow Amount and (ii) the
Common Share Allocation Amount (subject, in the case of
Vendors that are non-residents of Canada within the meaning of
the Tax Act and who have not delivered to the
79
-4-
Purchaser a certificate meeting the requirements of Section
8.12, to any withholdings required to be made under the Tax
Act),
against delivery to the Purchaser of a certificate or certificates
representing the Purchased Shares, duly endorsed for transfer to the
Purchaser or as it may direct.
(d) Notwithstanding the foregoing provisions of this Section 2.3,
the Purchaser may, by notice in writing delivered to each
Management Vendor not less than ten Business Days prior to the
Closing Date, offer to satisfy all or any specified portion of
the amount otherwise payable to such Management Vendor
pursuant to Section 2.3(c) (the "Cash Portion") by
the delivery to such Management Vendor of Class A Common
Shares, Class B Voting Common Shares or Class A Preferred
Shares (each of which shall satisfy $1.00 of the Cash Portion)
on the basis described in such notice. Each Management Vendor
electing to accept such offer shall do so by notice in writing
delivered to the Purchaser and to Investco not less than three
Business Days prior to the Closing Date; such notice shall
specify that amount of the Cash Portion which such Management
Vendor has agreed shall be satisfied by the issuance of Class
A Common Shares, Class B Voting Common Shares or Class A
Preferred Shares. Furthermore, the Purchaser shall have the
right, by notice in writing delivered to any one or more of
the Management Vendors not less than three Business Days prior
to the Closing Date, to satisfy the obligation to deliver
Class A Common Shares to any such Management Vendor pursuant
to Section 2.3(b) by the delivery at the Time of Closing of
cash in lieu thereof.
(e) Notwithstanding the foregoing provisions of Section 2.3 or any
other provision of this Agreement, the Purchaser shall have
the right, by notice in writing delivered to Investco and the
Management Vendors not less than three Business Days prior to
the Closing Date, to reduce the portion of the Purchase Price
to be paid pursuant to Section 2.3(b) to such extent as may be
determined by Purchaser in its sole and absolute discretion
and to pay cash at the Time of Closing in lieu thereof. The
Purchaser agrees to exercise reasonable efforts to identify
structuring opportunities that may enable it to exercise its
discretion pursuant to the foregoing provisions of this
Section 2.3(e) and, in the event of the identification of
opportunities that it determines to be practical and
appropriate under the circumstances, to exercise its
discretion to so cause such a reduction."
4. FURTHER AMENDMENTS TO SECTION 2. Section 2 of the Share Purchase
Agreement is hereby further amended by adding the following Sections
immediately following Section 2.5:
"2.6 ACTIONS IN CONTEMPLATION OF CLOSING. Each party agrees to
execute all such documents and do all such other acts and things
(to the extent lawful and within its power), all in full
cooperation with the other parties, as may be necessary to effect
and implement:
80
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(a) prior to the Time of Closing the steps and transactions set out in
Sections 2.7 and 2.8 below in a manner that will permit the
consummation in accordance herewith of the purchase and sale of the
Purchased Shares provided for in Section 2.1. Each party shall consider
in good faith any changes or modifications to the steps and
transactions set out in Sections 2.7 and 2.8 and Sections 2.11 and 2.12
that are proposed by any other party.
2.7 CAPITALIZATION OF CANCO 1. The Purchaser shall cause to be
capitalized a company ("Canco 1") existing under the Canada
Business Corporations Act, of which all the voting shares are held,
directly or indirectly, by First Union Management, Inc. ("FUMI"),
such that Canco 1 (if it is to be the assignee of the
Purchaser in accordance with Section 12.7(c)) has cash at the Time of
Closing in an amount not less than the Canadian Dollar Equivalent of
U.S. $39.6 million together with such other cash amount as may be
necessary for Canco 1 in that circumstance to make the payments
described in Section 2.3(c). The authorized share capital of Canco 1
shall include Class A Common Shares, Class B Voting Common Shares and
Class A Preferred Shares with the respective attributes set forth with
respect thereto in Schedule 2.7
2.8 CONTINUANCE UNDER CBCA. The Vendors shall use their best efforts to
cause the Company, Xxxxxxx Parking Service Ltd. and Impark Properties
Ltd. to be continued as soon as practicable under the laws of Canada
pursuant the export and import continuance provisions of the Company
Act (British Columbia) and the Canada Business Corporations Act,
respectively.
2.9 PUT AND CALL AGREEMENT. First Union Real Estate Equity and Mortgage
Investments ("FUR") and Investco shall enter into at the
Time of Closing, and perform the respective obligations then to be
performed by them under, a put-call agreement, a security trust
indenture and a depositary agreement relating to Investco's Class A
Common Shares substantially on the terms and conditions described in
Schedule 2.9.
2.10 AMALGAMATIONS INVOLVING CANCO 1. The Purchaser shall ensure that,
so long as Investco (or a permitted assign other than FUR or FUMI) is a
holder of Class A Common Shares, any amalgamation involving Canco 1 and
any other corporation, including any amalgamation of Canco 1 and
Imperial Parking Limited, shall be accomplished as a short form
vertical amalgamation under the Canada Business Corporations Act, with
Canco 1 as the holding corporation in each case. For greater certainty,
the Purchaser shall ensure that all rights and obligations of Canco 1
shall be rights and obligations of the corporation continuing following
any such amalgamation without the requirement of any assignment or
assumption agreement or other formality.
2.11 554506 ALBERTA LTD. The Purchaser may at any time prior to the
Closing Date request by written notice to Investco that the Vendors use
their reasonable best efforts to cause the Company to purchase, on
terms and conditions acceptable to Investco and the Purchaser, acting
reasonably, on or before the Closing Date all the outstanding shares of
81
-6-
554506 Alberta Ltd. not currently owned, directly or indirectly, by the
Company. Any such purchase shall be completed by the Company by drawing
down under its credit facilities with Canadian Imperial Bank of
Commerce an amount sufficient to pay the full amount of the purchase
price for such shares; provided, however, that any indebtedness
incurred by the Company in connection with such acquisition shall not
be taken into account in any calculation of the Closing Debt.
2.12 NO BREACH FOR IMPLEMENTING PRE-CLOSING STEPS. The parties hereby
agree that to the extent that any inaccuracy in any representation and
warranty made by any party in the Share Purchase Agreement results
solely from any action taken by that party in good faith compliance
with its obligations which are required to be fulfilled at or prior to
the Time of Closing under Sections 2.8 and 2.11, the intention to take
which action such party has disclosed to the Purchaser (if such party
is a Vendor) or to Investco (if such party is the Purchaser) prior to
taking the same, the same shall be deemed not to cause, result in or
give rise to any breach of warranty or misrepresentation (or any
non-satisfaction of a condition to closing related thereto) by such
party under the Share Purchase Agreement or in any other agreement,
instrument or other document delivered in connection with the
transactions contemplated hereby. The taking of any action by any party
in good faith compliance with any of its obligations which are required
to be fulfilled at or prior to the Time of Closing under Sections 2.8
and 2.11, the intention to take which action such party has disclosed
to the Purchaser (if such party is a Vendor) or to Investco (if such
party is the Purchaser) prior to taking the same, shall be deemed not
to cause, result in or give rise to any breach by such party of any
covenant or agreement (or any non-satisfaction of a condition to
closing related thereto) contained in the Share Purchase Agreement,
including the covenants and agreements of the Vendors contained in
Section 7.4, or in any other agreement, instrument or other document
delivered in connection with the transactions contemplated hereby.
2.13 CONSENT TO POST-CLOSING TRANSACTIONS. The Vendors hereby consent
to, and agree that they will suffer no adverse consequences as a
result of, any of the following transactions to be completed at or
following the Time of Closing:
(a) the direct or indirect sale by the Company of the
Opco Subsidiaries;
(b) any amalgamation made in accordance with Section
2.10; and
(c) the sale of the Real Property (or the real property
owned by 000000 Xxxxxxx Ltd.) by any owner thereof
from time to time.
2.14 TAX ELECTION. If any Vendor who is not exempt from tax
under Part I of the Tax Act has received Class A Common Shares pursuant
to Section 2.3(b) and so elects by giving written notice to Canco 1 on
the Closing Date, the Purchaser shall cause Canco 1 to elect jointly
with such Vendor under subsection 85(1) of the Tax Act (or any
successor provision thereto of similar effect) and under the equivalent
provision of any provincial tax
82
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legislation, in prescribed form, and shall therein agree that the
elected amount in respect of such Vendor's Purchased Shares shall be an
amount not less than (a) that Vendor's Pro Rata Share of the Purchase
Price, less (b) that Vendor's Pro Rata share of the Common Share
Allocation Amount, subject to the limitations prescribed by the
relevant legislation. The Vendor and Canco 1 shall file such election
as required by the relevant legislation and the administrative
practices of Revenue Canada so that it shall have full force and effect
for purposes of the relevant legislation.
5. AMENDMENT TO SECTION 3. Section 3 of the Share Purchase Agreement is
hereby amended by adding the following new Section 3.3 immediately following
Section 3.2:
"3.3 REPRESENTATIONS RE EXTRAORDINARY BONUSES. Each of the Management
Vendors represents and warrants to the Purchaser that he has not
received any extraordinary bonus or other compensation from Onex or any
of its Affiliates or Associates during the 18 months preceding the date
hereof except as disclosed in writing to the Purchaser and is not
entitled to receive any such extraordinary bonus or other compensation
under any commitment or agreement from Onex or any of its Affiliates or
Associates. The Purchaser agrees that the information referred to above
in this Section 3.3, including the information contained in such
written disclosure, shall be subject to the February 7, 1997
confidentiality agreement referred to in Section 1.5."
6. AMENDMENTS TO SECTION 8. Section 8 of the Share Purchase Agreement is
hereby amended by adding the following Section immediately following Section 8.
12, renumbering the present Section 8.13 to Section 8.14 and replacing the
reference to "8.12" in the first line of the present Section 8.13 with a
reference to "8.13":
"8.13 DEPOSITARY EXECUTION OF DEPOSITARY AGREEMENT. A depositary
satisfactory to the Purchaser and Investco, each acting reasonably,
shall have executed and delivered a depositary agreement containing
substantially the terms set out with respect to such agreement in
Schedule 2.9."
7. AMENDMENTS TO SECTION 9. Section 9 of the Share Purchase Agreement is
hereby amended by adding the following Section immediately following Section 9.
6 and renumbering the present Section 9.7 to Section 9.8 and replacing the
reference to "9.6" in the first line of the present Section 9.7 with a
reference to "9.7":
"9.7 TRUSTEE EXECUTION OF SECURITY TRUST INDENTURE. A trustee
satisfactory to the Purchaser and Investco, each acting reasonably,
shall have executed and delivered a security trust indenture containing
substantially the terms set out with respect to such indenture in
Schedule 2.9."
8. AMENDMENTS TO SECTION 10. Section 10 of the Share Purchase Agreement is
hereby amended as follows:
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(a) by deleting Section 10.4 and substituting the following therefor:
"10.4 The Purchaser may, by written notice delivered to the Vendors at
or prior to 8:00 p.m. (Toronto time) on March 19, 1997, terminate the
obligations of all parties under this Agreement (other than those set
forth in Sections 12.2, 12.3, 12.4 and 12.5) by reason of the failure
of the Purchaser and the Management Vendors to agree in principle on a
reasonable basis to the terms of the Management Vendors'
investment in the Company (or its Affiliates or successors, including
Canco 1) to be made at or after the Time of Closing. The termination of
such obligations pursuant to this Section 10.4 shall relieve all
parties of all liabilities relating hereto, other than those set forth
in Sections 12.2, 12.3, 12.4 and 12.5 and in the confidentiality
agreements referred to in Section 1.5 and other than those provisions
of the Escrow Agreement relating to the disposition of the funds then
held by the Escrow Agent"; and
(b) by adding the following sentences to the end of Section 10.6:
"Alternatively, Investco and any one or more Onex Associates may elect,
by notice in writing given in substantially the form of Schedule
10.6(b) given to the Purchaser not less than three Business Days prior
to the Closing Date, that such Onex Associate or Onex Associates will
sell the Purchased Shares held by it or them to the Purchaser in
accordance with this Agreement. In such case, each Onex Associate shall
be considered an Onex Vendor for all purposes of this Agreement. No
such notice shall affect Investco's 'Pro Rata Share' for the purposes
of Article 11. Sections 3.1(a), 3.2(b) and 12.9 shall be deemed to be
amended in accordance with the foregoing. The binding of any Onex
Associate as an Onex Vendor by the giving of a notice as aforesaid
shall constitute compliance by Investco with its obligations relating
to such Onex Associate under the penultimate sentence of
Section 11.13."
9. SCHEDULES. Schedules 2.7, 2.9 and 10.6(b) attached hereto are deemed to
be incorporated in and to form part of the Share Purchase Agreement and the
list of Schedules set out in Section 1.15 is hereby deemed to be amended
accordingly.
10. AMENDMENTS TO FIRST AMENDING AGREEMENT. The date "March 15, 1997"
is deleted where it appears in Section 6 of the First Amending Agreement, and
the date "March 19, 1997" is substituted therefor.
11. CONFIRMATION OF SHARE PURCHASE AGREEMENT. The Share Purchase Agreement
remains in full force and effect, unamended except as specifically provided in
paragraphs 2 to 9, inclusive, above. For greater certainty, each party hereto
hereby acknowledges and agrees that, notwithstanding any contrary act or
omission or any execution and delivery of any document at any time prior to
the execution and delivery of this amending agreement, all of the obligations
of the parties set out in the Share Purchase Agreement are and remain in full
force and effect as aforesaid and shall for all purposes be deemed to have
84
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continuously been in such force and effect from February 18, 1997 to and
including the date hereof, as amended on the respective date of each amending
agreement referred to above.
12. COUNTERPARTS. This agreement may be executed in any number of
counterparts, each of which shall constitute an original and all of which taken
together shall constitute one and the same instrument, and this agreement shall
be effective as of the latest date on which any counterpart is shown to have
been executed. Delivery hereof and of any counterpart to any party may be
effected by facsimile transmission made to that party. Failure of any
Management Vendor to execute this Agreement shall not relieve any party who has
executed this Agreement from its obligations hereunder.
IN WITNESS WHEREOF this amending agreement has been executed
by the parties as of the 17th day of March, 1997.
IMPARK INVESTMENTS INC. FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
by by
--------------------------- ---------------------------
/s/ Xxxx X. X. Xxxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------------ ------------------------------
Xxxx X. X. Xxxxxx Xxxxxxx X. Xxxxxx
/s/ J. Xxxxx Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx
------------------------------ ------------------------------
J. Xxxxx Xxxxxxx Xxxxxxx X. Xxxxxxx
(for himself and as sole beneficiary (for himself and as sole beneficiary
of RRSP trust account no. V002679 of RRSP trust account no. 000-00000-00
with Laurentian Bank of Canada) with RBC Dominion Securities Inc.)
/s/ J. Xxxxx Xxxxxxx /s/ Xxxxxx X. Xxxxxx
------------------------------ ------------------------------
J. Xxxxx Xxxxxxx Xxxxxx X. Xxxxxx
(for himself and as sole beneficiary (for himself and as sole beneficiary
of RRSP trust account no. 000-00000-00 of RRSP trust account no. 000-00000-00
with Gundyco) with Gundyco)
/s/ Xxxxx XxxXxx /s/ Xxxxxxx X. Xxxxxxx
------------------------------ ------------------------------
Xxxxx XxxXxx Xxxxxxx X. Xxxxxxx
85
-10-
/s/ Xxxxx X. Xxxxxx /s/ Xxxxxx X. XxxXxxxxx
------------------------------ ------------------------------
Xxxxx X. Xxxxxx Xxxxxx X. XxxXxxxxx
(for himself and as sole beneficiary (for himself and as sole beneficiary
of RRSP trust account no. 8RABNQS of RRSP trust account no. 000-00000-00
with Midland Xxxxxx Capital Inc.) with Gundyco)
/s/ Xxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxxx
------------------------------ ------------------------------
Xxxxxx Xxxxxxx Xxxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxx
------------------------------
Xxxxx Xxxxxx
-----------------------------
The undersigned acknowledges and consents to
the foregoing as of the 17th day of March, 1997
ONEX CORPORATION
By /s/ Authorized Xxxxxx
-----------------------------
86
SCHEDULE 2.7 (1)
TERM SHEET
CANCO 1
CLASS A NON-VOTING COMMON SHARES
------------------------------------------------------------------------------
ISSUER: Canco 1 (the "Company").
ISSUE: Class A Non-Voting Common Shares (the "Shares")
AUTHORIZED NUMBER: The Company will be authorized to issue
up to 15,000,000 Shares.
DIVIDENDS: Each Share will entitle the holder thereof to
dividends if, as and when declared by the
Company, subject to the rights of holders of
classes of shares ranking equally with or ahead
of the Shares.
PRIORITY: The Shares will rank equally with the Class B
Voting Common Shares of the Company and behind
any other class of shares in the capital of the
Company from time to time, if the provisions of
such other class so provide, with respect to the
payment of dividends and the repayment of capital
or other distributions to be made on the
liquidation, dissolution or winding-up of the
Company.
RIGHTS ON LIQUIDATION: Subject to the rights of holders of shares
having a preference over the Shares, in the
event of the liquidation, dissolution or
winding-up of the Company or any other
distribution of the assets of the Company to its
shareholders for the purpose of winding up its
affairs, the holders of the Shares and of the
Class B Voting Common Shares then outstanding
shall be entitled to receive the remaining net
assets of the Company, pro rata to the number of
Shares and Class B Voting Common Shares then
held.
CURRENCY: All amounts payable by way of dividends or
distributions upon the liquidation, dissolution
or winding-up of the Company shall be paid in the
lawful money of Canada.
NOTICE RIGHTS: Except as provided by law or as described
in this paragraph, holders of the Shares shall
not be entitled as such to receive notice of any
meeting of holders of any other class of shares
of the Company.
The Company shall provide 60 days' prior
notice to its shareholders
87
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before it may (a) issue in any period of twelve
consecutive months ending on or prior to March
31, 2002 more than 1,000,000 Class B Voting
Common Shares or more than 1,000,000 Class A
Common Shares, excluding shares issued for per
share consideration equal to or exceeding $1.00
per share, or (b) subdivide on or prior to March
31, 2002 any outstanding Class B Voting Common
Shares.
The Company shall provide 180 days' notice to
its shareholders prior to taking any corporate
action that would diminish or remove the
limitation on liability of shareholders provided
for under subsection 45(1) of the Canada Business
Corporations Act.
VOTING RIGHTS: Except as provided by law, holders of the
Shares shall not be entitled as such to vote.
The approval of the holders of the Shares with
respect to any matter that requires their
approval may be given by special resolution
either in writing by the holders of two-thirds of
the Shares then outstanding or passed by
two-thirds of the votes cast on such matter at a
special meeting called and held for the purpose
of considering the same at which one or more
holders of not less than 25% of the Shares then
outstanding are present in person or represented
by proxy. Each Share shall entitle the holder
thereof to one vote on those matters on which
such holders are entitled as such to vote.
SCHEDULE 2.7 (2)
TERM SHEET
CANCO 1
CLASS B VOTING COMMON SHARES
------------------------------------------------------------------------------
ISSUER: Canco 1 (the "Company").
ISSUE: Class B Voting Common Shares (the "Shares").
AUTHORIZED NUMBER: The Company will be authorized to issue
an unlimited number of Shares.
88
-3-
DIVIDENDS: Each Share will entitle the holder thereof to
dividends if, as and when declared by the
Company, subject to the rights of holders of
classes of shares ranking equally with or ahead
of the Shares.
PRIORITY: The Shares will rank equally with the Class A
Non-Voting Common Shares of the Company and
behind any other class of shares in the capital
of the Company from time to time, if the
provisions of such other class so provide, with
respect to the payment of dividends and the
repayment of capital or other distributions to be
made on the liquidation, dissolution or
winding-up of the Company.
RIGHTS Subject to the rights of holders of shares having
ON LIQUIDATION: a preference over the Shares, in the event of the
liquidation, dissolution or winding-up of the
Company or any other distribution of the assets
of the Company to its shareholders for the
purpose of winding up its affairs, the holders of
the Shares and of the Class A Non-Voting Common
Shares then outstanding shall be entitled to
receive the remaining net assets of the Company,
pro rata to the number of Shares and Class A
Non-Voting Common Shares then held.
NOTICE RIGHTS: The Company shall provide 60 days' prior
notice to its shareholders before it may (a)
issue in any period of twelve consecutive months
ending on or prior to March 31, 2002 more than
1,000,000 Class B Voting Common Shares, excluding
shares issued for per share consideration equal
to or exceeding $1.00 per share, or (b)
subdivide on or prior to March 31, 2002 any
outstanding Class B Voting Common Shares.
The Company shall provide 180 days equal to or
prior notice to its shareholders of any meeting
of shareholders called to consider any proposed
corporate action that would diminish or remove
the limitation on liability of shareholders
provided for under subsection 45(1) of the
Canada Business Corporations Act.
CURRENCY: All amounts payable by way of dividends or
distributions upon the liquidation, dissolution
or winding-up of the Company shall be paid in the
lawful money of Canada.
VOTING RIGHTS: Holders of the Shares shall be entitled
as such to receive notice of and to vote at any
meeting of shareholders of the Company, subject
to the rights of holders of any other class of
shares of the Company (whether at law or as set
out in the share provisions relating to such
class of shares) to vote
89
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as a class on certain matters. Each Share shall
entitle the holder thereof to one vote on those
matters on which such holders are entitled as
such to vote.
SCHEDULE 2.7 (3)
TERM SHEET
CANCO 1
CLASS A PREFERRED SHARES
------------------------------------------------------------------------------
ISSUER: Canco 1 ("the Company").
ISSUE: Class A $1.00 Redeemable Preferred Shares (the
"Shares").
AUTHORIZED NUMBER: The Company will be authorized to issue up to
2,000,000 Shares.
REDEMPTION: Redeemable at any time after March 31, 2002 at
the option of the Company on one day's notice to
the holders at $1.00 per Share plus declared but
unpaid dividends.
DIVIDENDS: Each Share will entitle the holder thereof to
cumulative dividends, subject to the rights of
holders of classes of shares ranking equally with
or ahead of the Shares.
PRIORITY: The Shares will rank in priority to every other
class of shares in the capital of the Company
from time to time with respect to the payment of
dividends and the repayment of capital (including
by way of redemption or purchase for
cancellation) or other distributions to be made
on the liquidation, dissolution or winding-up of
the Company, to the extent of the $1.00
preference amount per Share plus declared but
unpaid dividends.
RIGHTS ON In the event of the liquidation, dissolution or
LIQUIDATION: winding-up of the Company or any other
distribution of the assets of the Company to its
shareholders for the purpose of winding up its
affairs, the holders of the Shares then
outstanding shall be entitled to receive $1.00
per Share plus declared but unpaid dividends from
the remaining net assets of the Company in
preference to holders of shares of every other
class.
90
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CURRENCY: All amounts payable by way of dividends,
redemption price or distributions upon the
liquidation, dissolution or winding-up of the
Company shall be paid in the lawful money of
Canada.
VOTING RIGHTS: Except as provided by law, holders of the
Shares shall not be entitled as such to receive
notice of or to vote at any meeting of the
holders of shares of the Company.
91
SCHEDULE 2.9 (1)
TERM SHEET
PUT-CALL AGREEMENT
------------------------------------------------------------------------------
PARTIES: First Union Real Estate Equity and Mortgage
Investments, a business trust existing under the
laws of the State of Ohio ("FUR").
Impark Investments Inc. ("Investco")
and the Onex Associates holding Shares at or
immediately prior to the Time of Closing
SUBJECT SHARES: Class A Non-Voting Common Shares in the
capital of Canco 1 acquired by Investco and the
Onex Associates from Canco 1 at the Time of
Closing pursuant to the Share Purchase Agreement
(the "Shares").
CURRENCY: Unless otherwise specified, all dollar amounts
set out herein are expressed in United States
dollars.
CONSIDERATION: Investco and the Onex Associates shall pay their
respective pro rata shares (based on the
proportion that the number of Shares held by each
such party bears to the total number of Shares
held by Investco and the Onex Associates) of Cdn.
$250,000 to FUR and grant to FUR the call rights
described below in consideration for the grant by
FUR of the put rights described below.
DEPOSIT OF ELIGIBLE Prior to the closing of the transactions
SECURITIES: contemplated by the Holdings Share Purchase
Agreement, FUR will execute and deliver the
Security Trust Indenture and will deliver to and
deposit with the Trustee Eligible Securities
having an aggregate face value (or in the case of
Eligible Securities denominated in U.S. dollars,
the Canadian Dollar Equivalent thereof) at least
equal to the aggregate issue price of the Shares
to be issued to Investco and the Onex Associates
at the closing. Such Eligible Securities will
secure the obligations of FUR under the Put-Call
Agreement and under the Security Trust Indenture.
PARTIAL PUT If, at the end of any calendar quarter ending
RIGHT: on or after September 30, 1998, the Total Asset
Value of FUR equals or exceeds $750 million for
the first time after the date of the Put-Call
Agreement but does not exceed
92
-2-
$1 billion, then Investco and the Onex Associates
will be entitled to put to FUR one-half (but not
less or more than one-half) of the Shares held by
them as at the end of such calendar quarter, at
the put price prevailing as at the date of
closing such put transaction, as indicated in
Appendix A hereto.
TRIGGER EVENT Investco and the Onex Associates will have the
PUT RIGHT: right following the occurrence of the Trigger
Event (as defined below) to sell all but not less
than all of the outstanding Shares held by them
to FUR at the put price prevailing as at the date
of closing such put transaction, as indicated in
Appendix A hereto.
TRIGGER EVENT: The first to occur of the following events and
circumstances shall be the "Trigger Event":
1. The Total Asset Value of FUR equalling
or exceeding $1.0 billion at the end of
any calendar quarter ending on or after
September 30, 1998.
2. The effective date (as determined by
the enacting or issuing governmental
body) on which (i) section 856(c)(5)(B)
of the U.S. Internal Revenue Code of
1986, as amended, insofar as such
section requires that a real estate
investment trust's total assets "be
limited in respect of any one issuer to
an amount not greater in value than 5%
of the value of the total assets of the
[REIT]", is repealed by the U.S.
Congress, provided that no successor
statute or U.S. Federal administrative
rule is enacted or issued before or
contemporaneously with such repeal, or
(ii) the reference in the above-quoted
language to "5%" is amended by act of
the U.S. Congress or U.S. Federal
administrative rule to provide for a
percentage equal to or exceeding "10%".
3. First Union Management Inc. ("FUMI")
and its affiliates ceasing to own 90% of
the outstanding voting and equity shares
of Canco 1 or its successors (excluding
the Shares and shares issued to the
Management Vendors or under management
incentive and compensation
arrangements), or FUR selling
subordinated debt securities issued by
Canco 1 or its successors (unless at the
time of the sale the Total Asset Value
of FUR is less than $600 million).
4. The giving prior to March 31, 2002 of
notice by Canco 1 or its
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successor as issuer of the Shares, where
such notice is required to be given
under the articles of Canco 1, that it
(a) intends to issue more than 1,000,000
Class B Voting Common Shares in any
period of 12 consecutive months at a per
share consideration equal to or
exceeding $1 per share, (b) intends to
subdivide any outstanding Class B Voting
Common Shares or (c) intends to take any
corporate action that would diminish or
remove the limitation on liability of
shareholders provided for under
subsection 45(1) of the Canada Business
Corporations Act.
5. Any event or series of events by which
(i) any "person" or "group" (as such
terms are used in Sections 13(d) and
14(d)(2) of the United States Securities
Exchange Act of 1934 (the "Exchange
Act")) becomes, whether by means of any
issuance or direct or indirect transfer
of securities, merger, consolidation,
liquidation, dissolution or otherwise,
the "beneficial owner" (as such term is
used in Rule 13d-3 under the Exchange
Act, except that a person shall be
deemed to be a "beneficial owner" of all
securities that any such person has the
right to acquire, whether such right is
exercisable immediately or only after
the passage of time), directly or
indirectly through one or more
intermediaries, of more than 35% of the
total voting rights attaching to the
then-outstanding voting securities of
FUR or FUMI, or (ii) during any period
of two consecutive years, individuals
who at the beginning of such period
constituted FUR's board of trustees or
FUMI's board of directors (together with
any new trustees or new directors whose
election by the FUR's board of trustees
or FUMI's board of directors (as the
case may be) or whose nomination for
election by FUR's or FUMI's
stockholders, as applicable, was
approved by a vote of 66 2/3% of FUR's
trustees or FUMI's directors (as
applicable) then still in office who
were either trustees or directors (as
applicable) at the beginning of such
period or whose election or nomination
for election was previously so approved)
cease for any reason to constitute a
majority of FUR's trustees or FUMI's
directors (as applicable) then still in
office.
6. Any default under the Put-Call
Agreement or the Security Trust
Indenture (subject to a five business
day cure period following notice with
respect to defaults other than those
relating to obligations to make
payments, deposit Eligible Securities or
perfect the Trustee's security interest
in the Eligible Securities),
94
-4-
or any event of default or other
circumstance under any agreement to
which FUR is a party that automatically
or otherwise results in an acceleration
of the time for payment of any monetary
obligation of FUR in an amount exceeding
$5.0 million, unless the same has been
remedied or waived within five business
days after arising.
7. The occurrence of the day that falls 30
months after the Issue Date.
IMMEDIATE PUT: All the outstanding Shares held by Investco
and the Onex Associates may be put to FUR
immediately, without further notice, act or
formality, upon Investco providing notice to FUR
to that effect following the earliest to occur
of:
- any voluntary or involuntary act of
bankruptcy or insolvency of FUR or Canco
1 or their successors after, with
respect to involuntary acts of
bankruptcy, such cure periods as are
permitted under the principal credit
facility of FUR;
- any voluntary or involuntary step in the
dissolution, liquidation or winding-up
of FUR or Canco 1 or their successors
after, with respect to involuntary acts
of bankruptcy, such cure periods as are
permitted under the principal credit
facility of FUR; or
- the commencement on behalf of FUR in any
court of competent jurisdiction of any
action to challenge, or the inclusion in
pleadings filed on behalf of FUR with
any court of competent jurisdiction of a
request for relief that challenges, the
validity of the Put-Call Agreement or
the Security Trust Indenture.
The transfer of title to the Shares in this
situation will be deemed to occur immediately
upon delivery of such notice, with the put price
being held by FUR in trust for Investco and the
Onex Associates beginning upon such delivery, to
be released upon surrender of the Share
certificates. Provided that such exercise notice
is duly delivered, the immediate put will so
occur notwithstanding whether any other notice of
exercise of a put or call right, or notice of an
election to delay the closing of a put
transaction, has previously been given. The
provisions of this section override the other
provisions of this term sheet relating to
exercise periods and closing periods. The put
price shall be that prevailing on the date of
delivery of such notice, as indicated in Appendix
A hereto.
95
-5-
FUR CALL RIGHTS: FUR will have the right during a
30-day period following the first anniversary of
the occurrence of the Trigger Event to acquire
all of the outstanding Shares from Investco and
the Onex Associates at the call price prevailing
as at the date of closing such call transaction,
as indicated in Appendix A hereto.
FUR will have an additional call right during a
30-day period following the second anniversary of
the occurrence of the Trigger Event to acquire
all of the outstanding Shares from Investco and
the Onex Associates at the call price prevailing
as at the date of closing such call transaction,
as indicated in Appendix A hereto.
FUR EXTENSION RIGHT: If:
- the Trigger Event occurs on the day that
falls 30 months after the Issue Date
(without the occurrence at such time of
any condition described in paragraphs 3
to 6 of the definition of "Trigger
Event"), and Investco's and the Onex
Associates' put rights are exercised by
them;
- during the period between the exercise
date and the closing, FUR elects by
notice in writing given to the Trustee
and Investco to delay the closing until
the day that falls 36 months after the
Issue Date; and
- such notice is accompanied by a payment
to Investco and the Onex Associates
equal to 3% of the initial issue price
of the Shares then held by such parties;
then the closing of the put transaction will
occur on the day that falls 36 months after the
Issue Date and at the put price prevailing as at
the date of closing such put transaction, as
indicated in Appendix A hereto; PROVIDED THAT
should any of the events or circumstances
described in paragraphs 3 to 6 of the definition
of "Trigger Event" occur or arise after such
election is made, then the closing of the put
transaction will be governed by the provisions
under "Exercise of Put/Call Rights and Closing
Periods". The occurrence of such events or
circumstances shall be for such purpose the date
of exercise of the put option.
96
-6-
EXERCISE OF Investco will be able to exercise, on behalf of
PUT/CALL RIGHTS itself and behalf of each of the Onex Associates,
AND CLOSING any put right hereunder by notice in writing
PERIODS: given to FUR at any time following the
satisfaction of any condition to the exercise of
such right until the 30th day following the
giving of notice by FUR of such event. As an
exception to that, Investco may not exercise any
put right during the final 15 days of any
calendar quarter. For greater certainty, each
Onex Associate shall be bound by the exercise of
any put right by Investco and shall not be
entitled to exercise any put right independently
of Investco.
The closing of any put transaction will occur 30
days after the exercise of the put right, except
that if a put right is exercised between 30 and
16 days (inclusive) prior to the end of a
calendar quarter, then the closing of the
corresponding put transaction will occur 5 days
prior to the last day of such calendar quarter.
In each case, closing will be effected by the
tendering of the put price against delivery of
the relevant Share certificates.
FUR's call rights can be exercised on 30 days'
notice and the closing of the purchase and sale
transaction will occur 30 days after the giving
of such notice, with closing being effected by
the tendering of the call price against delivery
of the Share certificates.
ADJUSTMENTS TO With respect to any put or call right that
PUT/CALL PRICE: results in the determination of the put or call
price on or as of a date falling between two
dates set out in Appendix A, the price per share
will be calculated by dividing (a) the amount by
which the put or call price on the later of such
dates exceeds the price on the former date by (b)
the number of days between such dates and (c)
multiplying the result by the number of days from
but not including the former date to and
including the date of closing.
TITLE TO SHARES: At the time of the closing of any put
or call, Investco and the Onex Associates shall
represent and warrant to FUR that they have good
and marketable title to the Shares being
transferred, free and clear of any lien, charge,
pledge, encumbrance, security interest, call,
option or adverse claim, except pursuant to the
provisions of the Put-Call Agreement and the
Depositary Agreement.
97
-7-
ADDITIONAL FUR shall be required every six months to
ELIGIBLE purchase additional Eligible Securities having an
SECURITIES: aggregate cost, excluding commissions, fees and
expenses of acquisition, at least equal to the
aggregate amount of increase over such six months
in the aggregate put price of the Shares held by
Investco and the Onex Associates. In the event of
the exercise of a partial put right, the Eligible
Securities may be reduced so that those remaining
have an aggregate cost, as calculated above, at
least equal to the aggregate put price of the
remaining Shares held by Investco and the Onex
Associates. FUR shall also be required every six
months to purchase additional Eligible Securities
as necessary to offset any diminution in the
Canadian dollar equivalent value of the Eligible
Securities then held by the Trustee below the
then prevailing put and call price to the extent
caused by the effect on U.S. dollar denominated
Eligible Securities of any reduction in the value
of the U.S. dollar against the Canadian dollar.
These additional Eligible Securities shall be
delivered to and deposited with the Trustee to be
held as security for the obligations of FUR under
the Put-Call Agreement and under the Security
Trust Indenture. FUR may hedge the foreign
exchange risk in some other manner with the prior
written consent of Investco, not to be
unreasonably withheld.
TRANSFER OF Prior to the expiry of FUR's call rights
SHARES: hereunder, Investco may transfer Shares
only to its affiliates, to employees, officers
and directors of Onex Corporation, to
corporations pursuant to which such individuals
participate in Onex's management investment plan,
to FUR and to FUMI and the Onex Associates may
transfer Shares only to, in the case of an Onex
Associate that is a corporation, an affiliate or
shareholder of such corporation or to any
corporation that is an affiliate of Onex
Corporation or, in the case of any other Onex
Associate, to a corporation controlled, directly
or indirectly, by such Onex Associate or
Associates of such Onex Associate or to any
corporation that is an affiliate of Onex
Corporation, to FUR and to FUMI provided that in
each case the transferee agrees in the prescribed
form to be bound by the provisions of the
Put-Call Agreement and the Depositary Agreement
and to retain the status which permitted it to be
a transferee. FUR will use its best efforts to
secure any Canco 1 corporate or shareholder
approval of any transfer of Shares permitted by
the Put-Call Agreement or resulting from the
exercise of any put or call right. If at any time
Canco 1 has ceased to be a "private company"
within the meaning of the Securities Act
(Ontario), FUR will pay any fee charged by any
securities regulatory authority in connection
with a put or call transaction hereunder. The
Shares will be held in accordance with a
depositary agreement both pending and following
any
98
-8-
permitted transfer. Nothing herein shall
prevent Investco from acquiring any Class A
Common Shares held by Management Vendors provided
that such Class A Common Shares shall not
constitute Shares for the purposes of the
Put-Call Agreement.
RECOURSE: Notwithstanding any failure of FUR to fulfill its
obligations under the Put-Call Agreement or the
Security Trust Indenture, Investco and the Onex
Associates shall have recourse in executing any
judgment against FUR to all the property and
assets of FUR other than:
(a) property directly or indirectly
acquired by Canco 1 on the Closing Date
in connection with the acquisition of the
Purchased Shares (including the Real
Property);
(b) property, the fair market value of
which is wholly or partly attributable to
the property referred to in (a);
(c) property, the fair market value of
which is determinable primarily by
reference to the fair market value of,
or any proceeds of disposition of, the
property referred to in (a);
(d) an interest in, or indebtedness of,
any corporation, partnership, trust or
other person that directly capitalizes
Canco 1 in whole or in part; and
(e) substitutions for any property,
interest or indebtedness referred to in
(a), (b), (c) or (d) above;
provided that in no event shall recourse not be
available to those assets subject to the Security
Trust Indenture.
AMENDMENTS: Any amendments to the Put-Call Agreement may be
made by agreement in writing between FUR and
Investco and the provisions of such agreement may
be waived by such of those two parties as is the
beneficiary thereof. Any such amendment to the
Put-Call Agreement shall be binding upon the Onex
Associates without any further act or formality
on their part.
FUR RIGHTS FUR and its affiliates will agree not to exercise
RELATING any class voting rights associated with Shares
TO SHARES: held by them prior to March 31, 2002.
99
-9-
PROTECTIVE The Put-Call Agreement will contain
PROVISIONS: provisions providing that the put and call rights
thereunder relate to all securities into which
the Shares may be converted, exchanged,
consolidated or subdivided upon any
reorganization of the capital of Canco 1 or its
successors, or any arrangement or amalgamation or
other like transaction relating to such persons,
with corresponding changes to the put and call
prices.
NOTICES: FUR will be required to provide timely notice to
Investco of the occurrence of any event or
circumstance giving rise to the ability to
exercise any put rights hereunder. FUR shall
provide to Investco on request any additional
information reasonably necessary to permit
Investco to determine whether such an event or
circumstance may occur or whether it has occurred
at any time. FUR shall provide to Investco on a
quarterly basis a certificate of the nature
described in the definition of "Total Asset
Value" below.
ASSIGNMENT: The benefit of this agreement can be assigned
only to the persons and in the manner that Shares
can be transferred hereunder. References to
Investco, the Onex Associates and Canco 1 include
their successors and, in the case of Investco and
the Onex Associates, their permitted assigns.
GOVERNING LAW: Province of Ontario.
DEFINITIONS: "CANADIAN DOLLAR EQUIVALENT" has the meaning
given to it in the Holdings Share Purchase
Agreement.
"ELIGIBLE SECURITIES" means United States
Government or Government of Canada debt
securities denominated in U.S. or Canadian
dollars and having a term to maturity at the time
of purchase by FUR or by the Trustee of not more
than one year.
"TOTAL ASSET VALUE" means at any time the "value
of the total assets" of FUR determined at such
time within the meaning of section 856(c)(5) of
the United States Internal Revenue Code,
expressed in United States dollars, as certified
with supporting calculations and information by
two senior officers of FUR in accordance with the
Put-Call Agreement.
"HOLDINGS SHARE PURCHASE AGREEMENT" means the
share purchase agreement made as of February 18,
1997, as amended to and including March 11, 1997,
relating to the purchase and sale of the
outstanding
100
-10-
shares of Imperial Holdings No. 2 Inc.
"ISSUE DATE" means the date on which the Shares
are first issued.
"TRUSTEE" means Trust Company, a trust
company existing under the laws of Canada or of a
province of Canada, as trustee for Investco and
the Onex Associates.
APPENDIX A
TO SCHEDULE 2.9 (1)
DATE OF CLOSING OF
PUT/CALL TRANSACTION PURCHASE PRICE(1)
------------------------------------------------------------------------------------
September 30, 1997 Issue Price(2) x 1.04
------------------------------------------------------------------------------------
March 31, 1998 September 30, 1997 Price x 1.045
------------------------------------------------------------------------------------
September 30, 1998 March 31, 1998 Price x 1.05
------------------------------------------------------------------------------------
March 31, 1999 September 30, 1998 Price x 1.055
------------------------------------------------------------------------------------
September 30, 1999 March 31, 1999 Price x 1.06
------------------------------------------------------------------------------------
March 31, 2000 September 30, 1999 Price x 1.065
------------------------------------------------------------------------------------
September 30, 2000 March 31, 2000 Price x 1.07
------------------------------------------------------------------------------------
March 31, 2001 September 30, 2000 Price x 1.075
------------------------------------------------------------------------------------
September 30, 2001 March 31, 2001 Price x 1.08
------------------------------------------------------------------------------------
March 31, 2002 September 30, 2001 Price x 1.085
------------------------------------------------------------------------------------
--------
(1) The per Share price is this amount divided by the number of Shares
originally issued in accordance with the Share Purchase Agreement.
(2) Issue Price equates to the Common Share Allocation Amount in the Share
Purchase Agreement (in Canadian dollars).
101
SCHEDULE 2.9 (2)
TERM SHEET
SECURITY TRUST INDENTURE
--------------------------------------------------------------------------------
PARTIES: First Union Real Estate Equity and Mortgage
Investments, a business trust existing under the
laws of the State of Ohio ("FUR").
Trust Company (the
"Trustee"), a trust company existing under
the laws of Canada or of a province of Canada,
as trustee for Investco and the permitted
transferees of its Class A Non-Voting Common
Shares in the capital of Canco 1 (the "Shares").
"Investco" herein means Investco or any
permitted transferee of its Shares.
Impark Investments Inc. ("Investco") and its
permitted assigns under the Share Purchase
Agreement and permitted transferees of the Shares.
DEPOSIT OF Eligible Securities will be deposited with the
ELIGIBLE Trustee on the Issue Date and from time to time
SECURITIES: thereafter to secure the obligations of FUR under
the Put-Call Agreement and under the Security
Trust Indenture. The Trustee will reinvest
Eligible Securities that mature, and any
distributions on or proceeds of Eligible
Securities, into new Eligible Securities until
distribution or realization in accordance with the
indenture.
RIGHTS AND Upon the occurrence of any event of default under
REMEDIES: the Put-Call Agreement or under the Security Trust
Indenture (subject to a five business day cure
period with respect to defaults other than those
relating to obligations to make payments, deposit
Eligible Securities or perfect the Trustee's
security interest in the Eligible Securities),
the Trustee will be entitled to realize on the
trust assets and to exercise its remedies at law
and in equity. Other than with respect to the
failure of FUR to pay any amount owing upon an
immediate put of the Shares (in which case the
Trustee shall be required to exercise its
remedies), the Trustee will take enforcement
action only upon the direction of Investco. In
other respects, the Security Trust Indenture will
include customary enforcement rights and remedies.
ALLOCATION All income earned on the Eligible Securities
OF INCOME: held at any time shall be solely for the account
of FUR. All such amounts shall automatically be
deposited with and held by the Trustee as
additional collateral under the Security Trust
Indenture, and the Trustee shall invest or
reinvest
102
- 2 -
the same in Eligible Securities
TRUSTEE Investco may direct the Trustee to do any act or
DIRECTIONS: thing in accordance with the Security Trust
Indenture, except that prior to any default, FUR
may direct the Trustee as to the manner in which
the Trustee may comply with its obligations to
reinvest in accordance with the Security Trust
Indenture any distributions or proceeds received
on or from Eligible Securities.
TRUSTEE FEES: The fees and expenses of the Trustee shall be paid
by FUR.
TRUSTEE The Trustee shall retain all evidences of
PROVISIONS: ownership of the Eligible Securities until they
are sold, returned to FUR or otherwise dealt with
in accordance with the Security Trust Indenture.
The Trustee shall not be required to do any act or
thing except as specifically provided for in the
Security Trust Indenture or pursuant to a
direction properly given in accordance with the
Security Trust Indenture. The Trustee shall be
entitled to retain legal advice with respect to
any ambiguity in its obligations under the
Security Trust Indenture.
INDEMNITY: FUR shall indemnify the Trustee against any loss
or claim relating to any act or omission under the
Security Trust Indenture, excluding gross
negligence and wilful misconduct.
RESIGNATION AND The Trustee may resign on six months' notice,
REPLACEMENT: such resignation to be effective upon the
appointment of a replacement trustee, and any
party may apply on notice to the other parties to
the Ontario Court (General Division) for an order
appointing a replacement trustee if the parties
have failed to do so within such six-month period.
Investco may, by direction, replace the Trustee
with another trust company (incorporated under the
laws of Canada or of a province of Canada) that is
acceptable to FUR, acting reasonably.
AMENDMENTS: The Security Trust Indenture may be amended from
time to time by agreement in writing between FUR
and Investco, except that any amendment affecting
the scope of responsibility or the indemnity of
the Trustee shall require the consent of the
Trustee.
NOTICES: The Trustee will be entitled to receive the same
notices that Investco is entitled to receive under
the Put-Call Agreement.
TERMINATION AND The obligations of FUR under the Security Trust
DISCHARGE: Indenture shall terminate
103
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when FUR's obligations to Investco under the
Put-Call Agreement and the Security Trust
Indenture have been performed in full and the
Put-Call Agreement has terminated in accordance
with its terms. At such time, the Trustee shall
release all remaining trust assets (net of the
Trustee's fees and expenses) to FUR and discharge
any security interests against them.
GOVERNING LAW: Province of Ontario.
DEFINITIONS: "ELIGIBLE SECURITIES" means United States
Government or Government of Canada debt
securities denominated in U.S. or Canadian dollars
and having a term to maturity at the time of
purchase by FUR or by the Trustee of not more than
one year.
104
SCHEDULE 2.9 (3)
TERM SHEET
DEPOSITARY AGREEMENT
------------------------------------------------------------------------------
PARTIES: First Union Real Estate Equity and Mortgage
Investments, a business trust existing under the
laws of the State of Ohio ("FUR").
Investco (which shall include the permitted
transferees of it Class A Non-Voting Common Shares
(the "Shares") in the capital of Canco 1).
(the "Depositary").
DEPOSIT OF SHARES: Upon the issuance of the Shares, the certificates
representing the same shall be deposited with and
held by the Depositary to be dealt with in
accordance with this agreement. All non-cash
distributions resulting from a share split or
extraordinary distribution on the Shares that
reduces the capital of Canco 1, which
distributions represent ownership or equity
interests in Canco 1, shall be held by the
Depositary in the same manner as the Shares are
held.
105
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DEALING WITH SHARES: The Depositary shall deal with the Shares as
follows:
1. At all times and in all
circumstances, the Depositary shall
deal with the Shares as directed in
writing by FUR and Investco acting
jointly.
2. In the event the Depositary
believes, after obtaining legal
advice, that its obligations with
respect to the Shares is subject to
ambiguity, the Depositary may apply
for and comply with the directions
of a court of competent
jurisdiction.
3. At any time, the Depositary shall
permit the certificates
representing the Shares to be
registered in the name of any
corporation that an officer of
Investco swears in an affidavit is
an affiliate of Investco and a
permitted transferee of such Shares
pursuant to the provisions of the
put-call agreement (provided that
the Depositary shall not release
the Shares to such corporation).
4. At any time when the Depositary is
directed by Investco to deliver the
Shares to FUR in connection with the
exercise of Investco's put right,
the Depositary shall do so.
5. At any time when the Depositary is
directed by FUR to deliver the
Shares to FUR in connection with
the exercise of FUR's call right,
the Depositary shall do so upon
receipt of funds in the amount
determined by reference to the
put/call payment table (which will
be in the form annexed to the
put-call agreement).
6. On October 31, 2001, the Depositary
shall deliver to Investco any
Shares then held by the Depositary.
DIVIDENDS: All dividends and distributions, other than those
that are to be held by the Depositary as provided
above, shall be paid by the Depositary to
Investco.
NATURE OF DEPOSITARY Investco will retain ownership of the Shares
INTEREST: until it disposes of them in accordance with its
obligations, and all income earned on the Shares
at any time shall be solely for the account of
Investco.
DEPOSITARY FEES: The fees and expenses of the Depositary shall be
paid by FUR.
DEPOSITARY The Depositary shall retain all evidences of
PROVISIONS: ownership of the Shares until
106
- 3 -
they are dealt with in accordance with this
agreement. The Depositary shall not be required to
do any act or thing except as specifically
provided for in this agreement or pursuant to a
direction properly given in accordance with this
agreement. The Depositary shall be entitled to
retain legal advice with respect to any ambiguity
in its obligations under this agreement.
INDEMNITY: FUR shall indemnify the Depositary against any
loss or claim relating to any act or omission
under this agreement, excluding gross negligence
and wilful misconduct.
RESIGNATION AND The Depositary may resign on six months' notice,
REPLACEMENT: such resignation to be effective upon the
appointment of a replacement depositary, and any
party may apply to the Ontario Court (General
Division) for an order appointing a replacement
depositary if the parties have failed to do so
within such six-month period.
FUR may, by direction, replace the Depositary with
another depositary that is acceptable to Investco,
acting reasonably.
AMENDMENTS: This agreement may be amended from time to time by
agreement in writing between FUR and Investco,
except that any amendment affecting the scope of
responsibility or the indemnity of the Depositary
shall require the consent of the Depositary.
TERMINATION AND The obligations of the Depositary shall terminate
DISCHARGE: when all of the Shares have been dealt with in
accordance with the agreement.
GOVERNING LAW: Province of Ontario.
107
SCHEDULE 10.6(b)
----------------
ONEX VENDOR NOTICE
------------------
TO: FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
REFERENCE is made to the share purchase agreement made the 18th
day of February, 1997 between Impark Investments Inc. ("Investco") and First
Union Real Estate Equity and Mortgage Investments (the "Purchaser"), to which
the following persons (the "Management Vendors") became parties in accordance
therewith pursuant to instruments of adhesion dated February 21, 1997:
Xxxx X.X. Xxxxxx, Xxxxxxx X. Xxxxxx, J. Xxxxx Xxxxxxx (and Laurentian Bank of
Canada in trust for account no. V002679, a registered retirement savings plan
trust of which J. Xxxxx Xxxxxxx is the sole beneficiary), Xxxxxxx X. Xxxxxxx
(and RBC Dominion Securities Inc. in trust for account no. 000-00000-00, a
registered retirement savings plan trust of which Xxxxxxx X. Xxxxxxx is the
sole beneficiary), J. Xxxxx Xxxxxxx (and Gundyco in trust for account no.
000-00000-00, a registered retirement savings plan trust of which
J. Xxxxx Xxxxxxx is the sole beneficiary), Xxxxx XxxXxx, Xxxxxxx X. Xxxxxxx,
Xxxxxx X. Xxxxxx (and Gundyco in trust for account no. 000-00000-00, a
registered retirement savings plan trust of which Xxxxxx X. Xxxxxx is the sole
beneficiary), Xxxxx X. Xxxxxx (and Midland Xxxxxx Capital Inc. in trust for
account no. 8RABNQS, a registered retirement savings plan trust of which Xxxxx
X. Xxxxxx is the sole beneficiary), Xxxxxx X. XxxXxxxxx (and Gundyco in trust
for account no. 000-00000-00, a registered retirement savings plan trust of
which Xxxxxx X. XxxXxxxxx is the sole beneficiary), Xxxxxx Xxxxxxx, Xxxxxx
Xxxxxxxx and Xxxxx Xxxxxx, as amended by an amending agreement (the "First
Amending Agreement") made as of February 26, 1997 by the foregoing parties and
by further amending agreements made as of March 2, 1997 and as of March 7, 1997
between the Purchaser and Investco (both in its own capacity and as agent and
attorney for the Management Vendors and as of March 17, 1997 between the
parties thereto (such agreement, as so amended, being hereinafter referred to
as the "Share Purchase Agreement"). Capitalized terms used without other
definition herein and that are defined in the Share Purchase Agreement have
the respective meanings herein as are ascribed to them in the Share Purchase
Agreement.
WHEREAS is an Onex Associate and is the registered and
beneficial holder of common shares in the capital of Holdco and whereas
is the optionee under an option granted by Impark Holdings Inc. on
November 11, 1996 in respect of common shares in the capital of Holdco
(for purposes of this instrument, each of and is an "Onex
Vendor" and the common shares held by either Onex Vendor or that either Onex
Vendor has the right to acquire under option are herein referred to as the
"Sale Shares");
NOW THEREFORE for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by the parties, the parties
agree as follows:
108
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1. Notwithstanding section 4 of the acknowledgement executed and delivered
by the Onex Vendors in accordance with Section 10.6 of the Share
Purchase Agreement, the Onex Vendors shall sell all of the Sale Shares
to the Purchaser at the Time of Closing in accordance with the Share
Purchase Agreement and on the terms and subject to the conditions
therein set forth. Except as provided for herein, such acknowledgement
remains in full force and effect.
2. The Onex Vendors are [ ] are not [ ] NON-RESIDENTS of Canada within the
meaning of the Income Tax Act (Canada). If the Onex Vendors are
non-residents of Canada as so defined, the Onex Vendors will apply for
certificates under section 116 of the Income Tax Act (Canada) as
contemplated by Section 8.12 of the Share Purchase Agreement.
3. Investco shall not be required to purchase the Sale Shares or to sell
them to the Purchaser under the Share Purchase Agreement.
4. The Purchaser shall be required to purchase the Sale Shares in
accordance with the Share Purchase Agreement and on the terms and
subject to the conditions therein set forth.
DATED as of this _____ day of ________________, 1997.
SIGNED, SEALED AND DELIVERED )
in the presence of )
)
)
) ---------------------------------
) [NAME OF INDIVIDUAL ONEX VENDOR]
)
IMPARK INVESTMENTS INC. [NAME OF CORPORATE
ONEX VENDOR]
by by
---------------------------- -----------------------------
109
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Acknowledged and agreed to as of the
date set forth above.
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
by
----------------------------
110
SHARE PURCHASE FIFTH AMENDING AGREEMENT
REFERENCE is made to the share purchase agreement made the
18th day of February, 1997 between Impark Investments Inc. ("Investco") and
First Union Real Estate Equity and Mortgage Investments ("FUR"), to which the
following persons (the "Management Vendors") became parties in accordance
therewith pursuant to instruments of adhesion dated February 21, 1997: Xxxx X.X.
Xxxxxx, Xxxxxxx X. Xxxxxx, J. Xxxxx Xxxxxxx (and Laurentian Bank of Canada in
trust for account no. V002679, a registered retirement savings plan trust of
which J. Xxxxx Xxxxxxx is the sole beneficiary), Xxxxxxx X. Xxxxxxx (and RBC
Dominion Securities Inc. in trust for account no. 000-00000-00, a registered
retirement savings plan trust of which Xxxxxxx X. Xxxxxxx is the sole
beneficiary), J. Xxxxx Xxxxxxx (and Gundyco in trust for account no.
000-00000-00, a registered retirement savings plan trust of which J. Xxxxx
Xxxxxxx is the sole beneficiary), Xxxxx XxxXxx, Xxxxxxx X. Xxxxxxx, Xxxxxx X.
Xxxxxx (and Gundyco in trust for account no. 000-00000-00, a registered
retirement savings plan trust of which Xxxxxx X. Xxxxxx is the sole
beneficiary), Xxxxx X. Xxxxxx (and Midland Xxxxxx Capital Inc. in trust for
account no. 8RABNQS, a registered retirement savings plan trust of which Xxxxx
X. Xxxxxx is the sole beneficiary), Xxxxxx X. XxxXxxxxx (and Gundyco in trust
for account no. 000-00000-00, a registered retirement savings plan trust of
which Xxxxxx X. XxxXxxxxx is the sole beneficiary), Xxxxxx Xxxxxxx, Xxxxxx
Xxxxxxxx and Xxxxx Xxxxxx, as amended by an amending agreement (the "First
Amending Agreement") made as of February 26, 1997 by the foregoing parties and
by further amending agreements made as of March 2, 1997 and as of March 7, 1997
between the Purchaser and Investco (both in its own capacity and as agent and
attorney for the Management Vendors and by a further amending agreement made as
of March 17, 1997 made between the parties to the First Amending Agreement (such
agreement, as so amended, being hereinafter referred to as the "Share Purchase
Agreement").
WHEREAS FUR has assigned its rights and benefits under the
Share Purchase Agreement to First Union Management, Inc. (the "Purchaser");
AND WHEREAS the parties to the Share Purchase Agreement wish
to amend such agreement on the terms set out herein;
NOW THEREFORE in consideration of the premises and the
respective covenants set forth below, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each of the parties hereto, the parties hereby agree as follows:
1. DEFINED TERMS AND REFERENCES. Capitalized terms that are
used herein without other definition and that are defined in the Share
Purchase Agreement shall have the respective meanings herein that are
ascribed thereto in the Share Purchase Agreement, unless the context
otherwise requires. References herein to Sections mean Sections of the
Share Purchase Agreement.
2. CLOSING DATE. Notwithstanding Section 1.1(i), the undersigned
agree that the Closing Date shall be April 17, 1997.
3. CLOSING DEBT. Notwithstanding Section 1.1(j), the undersigned
agree that the Closing Debt shall be $36,366,847.
111
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4. COMMON SHARE ALLOCATION AMOUNT. Notwithstanding Section
1.1(l.1), the undersigned agree that the Common Share Allocation Amount
shall be $16,222,600.
5. ALLOCATION OF PORTION OF PURCHASE PRICE. Notwithstanding
Section 2.3, the aggregate Purchase Price payable under Section 2.2 on
the Closing Date to Investco and the Onex Vendors shall be allocated as
provided for in Schedule 1 hereto.
6. CONFIRMATION OF SHARE PURCHASE AGREEMENT. The Share Purchase
Agreement remains in full force and effect, unamended except as
specifically provided in paragraphs 2 to 5, inclusive, above.
7. COUNTERPARTS. This agreement may be executed in any number
of counterparts, each of which shall constitute an original and all of
which taken together shall constitute one and the same instrument, and
this agreement shall be effective as of the latest date on which any
counterpart is shown to have been executed. Delivery hereof and of any
counterpart to any party may be effected by facsimile transmission made
to that party.
IN WITNESS WHEREOF this amending agreement has been executed
by the parties as of the 15th day of April, 1997.
IMPARK INVESTMENTS INC. FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
by /s/ Authorized Signer by /s/ Authorized Signer
--------------------------- ---------------------------
FIRST UNION MANAGEMENT, INC.
by /s/ Authorized Signer
---------------------------
-----------------------------
The undersigned acknowledges and consents to
the foregoing as of the 17th day of April, 1997
ONEX CORPORATION
by /s/ Authorized Signer
--------------------------
112
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SCHEDULE 1
TO THE SHARE PURCHASE FIFTH AMENDING AGREEMENT
------------------------------ ---------------------------- --------------------------- ----------------------------
Vendor Section 2.3(a) Allocation Section 2.3(b) Allocation Section 2.3(c) Allocation
of Escrow Amount of Class A Common Shares of Remaining Cash
------------------------------ ---------------------------- --------------------------- ----------------------------
Investco $1,813,169.55 14,006,307 $43,437,178.69
------------------------------ ---------------------------- --------------------------- ----------------------------
1170821 Ontario Inc. nil 52,243 53,046.81
------------------------------ ---------------------------- --------------------------- ----------------------------
1170809 Ontario Inc. nil 43,993 44,669.68
------------------------------ ---------------------------- --------------------------- ----------------------------
1170810 Ontario Inc. nil 49,491 50,253.52
------------------------------ ---------------------------- --------------------------- ----------------------------
1170812 Ontario Inc. nil 49,491 50,253.52
------------------------------ ---------------------------- --------------------------- ----------------------------
1170697 Ontario Inc. nil 8,250 8,377.12
------------------------------ ---------------------------- --------------------------- ----------------------------
1170819 Ontario Inc. nil 8,250 8,377.12
------------------------------ ---------------------------- --------------------------- ----------------------------
1170698 Ontario Inc. nil 13,735 13,968.22
------------------------------ ---------------------------- --------------------------- ----------------------------
Xxxxxxx X. Xxxxxx nil 78,255 368,555.88
------------------------------ ---------------------------- --------------------------- ----------------------------
Xxxxx X. Xxxxxxxx nil 65,899 310,362.57
------------------------------ ---------------------------- --------------------------- ----------------------------
Xxxxxxx Xxxx nil 74,138 349,157.01
------------------------------ ---------------------------- --------------------------- ----------------------------
Xxxx X. Xxxxxx nil 74,138 349,157.01
------------------------------ ---------------------------- --------------------------- ----------------------------
Xxxxxx X. Xxx nil 12,356 58,193.32
------------------------------ ---------------------------- --------------------------- ----------------------------
Xxxxxx X. Xxxxxxx nil 12,356 58,193.32
------------------------------ ---------------------------- --------------------------- ----------------------------
Xxxxxx X. Xxxxxx nil 20,606 96,975.96
------------------------------ ---------------------------- --------------------------- ----------------------------
Xxxx X. Xxxxx nil 123,629 399,410.53
------------------------------ ---------------------------- --------------------------- ----------------------------
TOTAL $1,813,169.55(1) 14,693,137(2) $45,656,130.28(3)
------------------------------ ---------------------------- --------------------------- ----------------------------
Notes:
--------
[FN]
1. Proportionate share of Investco and Onex Vendors of $2,001,909 Escrow Amount.
Investco and the Onex Vendors hold an aggregate of 31,390,000 Purchased Shares,
out of a total of 34,657,500, or 90.572026256%.
2. The Common Share Allocation Amount is U.S. $11,600,000 x 1.3985, or Cdn.
$16,222,600. Each Class A Common Share that is issued satisfies $1.00 of that
amount. At 90.572026256%, Investco and the Onex Vendors in aggregate are
entitled to 14,693,137 Class A Common Shares.
3. The total cash payable is $105,000,000, less Closing Debt ($38,444,347 +
$1,000,000 + $1,077,500) = $68,633,153, less the Common Share Allocation Amount
of $16,222,600 = $52,410,553, less the Escrow Amount of $2,001,909 =
$50,408,644. At 90.572026256%, the aggregate share of these Vendors is
$45,656,130.28.
