Exhibit 2.04
CONFIDENTIAL INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND IS BEING FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ANY SUCH OMISSIONS
IN THIS DOCUMENT ARE INDICATED BY THE REFERENCE
"[CONFIDENTIAL INFORMATION OMITTED]".
SHARE PURCHASE AGREEMENT
THE TORONTO-DOMINION BANK
and
BUSINESS WIND0WS INC.
and
3454916 CANADA INC.
and
CERIDIAN CANADA LTD.
and
CERIDIAN CORPORATION
and
CERIDIAN CANADA HOLDINGS, INC.
JANUARY 26,1998
TABLE OF CONTENTS
1. DEFINED TERMS AND SCHEDULES 2
1.1 Definitions 2
1.2 Additional Definitions 6
1.3 Exhibits and Schedules 7
1.4 Headings and Table of Contents 7
1.5 Gender and Number 7
1.6 Currency 7
1.7 Invalidity of Provisions 8
1.8 Entire Agreement 8
1.9 Waiver and Amendment 8
1.10 Generally Accepted Accounting Principles 8
1.11 Governing Law and Attornment 8
2. PURCHASE AND SALE 9
2.1 Purchase and Sale of Assets 9
2.2 Purchase and Sale of Shares 9
2.3 Excluded Contracts and Software 9
2.4 Ancillary Agreements 9
2.5 Deliveries 9
3. PURCHASE PRICE 10
3.1 Purchase Price 10
3.2 Adjustments 10
4. REPRESENTATIONS AND WARRANTIES OF THE BANK AND BW 11
4.1 Organization, Standing and Authority 11
4.2 Authorization 12
4.3 No Conflicting Agreements 12
4.4 Bank Consents 12
4.5 The Corporation 12
4.6 Authorization 13
4.7 Consents re: the Corporation 13
4.8 Title to Shares 13
4.9 Title to Payroll Assets 13
4.10 Legal Proceedings 13
4.11 No Option 14
4.12 Conduct of Payroll Business 14
4.13 Financial Information 14
4.14 Litigation 14
4.15 Payroll Client Contracts 14
4.16 Proprietary Payroll Software 15
4.17 Labour Relations 15
(a) Employees 15
(b) Written or Oral Contracts 16
(c) Collective Agreements 16
(d) Liabilities to Employees 16
(e) Compliance with Laws 16
(f) No Changes 17
(g) Retiree Benefits 17
4.18 Payroll Trademarks 17
4.19 No Finder's Fee or Broker's Fee 18
4.20 Bank's Residence 18
4.21 Registration for Taxes 18
4.22 Plans 18
4.23 List of Customers 18
4.24 Undisclosed Liabilities 18
4.25 Operation of the Businesses 19
4.26 Product Defects 19
4.27 Organization, Standing and Authority of BW 19
4.28 BW Shares 19
4.29 BW Authorization 19
4.30 No Conflicting BW Agreements 19
4.31 BW Consents 20
4.32 Title to Assets 20
4.33 Legal Proceedings 20
4.34 No Option 20
4.35 Financial Information 20
4.36 Undisclosed Liabilities 21
4.37 Conduct of the HRMS Business 21
4.38 HRMS Litigation 21
4.39 HRMS Client Contracts 21
4.40 Proprietary HRMS Software 21
4.41 HRMS Trademarks 22
4.42 Labour Relations 23
4.43 No Finder's Fee or Broker's Fee 23
4.44 BW's Residence 23
4.45 BW Registration for Taxes 23
5. REPRESENTATIONS AND WARRANTIES OF CERIDIAN, CERIDIAN HOLDINGS AND
THE PURCHASER 23
5.1 Organization, Standing and Authorization 23
5.2 Authorization, Execution and Enforceability 23
5.3 No Conflicting Agreements 24
5.4 Consents 24
5.5 Legal Proceedings 24
5.6 Compliance with Laws 24
5.7 No Bankruptcy Proceedings 24
5.8 Organization, Standing and Authorization 25
5.9 Authorization, Execution and Enforceability
re: Ceridian and Ceridian Holdings 25
5.10 No Conflicting Agreements 25
5.11 Consents 25
5.12 Legal Proceedings 26
5.13 Authorization, Execution and Enforceability re: the
Corporation 26
5.14 No Conflicting Agreements 26
5.15 Consents 26
5.16 Duly Licenced 26
5.17 Brokers' and Finders' Fees 27
5.18 Corporation Plans 27
6. SURVIVAL AND INDEMNIFICATION 27
6.1 Survival 27
6.2 Indemnification by Bank and BW 27
6.3 Software and Trademark Indemnification 28
6.4 Indemnification by the Purchaser 30
6.5 Indemnification for Claims Other Than
Third Party Claims 31
6.6 Indemnification against Third Party Claims 31
6.7 Expiry of Liability 33
6.8 Limit 33
7. COVENANTS 33
7.1 Covenants of the Bank and BW 33
(a) Reasonable Efforts to Maintain and Preserve 33
(b) Notice of Cessation in Ordinary Course 34
(c) Covenant Not to Compete 34
(d) Non-Solicitation 35
(e) Documents 36
(o Reasonable Assistance 36
7.2 Covenants of the Purchaser and the Corporation 36
(a) Documents 36
(b) Non-Solicitation 36
(c) Receivables 37
7.3 Other Covenants 37
(a) Employees 37
(b) Bank's Benefit Plans 41
(c) Pension Plan 43
(d) Competition Act/Investment Canada Act 43
(e) Confidentiality 43
(f) Consents Required in Contracts 44
(h) Trust Funds Under Administration 44
(i) Third Party Payments 44
(j) Transfer Agreement Fees 45
(k) Returns 45
8. CONDITIONS OF CLOSING 45
8.1 For the Benefit of the Purchaser 45
(a) Representations and Warranties Remain Correct 46
(b) Compliance with Covenants 46
(c) No Actions or Proceedings 46
(d) Consents, Authorizations and Registrations 46
(e) Agreements 46
(f) Consents 47
8.2 For the Benefit of the Bank and BW 47
(a) Representations and Warranties Remain Correct 47
(b) Compliance with Covenants 48
(c) No Actions or Proceedings 48
(d) Consents, Authorizations and Registrations 48
(e) Documents 48
(o Approval 48
9. CLOSING 49
10. GENERAL PROVISIONS 49
10.1 Independent Contractors 49
10.2 Notices 49
10.3 Exclusion of Consequential Damages 50
10.4 Termination 50
10.5 Time of the Essence 51
10.6 Public Notices and Confidentiality 51
10.7 Year 2000 Estimates 51
10.8 Counterparts 51
10.9 No Assignment 51
10.10 Further Assurances 52
10.11 Language 52
10.12 Successors and Assigns 52
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made as of the 26th day of January, 1998,
AMONG:
THE TORONTO-DOMINION BANK, a Canadian chartered bank,
(hereinafter called the "Bank"),
OF THE FIRST PART,
-and-
BUSINESS WINDOWS INC., a corporation existing under the laws of
Ontario
(hereinafter called "BW'),
OF THE SECOND PART,
- and -
3454916 CANADA INC., a corporation existing under the laws of
Canada,
(hereinafter called the "Corporation"),
OF THE THIRD PART,
-and-
CERIDIAN CANADA LTD., a corporation existing under the laws of
Canada,
(hereinafter called the "Purchaser"),
OF THE FOURTH PART,
- and -
CERIDIAN CORPORATION, a corporation existing under the laws of
Delaware,
(hereinafter called "Ceridian"),
OF THE FIFTH PART,
- and -
- Page 2 -
CERIDIAN CANADA HOLDINGS, INC., a corporation existing under the laws of
Delaware,
(hereinafter called "Ceridian Holdings"),
OF THE SIXTH PART.
WHEREAS the Bank and BW own and operate the Payroll Business and the HRMS
Business;
AND WHEREAS effective as of the Effective Transfer Time, the Bank and BW
intend to sell to the Corporation and the Corporation intends to purchase the
Purchased HRMS Assets and the Purchased Payroll Assets, for valuable
consideration, upon and subject to the terms and conditions of the Transfer
Agreement;
AND WHEREAS upon the Effective Transfer Time, the Bank and BW shall be
the registered and beneficial owners of the Shares;
AND WHEREAS effective as of the Effective Time, the Bank and BW intend
to sell to the Purchaser and the Purchaser intends to purchase from the Bank
and BW all of the Shares, for valuable consideration, upon and subject to the
terms and conditions of this Agreement;
AND WHEREAS each of Ceridian and Ceridian Holdings is a party to this
Agreement for the purposes of guaranteeing the performance by the Corporation
(after the Effective Time) and the Purchaser of their obligations hereunder;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
mutual covenants and agreements herein set out and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto covenant and agree as follows:
1. DEFINED TERMS AND SCHEDULES
1.1 Definitions - Where used herein, except where the context otherwise
requires, the following terms shall have the following meanings
respectively:
(a) "Absent Employees" means those employees of the Payroll Business
who are on Short-Term Disability, maternity leave, parental
leave, or other approved leave of absence (except Long-Term
Disability), as listed on Schedule 1.1(a);
(b) "Agreement" means this agreement and all schedules attached to
this agreement, in each case as they may be amended or
supplemented from time to time, and the
Page 3 -
expressions "hereof', "herein", "hereto", "hereunder", "hereby"
and similar expressions refer to this agreement and, unless
otherwise indicated, references to articles and sections are to
"Articles" and "Sections" in this agreement;
(c) "Ancillary Agreements" means the Trademark Licence Agreement, the
Transitional Services Agreement and the Joint Sales and Marketing
Agreement;
(d) "Bank's Benefit Plans" means the benefit plans, arrangements,
agreements, programs, policies, or practices of the Bank set
forth in Schedule 1. I (d) hereto, and for greater certainty,
includes the Pension Plan;
(e) "Business Day" means a day other than a Saturday, Sunday or
statutory holiday in the Province of Ontario;
(f) "Closing" means the consummation and completion of the
purchase and sale by the Purchaser of the Shares and the
additional transactions and agreements provided hereunder;
(g) "Closing Date" means 10:00 a.m. Toronto time at the Closing Place
on January 30, 1998, or such other time and date as the parties
may agree upon in writing;
(h) "Closing Place" means the offices of Xxxxxx Xxxxxxx, 00 Xxxxx
Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx X0X 3 SI;
(i) "Designated Employees" means the employees of the Bank listed in
Schedule 4.17(a) hereto (which schedule includes Absent Employees
but excludes LTD Employees) whose employment will be continued
with the Corporation, as required pursuant to this Agreement;
(j) "Effective Date" means January 31, 1998 or such other date as the
parties may agree upon in writing, provided that in respect of
Absent Employees, the "Effective Date" means the date upon which
they commence employment with the Corporation;
(k) "Effective Time" means 12:02 a.m. (Toronto Time) on the Effective
Date, or such other time as the parties may agree upon in
writing, provided that in respect of Absent Employees, the
"Effective Time" means 12:01 a.m. on the date upon which they
commence employment with the Corporation;
(l) "Effective Transfer Time" means 12:01 a.m. (Toronto Time) on
the Effective Date, or such other time as the parties may agree
upon in writing;
Page 4 -
(m) "HR/Architect" means the human resource management system of BW
which is operated under the trademark "HR/Architect";
(n) "HR/Foundation" means the human resource management system of BW
which is operated under the trademark "HR/Foundation";
(o) "HRMS Business" means the business of providing HRMS Services to
HRMS Clients carried on by BW as of the Closing Date;
(p) "HRMS Clients" mean Persons to whom BW provides HRMS Services as
of the Closing Date;
(q) "HRMS Services" means human resource management services provided
through the use of HR/Foundation and HR/Architect;
(r) "HRMS Trademarks" means "HR/Architect" and "HR/Foundation";
(s) "Joint Sales and Marketing Agreement" means the agreement dated
the .Effective Date between the Bank and the Corporation,
substantially in the form of .Exhibit "C" hereto;
(t) "Long-Term Disability" means the long-term disability plan of the
Bank applicable to employees of the Payroll Business;
(u) "LTD Employees" means the employees of the Payroll Business
collecting benefits from Long-Term Disability, all of whom are
listed on Schedule 1.I (u) hereto;
(v) "Mainframe Computer" means the host OS/390 processor owned by the
Bank and used in connection with, inter alia, the processing of
Payroll Services, and any replacement thereof,
(w) "Payflex" means the payroll processing services system of the
Bank which is operated under the trademarks "Payflex" and
"Paieflex";
(x) "Paymaster" means the payroll processing services system of the
Bank which is operated under the trademarks "Paymaster",
"Paiemaitre" and "Autopay";
(y) "PaymasterE" means the payroll processing services system of the
Bank which is operated under the name "PaymasterE";
- Page 5 -
(z) "Payroll Business" means the business of providing Payroll
Services to Payroll Clients carried on by the Bank as of the
Closing Date;
(aa) "Payroll Clients" means Persons to whom the Bank provides Payroll
Services as of the Closing Date;
(bb) "Payroll Services" means payroll and payroll-related services,
including, without limitation, services processed through the use
of Payflex, Paymaster, PaymasterE, and Phone'n Pay, but excluding
payroll processed for employees of the Bank;
(cc) "Payroll Trademarks" means "Autopay", "Payflex", "Paieflex",
"Phone'n Pay", "PayLink", "Paymaster" and "Paiemaitre";
(dd) "Pension Plan" means The Pension Fund Society of The
Toronto-Dominion Bank established by the Bank, which is a
registered pension plan under the Income Tax Act (Canada) and the
Pension Benefits Standards Act (Canada) in which the Designated
Employees, among others, contribute to and accrue pension
benefits;
(ee) "Person" means an individual, partnership, joint venture,
association, corporation, trust, or a government or any
department or agency thereof. or any other entity;
(ff) "Phone'n Pay" means the payroll processing services system of the
Bank which is operated under the trademark "Phone'n Pay" and the
tradename "Paiedirect";
(gg) "Purchase Price" means the price payable by the Purchaser to the
Bank and BW for the Shares, as determined in accordance with the
provisions of Article 3 hereof;
(hh) "Shares" means 49,687,167 common shares of the Corporation, being
all of the issued and outstanding common shares of the
Corporation;
(ii) "Short-Term Disability" means the short-term disability plan of
the Bank applicable to employees of the Payroll Business;
(jj) "Taxes" means federal, provincial or municipal taxes, including,
without limitation, income, sales, goods and services, excise,
business, duties and other like charges and all penalties,
interest and fines with respect thereto, payable to any federal,
provincial, municipal, local or other government or governmental
agency, authority, board, bureau or commission, domestic or
foreign, and "Tax
- Page 6 -
Legislation" means legislation pursuant to which Taxes may be
exigible or payable;
(kk) "Trademark Licence Agreement" means the trademark licence
agreement dated the Effective Date between the Bank and the
Corporation, substantially in the form of Exhibit "A" hereto,
pursuant to which each of the Corporation and the Bank is granted
a limited licence and right to use certain trademarks of the
other in connection with post-Closing products and promotional
materials of the HRMS Business and the Payroll Business;
(11) "Transaction Fees" means, with respect to the twelve-month period
ended October 31, 1997, the aggregate of. (i) (A) fees invoiced
by the Bank during such period with respect to payroll
transactions, maintenance, custom programming, implementation,
customer training, T4 and other regulatory form preparation, and
other similar transactions, and (B) interest income (with imputed
interest income calculated at a rate of 3.85% per annum on the
average daily cash balances of the Payroll Business), all with
respect to the Payroll Business, and (ii) fees invoiced by BW
during such period with respect to software sales, maintenance,
custom programming, implementation and customer training, and
other similar transactions, all with respect to the HRMS
Business;
(mm) "Transfer Agreement" means the asset transfer agreement to be
entered into between the Bank, BW and the Corporation, pursuant
to which, effective as of the Effective Transfer Time, the Bank
and BW shall transfer the Purchased HRMS Assets and the Purchased
Payroll Assets to the Corporation and the Corporation shall issue
all but one of the Shares to the Bank and BW and shall assume and
become liable for the Assumed HRMS Liabilities and the Assumed
Payroll Liabilities, substantially in the form of Exhibit "D"
hereto;
(nn) "Transferred Employees" means the Designated Employees who do not
reject the continued employment with the Corporation pursuant to
Article 7;
(oo) "Transition Period" has the meaning ascribed to it in the
Transitional Services Agreement; and
(pp) "Transitional Services Agreement" means the transitional services
agreement dated the Effective Date, between the Bank and the
Corporation, substantially in the form of Exhibit "B" hereto.
1.2 Additional Definitions - the terms "Assumed HRMS Liabilities",
"Assumed Payroll Liabilities", "HRMS Contracts", "Payroll Contracts",
"Excluded Contracts", "Excluded Software", "Payroll Clients",
"Purchased HRMS Assets", "Purchased Payroll Assets",
- Page 7 -
"Proprietary Payroll Software" and "Proprietary HRMS
Software" shall have the meaning ascribed to them in the
Transfer Agreement.
1.3 Exhibits and Schedules - The following are the exhibits and schedules
annexed hereto which are incorporated by reference herein and are
deemed to be a part hereof:
Exhibits
"A" - Trademark Licence Agreement
"B" - Transitional Services Agreement
"C" - Joint Sales and Marketing Agreement
"D" - Transfer Agreement
Schedules
1. 1 (a) - Absent Employees
1. 1 (d) - Bank Benefit Plans
1. I (u) - LTD Employees
3.1 - Calculation of the Purchase Price
4.13 - Financial Information
4.15 - Material Non-Standard Payroll Contracts
4.16 - Year 2000
4.17(a) - Designated Employees
4.17(b) - Standard Bank Employment Contracts
4.17(f) - Plan Changes
4.17(g) - Retiree Benefits
4.24 - Undisclosed Liabilities
5.18 - Corporation Plans
8. 1 (f) - Material Contracts
10.7 - Year 2000 Estimates
1.4 Headings and Table of Contents - The inclusion of headings and a table
of contents in this Agreement is for convenience of reference only and
shall not affect the construction or interpretation of this Agreement.
1.5 Gender and Number - In this Agreement, unless the context otherwise
requires, words importing the singular include the plural and vice
versa and words importing gender include all genders.
1.6 Currency - Except where otherwise expressly provided, all amounts in
this Agreement are stated and shall be paid in Canadian currency.
- Page 8 -
1.7 Invalidity of Provisions - Each of the provisions contained in this
Agreement is distinct and severable and a declaration of invalidity or
unenforceability of any such provision or part thereof by a court of
competent jurisdiction shall not affect the validity or enforceability
of any other provision of this Agreement. Any provision of this
Agreement which is illegal, prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such illegality, prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
1.8 Entire Agreement - This Agreement, the Ancillary Agreements and the
Transfer Agreement embody the entire agreement and understanding among
the parties hereto and supersede all prior agreements between such
parties in connection with the subject matter hereof Other than the
foregoing mentioned agreements, there are no representations,
warranties or covenants (including any that may be implied by statute)
and there are no agreements between the parties in connection with
such subject matter except as specifically set forth or referred to in
this Agreement. No reliance is placed on any warranty,
representation, opinion, advice or assertion of fact made by any party
hereto or its employees or agents, except to the extent that the same
has been reduced to writing and included as a term of this Agreement
or in any of the foregoing mentioned agreements. Accordingly, there
shall be no liability, either in tort or in contract, assessed in
relation to any such warranty, representation, opinion, advice or
assertion of fact, except to the extent aforesaid. Except as provided
in this Agreement, neither this Agreement nor any of the terms hereof
may be changed, waived, discharged or terminated otherwise than by an
instrument in writing signed by the party against which enforcement of
such change, waiver, discharge or modification is sought.
1.9 Waiver and Amendment - Except as expressly provided in this Agreement,
no amendment, waiver or termination of this Agreement shall be binding
unless executed in writing by the party to be bound thereby. No
waiver of any provision of this Agreement shall constitute a waiver of
any other provision nor shall any waiver of any provision of this
Agreement constitute a continuing waiver unless otherwise expressly
provided. No failure to enforce any provision hereof shall operate as
a waiver of such provision or of any other provision hereof.
1.10 Generally Accepted Accounting Principles - In this Agreement, except
to the extent otherwise expressly provided, references to "generally
accepted accounting principles" mean, for all principles stated in the
Handbook of the Canadian Institute of Chartered Accountants, such
principles so stated.
1.11 Governing Law and Attornment - This Agreement shall be governed by and
construed in accordance with the law of the Province of Ontario and
the federal law of Canada
Page 9 -
applicable therein. The parties shall attorn to the non-exclusive
jurisdiction of the courts of the Province of Ontario.
2. PURCHASE AND SALE
2.1 Purchase and Sale of Assets - Subject to the terms and conditions
contained herein, the Bank, BW and the Corporation covenant and agree
to enter into the Transfer Agreement on the (,'losing Date, pursuant
to which, effective as of the Effective Transfer Time, the Bank and BW
shall sell, assign and transfer the Purchased Payroll Assets and the
Purchased HRMS Assets to the Corporation and the Corporation shall
purchase and acquire the Purchased Payroll Assets and the Purchased
HRMS Assets, in consideration for the issuance to the Bank and BW of
all of the Shares (less one common share of the Corporation issued to
the Bank prior to the Effective Transfer Time), and the Corporation
shall assume and become liable for the Assumed Payroll Liabilities and
the Assumed HRMS Liabilities on and after the Effective Transfer Time.
2.2 Purchase and Sale of Shares - Subject to the terms and conditions
contained herein, the Bank and BW covenant and agree to sell, assign
and transfer the Shares to the Purchaser, and the Purchaser covenants
and agrees to purchase and acquire the Shares, on the Closing Date but
with effect as of the Effective Time, in consideration for payment by
the Purchaser to the Bank and BW of the Purchase Price, subject to
adjustments, which shall be allocated between the Bank and BW in
accordance with Section 3. 1.
2.3 Excluded Contracts and Software - The Purchaser and the Corporation
acknowledge and agree that they have been notified of the nature and
purpose of the Excluded Contracts and the Excluded Software, the
services and functions of which the Bank shall make available to the
Corporation during the Transition Period, subject to the terms of the
Transitional Services Agreement. If from and after the end of the
Transition Period the Corporation requires goods and services of the
type provided under the Excluded Contracts, or software with
functionality of the type provided by the Excluded Software, the
Corporation shall be responsible, at its cost, and with the reasonable
cooperation of the Bank and BW, to establish its own contractual
relationships with the parties to the Excluded Contracts, or to make
alternative arrangements for the provision of the goods and services
that were provided to the Bank or BW pursuant to the Excluded
Contracts, and to separately licence, purchase or establish equivalent
software to the Excluded Software.
2.4 Ancillary Agreements - On Closing, the parties hereto covenant and
agree to enter into the Ancillary Agreements applicable to them.
2.5 Deliveries - Delivery of and access to substantially all of the
Purchased HRMS Assets and the Purchased Payroll Assets shall be made
by the Bank and BW to the Corporation
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on the Closing Date and delivery of and access to the remaining
Purchased HRMS Assets and Purchased Payroll Assets shall be made by
the Bank and BW to the Corporation as soon as reasonably practicable
after Closing.
3. PURCHASE PRICE
3.1 Purchase Price - The Purchase Price for the Shares shall be an amount
equal to $49,687,167, which is the aggregate of (i) $49,471,494, being
the product of 1.5 and the amount of the Transaction Fees, the
calculation of which is set forth in Schedule 3. 1;
(ii) $1, being the amount paid by the Bank as the subscription price
for one common share of the Corporation; and (iii) $215,672, being the
agreed Canadian dollar equivalent of US$150,000. The Purchase Price
shall be allocated as to $100,000 to BW, and the balance to the Bank.
The Purchase Price shall be subject to adjustments determined in
accordance with Section 3.2 and shall be payable by the Purchaser to
the Bank (on behalf of the Bank and BW) on the Closing Date by
certified cheque or bank draft of a Canadian chartered bank or by wire
transfer of immediately available funds to the Bank's account
designated by the Bank in writing to the Purchaser at least two
Business Days prior to the Closing Date.
3.2 Adjustments - The parties agree that the Purchase Price shall be
adjusted by those items properly subject to adjustment with respect to
the Payroll Business and the HRMS Business transferred pursuant to the
Transfer Agreement including, without limitation, (i) work-in-process
accrued up to the Effective Transfer Time, (ii) prepaid expenses
related to the HRMS Business and the Payroll Business, (iii)
contractual obligations of the Bank and BW which have been prepaid to
the Bank or BW or for which deposits have been submitted to the Bank
or BW and (iv) obligations or remittances with respect to the
Designated Employees including, without limitation, statutory vacation
pay, premiums for unemployment insurance, provincial health care
plans, employer health tax and Quebec and Canada Pension Plan, accrued
wages, salaries and bonuses, (collectively the "Adjustable Items"),
which shall be calculated and adjusted as of the Effective Date. The
principle of the adjustment procedure is that the Bank and BW are
entitled to the benefits of and are responsible for and shall pay all
applicable amounts relating to the foregoing for the period ending as
of the Effective Transfer Time, and the Corporation is entitled to the
benefits of and is responsible for and shall pay all applicable
amounts relating to the foregoing for the period commencing from and
after the Effective Transfer Time. To the extent that the Bank or BW
has paid amounts relating to the Adjustable Items, the benefit of
which will continue from and after the Effective Date, the Purchase
Price shall be adjusted in favour of the Bank or BW, as the case may
be, in the amount which is attributable to the HRMS Business or the
Payroll Business for the period following the Effective Transfer Time
and the benefit of which is receivable by the Corporation following
the Effective Transfer Time. To the extent that the Bank or BW has
received amounts relating to Adjustable Items which are properly
allocable to the HRMS Business
- Page 11 -
or the Payroll Business from and after the Effective Transfer Time,
the Purchase Price shall be adjusted in favour of the Purchaser in the
amount which is attributable to the HRMS Business or the Payroll
Business for the period following the Effective Date.
An adjustment shall also be made between the parties, if necessary,
with respect to funds under administration, including funds held on
behalf of Payroll Clients pursuant to statutory trusts, to be
transferred by the Bank to the Corporation pursuant to Section 7.3(h),
in the event that an incorrect amount of such funds is transferred.
The parties agree to use reasonable efforts to determine and account
for any such adjustments prior to Closing. On or before 120 days
after the Closing Date, the parties shall co-operate to prepare a
statement of adjustments for Adjustable Items determined after the
Closing, and any required payments shall be made forthwith thereafter.
Adjustable Items determined after such period shall be itemized on a
case by case basis and any required payments shall be made forthwith
thereafter.
In the event that the parties are unable to agree on the amount of
adjustments for all Adjustable Items, adjustments shall be made
between the parties with respect to those of the Adjustable Items set
forth in the statement of adjustments that are not in dispute. With
respect to those of the Adjustable Items that are subject to a
dispute, in the event that the parties, acting reasonably, are unable
to reach agreement, the dispute shall be presented for determination
to a major national accounting firm as agreed by the Bank and the
Purchaser as soon as possible after the 120-day period after the
Closing Date referred to above. Such accounting firm shall act as an
expert and not an arbitrator, and the decision of the accounting firm
shall be conclusive and binding on the Bank and the Purchaser, and
shall be final and not subject to judicial review. It is the
intention of the parties hereto that the decision of the accounting
firm shall be enforced to the fullest extent permitted by applicable
law.
The apportionment of the fees and expenses of the accountant as
between the parties shall be the subject of determination by the
accountant.
4. REPRESENTATIONS AND WARRANTIES OF THE BANK AND BW
The Bank and BW jointly and severally represent and warrant to the Purchaser as
follows:
4.1 Organization, Standing and Authority - The Bank is a Canadian
chartered bank, validly existing under the laws of Canada. The Bank
has all requisite power and authority to execute and deliver this
Agreement, the Transfer Agreement and each of the Ancillary Agreements
and to perform its obligations hereunder and thereunder, and to
complete the transaction of purchase and sale contemplated hereunder
and thereunder.
- Page 12 -
4.2 Authorization - The execution, delivery and performance by the Bank of
this Agreement, the Transfer Agreement and the Ancillary Agreements
have been duly authorized by all necessary corporate action of the
Bank, and all persons executing this Agreement, the Transfer Agreement
and the Ancillary Agreements on behalf of the Bank have been duly
authorized to do so by all necessary corporate action on the part of
the Bank. This Agreement has been, and each of the Transfer Agreement
and the Ancillary Agreements when executed by the Bank will be, duly
executed and delivered by the Bank. This Agreement constitutes, and
each of the Transfer Agreement and the Ancillary Agreements when
executed and delivered by the Bank will constitute, the legal, valid
and binding obligation of the Bank, enforceable against it in
accordance with their terms, except as enforceability thereof may be
limited by bankruptcy, insolvency, reorganization or similar laws of
general application, and equitable remedies that may be granted or
imposed by a court of competent jurisdiction.
4.3 No Conflicting Agreements - The execution and delivery by the Bank of
this Agreement and each of the Transfer Agreement and the Ancillary
Agreements and the performance by the Bank of its obligations
hereunder and thereunder do not and will not (i) result in or
constitute a default under, breach or violation of, or an event that
with notice or lapse of time or both would be a breach or violation
of, the organizational documents of the Bank, or any existing note,
bond, mortgage, indenture, deed of trust, licence, permit, lease, loan
agreement, contract or other agreement, instrument or arrangement to
which the Bank is a party or by the terms of which the Bank is or may
be bound or affected; or (ii) violate or contravene any law to which
it is subject.
4.4 Bank Consents - No consent, approval or authorization under any
material indenture, contract, instrument or other agreement (excluding
Payroll Contracts) to which the Bank is a party is required to be
obtained in connection with the execution, delivery and performance by
the Bank of this Agreement or any of the Ancillary Agreements. There
are no consents, approvals, permits or authorizations, declarations,
filings or registrations with, or notices to, any governmental or
regulatory authority required to be made or obtained by the Bank in
connection with the execution and delivery of this Agreement or any of
the Transfer Agreement or the Ancillary Agreements and the performance
of the transactions contemplated hereby or thereby, except for the
consent of the Office of the Superintendent of Financial Institutions
with respect to the temporary substantial investment of the Bank in
the Corporation.
4.5 The Corporation - The Corporation is a corporation duly organized,
validly existing and in good standing under the laws of Canada. The
authorized capital of the Corporation consists solely of an unlimited
number of common shares. Effective as of the Effective Transfer Time,
the Shares shall be all of the issued and outstanding shares of the
Corporation and shall have been issued to the Bank and BW as fully
paid and nonassessable shares in the capital of the Corporation.
Immediately prior to the Effective
- Page 13 -
Transfer Time, the Corporation shall have no active business, assets,
liabilities or employees.
4.6 Authorization - The execution, delivery and performance by the
Corporation of this Agreement and the Transfer Agreement have been or
will be duly authorized by all necessary corporate action of the
Corporation, and all persons executing this Agreement and the Transfer
Agreement on behalf of the Corporation have been or will be duly
authorized to do so by all necessary corporate action on the part of
the Corporation. This Agreement has been, and the Transfer Agreement
when executed by the Corporation will be, duly executed and delivered
by the Corporation. This Agreement constitutes, and the Transfer
Agreement when executed and delivered by the Corporation will
constitute, the legal, valid and binding obligation of the
Corporation, enforceable against it in accordance with its terms,
except as enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or similar laws of general application, and
equitable remedies that may be granted or imposed by a court of
competent jurisdiction.
4.7 Consents re: the Corporation - No consent, approval or authorization
under any material indenture, contract, instrument or other agreement
to which the Corporation is a party or by which it is bound is
required to be obtained in connection with the execution, delivery and
performance by the Corporation of this Agreement or the Transfer
Agreement. There are no consents, approvals, permits or
authorizations, declarations, filings or registrations with, or
notices to, any governmental or regulatory authority required to be
made or obtained by the Corporation in connection with the execution
and delivery of this Agreement or the Transfer Agreement and the
performance of the transactions contemplated hereby or thereby.
4.8 Title to Shares - On Closing, the Bank and BW shall have good and
marketable title to the Shares free and clear of all liens, security
interests and other encumbrances, and shall have the full legal right,
power and authority to sell and transfer the Shares to the Purchaser.
4.9 Title to Payroll Assets - The Bank now is, and immediately prior to
the Effective Transfer Time the Bank will be, the sole registered and
beneficial owner of all right, title and interest in and to the
Purchased Payroll Assets, free and clear of claims, liens, security
interests, and other encumbrances. The Bank has the full legal right,
power and authority to sell, assign and transfer the Purchased
Pay-roll Assets to the Corporation effective as of the Effective
Transfer Time and has not assigned, licensed or otherwise conveyed
such rights, licenses or privileges to any other Person.
4.10 Legal Proceedings - There are no legal proceedings pending, and the
Bank and BW are not aware of any legal proceedings threatened or of
any circumstances which may reasonably be expected to give rise to
such proceedings, which in any way might interfere
Page 14 -
with the sale or delivery of the Purchased Payroll Assets or the
Shares, or the consummation of any of the transactions contemplated
herein or under the Transfer Agreement or the Ancillary Agreements.
4.11 No Option - Except for the Corporation, no Person has any agreement or
option or any right or privilege (whether by law or by contract)
capable of becoming an agreement or option to acquire any of the
Purchased Payroll Assets. Except for the Purchaser, no Person has any
agreement or option or any right or privilege (whether by law or by
contract) capable of becoming an agreement or option to acquire any of
the Shares from the Bank
4.12 Conduct of Payroll Business - The Payroll Business has been conducted
since October 31, 1997 (the "Payroll Reference Date") in the ordinary
course, consistent with past practice. Since the Payroll Reference
Date, there has not been any change in the operation business, assets
or financial condition of the Payroll Business other than changes in
the ordinary course which have not individually or collectively had
any material adverse effect on the condition (financial or other),
results of operation, or assets of the Payroll Business and, since the
Payroll Reference Date, the Bank has not entered into any transaction
in connection with the Payroll Business not in the ordinary course of
the Payroll Business, other than this Agreement.
4.13 Financial Information - The financial information relating to the
Payroll Business provided by the Bank to the Purchaser and set forth
in Schedule 4.13 hereto has been prepared in accordance with generally
accepted accounting principles, consistently applied, and presents a
true and complete statement of the financial condition of the Payroll
Business for the fiscal periods stated therein.
4.14 Litigation - There is no suit, action, litigation, arbitration or
proceeding in progress, pending or threatened against or involving the
Payroll Business with the exception of the action commenced in Quebec
Superior Court by Xxxxx Xxxxxxxx, particulars of which have been
provided to the Purchaser, and there is not presently outstanding
against the Bank in respect of the Payroll Business any judgment,
decree, injunction or order of any court, governmental department,
agency or arbitrator.
4.15 Payroll Client Contracts - The Bank has delivered to the Purchaser a
true and correct copy of its standard contract terms incorporated in
Payroll Contracts entered into with Payroll Clients for the provision
of Payroll Services. Each of the Payroll Clients has entered into
such form of standard contract with the Bank or has been provided
Payroll Services consistent therewith or a variation thereto that is
not materially adverse to the Payroll Business. Schedule 4.15 sets
forth the material non-standard Payroll Contracts entered into with
Payroll Clients, copies of which have been made available to the
Purchaser.
- Page 15 -
4.16 Proprietary Payroll Software -
(a) The Proprietary Payroll Software does not infringe any copyright,
patent, trademark, trade secret, or other intellectual property,
proprietary or other right of any third party.
(b) Schedule 1. 1(11) to the Transfer Agreement sets forth a complete
and accurate list of the Proprietary Payroll Software of the
Payroll Business. The Proprietary Payroll Software, together
with the other software to be made available to the Corporation
pursuant to the Transitional Services Agreement, constitutes all
of the material software used in the Payroll Business.
(c) The Proprietary Payroll Software:
(i) is complete in all respects and shall perform in
accordance with its data control manuals and user
manuals;
(ii) is free of all viruses, errors, defects and disabling
devices that would cause any component of the
Proprietary Payroll Software or of databases created
thereby to be erased, modified, deleted, damaged,
disabled or made inoperable or otherwise rendered
incapable of performing in accordance with its
published specifications; and
(iii) has been designed, developed, configured and
implemented in a good and workmanlike manner.
(d) Schedule 4.16 sets forth testing and other procedures conducted
with respect to the Paymaster (CPX) for verifying Year 2000
compliance, and also sets forth testing that has not yet been
conducted that would verify Year 2000 compliance for such
software. All other Proprietary Payroll Software is not Year
2000 compliant.
4.17 Labour Relations -
(a) Employees: Schedule 4.17(a) contains a true and complete list of
the Designated Employees, their titles and positions held as of
the date of this Agreement, their length of service with the
Bank, the locations of their employment and the material terms
and conditions of their employment or engagement, including their
current annual compensation, standard hours of work, commissions
and bonuses and their benefits and perquisites, and participation
in the Pension Plan and the other Bank's Benefit Plans.
- Page 16 -
(b) Written or Oral Contracts: Except for standard Bank
employment/offer contracts (a copy of all standard versions of
which are attached as Schedule 4.17(b)), there are (i) no written
contracts of employment entered into with any Designated
Employees; (ii) no oral contracts of employment which provide
termination notice or pay in lieu of such notice or severance pay
to any of the Designated Employees in excess of termination
notice or pay in lieu of such notice or severance pay required by
applicable labour or employment standards law or at common law;
and (iii) no confidentiality, non-competition or nonsolicitation
contracts between the Bank and any Designated Employees.
There are no variations to any of the standard versions of
employment contracts attached as Schedule 4.17(b), entered into
by any of the Designated Employees, which are individually or in
the aggregate materially adverse to the Payroll Business.
(c) Collective Agreements: The Bank has not made any agreements with
any labour union or employee association in connection with the
Payroll Business or the HRMS Business nor made any commitments to
or conducted any negotiations with any labour union or employee
association with respect to any future agreements relating to the
Payroll Business or the HRMS Business. To the best knowledge of
the Bank, there have been no attempts to organize a trade union
or employee association for any employees of the Payroll Business
or the HRMS Business. There is no labour strike, employee
disturbance or work stoppage or slowdown pending or, to the best
knowledge of the Bank, threatened against the Bank with respect
to the Payroll Business or the HRMS Business.
(d) Liabilities to Employees: The Bank has no liability of any kind
to any Designated Employee except for compensation, commissions,
bonuses, and benefits and pensions payable to such Designated
Employee in the ordinary course of the Payroll Business or the
HRMS Business.
(e) Compliance with Laws: The Bank is in compliance (and shall be in
compliance immediately prior to the Effective Time) in all
material respects with all applicable laws, statutes,
regulations, rules and by-laws relating to the employment of
Designated Employees, including, without limiting the generality
of the foregoing, those related to wages, pay equity, hours of
work, collective bargaining and labour relations, occupational
health and safety, workers compensation, human rights, pension
benefits standards and labour and employment standards and is not
liable for any arrears of wages, assessments, penalties or other
sums for failure to comply with any of the foregoing.
- Page 17 -
(f) No Changes: Except as disclosed in Schedule 4.17(f), with respect
to the Designated Employees, no commitment, express or implied,
has been made to change compensation or to change any benefit
under the Pension Plan or the other Bank's Benefit Plans or to
offer additional benefits.
(g) Retiree Benefits: Except as disclosed in Schedule 4.17(g), there
are no benefits promised to Designated Employees, applicable to
them, or their dependents upon the retirement of the Designated
Employees, other than in respect of the Pension Plan.
(h) No Vacation Accrual: As at January 31, 1998, none of the
Designated Employees shall have any accrued and unused vacation
for the period ended December 31, 1997.
4.18 Payroll Trademarks -
(a) The only trademarks used in connection with the Payroll Business
are the Payroll Trademarks and the trademarks of the Bank
licenced pursuant to the Trademark Licence Agreement;
(b) The Bank has the unrestricted right and has not licenced or
otherwise permitted any other Person to use the Payroll
Trademarks;
(c) The Bank has registered the Payroll Trademarks in the Canadian
Trademarks office;
(d) The Payroll Trademarks are in full force and effect and have not
been used or enforced or failed to be used or enforced in a
manner that would result in the abandonment, cancellation or
unenforceability of any right in the Payroll Trademarks;
(e) The Bank has no knowledge of any claim of adverse ownership or
invalidity or other opposition or conflict with any of the
Payroll Trademarks nor of any pending or threatened suit,
proceeding, claim, demand, action or investigation of any nature
or kind against the Bank relating to the Payroll Trademarks; and
(f) The Bank has no knowledge that any activity relating to the
conduct of the Payroll Business or the Payroll Trademarks
breaches, violates, infringes or interferes with any trademarks
or other intellectual property rights of any third party or
requires payment for the use of any trademarks or other
intellectual property rights of a third party.
- Page 18 -
4.19 No Finder's Fee or Broker's Fee - No Person has, or as a result of any
of the transactions contemplated hereby will have, by reason of any
commitment of the Bank towards such Person, any right, interest or
valid claim against or upon Ceridian, Ceridian Holdings, the Purchaser
or the Corporation or any property of Ceridian, Ceridian Holdings, the
Purchaser or the Corporation for any commission, fee or other
compensation as broker or finder or for services in any similar
capacity.
4.20 Bank's Residence - The Bank is not a non-resident within the meaning
of that term as used in the Income Tax Act (Canada).
4.21 Registration for Taxes - The Bank is duly registered under Part IX of
the Excise Tax Act (Canada) under registration number 105255145 and
under the Quebec Sales Tax Act under registration number 100004293.
4.22 Plans - The Bank Benefit Plans are all of the benefit plans,
arrangements, agreements, programs, policies or practices, whether
oral or written, formal or informal, funded or unfunded (other than
governmental mandated benefits of general application) in which the
Designated Employees participate or are eligible to participate,
including but not limited to:
(i) retirement savings or pensions including, without
limitation, any registered retirement savings plan, or
supplemental pension or retirement plan;
(ii) stock option, hospitalization, health, dental,
disability, unemployment insurance, vacation pay,
severance pay, sick leave, club membership, company
car, company awards, company loans, consulting or other
similar compensation arrangements.
Summaries of the Bank Benefit Plans, copies of all material employee
communications relative to Bank Benefit Plans and copies of all work
permits and employment related government authorizations or permits
have been provided to the Purchaser.
4.23 List of Customers - The lists of HRMS Clients and Payroll Clients to
be delivered on Closing to the Purchaser pursuant to Article 8, shall
be complete and accurate lists.
4.24 Undisclosed Liabilities - Except as disclosed in Schedule 4.24 hereto
and except as incurred in the ordinary and usual course of the Payroll
Business, there is no outstanding indebtedness or liabilities or
obligations (whether accrued, absolute, contingent or otherwise) of
the Payroll Business of a nature customarily reflected or reserved
against in a balance sheet (including the notes thereto) prepared in
accordance with generally accepted accounting principles.
Page 19 -
4.25 Operation of the Businesses - The Purchased Payroll Assets and the
Purchased HRMS Assets, together with the services to be provided by
the Bank to the Corporation under the Transitional Services Agreement,
are sufficient to operate the Payroll Business and the HRMS Business
as was conducted as of the Closing Date.
4.26 Product Defects - There are no defects in the products or services of
the Payroll Business heretofore or currently being distributed or sold
by the Payroll Business which would materially adversely affect the
performance and quality of such products and services, provided,
however, that this representation and warranty does not extend to any
aspect or component of the products or services of the Payroll
Business that are not defective as at the Effective Time but that
become defective after the Effective Time as a result of modifications
made to such products or services by the Corporation. There are no
express or implied warranties outstanding with respect to the products
or services of the Payroll Business except as imposed by law or as
described in the contracts referred to in Section 4.15.
4.27 Organization, Standing and Authority of BW - BW is a corporation
validly existing under the laws of Ontario, and it has all necessary
corporate power, authority and capacity to own its property and assets
and to carry on the HRMS Business as is presently conducted by it. BW
has all requisite power and authority to execute and deliver this
Agreement and the Transfer Agreement and to perform its obligations
hereunder and thereunder and to complete the transaction of purchase
and sale contemplated hereunder and thereunder.
4.28 BW Shares - All of the issued and outstanding shares of BW are owned
as of record and beneficially by the Bank. No options, warrants or
other rights to purchase shares or other securities of BW have been
authorized or agreed to be issued or are outstanding.
4.29 BW Authorization - The execution, delivery and performance by BW of
this Agreement and Transfer Agreement have been duly authorized by all
necessary corporate action of BW, and all persons executing such
agreements on behalf of BW have been duly authorized to do so by all
necessary corporate action on the part of BW. This Agreement and the
Transfer Agreement have been duly executed and delivered by BW and
constitute the legal, valid and binding obligations of BW, enforceable
against BW in accordance with their terms, except as enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or
similar laws of general application, and equitable remedies that may
be granted or imposed by a court of compete-.it jurisdiction.
4.30 No Conflicting BW Agreements - The execution and delivery by BW of
this Agreement and the Transfer Agreement and the performance by EW of
its obligations hereunder and thereunder does not and will not (i)
result in or constitute a default under, breach or violation of, or an
event that with notice or lapse of time or both would be a breach or
- Page 20 -
violation of the organizational documents of BW, or any existing note,
bond, mortgage, indenture, deed of trust, licence, permit, lease, loan
agreement, contract or other agreement, instrument or arrangement to
which BW is a party or by the terms of which BW is or may be bound or
affected, or (ii) violate or contravene any law to which it is
subject.
4.31 BW Consents - No consent, approval or authorization under any material
indenture, contract, instrument or other agreement (excluding HRMS
Contracts) to which the Bank or BW is a party or by which they are
bound is required to be obtained in connection with the execution,
delivery and performance by BW of this Agreement and the Transfer
Agreement. There are no consents, approvals, permits or
authorizations, declarations, filings or registrations with, or
notices to, any governmental or regulatory authority required to be
made or obtained by BW in connection with the execution and delivery
of this Agreement and the Transfer Agreement and the performance of
the transactions contemplated hereby or thereby.
4.32 Title to Assets - BW now is and immediately prior to the Effective
Transfer Time will be (and the Bank, to the extent that it owns any of
the Purchased HRMS Assets now is and immediately prior to the
Effective Transfer Time will be) the sole registered and beneficial
owner of all right, title and interest in and to the Purchased HRMS
Assets, free and clear of claims, liens, security interests, and other
encumbrances. BW (and the Bank, to the extent that it owns any of the
Purchased HRMS Assets) has the full legal right, power and authority
to sell, assign and transfer the Purchased HRMS Assets to the
Corporation effective as of the Effective Transfer Time, and has not
assigned, licensed or otherwise conveyed such rights, licences or
privileges to any other Person.
4.33 Legal Proceedings - There are no legal proceedings pending and BW and
the Bank are not aware of any legal proceedings threatened or of any
circumstances which may reasonably be expected to give rise to such
proceedings which in any way might interfere with the sale or delivery
of the Purchased HRMS Assets, or the consummation of any of the
transactions contemplated herein.
4.34 No Option - Except for the Corporation, no Person has any agreement or
option or any right or privilege (whether by law or by contract)
capable of becoming an agreement or option to acquire any of the
Purchased HRMS Assets. Except for the Purchaser, no Person has any
agreement or option or any right or privilege (whether by law or by
contract) capable of becoming an agreement or option to acquire any of
the Shares from BW.
4.35 Financial Information - The financial information relating to the HPMS
Business provided to the Purchaser and set forth in Schedule 4.13
hereto has been prepared in accordance with generally accepted
accounting principles, consistently applied, and
- Page 21 -
presents a true and complete statement of the financial condition of
the HRMS Business for the fiscal periods stated therein.
4.36 Undisclosed Liabilities - Except as disclosed in Schedule 4.24 hereto
and except as incurred in the ordinary and usual course of the HRMS
Business, there is no outstanding indebtedness or liabilities or
obligations (whether current, absolute, contingent or otherwise) of
the HRMS Business of a nature customarily reflected or reserved
against any balance sheet (including the notes thereto) prepared in
accordance with generally accepted accounting principles.
4.37 Conduct of the HRMS Business - The HRMS Business has been conducted
since October 31, 1997 (the "HRMS Reference Date") in the ordinary
course, consistent with past practice. Since the HRMS Reference Date,
there has not been any change in the operation, business, assets or
financial condition of the HRMS Business other than changes in the
ordinary course which have not individually or collectively had any
material adverse effect on the condition (financial or other), results
of operation, or assets of the HRMS Business, and since the HRMS
Reference Date, neither the Bank nor BW has entered into any
transaction in connection with the HRMS Business not in the ordinary
course of the HPMS Business, other than this Agreement.
4.38 HRMS Litigation - There is no suit, action, litigation, arbitration or
proceeding in progress, pending or threatened against or involving the
HRMS Business and there is not presently outstanding against BW or the
Bank in respect of the HRMS Business any judgment, decree, injunction
or order of any court, governmental department, agency or arbitrator.
4.39 HRMS Client Contracts - BW has delivered to the Purchaser a true and
correct copy of the standard contract terms incorporated in contracts
entered into between BW (or the Bank) and HRMS Clients for the
provision of HRMS Services. Each of the HRMS Clients has entered into
such form of standard contract with BW (or the Bank) or has been
provided services consistent therewith or with a variation thereto
that is not materially adverse to the HRMS Business.
4.40 Proprietary HRMS Software -
(a) The Proprietary HRMS Software does not infringe any copyright,
patent, trademark, trade secret, or other intellectual property,
proprietary or other right of any third party.
(b) The Xxxxxx XX Interface software is the only Proprietary HRMS
Software of the HRMS Business.
- Page 22 -
(c) The Proprietary HRMS Software:
(i) is complete in all respects and shall perform in
accordance with its scope documents and user manuals;
(ii) is free of all viruses, errors, defects and disabling
devices that would cause any component of the
Proprietary HRMS Software or of databases created
thereby to be erased, modified, deleted, damaged,
disabled or made inoperable or otherwise rendered
incapable of performing in accordance with its
published specifications; and
(iii) has been designed, developed, configured and
implemented in a good and workmanlike manner.
(d) The Proprietary HRMS Software is not year 2000 compliant.
4.41 HRMS Trademarks -
(a) The only trademarks used in connection with the HRMS Business are
the HRMS Trademarks and the trademarks of the Bank licenced
pursuant to the Trademark Licence Agreement;
(b) The Bank and BW have the unrestricted right and has not licenced
or otherwise permitted any other Person to use the HRMS
Trademarks;
(c) The Bank and BW have registered the HRMS Trademarks in the
Canadian Trademarks office;
(d) The HRMS Trademarks are in full force and effect and have not
been used or enforced or failed to be used or enforced in a
manner that would result in the abandonment, cancellation or
unenforceability of any right in the HRMS Trademarks;
(e) The Bank and BW have no knowledge of any claim of adverse
ownership or invalidity or other opposition or conflict with any
of the BRMS Trademarks nor of any pending or threatened suit,
proceeding, claim, demand, action or investigation of any nature
or kind against the Bank relating to the HRMS Trademarks; and
(f) The Bank and BW have no knowledge that any activity relating to
the conduct of the HRMS Business or the HRMS Trademarks breaches,
violates, infringes or interferes with any trademarks or other
intellectual property rights of any third
- Page 23 -
party or requires payment for the use of any trademarks or other
intellectual property rights of another party.
4.42 Labour Relations - BW does not employ any employees for the HRMS
Business.
4.43 No Finder's Fee or Broker's Fee - No Person has, or as a result of any
of the transactions contemplated hereby will have, by reason of any
commitment of BW towards such Person, any right, interest or valid
claim against or upon Ceridian, Ceridian Holdings, the Purchaser or
the Corporation or any property of Ceridian, Ceridian Holdings, the
Purchaser or the Corporation for any commission, fee or other
compensation as broker or finder or for services in any similar
capacity.
4.44 BW's Residence - BW is not a non-resident within the meaning of that
term as used in the Income Tax Act (Canada).
4.45 BW Registration for Taxes - BW is duly registered under Part IX of the
Excise Tax Act (Canada) under registration number 139484307 and under
the Quebec Sales Tax Act under registration number 101772976 1.
5. REPRESENTATIONS AND WARRANTIES OF CERIDIAN, CERIDIAN HOLDINGS AND THE
PURCHASER
The Purchaser, Ceridian Holdings and Ceridian jointly and severally represent
and warrant to the Bank and BW as follows:
5.1 Organization, Standing and Authorization - The Purchaser is a
corporation, duly organized, validly existing and in good standing
under the laws of Canada. The Purchaser has all necessary power and
authority to own, lease or licence its property and to conduct its
business as now conducted. The Purchaser has the requisite power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder, and to consummate the transactions contemplated
hereby including, without limitation, the purchase of the Shares.
5.2 Authorization, Execution and Enforceability - The execution, delivery
and performance by the Purchaser of this Agreement have been duly
authorized by all necessary corporate action of the Purchaser, and no
further corporate action is required to be taken by the Purchaser in
order to execute, deliver and perform this Agreement. All persons
executing this Agreement on behalf of the Purchaser have been duly
authorized to do so by all necessary corporate action on the part of
the Purchaser. This Agreement has been duly executed and delivered by
the Purchaser and constitutes the legal, valid and binding obligation
of the Purchaser, enforceable against the Purchaser in accordance with
its terms, except as enforceability thereof may be limited by
bankruptcy, insolvency,
- Page 24 -
reorganization or similar laws of general application, and equitable
remedies that may be granted or imposed by a court of competent
jurisdiction.
5.3 No Conflicting Agreements - The execution and delivery by the
Purchaser of this Agreement and the performance by the Purchaser of
its obligations hereunder does not and will not (i) result in or
constitute a default under, breach or violation of, or an event that
with notice or lapse of time or both would be a breach or violation
of, the organizational documents of the Purchaser, or any existing
note, bond, mortgage, indenture, deed of trust, licence, permit,
lease, loan agreement, contract or other agreement, instrument or
arrangement to which the Purchaser is a party or by the terms of which
the Purchaser is or may be bound or affected; or (ii) violate or
contravene any law to which it is subject.
5.4 Consents - No consent, approval or authorization under any material
indenture, contract, instrument or other agreement to which Ceridian
or the Purchaser is a party or by which either of them is bound is
required to be obtained in connection with the execution, delivery and
performance by the Purchaser of this Agreement. There are no
consents, approvals, permits or authorizations, declarations, filings
or registrations with, or notices to, any governmental or regulatory
authority required to be made or obtained by the Purchaser in
connection with the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby or thereby, except
that Ceridian or the Purchaser will make appropriate filings under the
Investment Canada Act within 30 days following the Closing.
5.5 Legal Proceedings - There are no legal proceedings pending and
Ceridian and the Purchaser are not aware of any legal proceedings
threatened or of any circumstances which may reasonably be expected to
give rise to such proceedings against Ceridian which in any way might
interfere with the purchase of the Shares or the consummation of any
of the transactions contemplated under this Agreement.
5.6 Compliance with Laws - The Purchaser is not in default under or in
violation of any law, except for such defaults or violations that
would not, individually or in the aggregate, result in a material
adverse effect on the condition (financial or other) or prospects of
the Purchaser.
5.7 No Bankruptcy Proceedings - There are no bankruptcy, insolvency or
receivership proceedings outstanding against Ceridian, Ceridian
Holdings or the Purchaser and neither the Purchaser, Ceridian Holdings
nor Ceridian has made any assignment for the benefit of any creditors
and no execution or attachment has been levied against the Purchaser
on account of any liens or judicial process.
- Page 25 -
5.8 Organization, Standing and Authorization - Each of Ceridian and
Ceridian Holdings is a corporation, duly organized, validly existing
and in good standing under the laws of Delaware. Each of Ceridian and
Ceridian Holdings has all necessary power and authority to own, lease
or licence its property and to conduct its business as now conducted
and has the requisite power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.
5.9 Authorization, Execution and Enforceability re: Ceridian and Ceridian
Holdings The execution, delivery and performance by Ceridian and
Ceridian Holdings of this Agreement have been duly authorized by all
necessary corporate action of Ceridian, and no further corporate
action is required to be taken by Ceridian or Ceridian Holdings in
order to execute, deliver and perform this Agreement. All persons
executing this Agreement on behalf of Ceridian and Ceridian Holdings
have been duly authorized to do so by all necessary corporate action
on the part of Ceridian. This Agreement has been duly executed and
delivered by Ceridian and Ceridian Holdings and constitutes the legal,
valid and binding obligation of Ceridian and Ceridian Holdings,
enforceable against them in accordance with its terms, except as
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws of general application, and equitable
remedies that may be granted or imposed by a court of competent
Jurisdiction.
5.10 No Conflicting Agreements - The execution and delivery by each of
Ceridian and Ceridian Holdings of this Agreement and the performance
by each of Ceridian and Ceridian Holdings of their obligations
hereunder do not and will not (i) result in or constitute a default
under, breach or violation of, or an event that with notice or lapse
of time or both would be a breach or violation of, the organizational
documents of Ceridian or Ceridian Holdings, or any existing note,
bond, mortgage, indenture, deed of trust, licence, permit, lease, loan
agreement, contract or other agreement, instrument or arrangement to
which Ceridian or Ceridian Holdings is a party or by the terms of
which Ceridian or Ceridian Holdings is or may be bound or affected; or
(ii) violate or contravene any law to which they are subject.
5.11 Consents - No consent, approval or authorization under any material
indenture, contract, instrument or other agreement to which either of
Ceridian or Ceridian Holdings is a party or by which either of them is
bound is required to be obtained in connection with the execution,
delivery and performance by Ceridian or Ceridian Holdings of this
Agreement. There are no consents, approvals, permits or
authorizations, declarations, filings or registrations with, or
notices to, any governmental or regulatory authority required to be
made or obtained by Ceridian or Ceridian Holdings in connection with
the execution and delivery of this Agreement and the performance of
the transactions contemplated hereby or thereby, except that Ceridian
or the Purchaser will make appropriate filings under the Investment
Canada Act within 30 days following the Closing.
- Page 26 -
5.12 Legal Proceedings - There are no legal proceedings pending and neither
of Ceridian nor Ceridian Holdings is aware of any legal proceedings
threatened or of any circumstances which may reasonably be expected to
give rise to such proceedings against the Purchaser which in any way
might interfere with the entering into of this Agreement by Ceridian
or Ceridian Holdings or the performance of their obligations
hereunder.
5.13 Authorization, Execution and Enforceability re: the Corporation - The
execution, delivery and performance by the Corporation of the
Ancillary Agreements shall as of the Effective Date be duly authorized
by all necessary corporate action of the Corporation, and no further
corporate action shall be required to be taken by the Corporation in
order to execute, deliver and perform the Ancillary Agreement. All
persons executing the Ancillary Agreements on behalf of the
Corporation shall be duly authorized to do so by all necessary
corporate action on the part of the Corporation. The Ancillary
Agreements shall be duly executed and delivered by the Corporation and
shall constitute, the legal, valid and binding obligation of the
Corporation enforceable against the Corporation in accordance with its
terms, except as enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or similar laws of general application, and
equitable remedies that may be granted or imposed by a court of
competent jurisdiction.
5.14 No Conflicting Agreements - The execution and delivery by the
Corporation of the Ancillary Agreements and the performance by the
Corporation of its obligations thereunder will not (i) result in or
constitute a default under, breach or violation of, or an event that
with notice or lapse of time or both would be a breach or violation
of, the organizational documents of the Corporation, or any existing
note, bond, mortgage, indenture, deed of trust, licence, permit,
lease, loan agreement, contract or other agreement, instrument or
arrangement to which Ceridian, Ceridian Holdings or the Purchaser may
be a party or by the terms of which Ceridian, Ceridian Holdings, the
Purchaser or the Corporation (following the Effective Time) may be
bound or affected; or (ii) violate or contravene any law to which
it is subject.
5.15 Consents - No consent, approval or authorization under any material
indenture, contract, instrument or other agreement to which Ceridian
or the Purchaser is a party or by which Ceridian, the Purchaser or the
Corporation (following the Effective Time) may be bound is required to
be obtained in connection with the execution, delivery and performance
by the Corporation of the Ancillary Agreements. There are no
consents, approvals, permits or authorizations, declarations, filings
or registrations with, or notices to, any governmental or regulatory
authority required to be made or obtained by the Corporation in
connection with the execution and delivery of the Ancillary Agreements
and the performance of the transactions contemplated hereby or
thereby.
5.16 Duly Licenced - Following the Closing, the Purchaser shall cause the
Corporation to be duly licenced, registered or qualified in each
jurisdiction in which it shall conduct the
- Page 27 -
HRMS Business and the Payroll Business, to perform its obligations
under this
Agreement and the Ancillary Agreements, and to enable the HRMS
Business and Payroll Business to be conducted as it is now conducted,
and all such licences, registrations, and qualifications shall be
valid, subsisting and in good standing.
5.17 Brokers' and Finders' Fees - No Person has, or as a result of any of
the transactions contemplated hereby will have, by reason of any
commitment of Ceridian, Ceridian Holdings or the Purchaser towards
such Person, any right, interest or valid claim against or upon BW or
the Bank or any property of BW or the Bank for any commission, fee or
other compensation as broker or finder or for services in any similar
capacity.
5.18 Corporation Plans - Schedule 5.18 sets forth a list of benefits that
the Corporation will make available to the Transferred Employees on
and after the dates set out in Schedule 5.18, subject to regulatory
approval.
6. SURVIVAL AND INDEMNIFICATION
6.1 Survival - Except as specifically provided in this Agreement, the
representations, warranties and covenants set forth herein or in any
certificate or other document delivered pursuant hereto and the
obligations of the parties hereto with respect thereto shall survive
the Closing and shall continue in full force and effect, provided that
such representations, and warranties shall only survive for a period
of [confidential information omitted] from the Closing Date, except
with respect to (i) tax matters (which shall survive the Closing Date
and continue in full force and effect until, but not after,
[confidential information omitted] or (ii) the matters represented and
warranted in Sections 4.8, 4.9 and 4.32 [confidential information
omitted]. If prior to the expiry of the said period no claim shall
have been made hereunder with respect to any such matters, the parties
shall have no further liability hereunder with respect thereto. No
due diligence investigation by a party hereto shall have the effect of
waiving any representation or warranty in its favour by another party.
6.2 Indemnification by Bank and BW - Subject to Section 6.3, the Bank and
BW shall be jointly and severally liable to Ceridian, Ceridian
Holdings, the Purchaser and the Corporation and shall defend,
indemnify and hold harmless Ceridian, Ceridian Holdings the Purchaser
and the Corporation and their respective officers, directors,
shareholders and employees against any and all losses, liabilities,
damages, demands, claims, suits, actions, judgments, causes of action,
assessments, fines, costs or expenses including, without limitation,
interest, penalties and attorneys' and accounting fees, asserted
against, resulting to, imposed on or incurred or suffered by Ceridian,
Ceridian Holdings, the Purchaser or the Corporation, directly or
indirectly, as a result of or arising out of:
- Page 28 -
(a) the breach of any agreement, covenant, or representation and
warranty of the Bank or BW contained in this Agreement, the
Transfer Agreement, the Ancillary Agreements, or in any document
required to be entered into by the Bank or BW in favour of the
Corporation, the Purchaser, Ceridian or Ceridian Holdings
hereunder;
(b) non-fulfilment of any agreement, covenant or obligation of the
Bank or BW contained in this Agreement, the Transfer Agreement,
the Ancillary Agreements or in any document required to be
entered into by the Bank or BW in favour of the Purchaser, the
Corporation, Ceridian or Ceridian Holdings hereunder;
(c) all claims brought by or in respect of any of the Designated
Employees resulting from matters arising and accruing prior to
the Effective Time and all claims brought by or in respect of any
of the LTD Employees resulting from matters arising and accruing
at any time, in respect of, without limitation, wages, salaries,
bonuses, commissions, vacation pay, holiday pay, severance pay,
termination notice or pay in lieu of such notice, termination
pay, pension and other employee benefits, income tax
withholdings, unemployment insurance, employer health tax and any
other federal or provincial employment legislation related to
employment matters, except for any matters for which the
Corporation has expressly assumed responsibility under the terms
of this Agreement, the Transfer Agreement or the Ancillary
Agreements; and
(d) non-compliance with applicable bulk sales legislation in
connection with the transactions contemplated by the Transfer
Agreement.
6.3 Software and Trademark Indemnification
(a) The Bank shall, at its own expense, defend or arrange for the
defence of, or settle any action brought or claim made against
Ceridian, Ceridian Holdings, the Purchaser or the Corporation
based on any allegation that (i) the Proprietary HRMS Software or
the Proprietary Payroll Software infringes any patent, copyright,
trade secret or any other intellectual property right in any
jurisdiction, or (ii) that the Payroll Trademarks or the HRMS
Trademarks infringe any trademarks or other intellectual property
rights of any other Person. The Bank shall be liable to and
shall indemnify and hold harmless Ceridian, Ceridian Holdings,
the Purchaser and the Corporation and their respective officers,
directors, shareholders and employees against any and all costs,
losses, liabilities, demands, claims, suits, actions, judgments,
assessments, causes of actions, fees and expenses and damages in
any such claim or action including, without limitation, interest,
penalties and attorney's and accounting fees asserted against,
resulting to, imposed on or incurred or suffered by Ceridian,
Ceridian Holdings,
Page 29 -
the Purchaser or the Corporation directly or indirectly as a
result of or arising out of any of the aforementioned claims or
actions, provided that:
(i) Ceridian, Ceridian Holdings, the Purchaser and the
Corporation promptly notify the Bank when it receives
any notice of such claim or allegation of infringement;
(ii) Ceridian, Ceridian Holdings, the Purchaser and the
Corporation fully cooperate with the Bank in the
defence or settlement of such action; and
(iii) the Bank shall have sole control of the defence or
settlement of any such claim or action.
(b) The Bank shall not be liable for any infringement or claim
thereof based on any modifications to the Proprietary HRMS
Software or the Proprietary Payroll Software made by, or improper
use thereof by Ceridian, Ceridian Holdings, the Purchaser, the
Corporation, or any third party.
(c) In the event a successful claim of infringement (save and except
for a claim made under Section 6.3(b)) shall restrain Ceridian's,
Ceridian Holdings, the Purchaser's or the Corporation's use of
all or part of the Proprietary HRMS Software or the .Proprietary
Payroll Software, the Bank shall, at its expense, take one of the
following actions (the selection of which shall be in the sole
discretion of the .Bank):
(i) procure for Ceridian, Ceridian Holdings, the Purchaser
or the Corporation the right to continue using the
alleged infringing or misappropriated Proprietary HRMS
Software or the Proprietary Payroll Software at no cost
to Ceridian, Ceridian Holdings, the Purchaser or the
Corporation; or
(ii) replace or modify the Proprietary HRMS Software or the
Proprietary Payroll Software so that it becomes
non-infringing (with the reasonable assistance of the
Purchaser, provided that the services of the
Purchaser's SR&D personnel engaged to assist with this
process shall be paid by the Bank at reasonable per
them rates). The Bank agrees that such replacement or
modification will be equivalent to the original
Proprietary HRMS Software or the Proprietary Payroll
Software in functionality and performance as is
reasonably practicable, provided, however, that the
functionality and performance shall not be materially
changed or degraded.
- Page 30 -
(d) The foregoing paragraphs of this Section 6.3 state the entire
liability of the Bank for any loss or damage whatsoever as a
result of the infringement of any intellectual property rights
and supersede, in the event of conflict with, any other provision
of this Agreement.
6.4 Indemnification by the Purchaser - Ceridian, Ceridian Holdings, the
Purchaser and the Corporation shall be jointly and severally liable to
the Bank and BW and shall defend, indemnify and hold harmless the Bank
and BW and their officers, directors, shareholders and employees
against any and all losses, liabilities, damages, demands, claims,
suits, actions, judgments, causes of action, assessments, fines, costs
or expenses including, without limitation, interest, penalties and
attorneys' and accounting fees, asserted against, resulting to,
imposed on, or incurred or suffered by the Bank and BW, directly or
indirectly, as a result of or arising out of-
(a) the breach of any agreement, covenant, representation or warranty
by the Purchaser, the Corporation, Ceridian or Ceridian Holdings
contained in this Agreement, the Transfer Agreement, the
Ancillary Agreements or in any document required to be entered
into by the Purchaser, Ceridian, Ceridian Holdings or the
Corporation in favour of the Bank or BW hereunder;
(b) any matter requiring indemnification by the Corporation in favour
of the Bank pursuant to subsection 12. 1 (b)(ii), (iii) and (iv)
of the Transitional Services Agreement;
(c) the non-fulfilment of any agreement, covenant or obligation of
the Purchaser or the Corporation contained in this Agreement, the
Transfer Agreement, the Ancillary Agreements or in any document
required to be entered into by the Purchaser, the Corporation,
Ceridian Holdings or Ceridian in favour of the Bank or BW
hereunder or thereunder, including, without limitation, the
assumption of the Assumed BRMS Liabilities and the Assumed
Payroll Liabilities;
(d) all claims brought by or in respect of any of the Transferred
Employees, resulting from matters arising and accruing on and
after the Effective Time, in respect of wages, salaries, bonuses,
commissions, vacation pay, holiday pay, severance pay,
termination notice or pay in lieu of such notice, termination
pay, pension and other employee benefits, income tax
withholdings, unemployment insurance, employer health tax and any
other federal or provincial employment legislation related to
employment matters, except for any matters for which the Bank has
expressly retained responsibility under the terms of this
Agreement, the Transfer Agreement or the Ancillary Agreements;
and
- Page 31 -
(e) all liability of the Bank and BW for Taxes that may be assessed
upon them in connection with the transfer of the Purchased
Payroll Assets and the Purchased HRMS Assets pursuant to the
Transfer Agreement, but excluding income taxes payable by BW or
the Bank as a result of the disposition of the Purchased HRMS
Assets or Purchased Payroll Assets to the Corporation pursuant to
the Transfer Agreement.
6.5 Indemnification for Claims Other Than Third Party Claims - Following
receipt from a party hereto (the "Indemnified Party") of a written
notice of a claim for indemnification which has not arisen in respect
of a Third Party Claim (as defined in Section 6.6 below), the party or
parties in receipt of such notice (the "Indemnifying Party") shall
have thirty (30) Business Days to make such investigation of the
claim as the Indemnifying Party 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. If the
Indemnified Party and the Indemnifying Party agree at or prior to the
expiration of such thirty (30) Business Days (or any mutually agreed
upon extension thereof) to the validity and amount of the claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the
full agreed upon amount of the claim. If the Indemnified Party and
the Indemnifying Party do not reach agreement within such period
(or any mutually agreed upon extension thereof), such dispute shall
be resolved by any arbitration proceeding as may be agreed between
the Indemnified Party and the Indemnifying Party, or shall be subject
to resolution by proceedings to be commenced before a court of
competent jurisdiction.
6.6 Indemnification against Third Party Claims
Except as provided in Section 6.3,
(a) Promptly upon receipt by a party hereto (herein referred to as
the "Indemnitee") of notice of any claim by a third party (a
"Third Party Claim") in respect of which the Indemnitee proposes
to demand indemnification from another party or parties to this
Agreement (the "Indemnitor"), the lndemnitee shall give notice
(the "Notice") to that effect to the Indemnitor. The Notice
shall set forth the actual or estimated amount of the loss or
losses incurred or to possibly be incurred, and shall specify in
reasonable detail the items of loss or potential loss included in
the amount so stated, the date such matter occurred, the basis
for any anticipated loss or losses, and the nature of the
misrepresentation, breach of warranty or breach of covenant or
claim to which such items relate. The failure the give the
Notice on a timely basis shall not affect the Indemnitee's right
to indemnification hereunder except to the extent that the
Indemnitor is materially prejudiced thereby, subject to Section
6.7.
- Page 32 -
(b) 'The Indemnitor shall have the right, by notice to the Indemnitee
not later than the earlier of (i) twenty (20) Business Days after
receipt of the notice described in Section 6.6(a) and (ii) the
date upon which any action must be taken in reply to such Notice,
to assume the control of the defence, compromise or settlement of
the Third Party Claim, provided that:
such assumption shall, by its terms, be without cost to
the Indemnitee; and
(ii) the Indemnitor shall at the Indemnitee's request
furnish the Indemnitee with reasonable security against
any costs or other liabilities to which it may be or
become exposed by reason of such defence, compromise or
settlement.
(c) Upon the assumption of control by the Indemnitor as aforesaid,
the Indemnitor shall diligently proceed with the defence,
compromise or settlement of the Third Party Claim, at the
Indemnitor's sole expense, including employment of counsel
reasonably satisfactory to the lndemnitee (verification of
satisfaction with the choice of counsel not to be unreasonably
withheld or delayed) and, in connection therewith, the Indemnitee
shall co-operate fully, but at the expense of the Indemnitor, to
make available to the Indemnitor all pertinent information and
witnesses under the Indemnitee's control, make such assignments
and take such other steps as are necessary to enable the
Indemnitor to conduct such defence, compromise or settlement,
provided always that the Indemnitee shall be entitled to
reasonable security from the Indemnitor for any expense, costs or
other liabilities to which it may be or may become exposed by
reason of such cooperation. Provided that the Indemnitor is
reasonably contesting any such Thirty Party Claim in good faith,
the Indemnitee shall not pay or settle any such Third Party
Claim. Notwithstanding the foregoing, the Indemnitee shall have
the right to pay or settle any such claim, provided that in such
event the Indemnitee shall waive any right to indemnification
therefor by the Indemnitor.
(d) If the Indemnitor fails to give notice to the Indemnitee as
provided in Section 6.6(b) or if the Indemnitor does not
reasonably contest the Third Party Claim in good faith, the
Indemnitee shall be entitled to assume the control of the
defence, compromise or settlement of the Third Party Claim as in
its sole discretion may appear advisable. The Indemnitee shall,
however, consult with the Indemnitor prior to agreeing to any
compromise or settlement of the Third Party Claim.
(e) The final determination of any such Third Party Claim including
all related costs and expenses (including all legal fees and
disbursements incurred by the Indemnitee) shall be binding and
conclusive upon the parties hereto as to the
- Page 33 -
validity or invalidity, as the case may be, of such Third Party
Claim against the Indemnitor hereunder.
6.7 Expiry of Liability -
(a) The foregoing obligations of indemnification with respect to
representations and warranties shall be subject to the time
limitations set forth in Section 6.1 hereof and no party shall be
required to indemnify and save harmless any other party with
respect to such matters for which indemnification is sought
unless such party shall have been provided with notice pursuant
to Section 6.5 or Section 6.6, as the case may be, on or prior to
the expiration of the time periods set out in Section 6.1. With
respect to the obligations of indemnification under Sections
6.2(c) and 6.4(d) and 6.4(e), no party shall be required to
indemnify and save harmless any other party with respect to such
matters for which indemnification is sought unless such party
shall have been provided with notice pursuant to Section 6.5 or
6.6, as the case may be, on or prior to sixty (60) days after the
expiration of the applicable limitation periods in which a claim
can be made with respect to such matters.
(b) The assumption of liabilities by the Corporation relating to the
Assumed HRMS Liabilities and the Assumed Payroll Liabilities
shall terminate only upon complete performance thereof.
6.8 Limit - Notwithstanding any other provision of this Agreement, except
for the indemnification granted under Section 6.4(e), no claim for
indemnification, damages or other relief will be valid against a party
hereto until such time as the cumulative amount of losses for which
claims for indemnification made against the party exceeds $1 00,000,
at which time the losses indemnified shall revert to the first dollar
of loss. The maximum aggregate liability of a party, under all such
claims, shall not exceed the amount of the Purchase Price.
7. COVENANTS
7.1 Covenants of the Bank and BW - The Bank and BW covenant and agree with
the Purchaser as follows:
(a) Reasonable Efforts to Maintain and Preserve: The Bank and BW will
exercise all reasonable efforts to ensure that, from the date
hereof until the Closing Date, except as otherwise herein
provided or approved in writing by the Purchaser,
(i) the Payroll Business and the HRMS Business will each be
conducted only in the ordinary course in substantially
the same manner as prior to the date
- Page 34 -
hereof and in such manner that each of the
representations and warranties made by the Bank and BW
herein as of the date hereof will, as of the Effective
Time, be true and correct in all material respects,
provided that any price increases or decreases
implemented by the Bank for the Payroll Services, or by
BW for the HRMS Services prior to the Effective Time,
shall be consistent with the Bank's and BW's usual
practice of instituting price increases or decreases;
and
(ii) the organization of the Payroll Business and the HRMS
Business will be maintained intact, the services of
their competent employees will be retained, and their
relationships with and the goodwill of their customers,
suppliers and others having business relations with
them will be preserved, the whole so as to maintain the
goodwill of the Payroll Business and the HRMS Business.
(b) Notice of Cessation in Ordinary Course: The Bank and BW will
promptly notify the Purchaser of the happening or existence or
apprehended happening or existence of any event or circumstance
on or prior to the Effective Time by reason of which either of
the Payroll Business or the HRMS Business has ceased or may cease
to be conducted in the ordinary course as heretofore provided or
by reason of which any of the representations and warranties made
by the Bank or BW herein may cease to be true and correct.
(c) Covenant Not to Compete: For a period of [confidential
information omitted] from and after the Closing Date, the Bank
and BW shall not, and shall ensure that their respective
affiliates do not directly or indirectly [confidential
information omitted] provide payroll services or human resource
management services similar to the type carried on by the Payroll
Business and the HRMS Business, provided that the Bank and its
affiliates shall not be precluded from any of the following:
(i) providing payroll services and human resource
management services to employees of the Bank and its
affiliates;
(ii) acquiring an interest in the assets or shares of a
Person that carries on, as its non-principal business,
a payroll services and/or human resource management
services business, provided that the Corporation shall
be given a right of first opportunity to purchase such
Person's Canadian payroll services business and/or
human resource management services business, on terms
as may be negotiated in good faith. In the event of
the waiver or other termination of such right of first
opportunity by the Corporation without the Corporation
having purchased such business or businesses, the Bank
and its affiliates shall not be obligated to cause any
- Page 35 -
such Person to cease providing payroll services and/or
human resource management services, whether or not such
services compete with the Payroll Business, provided
that the payroll services and/or human resource
management services of such Person shall not be branded
with the trademarks, tradenames or logos of the Bank;
In the event that the payroll services and/or human
resource management services business of such Person
subsequently becomes the principal business of such
Person, the Corporation shall again be given a right of
first opportunity to purchase such Person's Canadian
payroll services business and/or human resource
management services business on terms as may be
negotiated in good faith. In the event of the waiver
or other termination of such right of first opportunity
by the Corporation without the Corporation having
purchased such business or businesses, the Bank and its
affiliates shall not be obligated to cause any such
Person to cease providing payroll services and/or human
resource management services, whether or not such
services compete with the Payroll Business, provided
that the payroll services and/or human resource
management services of such Person shall not be branded
with the trademarks, tradenames or logos of the Bank;
(iii) acquiring an interest in the assets or shares of a
Person that carries on the business of providing
payroll services or human resource management services,
on a passive basis and for investment purposes only, or
on a security enforcement, provided that the payroll
services and human resource management services of such
Person are not branded with the trademarks, tradenames
or logos of the Bank; or
(iv) providing banking, financial services, and all other
non-payroll and non-human resource management services
to the Payroll Clients and to HRMS Clients.
(d) Non-Solicitation: For a period of [confidential information
omitted] from and after the Closing Date, the Bank shall not, and
shall ensure that its respective affiliates do not, solicit the
Transferred Employees directly or indirectly, for employment with
or provision of services to the Bank or its affiliates (provided
that general advertisements to the public for employment
positions shall be deemed not to be a solicitation for the
purposes of this subsection).
For a period of [confidential information omitted] from and after the Closing
Date, the Bank shall not, and shall ensure that its respective affiliates do
not, solicit:
- Page 36 -
(i) Payroll Clients to purchase payroll services of any
type from the Bank or any other Person; and
(ii) HRMS Clients to purchase human resource management
services of any type from the Bank or any other Person.
Notwithstanding the foregoing, the Bank may make solicitations in
order to provide the services that it is not precluded from
providing pursuant to Section 7. 1 (c)(iv).
(e) Documents: On or prior to the Closing Date, the Bank and BW will
execute all such agreements or documents contemplated in Section
8.1 and all other documents reasonably required by Ceridian,
Ceridian Holdings, the Purchaser or the Corporation to give
effect to the transactions contemplated herein.
Reasonable Assistance: The Bank shall provide the Purchaser with
reasonable assistance, at no expense to the Bank, in order to obtain
all necessary
governmental and regulatory approvals to be obtained by the Purchaser,
if any, in connection with the transactions provided for herein.
7.2 Covenants of the Purchaser and the Corporation - The Purchaser, the
Corporation, Ceridian Holdings and Ceridian covenant and agree with
the Bank as follows:
(a) Documents: On or prior to the Closing Date, the Purchaser, the
Corporation, Ceridian Holdings and Ceridian will execute all such
agreements or documents contemplated in Section 8.2 and all other
documents reasonably required by the Bank to give effect to the
transactions contemplated herein.
(b) Non-Solicitation: For a period of [confidential information
omitted] from and after the Closing Date, the Purchaser, the
Corporation, Ceridian Holdings and Ceridian shall not, and shall
ensure that their respective affiliates do not solicit employees
of the Bank and its affiliates that are not Designated Employees,
directly or indirectly, for employment with or provision of
services to the Purchaser or its affiliates (provided that
general advertisements made to the public for employment
positions shall not be deemed to be a solicitation for the
purposes of this subsection).
For a period of [confidential information omitted] from and after the
Closing Date, the Purchaser, the Corporation, Ceridian and Ceridian
Holdings shall not, and shall ensure that their respective affiliates
do not, directly or indirectly, sell or otherwise make available to a
Comparable Financial Institution, the lists of (i) Payroll Clients and
HRMS Clients and (ii) those customers of the Bank referred to the
Corporation pursuant
- Page 37 -
to the Joint Sales and Marketing Agreement, nor shall they permit or
acquiesce in any other Person doing the same.
For the purposes hereof, "Comparable Financial Institution" means a
bank or loan and trust corporation or any of their affiliates.
Insurance companies shall also be deemed to be a Comparable Financial
Institution at a future time if, pursuant to legislative changes,
insurance companies shall be permitted to engage in the provision of
banking and financial services comparable to those types of services
that a bank is permitted to conduct.
(c) Receivables: - The Corporation shall receive in trust for the
Bank and BW and shall deliver to the Bank and BW all payments
made to the Corporation in respect of accounts receivable of the
Payroll Business and the HRMS Business which are due in whole or
in part to the Bank and BW, both in respect of xxxxxxxx made
prior to the Effective Date and xxxxxxxx made on or after the
Effective Date, including those in respect of the work-in-process
allocated between the parties in accordance with Section 3.2.
The Corporation, the Bank and BW shall cooperate in the
accounting and delivery to the Bank and BW of such payments.
7.3 Other Covenants
(a) Employees:
(i) Employee Continuation -
A. The Corporation shall offer to continue the
employment of all of the Designated Employees
consistent with the provisions of this Section
7.3, commencing effective the Effective Time,
subject to Section 7.3(a)(vi). The Bank and the
Purchaser shall participate in a joint
communication strategy, to advise the Designated
Employees at least three Business Days prior to
the Closing Date of the continuation of their
employment by the Corporation.
The continuation of employment of the Transferred
Employees shall include terms and conditions which
are [confidential information omitted]. The terms
and conditions of continued employment shall
include,
- Page 38 -
without limitation, (i) job functions [confidential
information omitted]; (ii) [confidential information
omitted] base salaries [confidential information
omitted]; (iii) [confidential information omitted]
commissions, gain-sharing and bonuses [confidential
information omitted]; (iv) [confidential information
omitted] merit increase policy; (v) [confidential
information omitted], the benefits set forth in
[confidential information omitted], or other benefits
or compensation [confidential information omitted];
(vi) vacation, [confidential information omitted]; and
(vii) [confidential information omitted] retiree
benefits [confidential information omitted].
[confidential information omitted]
For the purposes of calculating service dates with
respect to eligibility for participation under the
Corporation's employee benefit plans and policies,
[confidential information omitted] and for any other
purposes required by law, the length of service of each
Transferred Employee [confidential information
omitted].
B. The [confidential information omitted] shall be
responsible to pay to the Transferred Employees
commissions and gain sharing amounts earned prior to
the Effective Time in accordance with the terms of the
applicable commission and gain sharing programs.
[confidential information omitted]
The [confidential information omitted] shall be
responsible to pay bonuses to the Transferred Employees
based on the fiscal year of the Payroll Business and
the HRMS Business ended October 31, 1997, and the
[confidential information omitted] shall be responsible
for the payment of a pro-rata amount of such bonuses
- Page 39 -
in respect of the performance of Transferred Employees
for the period of November 1, 1997 up to the Effective
Date, [confidential information omitted]
For the purposes hereof, references to commissions,
gain sharing amounts and bonuses shall be references to
the commission and bonus programs offered by the Bank
to Transferred Employees in effect on the Effective
Date as set forth in Schedules 4.17(a) and 4.17(b). To
the extent that any of such commissions, gain sharing
amounts and bonuses are calculated on a fiscal year
basis, adjustments with respect to these matters shall
be made as soon as possible after the period ended
October 31, 1998.
(ii) No Discouragement - Neither Ceridian, Ceridian
Holdings, the Purchaser, the Corporation the Bank, or
their affiliates shall take any action to discourage
any of the Designated Employees from accepting the
continued employment on behalf of the Corporation.
(iii) Transferred Employees - Subject to subsection
7.3(a)(vi), as at the Effective Time, all Transferred
Employees shall become employees of the Corporation for
all purposes and except as provided for herein, the
Bank shall have no obligations or liability in respect
of Transferred Employees only to the extent any such
obligation or liability arises from any action, event
or course of conduct that occurs on and after the
Effective Time. [confidential information omitted]
(iv) Consequences Upon Rejection - In the event that the
Bank terminates the employment of any Designated
Employees who reject continued employment with the
Corporation (the "Non-Transferred Employees") on, prior
to or after the Closing Date, [confidential information
omitted].
- Page 40 -
(v) Long-Term Disability - LTD Employees shall
[confidential information omitted].
(vi) Absent Employees - Subject to the provisions of this
subsection 7.3(a)(vi), the Corporation [confidential
information omitted] the employment of Absent Employees
[confidential information omitted]. The Corporation
shall, at the same time that offers of continued
employment are made to all Designated Employees or
shortly thereafter, communicate the intention of the
Corporation to [confidential information omitted] the
employment of an Absent Employee who is collecting
benefits under Short-Term Disability shall be
conditional upon [confidential information omitted] the
employment of those of the Absent Employees who are on
maternity or parental leave shall be conditional upon
[confidential information omitted] employment to any
other Absent Employee shall be conditional upon
[confidential information omitted]
[confidential information omitted] employment of Absent
Employees shall be consistent with all other provisions
of this Section 7.3 [confidential information omitted]
[confidential information omitted]. Without limiting
the preceding sentence, if the status of any Absent
Employee changes so that he or she commences collecting
benefits under Long-Term Disability [confidential
information omitted] such employee is an LTD Employee
for the purposes of this Agreement.
(vii) Vacation - The Corporation shall grant vacation to the
Transferred Employees [confidential information
omitted]
- Page 41 -
Statutory vacation pay accrual prior to the Effective
Time[confidential information omitted]
(viii) Dismissal - The Corporation shall not provide notice of
termination of employment to any of the Transferred
Employees, except for cause, until [confidential
information omitted]. Without limiting Section
7.3(a)(iii) and for greater certainty, in the event
that a Transferred Employee's service is terminated by
the Corporation [confidential information omitted]
(ix) Timing: The information in Schedule 4.17(a) and the
list of Absent Employees and LTD Employees shall be
updated on the Closing Date, and all references in this
Section 7.3 to the Designated Employees, the Absent
Employees and LTD Employees shall be deemed to be
reference to those persons and the information set
forth in such updated lists.
(b) Bank's Benefit Plans:
(i) [confidential information omitted] Except as expressly
provided in the Transitional Services Agreement, the
Transferred Employees shall cease to be covered by the
Bank's Benefit Plans from and after the Effective Time
[confidential information omitted] and shall thereafter
be covered by the Corporation's benefit plans.
[confidential information omitted] Transferred
Employees [confidential information omitted]
- Page 42 -
under the Corporation's benefit plans due to a
pre-existing condition.
(ii) Any claims for benefits incurred by the Transferred
Employees up to the Effective Time [confidential
information omitted] shall be payable by the Bank's
Benefit Plans. The Bank shall be liable to the
Corporation and shall defend, indemnify and hold
harmless the Corporation against any and all loss,
liability or expense arising out of any such claims
incurred as of or before the Effective Time.
(iii) Any claims for benefits incurred by the Transferred
Employees from and after the Effective Time
[confidential information omitted] shall be payable by
the Corporation's benefit plans according to their
terms. The Corporation shall be liable to the Bank and
shall defend, indemnify and hold harmless the Bank
against any and all loss, liability or expense arising
out of any such claims incurred on and after the
Effective Time [confidential information omitted].
However, nothing in this Agreement obligates the
Corporation to provide any particular benefit or
benefit plans so long as the Corporation has complied
with subsection 7.3(a)(i).
For the purposes of subsections 7.3(b)(ii) and
7.3(b)(iii), a claim shall be deemed to have been
incurred:
A. with respect to death or dismemberment, on the
actual date of death or of dismemberment;
B. with respect to short-term disability and
long-term disability, on the date the claimant
became disabled as determined in accordance with
the applicable plan; and
C. with respect to all extended health or dental, on
the date a service or supply giving rise to a
claim under the applicable Plan is purchased or
received by the claimant or his/her eligible
dependent.
Where a claim includes more than one service or supply, each of which
occurs at a single point in time (for example, a series of dental
appointments related to a treatment plan), each such service or supply
shall result in a separate claim
- Page 43 -
incurred as of the date on which the supply or service is
purchased or received as aforesaid. If sufficient information is
not available to identify charges associated with each claim (but
is sufficient for payment of the claims in the ordinary course of
claims adjudication), the total charges shall be prorated over
the number of claims.
(v) All Transferred Employees who participated in the
Bank's employee stock purchase plan immediately prior
to the Effective Date [confidential information
omitted]
(c) Pension Plan:
(1) Subject to and without limiting the Corporation's
commitment under subsection 7.3(a)(i), as soon as
practicable after the Closing Date, but effective as of
the Effective Time, the Corporation shall establish and
register with the applicable regulatory authorities, or
shall otherwise cause to be provided, a defined
contribution retirement plan (the "Corporation's
Pension Plan") for all Transferred Employees.
(ii) The Bank shall retain responsibility for, and satisfy
its obligations with respect to, all pension and
ancillary benefits accrued to the Transferred Employees
who participated in the Pension Plan to the Effective
Time in accordance with the terms thereof and
applicable federal and provincial laws.
(iii) As of the Effective Time, each of the Transferred
Employees will cease to actively participate in and
accrue benefits under the Pension Plan and will
commence participating in the Corporation's Pension
Plan for future service only in accordance with the
terms thereof and applicable federal and provincial
laws.
The Corporation's Pension Plan shall recognize the
period of employment of each of the Transferred
Employees with the Bank and its predecessors as
required by applicable federal and provincial laws.
(d) Competition Act/Investment Canada Act: The Bank, BW, the
Purchaser and the Corporation agree to file either individually,
o,- jointly (if required by law) all notices that may be required
under either the Competition Act and/or Investment Canada Act.
(e) Confidentiality: Ceridian, Ceridian Holdings, the Purchaser and
the Corporation shall keep confidential all confidential
information (unless readily available from
- Page 44 -
public or published information or sources or required to be
disclosed by law) obtained from the Bank and BW and not relating
to the Payroll Business or the HRMS Business. If this Agreement
is terminated without completion of the transactions contemplated
in this Agreement then, promptly after such termination, all
documents, work papers and other written material obtained from
the Bank and BW in connection with this Agreement shall be
returned to the Bank and BW, and Ceridian, Ceridian Holdings and
the Purchaser shall destroy any copies or notes taken summarizing
such information.
Consents Required in Contracts: The Bank, in co-operation with
the Purchaser, shall use reasonable efforts to obtain the
consents of third parties as may be necessary for the transfer
and assignment of Payroll Contracts and HRMS Contracts to the
Corporation and the subsequent change of control of the
Corporation. The Bank, acting jointly with the Purchaser, shall
use reasonable efforts to obtain the consent of Spectrum, Inc. as
may be necessary for the transfer and assignment of the contract
entered into between BW and Spectrum, Inc., to the Corporation,
and the subsequent change of control of the Corporation. If
consents cannot be obtained, any such contracts shall not be
assigned and the Bank or BW, as the case may be, shall to the
extent legally possible, hold its right, title and interest in,
to and under such contracts in trust for the benefit of the
Corporation in accordance with the Transfer Agreement.
(g) [Intentionally deleted]
(h) Trust Funds Under Administration: As of the Effective Time or on
the first Business Day thereafter, the Bank shall transfer all
funds under administration, including funds held on behalf of
Payroll Clients pursuant to statutory trusts (the "Funds") that
the Bank then holds in respect of payroll processed for Payroll
Clients, to a bank account of the Corporation designated in
writing by the Purchaser at least two Business Days prior to the
Closing Date. Notwithstanding the foregoing, subject to
agreement between the Bank and the Purchaser, the Bank shall make
a temporary investment of the Funds, and upon maturity of the
investment, the Bank shall transfer the Funds and the income
earned thereon to the bank account so designated in writing by
the Purchaser.
(1) Third Party Payments: On or prior to the Closing, the Bank shall
pay [confidential information omitted] to Cyborg Systems of
Canada Inc. ("Cyborg") in respect of the agreed upon fee for
securing Cyborg's consent to the assignment to the Corporation of
the contract between Bank and Cyborg. Unless otherwise agreed by
the parties, any fees payable to Spectrum, Inc. in respect of the
assignment to the Corporation of the contract between BW and
Spectrum, Inc. shall be paid by the Corporation. In addition,
the parties shall negotiate any apportionment of
- Page 45 -
payments required to be made to third parties to secure any
consents required to be obtained with respect to this Agreement
and the agreements contemplated hereby.
Transfer Agreement Fees: At the Closing, the Purchaser shall pay
to the Bank an amount equal to the legal fees and disbursements
incurred by the Bank as a result of the preparation of documents
and implementation of the transactions contemplated by the
Transfer Agreement, up to but not exceeding an amount of $17,500.
(k) Returns: The Bank will provide the Purchaser with copies of the
portions of the Bank's T661 returns filed with Revenue Canada for
the Bank's 1994, 1995, 1996 and 1997 taxation years that relate
to scientific research and experimental development related to
the Purchased Payroll Assets or the Purchased HRMS Assets (the
"Payroll/HRMS SR & ED"), together with copies of the portions of
all supporting reports and other documents that relate to the
Payroll/HRMS SR & ED, except for any such documents which the
Bank is not permitted to disclose or copy without the consent of
any third party. The foregoing copies shall be delivered by the
Bank as soon as reasonably practicable following the Closing
Date, provided that the Purchaser acknowledges that the Bank
requires a significant period of time to identify all of the
relevant documents. All such documents shall be kept in
strictest confidence by the Purchaser and the Purchaser shall not
disclose any portion of any of such documents to any person
except as required by law.
(1) Registrations: On or before Closing, the Bank shall register the
Corporation under part IX of the Excise Tax Act (Canada) and
under the Quebec Sales Tax Act and shall provide registration
particulars to the Purchaser.
(in) Statement: At Closing, the Bank shall provide the Purchaser with
a balance sheet of the Corporation prepared in accordance with
generally accepted accounting principles as at the Effective
Transfer Time reflecting the acquisition by the Corporation of
the Purchased Payroll Assets and the Purchased HRMS Assets, and
the issue of Shares by the Corporation pursuant to the Transfer
Agreement.
8. CONDITIONS OF CLOSING
8.1 For the Benefit of the Purchaser - The purchase and sale of the Shares
is subject to the following terms and conditions for the exclusive
benefit of the Ceridian, Ceridian Holdings and the Purchaser to be
fulfilled and performed on or prior to the Closing Date, provided that
Ceridian, Ceridian Holdings and the Purchaser in their sole discretion
may waive any of the said terms and conditions in whole or in part:
- Page 46 -
(a) Representations and Warranties Remain Correct: The
representations and warranties of the Bank and BW contained in
this Agreement or in any certificate or other document delivered
to the Purchaser pursuant hereto shall be true and correct on and
as of the Closing Date with the same force and effect as though
such representations and warranties had been made on and as of
such date.
(b) Compliance with Covenants: Each of the Bank, BW and the
Corporation shall have complied with all covenants and agreements
herein agreed to be performed or caused to be performed by it, in
all material respects, on or prior to the Closing Date,
including, without limitation, the sale and transfer of the
Purchased HRMS Assets and the Purchased Payroll Assets to the
Corporation pursuant to the Transfer Agreement.
(c) No Actions or Proceedings: No action or proceeding at law or in
equity shall be pending or threatened by any Person, including
without limiting the generality thereof, any governmental
authority, regulatory body or agency, to enjoin or prohibit:
(i) the purchase and sale of the Shares;
(ii) the purchase and sale of the Purchased HRMS Assets or
the Purchased Payroll Assets contemplated by the
Transfer Agreement or the right of the Corporation to
own the Purchased HRMS Assets or the Purchased Payroll
Assets; and
(iii) the right of the Corporation, Ceridian, Ceridian
Holdings or the Purchaser to conduct and carry on the
Payroll Business and the HRMS Business in the normal
course.
(d) Consents, Authorizations and Registrations: All necessary
consents, approvals, orders and authorizations of any Persons or
governmental authorities in Canada or elsewhere or required
pre-closing registrations, declarations, filings or recordings
with any such authorities in connection with the completion of
any of the transactions contemplated by this Agreement, the
Transfer Agreement or the Ancillary Agreements, shall have been
obtained or made on or before Closing.
(e) Agreements: The Bank and BW shall have delivered or caused to be
delivered to the Purchaser:
(i) the Ancillary Agreements;
- Page 47 -
(ii) an opinion of counsel of the Bank and BW in form and
substance satisfactory to the Purchaser's counsel,
acting reasonably;
(iii) share certificates representing the Shares duly
endorsed in blank for transfer, and the corporate
minute book, share certificates, corporate seal and
other corporate records of the Corporation;
the resignations of all of the directors of the
Corporation;
(v) a list of work-in-process of the HRMS Business and the
Payroll Business as at the Closing Date;
(vi) the lists of HMRS Clients and Payroll Clients;
(vii) a list, as at the Closing Date, of all Absent Employees
and any updates to Schedule 4.17(a); and
(viii) all other instruments, agreements and other documents
as the Purchaser and its counsel may reasonably require
in connection with the Closing; and
(f) Consents: Consents to the assignment, sublease or sublicence of
the material contracts set forth in Schedule 8. 1 (f) and the
change of control of the Corporation following such assignment,
sublease or sublicense shall have been received in form and
content satisfactory to the Purchaser, acting reasonably.
If any of the conditions contained in this Section 8.1 shall not be
fulfilled or performed at or prior to Closing to the satisfaction of
the Purchaser, acting reasonably, the Purchaser may, by notice to the
Bank and BW, terminate this agreement and the obligations of the Bank,
BW, Ceridian, Ceridian Holdings, the Corporation and the Purchaser
under this Agreement, without prejudice to any rights or remedies of
the Ceridian and the Purchaser. For greater certainty,
notwithstanding any provision in this Agreement, no right of
termination arises as a result of the breach of a representation,
warranty, or non-fulfillment of a covenant unless such breach or
non-fulfillment was material.
8.2 For the Benefit of the Bank and BW - The purchase and sale of the
Shares is subject to the following terms and conditions for the
exclusive benefit of the Bank and BW to be fulfilled and performed on
or prior to the Closing Date, provided that the Bank and BW in its
sole discretion may waive any of the said terms and conditions in
whole or in part:
(a) Representations and Warranties Remain Correct: The
representations and warranties of Ceridian, Ceridian Holdings and
the Purchaser contained in this
- Page 48 -
Agreement or in any certificate or other document delivered to
the Bank and BW pursuant hereto shall be true and correct in the
aggregate in all material respects on and as of the Closing Date
with the same force and effect as though such representations and
warranties had been made on and as of such date.
(b) Compliance with Covenants: Each of the Purchaser, Ceridian
Holdings and Ceridian shall have complied with all covenants and
agreements herein agreed to be performed or caused to be
performed by it in all material respects on or prior to the
Closing Date.
(c) No Actions or Proceedings: No action or proceeding at law or in
equity shall be pending or threatened by any Person, including
without limiting the generality thereof, any governmental
authority, regulatory body or agency to enjoin or prohibit the
purchase and sale of the Purchased HRMS Assets and the Purchased
Payroll Assets pursuant to the Transfer Agreement, and the sale
of the Shares to the Purchaser or any other transaction
contemplated hereby.
(d) Consents, Authorizations and Registrations: All necessary
consents, approvals, orders and authorizations of any Persons or
governmental authorities in Canada or elsewhere or required
pre-closing registrations, declarations, filings or recordings
with any such authorities in connection with the completion of
any of the transactions contemplated by this Agreement, the
Transfer Agreement or the Ancillary Agreements, shall have been
obtained or made on or before Closing.
(e) Documents: The Purchaser shall have delivered or caused to be
delivered to the Bank and BW:
(i) the Ancillary Agreements;
(ii) an opinion of counsel of Ceridian, Ceridian Holdings,
the Purchaser and the Corporation (post-acquisition),
in form and substance satisfactory to the Bank's
counsel, acting reasonably;
(iii) payment of the Purchase Price, subject to adjustments;
and
(iv) all other instruments, agreements and other documents
as the Bank and its counsel may reasonably require in
connection with the Closing
(f) Approval: The Bank's board of directors (or the authorized
committee thereof) shall have approved the entering into by the
Bank of this Agreement, the Transfer Agreement, the Ancillary
Agreements and the transactions and other agreements contemplated
hereunder.
Page 49 -
If any of the conditions contained in this Section 8.2 shall not
be fulfilled or performed at or prior to Closing to the
satisfaction of the Bank and BW, acting reasonably, the Bank and
BW may, by notice to the Purchaser, terminate this agreement and
the obligations of the Bank, BW, Ceridian, Ceridian Holdings, the
Corporation and the Purchaser under this Agreement, without
prejudice to any rights or remedies of the Bank and BW. For
greater certainty, notwithstanding any provision in this
Agreement, no right of termination arises as a result of the
breach of a representation, warranty, or non-fulfilment of a
covenant unless such breach or non-fulfilment was material.
9. CLOSING
Subject to Article 8, the sale and purchase of the Shares, the Purchased HRMS
Assets, and the Purchased Payroll Assets, and the assumption of the Assumed HRMS
Liabilities and the Assumed Payroll Liabilities, and the other transactions
herein provided for, shall be consummated and completed on the Closing Date at
the Closing Place.
10. GENERAL PROVISIONS
10.1 Independent Contractors - Nothing in this Agreement shall be construed
to create a partnership, joint venture, agency relationship or other
association between the Bank and BW, on the one hand, and the
Purchaser, the Corporation, Ceridian Holdings and Ceridian, on the
other, and neither of such parties has express or implied authority to
act on behalf of or make any representations whatsoever on behalf of
the other.
10.2 Notices - All notices, requests, demands, or other instruments or
communications required or permitted to be given hereunder or in
connection herewith may be hand delivered or sent by registered mail,
postage fully prepaid, or sent by telecopier or other electronic means
of written communication and addressed to the addressee as follows:
(a) in the case of the Bank and BW:
The Toronto-Dominion Bank
Corporate and Investment Banking Group
00 Xxxxxxxxxx Xxxxxx West, 10th floor
X.X. Xxx X
Xxxxxxx-Xxxxxxxx Xxxxxx
XXXXXXX XX X0X I A2
Attention: Xxxxxxx X. Xxxx
Senior Vice-President Treasury Services
Telecopier no.: 000-000-0000
Telephone no.: 000-000-0000
- Page 50 -
(b) in the case of Ceridian, Ceridian Holdings, the Purchaser and the
Corporation:
Ceridian Corporation
0000 00xx Xxxxxx Xxxxx
XXXXXXXXXXX, XXXXXXXXX
00000-0000
Attention: Xxxx X. Xxxxxx
Vice President and General Counsel
Telecopier no.: 000-000-0000
Telephone no.: 000-000-0000
or such other address as any of the said parties shall by notice in
writing direct. All notices, requests, demands or other instruments
or communications shall be deemed to be received:
(i) on the date of delivery, if delivered on a Business
Day, or if not a Business Day, on the Business Day next
following the day of delivery, and
(ii) on the fifth Business Day following the mailing
thereof, if mailed. In the event of a mail strike or
postal interruption all notices, requests, demands or
other instruments or communications shall be delivered
or sent by telecopier or other electronic means of
written communication.
All notices, requests, demands or other instruments or communications
sent by telecopier or other electronic means of written communication
shall be deemed to be received upon the completion of transmission, if
sent during the usual business hours of the jurisdiction where the
recipient is situate or if not sent during such business hours, then
at the opening of business on the next business day of such
jurisdiction.
10.3 Exclusion of Consequential Damages - No party shall be liable to any
other party (including any affiliates or subsidiaries) or to any other
Person for any special, incidental, consequential, punitive or any
other indirect loss or damage (including the loss of business
opportunities or the loss of future profits) arising out of this
Agreement or any obligation resulting herefrom, whether in an action
for or arising out of breach of contract, tort or any other cause of
action, even if such party has been advised of the possibility of such
damages.
10.4 Termination - This Agreement may be terminated at any time prior to
the Closing Date by mutual consent of the Bank and Ceridian. If the
transactions contemplated hereunder shall not have been completed on
or before February 6, 1998, either the Bank or Ceridian acting
individually may terminate this Agreement at any time thereafter upon
at least ten
- Page 51 -
(10) Business Days' prior notice to the other of them. In the event
of termination of this Agreement, this Agreement will be of no further
force or effect and there will be no liability on the part of any
party with respect thereto, except that the provisions of this Section
and Section 10.6 will survive any such termination and nothing herein
will relieve any party from liability for any wilful breach of this
Agreement.
10.5 Time of the Essence - Time shall be of the essence of this Agreement.
10.6 Public Notices and Confidentiality - All notices to third parties,
Payroll Clients and HP,MS Clients and all other publicity concerning
the transactions contemplated by this Agreement shall be jointly
planned and coordinated by the Bank, BW, the Purchaser, Ceridian and
the Corporation and no party shall act unilaterally in this regard
without the prior approval of the other party (such approval not to be
unreasonably withheld), except where required to do so by law or by
the applicable regulations or policies of any provincial, federal or
other regulatory agency of competent jurisdiction or any stock
exchange. None of the Bank, BW, the Purchaser, the Corporation or
Ceridian will disclose the basic terms of this Agreement, the Transfer
Agreement and the Ancillary Agreements to the public or media or any
other Person without the specific prior written consent of the other
parties.
10.7 Year 2000 Estimates - Attached as Schedule 10.7 hereto is a list of
certain work estimated by the Bank to achieve year 2000 compliance
with respect to certain of the Proprietary Payroll Software, and the
Bank's estimate of the time and cost of completion of such work. The
Bank does not represent and warrant, in any respect, the accuracy of
the estimates contained in such schedule. Ceridian, Ceridian
Holdings, the Purchaser and the Corporation acknowledge and agree that
the Bank shall have no liability for any inaccuracy of the estimates
contained in such schedule.
10.8 Counterparts - This Agreement may be executed by the parties hereto in
several counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall constitute but
one and the same instrument.
10.9 No Assignment - No party shall have the right to assign any interest
under this Agreement without the prior written consent of the other
parties. Notwithstanding the foregoing, the Bank shall be entitled to
assign its rights under this Agreement to a wholly-owned subsidiary of
the Bank to whom the Payroll Business or the HRMS Business may be
transferred prior to Closing, provided that no such assignment shall
relieve the Bank from any of its liabilities and obligations
hereunder. Ceridian, Ceridian Holdings and the Purchaser shall be
entitled to assign their rights under this Agreement to controlled
direct or indirect subsidiaries of Ceridian, provided that no such
assignment shall relieve Ceridian, Ceridian Holdings or the Purchaser
from any of its liabilities and obligations hereunder. In the event
of an assignment as contemplated by this Section, the
Page 52 -
assigning party or parties shall enter into such assurances as may be
reasonably required by the non-assigning party or parties.
10.10 Further Assurances - Each of the parties hereto shall promptly do,
make, execute and deliver, or cause to be done, made, executed and
delivered, all such further acts, documents and things as the other
party hereto may reasonably require from time to time for the purpose
of giving effect to this Agreement and shall use reasonable efforts
and take all such steps as may be reasonably within its power to
implement to the full extent the provisions of this Agreement.
10.11 Language - The parties hereto confirm that it is their wish that this
Agreement as well as all other documents relating hereto, including
communications, have been and shall be drawn up in English only.
Les parties aux presentes confirment leur volonte que cette convention
de meme que tous les documents, y compris tous avis, s'y rattachant,
soient rediges en anglais seulement.
10.12 Successors and Assigns - This Agreement shall enure to the benefit of
and be binding upon the parties hereto and their respective successors
and permitted assigns.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the date first written above.
THE TORONTO-DOMINION BANK
Per: /s/Xxxxxxx X. Xxxx
Name:
Title:
I have authority to bind the Bank
BUSINESS WINDOWS INC.
Per: /s/Xxxxxxx X. Xxxx
Name:
Title:
I have authority to bind the corporation
[Executions continued on page 53]
- Page 53 -
[Executions continued from page 52 ... ]
3454916 CANADA INC.
Per: /s/Xxxxxxx X. Xxxx
Name:
Title:
I have authority to bind the corporation
CERIDIAN CANADA LTD.
Per: /s/Xxxx X. Xxxxxx
Name:
Title:
I have authority to bind the corporation
CERIDIAN CORPORATION
Per: /s/Xxxx X.Xxxxxx
Name:
Title:
I have authority to bind the corporation
CERIDIAN CANADA HOLDINGS, INC.
Per: /s/Xxxx X. Xxxxxx
Name:
Title:
I have authority to bind the corporation
